Time Topic Responsible

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1 5/24/17

2 Time Topic Responsible 2:00pm Welcome & Introductions Snehal Sindhvad (SIG) 2:05pm SIG Working Group Concept & Structure Snehal Sindhvad (SIG) 2:15pm The Sourcing Lifecycle John Bree (NEO) 3:00pm Meeting Concludes

3 Working Council Leadership Team John Bree NEO Group Snehal Sindhvad SIG Member Services

4 Time Topic Responsible 2:00pm Welcome & Introductions Snehal Sindhvad (SIG) 2:05pm SIG Working Group Concept & Structure Snehal Sindhvad (SIG) 2:15pm The Sourcing Lifecycle John Bree (NEO) 3:00pm Meeting Concludes

5 The Charter or Purpose of this Working Council is: Ensure that SIG Members have a resource to turn to when they have questions concerning how organizations develop their sourcing strategies; Provide an environment for SIG Members to network and develop relationships with subject-matter experts, thought leaders and practitioners in this business area; Discuss sourcing strategies with SIG Members and focus on initial value assessments and optimal decision-making. This council will develop a general framework to help ensure that your business strategy is driving your decisions.

6 Working Councils are open to all SIG Members Buy-Side participation is the core of our success! John Bree is our Sell-side Council Leader

7 Time Topic Responsible 2:00pm Welcome & Introductions Snehal Sindhvad (SIG) 2:05pm SIG Working Group Concept & Structure Snehal Sindhvad (SIG) 2:15pm The Sourcing Lifecycle John Bree (NEO) 3:00pm Meeting Concludes

8 SOURCING LIFECYCLE The right outcomes with the right person in the right place at the right time with the right skills and at the right price! Too much to ask? - Bob Rosetta, MD, Global Head of Citi s Resource & Location Strategy

9 9 SOURCING LIFECYCLE BEGINS WITH OBJECTIVES STRATEGY SOURCING GOVERNANCE THE SOURCING LIFECYCLE - WHAT IS THE OBJECTIVE? - COST - QUALITY - SPEED TO MARKET - NEED FOR TALENT - Readiness Assessment Maturity Assessment Opportunity Identification Global Business Services Sourcing Strategy Service Design Process Optimization Spend Analytics Sourcing Analytics Location Assessment Supplier Assessment RFP Process Partner Selection Global In-House (GIC) Vendor Consolidation Re-negotiations Benchmarking Research Transition Design and Support Governance Design and Support Health Check Supplier and Location Monitoring Program and Project Management Governance As A Service Governance Planning Communications and Change Management

10 SOURCING EVOLUTION INDEX 10 FROM COST FOCUS TO STRATEGIC VALUE Companies who leverage global services successfully, typically progress through a fivestage evolution moving from a cost focus to one of strategic business enablement BASIC EVOLVING MATURE ADVANCED LEADERSHIP LABOR ARBITRAGE LABOR EFFICIENCY PROCESS EXCELLENCE OPERATIONS EXCELLENCE STRATEGIC VALUE I Beginning the journey II Moving up the curve III Comparable with local peers IV Better than most local peers V On par with world class programs Neo Group

11 3 SOURCING & GOVERNANCE MATURITY IS REQUIRED FOR SOURCING EVOLUTION V. Aligned Manage Value IV. Optimized Manage Outcomes III. Rationalized Manage Portfolio II. Proactive Manage Demand I. Reactive Includes Global In-House Centers and Partners Neo Group Manage Supply

12 4 START WITH IDENTIFYING THE RIGHT OPPORTUNITIES Portfolio Data Input Multi-dimensional Analysis Opportunity Recommendation by Scenarios Business Impact and Risk Operational Requirements All Functions/ Processes (per Data Collected) Skill Requirements Role Interaction and Criticality GLOBALYZE SM Technologies and Tools Documentation and Training Source: Neo SourcePrism SM

13 Global Audit Security Legal HR Finance Procurement 13 THEN CHOOSE THE RIGHT MODEL A structured framework should be put in practice for choosing the right engagement model Key Inputs Critical Factors Decision Planning Implementation Strategy Objectives Transformation Opportunities Requirements Criticality Core/Noncore Project Risks Requisite Controls Cost Effectiveness Knowledge Past / Present / Retention Vendor Performance SLAs / CSAT Governance - Outcomes Supplier What goes where - Portfolio Assessment Contracting Engagement Model Governance Framework Project Scoping Pricing Resources Measurements & Monitor Tollgates, Reviews, Approvals, SLAs, etc. Governance Structure & Modalities Health checks - Continuous Improvements Project Charter Project Plan Communications & Change Management Training Knowledge Management Systems Meeting & Reporting Cadence Published SLAs & Outcomes Corporate Services Source: Neo Group Within Client s Organization In Collaboration with Supplier EFFECTIVE GOVERNANCE FOCUSED ON OUTCOMES

