The business services sector (BSS) has for more than 20 years been one of the fastest growing global industries in the world. As this growth and evolution continues, we observe how the maturation process of BSS organisations evolves, how it develops more complex operating models, experiences different business dynamics, implements more advanced technological solutions and works hard to always meet changing customer expectations.
Some BSS organisations have begun suffering from that dynamic growth due to a wide competency gap, which leads us to ask a number of questions. What was overlooked by management teams? Why is the industry poorly positioned? What has been done to ensure that there is a strong supply of tailor-made competencies?
Firstly, however, we need to take a step back and define the reasons behind this gap.
Since the very beginning, the sector has been associated with transaction processing and boring activities that are not attractive from the perspective of employee development. Working in a collaborative service centre organisation or business process outsourcing is often compared to working in a bookkeeping office, working on an assembly line and is incorrectly referred to as not being demanding.
The simple operating model (transactional support functions like accounting, processing invoices, payments, statutory reporting, consolidation, hard HR and others) and the basic model “cost plus” still give the illusion that there is no place for effective business management. Nowadays however this is changing, as BSS organisations grow into global models and become stand-alone, profitable businesses with not enough leaders.
From the lowest positions in modern service centres, specialisation plays a big role, both at the level of individual employees and teams dedicated to customer service in their area of competence. A wide variety of customers and often incomplete standardisation require less specialisation than in organisations from other industries. This is followed by the highest standards of service, so that the customer “has one guardian”, and this in turn translates into a longer period of time needed to acquire the skills for leadership and managerial positions. Standard and frequent promotion of the best specialists results in a lack of knowledge and experience in the remaining areas necessary to perform these roles.
An international sector
Central and Eastern Europe, and – more and more often – the whole of Europe, is becoming an increasingly sought-after place of work and development. According to the latest Association of Business Services Leaders report, 10 per cent of employees in the Polish BSS sector are foreigners. A similar phenomenon is observed amongst Polish workers themselves, with more and more likely to move for work from city to city. This contributes to greater opportunities for both employees and businesses, but is a risk to personnel turnover and a challenge for managers.
The modern services sector is international like no other. It originally created transactional joint service centres, later competency centers, expert hubs, and outsourcing centres which transformed into global business service centres with more than 40 foreign languages and everyone speaking English. Building multicultural teams as well as serving customers around the world raises the level of complexity of management at the middle and highest levels.
The need for particular foreign languages has made it necessary for the modern services sector to employ a number of people who have not necessarily had any education or previous experience in competencies linked to their roles (such as the proliferation of language graduates working in financial and accounting centres serving international clients).
Flat organisational structures, quick promotions without complementary knowledge and experience, narrow specialisations, a lack of experience in managing teams, a lack of preparation for optimum operational and legal structures (SLA/OLA), and finally, management without properly prepared benchmarking are the main reasons for the competence gap among middle and senior staff in the BSS centres.
This leads to a strong fear of being tied to the sector, from which there is no way out of the traditional business development path (because the centres are not businesses – an erroneous perception), and results in lower interest in middle-level management positions (highly visible among financial bosses who do not often think of a career in the organisation of modern business services). It is also important that the BPO, SSC, IT and R&D centres in Poland are increasingly complex and elaborate organisations, employing more and more employees, in which management becomes increasingly difficult and requires entirely new competencies from managerial staff.
The competence gap in the Polish sector of modern services can be divided into two types: a gap in the expertise necessary for the performance of daily duties; and a gap in managerial skills necessary for staff to efficiently manage and develop modern service centres.
With the first type of competence gap, organisations are doing relatively well. Employees are involved in specialised internal and external training, completion of their substantive deficiencies and development of expertise. However, intense on-the-job training, which allows a quick and efficient way to prepare new employees for tasks they had not before faced, is of paramount importance. Hence, the gap in organisations is usually short-lived and individual.
A more structural problem is the gap in the competencies necessary for the management and development of modern service centres. The sector is still new and the dynamics of its development make the need for more and more skilled managerial staff with competencies that are much harder to “learn”. Market challenges, rising customer expectations, the development of modern technologies and the maturation of organisations from the sector of modern services make it necessary for managers to have a number of new skills such as creation and transformation of operational models, centralisation, optimisation, automation and robotisation of processes, talent management, strategic analysis, construction of business models and location studies, service quality management, effective communication and the ability to promote cooperation in multicultural and multi-generational teams.
These are more advanced skills, so backfilling this competency gap takes much more time and resources.
All of these types of competence are difficult to learn from theoretical training. It is necessary to practice, to use the experience of others, to analyse case studies and maintain contact with current knowledge, tools and solutions. It is not without reason that the MBA is primarily a practice which merely complements theory and previous experiences.
One way of contacting experts, exchanging experiences and acquiring the new knowledge needed by managers in the modern services sector is to be a member of industry organisations that organise conferences, meetings and platforms enabling professionals to share and exchange knowledge.
Specialist managerial training is a very important element in developing management competencies in the modern services sector. Its advantage is that it tends to focus on narrow issues, so you can choose training for a specific manager or organisation. However, the choice should always draw attention to the proportion of theoretical knowledge and analysis of practical solutions and case studies. The key is also the business experience of lecturers.
A great idea seems to be a comprehensive management programme focused on the managers of the sector of modern services. They allow for the parallel development of most of the competencies necessary for the management of organisations in the sector, give the opportunity to meet people at a similar stage of professional development, as well as industry experts. The disadvantage of such programmes is still their low availability – around the world there are still only a few programmes dedicated to managers in the modern services sector.
Emerging Europe, through its initiative, the Alliance for Business Services, Innovation and Technology, is an institutional and media partner of a new post-graduate programme of the Business Service Centre Organisation and Management, available at Collegium Civitas in Warsaw, Poland (academic year 2019-20). Click here for more information (also in English)