Moving From Shared Services to GBS What Does World-class Look Like?

Transcription

1 Moving From Shared Services to GBS What Does World-class Look Like? Penny Weller, PhD, CMA The Hackett Group

2 Moving From Shared Services to GBS What Does World-class Look Like? Shared Services is a successful, twenty+ year old concept that has worked exceptionally well for many functions including finance, HR, IT, and procurement. What happens when multiple shared services come together to leverage skills, technology and service management? Organizations are now benefiting with a compelling business case for enhanced savings and strategic alignment in an operating model called Global Business Services (GBS). In this session you will learn: Why so many companies are moving from shared services to GBS Which functions are most likely to embrace GBS and to what extent Why moving to GBS can be so political and how to offset those concerns How to build a culture within shared services that will help position your organization to move to a GBS

3 Penny Weller, PhD, CMA Global Business Services Advisory, North America Operations Leader Background: The Hackett Group: Senior Director, Advisory services and CGBS Certification Program Pfizer: Director, Performance Management Pfizer (formerly Pharmacia): Director, Finance Shared Services Motorola-certified Black Belt PhD dissertation: Financial & Business Performance, Malcolm Baldrige National Quality Award Recipients

4 Contents Hackett Overview Why so many companies are considering moving from shared services to GBS Which functions are most likely to embrace GBS and to what extent Why moving to GBS can be so political and how to offset those concerns How to build a culture within shared services that will help position your organization to move to a GBS

5 November 12-14, 2017

6 93% of the Dow Jones Industrials 87% of the Fortune % of the DAX 30 58% of the FTSE 100

7 The Hackett Group s Solution Offerings Advisory & Research Membership Benchmarking Business Transformation EPM, ERP & Analytics Provides ongoing insights into Worldclass performance infused with actionable advice Defines Worldclass performance Transforms performance into World class Designs and implements best practice technology capabilities

8 World-class GBS EFFECTIVENESS Alignment with corporate and business unit strategic goals Enterprise agility contribution Enterprise compliance with financial, operational rules and regulations Delivery of competitive advantage by reducing operating cost Competitive advantage through high-quality services Competitive advantage through business partnering EFFICIENCY Operating cost improvement Productivity improvement Quality improvement Customer service improvement 2X improvements in customer service productivity What World Class GBS Do Differently: 93% of World-class GBS rated as effective or highly effective in enterprise agility

9 Contents Hackett Overview Why so many companies are considering moving from shared services to GBS Which functions are most likely to embrace GBS and to what extent Why moving to GBS can be so political and how to offset those concerns How to build a culture within shared services that will help position your organization to move to a GBS

10 Myth: GBS is well understood and has buy in from everyone Reality: GBS is a complex, powerful organization capable of providing exceptional service while focusing on cost, quality and productivity improvements

11 Global Business Services Reality: Myth # 3 Myth: GBS is a natural evolution from shared services GBS takes a strong commitment and focus to engage employees, leadership, and the businesses they serve in a dedicated approach to operational excellence

12 Global Business Services Reality: Myth # 2 Myth: GBS has been in place a long time and has a wellunderstood framework While shared services has been around since the 90s, customer engagement, an end-to-end process ownership model, and a full GBS perspective is fairly recent

13 Global Business Services Reality: Myth # 4 Myth: GBS is accepted by everyone within the organization GBS is very political; i.e., especially as you broaden the scope end-to-end. Some see GBS as a threat

14 Strategic Choices Complexity Reduction Operational Excellence Customer Intimacy Strategic Enablement

15 Primary & Secondary Reasons Compliance Focus Cost Focus Operational Excellence Focus Customer Focus Risk & Controls World-class KPIs Quality Service Design

16 35% 2X 3X Average initial savings over base (vs. 20% Peer) More effective at contributing to enterprise agility More effective in meeting customer intimacy goals Source: The Hackett Group Digital Service Delivery Model, 2017

17 Business Unit #1 Business Unit #2 Business Unit #3 Economies of scale and skill Improved cost and efficiency Shared Services Improved reporting & details Leveraged technology Customer-centric focus and controls

18 A Shared Services is a functional operating model to organize, deliver, and continuously improve internal business services. VALUE A Global Business Services (GBS) is a global (enterprise-wide), multifunctional model used to organize, deliver and continuously improve internal business services provided to support value producing processes and business units.

