The 7 Lessons Learned of Highly Effective Shared Services

North America | Latin America | Europe | Middle East | Asia-PacificNorth America | Latin America | Europe | Middle East | Asia-Pacific

THE LESSONS LEARNED OF HIGHLY

EFFECTIVESHARED SERVICES(with apologies to Stephen R. Covey)

BC Financial Healthcare Professionals Society2013 Conference| October 1, 2013 | Vancouver, BC

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What we will cover today

Who We Are Definitions & Trends Lessons Learned


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Chazey Partners Profile

Global Offices Flexible Resource Model

Presentation handout is appended with more information on Chazey Partners


Chazey Partners: Who We Have Worked With

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Definitions & Trends in Shared Services

What is the back office?


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Structures have Benefits & Challenges

Remote from business

Unresponsive and inflexible

No Business/ Operational control over costs

Viewed as central overhead

Prevalence of shadow operations

Centralized

Challenges Disparate

processes Multiple

standards Duplication

of effort Different

control environments

High cost and costs unclear across the business

Not scalable

Decentralized

Challenges Responsive

to Business and Operational needs

Business/ Operations control decisions

Customized solutions to meet Business/ Operational requirements

Benefits Shared Highly client

focused Commercially

driven Service

Partnership Agreements

Clear unit costs

Flexible delivery

Clear understanding of drivers and activities

Common systems and support

Consistent standards and controls

Tight control environment

Economies of scale

Benefits


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Attribute Shared Services Centralization

Accountability Business Unit Corporate

Key Performance Target

Service excellence and continuous improvement

Cost reduction and central control

Service Partnership Agreements Widespread Rare

Classification An independent unit Another corporate function

Responsibility Partnership Demarcation

Shared Services vs. Centralization

North America | Latin America | Europe | Middle East | Asia-Pacific

Shared Services is the organization that…

Providing services that are…

Achieve by leveraging…

Employs a specialist

team

Geographically unconstrained

Client-focused

High quality Non-core Mission critical

Repetitive or

professionalLower costHigh

efficiency

Organizational

realignment

Technology

Standardization

Best Practices

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Achieve the Triple Benefits of Shared Services

Higher Quality

Lower Costs

Improved Control


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Trends in Shared Services

Shared Services Concept started in mid 1980’s. Concept initially driven by private sector multinationals Shared Services and Outsourcing initiatives typically result in "cost savings of 20%-50% on processes in scope” (Hfs-PWC report June 2011) "In today's business environment, nine out of every ten enterprises have shared services and 97 percent manage outsourcing relationships". (Hfs- PWC report June 2011) Mainly Finance driven early on in Europe/HR driven in North America Captive vs Outsource, On-shore vs Near-shore vs Off-shore Now much more end-to-end process focused Continued increase in scale and up the value chain in Shared Services (e.g. O2C, Reporting, Policy Very important now in the Public Sector – how to reduce deficits while not impacting front line services. Economic recession of 2008 has led to austerity agenda today in public sector: Shared Services is moving from opportunity to necessity


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Trends in Shared Services (continued)

Technology options continue to grow (e.g. document management, approvals, user self service, ERP, “cloud computing”, etc) Politics around offshoring jobs has been an issue for years, but has not stopped the trend (captive and BPO), although slowed for a while Multi-functional Shared Services now really starting to happen after years of this being in the textbooks Large scale, multi-tower outsourcing not very common, despite what many predicted. Selective outsourcing (which actually never went away) is more the trend “Innovative outsourcing” has not yet happened. Lift and shift did. Partly due to client requirements. Across all industry sectors the trend is towards shared services, hybrid shared services organizations with some outsourcing, and multifunctional shared services


Shared Services Examples in Public Sector

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North America | Latin America | Europe | Middle East | Asia-Pacific

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THE LESSONS LEARNED OF HIGHLY

EFFECTIVESHARED SERVICES

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Lesson Learned 1What’s in a Name?


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Lesson Learned 2Always File a

Flight Plan


Business Case Activities & Deliverables

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AS-IS

Carry out multiple site visits and workshops

Review and catalogue any existing process & sub

processes

Review a catalogue technology landscape

Complete Activity based Analysis

Finalise stakeholders interviews

Review existing reporting tools and mechanisms2 to 4 weeks

Current State Analysis:

Summary of Key Findings & Gap Analysis

Proposed

Complete best Practice diagnostics

High level process design

High level org design

Service delivery framework

Define high level KPIs and Metrics

Develop high level operating model

Finalise Technology assessment 4 to 5 weeks

Operating Model : To Be Processes &

Organisational Design

DESIGN, BUSINESS

CASE, RECOMMENDA

TION

5 to 6 weeks

Opportunity Matrix

Business Case Evaluation

Location Recommendations(s)