14 14 SOURCING ENGAGEMENT MODELS DEPEND ON PRICING & GOVERNANCE CHOICES Multiple sourcing models Most use the following or a combination of these for their operations Pricing Based Model As name suggests, the model is Price based Guidelines based on pricing of the work order Time & Material Fixed Price Managed Capacity Transaction Based Governance Based Model Based on governance strategies deployed for projects Most commonly seen as staff augmentation, managed capacity and managed services Client Managed Supplier Managed Co - Managed Managed Services

15 15 EXAMPLE: CHOOSING THE RIGHT MODEL High Business Staff Augmentation Capacity Model Managed Services Core Non Core Low High Resource Retention Low Criticality Controls Need to Control Resources Resource Deployment Visibility Control Via Deliverables Cost Predictability Time & Material, Everchanging Projections Fixed Measurable Budgets Knowledge Management Knowledge of Individuals Experience and Expertise of Firm/CoE Service Level Discipline/ Maturity Vendor Capability Unstructured SLAs Early Stage Structured SLAs Leading Practices, Continuous Improvements, Innovation

16 16 USE REAL-TIME DATA, TRENDS AND ANALYTICS TO SUPPORT SOURCING DECISIONS Source: Supply Wisdom SM

17 17 KNOW WHAT TO DO WHERE LOCATION ASSESSMENT MODEL Neo Group MACRO ECONOMIC ATTRACTIVENESS Macro Economic Indicators Currency attractiveness FINANCIAL ATTRACTIVENESS Salary Level (ITO, BPO, KPO) for entry level Salary growth (ITO, BPO, KPO) for entry level Rent (Grade 1 CBD) Rent growth Cost of living Increase INFRASTRUCTURE ATTRACTIVENESS Government support/incentive FDI attractiveness Power supply Transportation Software parks/sez s HUMAN RESOURCES ATTRACTIVENESS Scalability risk Number of Industry employees Attrition Overall and client GEOPOLITICAL ATTRACTIVENESS Political risk Crime rate Terrorism/Ethnic tension/social unrest INDUSTRY ATTRACTIVENESS Industry size ITO Industry size BPO Industry size KPO Projected Industry growth ITO Projected Industry growth BPO Mature Service Providers BUSINESS ENVIRONMENT ATTRACTIVENESS Ease of doing business Quality of life Cultural compatibility/support facilities for expats Access to healthcare Pollution levels Quality of education Business and support amenities/5 star rooms

18 18 CAPTIVE/IN-HOUSE IS ANOTHER OPTION Service depth Delivery methodologies Project & Performance Management QA Service Capability Alignment of management Management depth Leadership Capability Recruitment & Staffing Enhancing brand presence Training Performance Evaluation Focus on HCM HR team capability HRM Processes Stakeholder Management Appetite for more transitions Account management setup and capability Creating goodwill Foundational Elements GBS Building Blocks Neo Group Technology Edge Operating Model Focus on new and emerging technologies Technical thought leadership Knowledge sharing Market orientation Clarity of vision Capability to handle growth Decision making process Empowerment Cost effectiveness

19 19 SOURCE: PARTNER EXPERIENCE & CAPABILITIES Vendors/ Suppliers are requested to provide data and support their responses in regards to their Experience & Capabilities for the following. This needs to be their representative experience toward: Domain and Verticals o Percentage of Total Revenues o Number of Domain/ Vertical Clients and top 3 among them o Top 3 Locations by FTEs that serve similar clients o No. of FTEs by Total Experience Level that include experts o Center of Excellence (COE) data o Accreditations and/ or Certifications o Supplier Proficiency Level Functional Capabilities o Functional Area o Top 3 Clients by Revenue o Top 3 Clients by FTEs o Number of FTEs by total experience level o Center of Excellence (COE) data o Accreditations and/ or Certifications o Supplier Proficiency Level Technical Skills o Technology/ Tool Name o Number of unique clients with similar technology/ tools o Top 3 Locations by FTEs o No. of FTEs by Total Experience Level o Accreditations and/ or Certifications o Supplier Proficiency Level The above areas will be scored and the results will be heat-mapped to provide overall coverage and unique capabilities of the Vendors/ Suppliers

20 20 A GOOD TRANSITION FRAMEWORK DRIVES STABLE OPERATIONS PLAN MOBILIZE EXECUTE Setup Transition Governance Knowledge Transfer Plan Transition People Process Technology Shadow Support Reverse Shadow Support Review Scope Transition Baseline Steady State (Stabilization) Transition Governance Change management Time

21 21 A COLLABORATIVE TRANSITION SCORECARD DRIVES RIGHT INCENTIVES TRANSITION PLAN SKILL MATRIX AND RESOURCING DOCUMENTATION RISK ASSESSMENT - FEMA READINESS CHECKLIST TRANSITION SCORECARD A TYPICAL SCORECARD WILL ENCOMPASS EACH OF THE FOLLOWING AREAS PERFORMANCE INDICATORS KNOWLEDGE TRANSFER CHANGE MANAGEMENT ISSUES AND ESCALATIONS * REPORTING