19 Performance Motivators November 12-14, 2017 What Can Be Done in GBS? Work Distribution Leveraging Revenue, Gross Margin, Operating Profit BUSINESS UNITS Business Strategy Sales / Marketing / Operations Service, Cost & Strategic Enablement GBS / SHARED SERVICES Service Management Service Delivery Transactions Knowledge Earnings Per Share, Return on Equity, Return on Assets CORPORATE Enterprise / Portfolio Strategy Protection / Performance / Culture

20 Transactions Knowledge BUSINESS UNITS Business Strategy Sales / Marketing / Operations Business Unit Unique Processes Local Market Driven Processes Business Unit Business Intelligence High Automation Customer Intimacy Innovative Business Unit Competitive Advantage Continuous Operations Analytical Diagnostic Business Unit Specific Knowledge GBS / SHARED SERVICES Service Management Service Delivery High Volume Efficiency Focused Repetitive Activity High Automation Easily Measured Performance Consistent Requirements Cross Enterprise Integration Common Technology Platform Leveraged Skills Project / Issue Driven High Cost Skills High Demand Skills Common Analytics CORPORATE Enterprise / Portfolio Strategy Protection / Performance / Culture High Level Analysis Investor Relations Processes High Security Processes High Risk Processes Enterprise Fiduciary Strategic Confidential Companywide Compliance Statutory And Regulatory

21 Scope of Global Business Services November 12-14, 2017 Processes within Shared Services Accounts Payable Fixed Assets Contact Center Travel Expense Credit Cash Application Intercompany Accounting Time & Attendance Payroll Order Management Functional Shared Services Global Business Services Finance Human Resources Information Technology Procurement Supply Chain Finance Human Resources Information Technology Procurement Supply Chain Executive & Corporate Services Sales & Marketing Legal, Engineering, R&D Real Estate, Facilities Supply Chain, Logistics

22 Three-Stage GBS Model Value Stage 3 Agility Innovation Commercial Profile Customer-centric Mindset 7% Enterprise Strategic Enablement Integrated Services Stage 2 Multi-function End-to-end Process Ownership Service Management Enterprise Standards Technology Integration Centers of Excellence Captive Plus Delivery Model 39% Multi-function Shared Services Business Services Excellence Stage 1 Single-function Transactional Standardization Regional Consolidation Transactional Automation Function Aggregation Source: The Hackett Group s Global Business Services (GBS) performance study, % Function Transactional Excellence Focus

23 Operational Performance Stage 1 GBS deliver one-time cost savings and operational performance improvement through consolidation, labor arbitrage and functional standardization Enterprise Value Cost Saving GBS Value Stage 3 GBS organizations have the capability to deliver sustained improvement across all six value levers year over year Risk Management Employee Satisfaction Customer Service Stage 2 GBS deliver one-time cost savings and operational performance improvement by integrating end-to-end process and significantly improving customer service and employee empowerment

24 Contents Hackett Overview Why so many companies are considering moving from shared services to GBS Which functions are most likely to embrace GBS and to what extent Why moving to GBS can be so political and how to offset those concerns How to build a culture within shared services that will help position your organization to move to a GBS

25 % of GBS supporting each function ( ) 84% 84% 77% 79% 43% 41% 40% 38% 55% 59% 51% 52% 26% 22% 22% 27% 48% 53% 50% 37% Finance Information Technology Human Resources Direct Procurement Indirect Procurement % of GBS supporting each function by GBS maturity stage (2017) 70% 88% 100% 31% 44% 60% 39% 63% 90% 19% 35% 40% 36% 61% 90% Stage 1 Stage 2 Stage 3 Source: The Hackett Group s Global Business Services (GBS) performance study, 2017

