Several weeks ago, I posted my first poll “Key Topics for GBS Leadership” (really any functional leader but I’ll use GBS to keep it simple). Thanks to the folks who participated! Based on the feedback, the topic “Demonstrating Value Delivered” received the most votes. So, I am happy to share my thoughts.
First, let’s acknowledge a leader’s role includes architecting a strategy and the tactics so the GBS organization delivers value in alignment with the organization’s mission, strategic plan etc. Since this is the case, GBS leaders should think about how they define, track and share their organization’s “value delivered” to continually justify further investments in their organization (and maybe its very existence).
Here’s some approaches to consider.
Category 1 – Strategic: The first place to start is by tracking value created from strategic projects delivered (directly) or enabled (via support) by the GBS team. When I mean strategic, I refer to the most important projects to the company where GBS plays a meaningful role. It’s best if the value can be quantified as these projects usually have C level sponsorship and attention. For example, GBS is leading a procurement or real estate transformation project to support the company’s optimization goals or maybe playing a key role in acquisition integration. I would define value upfront, track it and report it periodically (especially in the strategic plan and [definitely] in the annual operating plan). While tracking hard savings is preferred, it’s also important to capture qualitative value delivered (for example, supporting an acquisition integration project, supplier diversity goals enabled, etc.). The point is, it’s a missed opportunity to not hi-lite GBS’ value delivered to these key corporate initiatives [and relate the value back to GBS’ capabilities].
Category 2 – Core to GBS’ Strategy: The second category of value delivered is capturing value from projects which don’t rise to the level of strategic to the corporation but clearly are strategic to the GBS organization’s mission and purpose of existing. Again, start with projects funded and value achieved (vs the business case) in the GBS organization’s project portfolio. Often these projects will be reported by service line or end to end process [if you have a GPO model). Some ideas to consider (working capital optimization, digitization of processes, setting up an offshore service line, expansion of service lines etc.). Every project should have a business case and the quantified value captured should be tracked and reported. Even better is to show in the organization’s operating budget, how any savings are reinvested in new capabilities (digital? analytics?) or given back to the organization to meet savings goals.
Category 3 – Continuous Improvement (CI) Projects: By definition, CI are small incremental changes and a key value proposition of the GBS model. While CI is expected from GBS, the quantified value produced is often not exciting to the Executive level. They want numbers that move the needle (like categories 1 and 2). Still, I suggest tracking the value of continuous improvements implemented by specific service lines (think procurement to pay, record to report, order to cash, travel planning to travel reporting etc). Try estimating the quantified value but if not practical, then list the qualitative value as well. While many executives will not always be interested in the details (the best will be), it’s good for the organization and the GBS team to acknowledge and celebrate improvements in the individual service lines. As I’ve said in my articles on CI, continuous improvement is an annuity. Further, this is the core mission of GBS (to drive business improvements) and the responsibility of all leaders, especially those at the helm of a GBS.
Category 4 – Operational Metrics: At the lowest level, each service line or end to end process, should think about value delivered using metrics key to the service line. A few ideas to illustrate my point. Value is created and delivered when:
-The ratio of high cost to lower cost labor by service line,
-Optimizing spans and layers vs benchmark,
-Reducing transaction costs over time,
-Reducing Control defects,
-Improving the level of automation achieved (reduced manual tasks),
-The number of best practices implemented,
-Percent of SLAs achieved or exceeded,
-NPS or CSAT by service line,
-Improvements to Turn around time or other performance metrics (quality).
-Etc.
The point is, each service line can think deeply about its process and the key metrics which can be improved to demonstrate its value delivered. If consistently tracked and shared, stakeholders will begin to understand the value delivered by the GBS.
Closing thoughts: There’s no question tracking, and reporting value delivered takes deep thinking, commitment, and resources. As a GBS leader, I would usually lean on my FPA support and my Service infrastructure team to manage this process. FPA brings both an objective perspective and they’re often key to both the GBS organization’s ongoing financial reviews (monthly/quarterly) and the annual operating plan process. However, value creation ownership must lie with the service line leaders.
A few last points to share.
- Instilling a discipline of tracking value in the team develops a business and results oriented mindset. This helps reinforce GBS as a P&L focused, results oriented organization.
- Being able to share value delivered supports branding and helping employees understand GBS’ value.
- One word of caution. Be careful to NOT make value delivered all about the GBS organization, try to give or share credit with stakeholders in the organization.
I hope my experience is helpful to any leader looking to articulate the value delivered by their organization. Please reach out if you want to chat more and of course, comments are welcome!
