Top 5 Mistakes to Avoid When Setting Up a Global Business Services Organization

Imagine investing millions into a global transformation—only to watch it crumble under misaligned goals, talent issues, or a poorly chosen model. It’s a scenario more common than you think.

In a hyper-competitive global economy, Global Business Services (GBS) have emerged as a game-changing operating model for companies seeking efficiency, scale, agility, and innovation. Whether it’s to streamline back-office functions, centralize operations, or drive digital transformation, Global Business Services provide a strategic approach to managing enterprise services across geographies and business units.

Yet, despite its many advantages, organizations often fall into common traps while setting up a GBS model. The consequences? Ballooning costs, lack of agility, employee disengagement, and eventually a GBS structure that fails to deliver value. Whether you’re launching a new captive unit, expanding to new geographies, or transitioning from shared services to a more unified model, this guide explores the Top 5 Mistakes to Avoid When Setting Up a Global Business Services Organization—so you build smart, scale fast, and stay ahead.

1. Failing to Align GBS Strategy with Business Goals

At the heart of every successful Global Business Services organization lies one non-negotiable principle: strategic alignment. Many companies approach GBS purely as a cost-reduction tool—focusing on offshoring or automation—without truly aligning it with long-term business goals. This tactical approach might show short-term savings but rarely delivers transformational value.

GBS should be positioned as a strategic partner that supports enterprise-wide objectives—be it customer experience improvement, digital innovation, or global expansion. It’s essential to ask: How does this GBS unit support our growth strategy? What KPIs will it impact? Who will own its performance?

By anchoring the GBS setup within the company’s strategic blueprint, it becomes easier to win leadership buy-in, secure resources, and deliver sustainable impact. A strategic GBS doesn’t just follow—it enables the business to lead in new markets, technologies, and operating models.

It’s also worth considering the role of Global Capability Centers (GCCs) as part of the broader GBS framework. GCCs offer a more evolved model by integrating R&D, analytics, digital innovation, and business-critical functions under one roof—creating not just operational leverage but strategic depth.

2. Overlooking Talent Complexity in a Global Context

Talent is the most critical input in your Global Business Services journey—but also the most complex to manage. Too often, companies underestimate the difficulty of sourcing, managing, and retaining talent across geographies, cultures, and functions. Even with a robust business model and strong tech stack, GBS initiatives falter if they can’t secure the right people.

Understanding local talent dynamics, wage inflation, attrition trends, cultural factors, and compliance obligations is crucial. For example, setting up a center in India or Eastern Europe may offer cost and skill advantages—but without tailored Talent Solutions, onboarding and retaining skilled professionals becomes a serious challenge.

Enter modern tools like AI recruitment tools, which are now a cornerstone of forward-thinking talent strategies. These tools enable organizations to shortlist candidates more objectively, reduce time-to-hire, and ensure cultural and competency fit. Combined with strong employer branding and a differentiated value proposition, they can dramatically improve your talent acquisition outcomes.

Additionally, selecting the right gcc hub—locations that offer rich talent ecosystems, favorable regulations, and tech-enabled infrastructure—is key. Markets like Bengaluru, Manila, and Warsaw are thriving due to their focus on skilling, innovation, and global delivery excellence.

3. Poor Governance and Ineffective Change Management

One of the most underestimated challenges in setting up Global Business Services is change resistance. As functions and teams are consolidated under one umbrella, processes change, reporting lines shift, and new operating norms emerge. Without a robust governance and change management strategy, these shifts can create friction and confusion across the organization.

A successful GBS setup requires a clear governance model that defines roles, responsibilities, escalation paths, and performance metrics across business units and geographies. Centralized governance provides control and standardization, while localized leadership ensures responsiveness and agility.

Equally important is your change management playbook. Effective Global Business Services transformation demands early and transparent communication, proactive stakeholder engagement, and cross-functional training. Employees need to understand the 'why' behind the change, what’s expected of them, and how they will benefit from the transition.

Notably, research indicates that 70% of change initiatives fail, often due to employee resistance and lack of management support.

When governance and change are treated as afterthoughts, the entire GBS model risks being perceived as bureaucratic, disconnected, or disruptive—rather than transformational.

4. Choosing the Wrong Operating Model

Choosing the right operating model is perhaps the most fundamental decision in your Global Business Services journey. Should you set up an internal captive unit? Should you outsource to third-party providers? Or should you opt for a hybrid model?

Many organizations jump straight into captive setups without assessing readiness. Others rely entirely on BPO vendors and lose visibility, control, and strategic capability. A more balanced and adaptive approach is the Build-Operate-Transfer (BOT) model.

BOT allows a specialized partner to build the GBS operation, operate it with full accountability for outcomes, and finally transfer it to the enterprise once it reaches maturity. This mitigates risk, accelerates time-to-value, and gives companies the flexibility to scale and adapt.

This model is particularly useful when entering new markets or launching new functions. BOT partners also bring domain knowledge, local expertise, and proven playbooks—critical when time and performance are of the essence.

Furthermore, companies must define whether the GBS will act as a cost center, a shared services unit, or a profit-driving function. The choice will determine the structure, governance, pricing, and talent strategy of the GBS.

5. Neglecting Technology and Process Optimization

Too often, GBS implementations prioritize headcount and location over digital readiness. Without technology-enabled operations, your Global Business Services unit will struggle to scale or deliver real-time insights.

Process optimization should not be a one-time exercise but a continuous one. Every process being centralized must be evaluated through a digital lens. Can it be automated? Is it scalable? Does it enable real-time reporting? Is it customer-centric?

This is where platforms like cloud-based ERP, robotic process automation (RPA), and advanced analytics come in. When combined with GCC solutions—which bring in mature tech, security, and compliance infrastructure—your GBS unit can drive exponential value.

Additionally, developing a unified data and technology architecture ensures cross-functional visibility and integration. GBS leaders should prioritize dashboards, self-service analytics, and workflow automation to enhance both speed and quality of service delivery.

Failing to digitize not only limits operational efficiency but also restricts your ability to innovate. In contrast, tech-enabled Global Business Services units become the nucleus of data-driven decision-making, predictive analytics, and enterprise agility.

Notably, research indicates that 70% of digital transformations fall short of their objectives, often due to factors like lack of clear strategy, insufficient leadership commitment, and inadequate technology integration.

Conclusion

Setting up a Global Business Services organization is not a plug-and-play exercise. It requires thoughtful planning, strategic intent, and constant course correction. The goal isn’t just to centralize operations—it’s to unlock enterprise agility, optimize resources, and enable innovation.

Avoiding the five critical mistakes discussed above—lack of strategic alignment, poor talent planning, weak governance, unsuitable operating models, and digital underinvestment—will dramatically improve your chances of success.

Whether you’re starting small or going big, your GBS model should reflect your growth ambition. Partnering with experts in Talent Solutions, exploring flexible models like Build-Operate-Transfer, integrating AI recruitment tools, and leveraging established GCC solutions can provide the boost you need.

In doing so, your Global Business Services operation won’t just be a back-office support function—it will be a frontline engine for innovation and value creation.

And as you scale, remember: the most successful Global Business Services organizations are those that combine the efficiency of global delivery with the strategic depth of local insight and digital innovation.