22 22 GOVERNANCE HELPS REALIZE DESIRED OUTCOMES GOVERNANCE MODEL A robust governance model is layered and addresses day to day operations while considering strategic and enterprise wide objectives. Organizational and Functional Governance is managed by a Global Sourcing Center of Excellence (GSCoE) while Operational Governance is managed by a PMO or VMO Governance Organizational Governance Functional Governance Operational Governance Align business strategy & global services initiatives Guide execution of enterprise wide globalization initiatives Ensure adequate risk mitigation and controls Program sponsorship Coordination, communication & control between process owners Provide for knowledge transfer and knowledge management Opportunity Identification & enable demand aggregation Cross-functional, cross-geography, cross-vendor alignment Manage global sourcing contracts and service levels Manage vendor relationships, performance and resources Manage scope and integration Reporting

23 Internal Supplier Market 23 A BALANCED SCORECARD SUPPORTS BETTER PARTNER MONITORING BALANCED SCORECARD A balanced scorecard methodology and library to create performance transparency and benchmarking capability Market Data (country, city, supplier) Price pressure and trends Wage inflation Operating cost escalation Infrastructure risks SLA Performance, CSAT, etc... Balanced Scorecard Metrics... Transaction Level Performance. Vendor Management Audits... Source: Supply Wisdom SM

24 24 PROACTICE RISK MONITORING AVOIDS DISRUPTIONS RISK MONITORING MODEL Proactively monitors in real-time Countries, Cities and Suppliers globally Shares valuable insights built from sophisticated analytical models Delivers actionable guidance from a team of expert industry analysts RISK RATING NEGLIGIBLE LOW MODERATE HIGH EXTREME SUPPLIER RISKS CITY RISKS COUNTRY RISKS FINANCIAL CLIENTS PEOPLE ALLIANCES SERVICE CAPABILITY GOVERNANCE INFRASTRUCTURE THOUGHT LEADERSHIP MACRO-ECONOMIC FINANCIAL BUSINESS INFRASTRUCTURE GEO-POLITICAL LEGAL SCALABILITY QUALITY OF LIFE MACRO-ECONOMIC FINANCIAL BUSINESS INFRASTRUCTURE GEO-POLITICAL LEGAL SCALABILITY QUALITY OF LIFE Source: Supply Wisdom SM

25 25 ENSURE CONSISTENT & EXTENSIVE SERVICE LEVELS It is important to follow a consistent service level framework SOURCES Used In-house New Created In-house Supplier Provided Advisor Provided Co-Developed (Advisor/Supplier) Peer Shared EVALUATE & DEFINE Impact - What affects the business Influence Will it have an influencing effect on the outcomes Will it manage stakeholders expectations Measurable Can it be measured objectively Relationship - Will the measures contribute to knowledge sharing and on-going improvements MONITOR What Really Matters CRITICAL SERVICE LEVELS (CSL) Leading & Lagging Indicators REPORTING SERVICE LEVELS (RSL) CRITICAL DELIVERABLES

26 26 DEVELOPING PEOPLE SKILLS ENABLES ONGOING SUCCESS PROCESS TRAINING TOOLS Change Mgmt. & Skills Process Frequency Rationale Client Provider SLA Monitoring Daily / Weekly Review SLA Analysis and reporting Monthly Control Calculate & monitor utilization Daily Capacity Estimation/Productivity Calculate Performance Credit, Earn-back Yearly Financial Impact Validate Performance Credit, Earn-back Yearly Financial Impact Validate RCA and track progress Ongoing Operational Excellence Manage Continuous Improvement (SLAs) Ongoing Continuous Improvement Review service level applicability Quarterly Redefining SLAs Publish Business/IT Availability Index Monthly Business Continuity Hiring Fulfillment / Metrics Monthly Business Continuity Monitor critical deliverables Notes Yearly CSAT Engagement Operational Health - check Quarterly Ops and Relationship Improvements Cultural Integration One-Team-Team On-Going Operational Excellence Project Reporting Monthly Control Contractual Compliance Audits Yearly CSAT Legal Compliance

27 27 HEALTH CHECKS CAN ENSURE BEST PRACTICES Executive Sponsorship Goals & Expectations Portfolio Strategy Delivery Model STRATEGY HEALTH CHECK HR Lifecycle Roles / Responsibilities Change Management Communications PEOPLE PROCESS Steady State Governance Transition Performance Productivity / Quality TECHNOLOGY COMPLIANCE Strategy Landscape Roadmap Security Physical Security Technical Security Contractual Delivery Compliance Certifications

28 28 QUESTIONS? THANK YOU! John Bree SVP & Partner USA 129 Newbury St., Suite 400 Boston, MA 02116, USA AMSTERDAM, NETHERLANDS BANGALORE, INDIA BOGOTA, COLOMBIA GUADALAJARA, MEXICO NEW YORK, USA SAO PAULO, BRAZIL SAN FRANCISCO, USA SYDNEY, AUSTRALIA