Recommend Governance Framework

Implementation Plan

Change management Plan

Identification of next steps

Recommendation, Business Case

& Implementation

Plan

Checkpoints with key stakeholders:

Project Board Steering GroupK

ey

Delivera

ble

s

BASELINE & BENCHMARK

Project kick off & mobilisation

Establish detailed plan, timelines, key

deliverables etc. for this stage

Review output from work to date

Initial Communications

Review and update baseline Calculations

Complete Further Stakeholder interviews

Key A

cti

vit

ies

Work

ste

p

0 to 2 weeks


Sample Leading Practices DiagnosticAccounts Payable

As-Is (4.0)Considered finance function, not part of procurementManual invoicesAll payments in through single SAP ERPAccounts payable responsibility centralizedWeekly cheque runs plus ad hocNo statistical review of small invoicesManual cheques infrequentAchieve 50% of available vendor discountsEFT not used

To-Be (8.0)Achieve leading practices except:

Continue with manual invoices (initially no funding for document management/scanning solution)EFT only possible for 30% of vendors

Is part of an end-to-end purchase-to-pay process with front end transactional processes designed to minimize own stream error correctionScan and route 100% of invoices when received by accounts payable processing centerProcess all payments through a single system.Centralized accounts payable responsibilities across the organizationOptimize number of check runs each month.Review 100% of large dollar invoices and statistically sample the remainderEliminate manual cheque request generation.Maximize vendor discountsUtilize EFT for payment to eliminate use of paper cheques

0 4 102 6 8Diagnostic Rating Scale:• 1 = Leading Practice is not adopted• 10 = Leading Practice is adopted in full

Score in Range 1-4

Score in Range 5-7

Score in Range 8-10

Current Future

Leading PracticeObservations

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Lesson Learned 3Don’t Leave

the Customer Behind


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9 Elements of Customer Interaction FrameworkAccount Management• CSO to client; via reporting,

interaction, escalation & communication

Client Contact Management• Client to CSO; to manage

and resolve queries and drive learning/improvement

Service Partnership Agreements• SPAs are 2-way agreements

clarifying both CSO services and client inputs

Client Feedback

• Client satisfaction continuously monitored both informally and formally

Continuous Improvement• Mechanisms to identify the

areas for improvement and to develop solutions

Process Control Database• Documents end-to-end CSO

processes; highlights activity of both CSO & client

Performance Measurement• Comprehensive KPIs,

measures and metrics framework, CSO & client

Performance Reporting• Process performance will be

reviewed monthly by CSO and client

Recharging Methodology• Define basis for charging for

CSO services to turn consumers into clients


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Lesson Learned 4Teams Need Air Cover


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Lesson Learned 5Houses Start with

a Foundation


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Activity ClassificationType of Activity Characteristics Examples

Transactional & Administrative

• Results more quantifiable• Processes benefit greatly from standardization,

automation and technology• Clear linkage between effort and results

(outputs generally experienced in short-term)• Generally not client-facing

• Accounts payable• Payroll• IT service desk• Fleet management• Facilities management• Mailroom

Professional & Technical

• Results are more qualitative• Standardization, automation and technology

have less of an impact• Relationship between effort and results is not

as clear (medium-term perspective)• Generally requires interaction with client

• Procurement advisory• Recruiting/staffing• IT applications• Health & safety• Space planning• End user training

Policy & Strategic

• Distant relationship between effort and results (long-term perspective)

• Standardization, automation and technology are not significant factors

• Clear linkage to strategic goals of organization

• Signing authority policy

• Business & strategic planning


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Lesson Learned 6Structure for Success


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Lesson Learned 7Transformation Takes a Team


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Chazey Profile


Chazey Partners’ Profile • Who We AreWe provide advice, guidance, support and implementation expertise, covering strategy setting, business case production, program management, outsourcing assessment, process optimization, technology enablement, training and change management.

Our functional breadth of experience includes the “big four” of HR, Finance, IT and Procurement, plus other support services such as Facilities, Real Estate, Legal, Communications, etc.

Example clients include Coca Cola Hellenic, Coca Cola Enterprises, Government of New Brunswick, Agrium, May Gurney, Gilead Sciences, Interior Health, Northern Health, Lawrence Berkeley Laboratory, FormFactor, National University of Ireland, Bridgestone, Gerdau, and many others.

Because we are passionate business people and Shared Service practitioners, we care about your success and deliver solutions relevant to your organization.

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Chazey Partners’ Profile • Public Sector ExperienceWe have serviced a great variety of clients across many industries and countries, covering Shared Services and Outsourcing, Business Transformation and Technology Enablement.