26 30% 36% 31% 29% 25% 19% 22% 24% 25% 20% 13% 14% Order Management Supply Chain, Logistics & Transportation Real Estate & Facilities Management 30% 36% 31% 29% 25% 19% 22% 24% 25% 20% 13% 14% Order Management Supply Chain, Logistics & Transportation Real Estate & Facilities Management Source: The Hackett Group s Global Business Services (GBS) performance study, 2017

27 Finance Example Accounts Payable Travel & Expense Intercompany Accounting General Ledger Fixed Asset Accounting Cash Application Customer Billing Dispute Management Collections Credit Payroll Cost Accounting Enterprise Consolidation Tax Management Treasury Management Compliance Management External Reporting Business Analysis Planning & Performance Management TOTAL 37% 29% 28% 27% 22% 20% 14% 8% 42% 83% 76% 63% 61% 55% 51% 51% 50% 47% 44% 38% 13% 20% 12% 24% 23% 57% 54% 25% 5% 26% 15% 26% 31% 43% 15% 20% 43% 38% 58% 52% 61% 54% 57% 9% 9% 12% 12% 21% 18% 30% 43% 6% 13% 26% 26% 38% 20% 29% 38% 32% GBS BU Corporate Center Source: The Hackett Group s Global Business Services (GBS) performance study, 2017

28 Contents Hackett Overview Why so many companies are considering moving from shared services to GBS Which functions are most likely to embrace GBS and to what extent Why moving to GBS can be so political and how to offset those concerns How to build a culture within shared services that will help position your organization to move to a GBS

29 Key Focus Areas to Ensure Success Governance consistently applied across functional shared services Customer Experience improved while Focusing on productivity, cost, compliance New capabilities, process standardization, end-to-end process design to enhance business outcomes

30 Consistent management guidance, setting cohesive policies and procedures, and assigning effective decision-rights (RACI) Governance Service Management Service Delivery

31 Getting to the right tables

32 Governance Service Management Capabilities enabling a GBS to align and optimize the delivery of work; strategy, design, transition, operation, and continual improvement Service Delivery

33 Service Management Framework Service Strategy Demand management Service portfolio management Financial management Service Design Supply management Service catalog management Supplier management Service Transition Service migration management Change management Service Operation Contact center management Infrastructure management Service continuity management Continual Service Improvement Quality Improvement Knowledge management

34 Capabilities and performance Financial Management Supply Management Service Continuity Management Quality Improvement Service Catalogue Management Service Demand Management Infrastructure Management Change Management Service Portfolio Management Service Migration Management Knowledge Management Strongest contribution Supplier Management Client Contact Center Management Correlation coefficient Source: Global Business Services (GBS) Service Management performance study, 2011 Weakest contribution

35 Governance Service Management Service Delivery Work delivered based on best practices process design and execution

36 Contents Hackett Overview Why so many companies are considering moving from shared services to GBS Which functions are most likely to embrace GBS and to what extent Why moving to GBS can be so political and how to offset those concerns How to build a culture within shared services that will help position your organization to move to a GBS

37 It s Really Not a Secret Continuous Improvement Service Strategy Voice of the Customer Service Management Service Design Change Management Make It Easy To Do Right End-to-End Processes KPIs and Measurement Governance Celebrate Success Toot Your Horn

38 Questions or Comments? November 12-14, 2017

39 Hackett Performance Studies define and capture how World-class performing organizations are organized, governed, and their savings potential compared to their Peers. The study covers key concepts including service management, governance, performance achievements, technology, and KPIs to assess your performance objectives. Free Studies Participants in these studies will: Learn how you compare with World-class / Top Performers Receive presentation with key research findings and assessment of your performance Participate by joining the Hackett Research Community or contact pweller@thehackettgroup.com

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