Choosing the Optimal Global Service Delivery Model

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Shantanu Ghosh

Business Leader, CFO Services & Consulting

January 28, 2012 - In the first wave of business process globalization, corporations in the developed world took advantage of the concept of getting transactional work done cheaply in emerging markets. The whole model was based on cost arbitrage and driven by connectivity and the acknowledgement and understanding of language skills, an educated workforce, and favorable demographics in the emerging markets. Over the past few years, successive changes have created a very different perspective on globalization. First, the economic turbulence and opportunities in different parts of the world created a much more global footprint for all corporations in terms of their core business, and therefore complexity and diversity in their business processes. Second, the slowdown of developed markets and opportunities in emerging markets required companies to become ultra-competitive in their business processes. This entailed a relentless drive towards standardization and best practice adoption and a need for speed and flexibility in order to capture local opportunities and balance local nuances and political rhetoric. Third, business process services providers have developed significant competencies and capabilities in different business process areas. They have gone up the value chain to redefine what constitutes core vs. non-core activities for enterprises and have globalized their delivery footprint significantly.

As a result, the Global Service Delivery (GSD) model for all businesses has changed dramatically. In this recent Business Finance article, we explore some of these emerging trends and the considerations driving the GSD model for global corporations, many of whom we partner with in shaping their strategy, designing their global processes, and executing same across the globe.