Due to the unique nature of working within the Public Sector and with Non-Profits, we wanted to specifically highlight the following organizations and experience below:

New Brunswick Internal Services Agency, New Brunswick, CanadaLawrence Berkeley National Laboratory, Berkeley, CaliforniaInterior Health and Northern Health, British Columbia, CanadaStanford UniversityUniversity College Galway in Ireland, IrelandThe World Wildlife FundThe International BaccalaureateNational Health Services (NHS), UKHealth Service Executive (Ireland)Non-Departmental Public Bodies (NDPBs)Ministry of Defense (MOD)South Yuba River Citizens LeagueOutsourced Services to Local Authorities 27


Chazey Partners’ Profile • Specific Relevant Speaking Experience

Phil Searle, Grant Farrell, Chas Moore and Janey Jux have chaired, arranged, presented at and facilitated workshops at a number of Public Sector Shared Services events, including the following:

• Shared Services in the Public Sector at the Queen Elizabeth II Conference Centre in London

• Chaired, presented at and help organize the Shared Services and Outsourcing Network‘s first North American Public Sector shared Services Conference, held in Chicago in November 2011

• Presented at and helped organize the Shared Services and Outsourcing Network’s second North American Public Sector Shared Services Conference, held in Chicago in November 2012

• Delivered a master class at the “Managing Change – Transforming the Public Sector” conference at the Barbican Centre, London 2011

• Chaired and presented at the 2012 “Power of Collaboration” conference for financial professionals in BC Healthcare at Vancouver, Canada

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Chazey Partners’ Profile • Specific Relevant ArticlesPublic Sector Shared Services and “Collaboration vs. Sharing”. Phil Searle, CEO Chazey Partners

What might be the Impact of the 2012 Presidential Election on Shared Services and Outsourcing in the US Public Sector? Phil Searle, CEO Chazey Partners

Are you getting the SPA treatment? Chas Moore, Managing Director, Canada

From front to back office. Grant Farrell, Managing Director, United States

Proactively managing your stakeholders. Janey Jux, Head of EMEA Public Sector Practice

Make or Buy Decision. Phil Searle, CEO Chazey Partners

What are Shared Services Best Practices? Phil Searle, CEO Chazey Partners

When is Shared Services not really Shared Services? Janey Jux, Head EMEA Public Sector Practice

Business Continuity Planning. Grant Farrell, Managing Director, United States

Client Relationship Management Framework. Grant Farrell, Managing Director, United States

Deploying Shared Services. Grant Farrell, Managing Director, United States

Developing the Business Case. Chas Moore, Managing Director, Canada

Shared Services Optimization. Phil Searle, CEO Chazey Partners

Technology Enablement. Grant Farrell, Managing Director, United States29


Business Transformation

We help clients to transform their support functions to realise significant benefits (lower costs, optimised working capital and improved performance) through best practice process development and roll out of optimal organisation, support and delivery structures.

Functional scope covering Finance, HR, IT and Procurement

Identify and target opportunities, and produce powerful business cases to reflect the opportunity and gain organisational buy in

Implement and support approved transformation initiatives rapidly to drive maximum ROI

Effective acquisition integration and business divestitures

Powerful project and change management, focussing on delivery and outcomes

Chazey Partners’ Profile • What We Do

Shared Services

Planning for, resourcing and implementing global and regional Shared Service Organisations (SSOs) covering a wide ranges of functions and processes including offshore solutions

Turning round sub optimal or failing SSOs

Statutory and Fiscal compliance delivered by SSOs for multiple countries and legal jurisdictions

Independent of any outsourcing providers, we offer impartial sourcing advice and support covering both internal and external options, to ensure that the best solutions for your business are found

Training and development for Shared Service practitioners and Shared Service customers

Technology Enablement

Implement and optimise ERP and other technology enablement solutions to maximise return on investment and in quick time.

Focussing on needs and value to the business, we view technology as an enabler and not an end in itself.

Resource technology projects to enhance chance of success through an optimal mix of IT, Business Systems Analysts, Business Process Integration, Business Process Owners, and Users

State of the art additional technology enablement where required

Effective training and support

Experience includes SAP, Oracle, JD Edwards, BAAN, Siebel, Peoplesoft, COINS and many others

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Your Speakers

Janet GarlandAssociate, Chazey Partners Canada

[email protected]

Mobile: 250-762-2501

Toll-Free: 1-855-5-SHARED

Chas MooreManaging Director, Chazey Partners Canada

[email protected]

Mobile: 250-469-4168

Toll-Free: 1-855-5-SHARED

mailto:[email protected]

mailto:[email protected]

The 7 Lessons Learned of Highly Effective Shared Services

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