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Annual Shared Services and BPO Conference 2013
Shared services from feasibility
through to implementation
Tibor Nagy & Jeppe Larsen
Key considerations
• Will the corporate vision and goals be reached by implementing a shared services
strategy?
• What functional activities can be transferred to a SSC?
• What would be the impacts on the current structure?
• Captive vs. Outsourcing?
• Standardisation first and then shared services?
• What is a realistic timetable to have the program implemented?
• What will be the implementation costs and ROI?
Deloitte utilises a proven five-phase methodology with all critical work streams
necessary to plan, design and implement shared services organisations and
optimise the performance of existing SSC operations.
Themes to be considered
Security and controls How will we ensure policy and procedures are followed?
Information Technology What applications and IT infrastructure changes must be made?
Processes How must processes change?
People How do we minimise the negative impact on colleagues?
Organisation How must the structure of the organisation change?
Real Estate Management Where will we locate the facilities and how do we optimise our portfolio?
Tax How will we optimise the tax structure?
Change management How will we make change happen?
Vendor management How will we effectively engage and manage 3rd party vendors?
Project management How will we manage the effort?
Value How will we create vision and strategy for the organisation?
Prepare
Assess
Evaluate Confirm Contract
Transition Optimise
Detailed Design Implementation
BPO
Shared Services
Will the corporate vision and goals be reached by implementing a
shared services strategy?
What functions/activities can be transferred to a SSC?
Financial Procurement HR Sales Other admin. Information
systems
Hig
h-v
olu
me
• Accounts
payable
• Accounts
receivable
• Travel and
expense
• Fixed assets
• General ledger
• Financial
controlling
• Reporting
• Transactional
procurement
• Order tracking
• E-catalogue
• Compliance
management
• Contract
management
• Payroll
• Benefits
• Employee
records
• Pension admin.
• HR Master
data
• Customer
service
• Call centre
• Order
management
• Complaint
management
• Claims admin.
• Document
services
• Tele-
communication
s
• PC/desktop
support
• Help desks
• Data centre
Hig
h-v
alu
e
• Cost
accounting
• Treasury
• Tax
• Internal audit
• Budgeting
• Material
specification
• Inventory
management
• Category
management
• Training design
and delivery
• Recruiting
• Relocation
• Nielsen
analytics
• Sales force
efficiency
• Competitor
monitoring
• Social media
analytics
• Legal
• Corporate
affairs
• Security
• Facilities
• Application
development
• Infrastructure
development
and
maintenance
Functional Shared Services vs Global Business Services (GBS)?
Business 1
Region 1 Region n
HR
SSC
F&A
OS
F&A
SSC
Business n
Region 1 Region n
HR
OS
F&A
O/S
F&A
OS
F&A
O/S
HR
OS
Business 1
Region 1 Region n
Business n
Region 1 Region n
Global Business Services
Outsourcing relationships Shared Services Centres
Most common situation Global business services
What would be the impacts on the current structure?
Governance
People
development
Process
ownership
Customer
interaction
Service
management
Culture
Little sharing Full integration
Sharing of
locations
Sharing of tools
and processes
Consistent service
management framework
Single over-arching governance with
one GBS lead, often C-level
GBS competency model and
training curriculum
End-to-end global process owners
Strong GBS culture
and brand
Universal customer interface supported
by standard toolset
Different models per function/BU
Governance by/in function
Specific to centre and/or function
Informal process networks
Different culture at each centre
Myriad of customer interaction tools
Leadership Global leadership across functions Functional leaders per location
Degree of
functional
integration
Systems and
master data
Sourcing
One integrated platform,
centralised master data management
Managed Services blending captive
and outsourcing solutions
Multiple systems and decentralised
master data
In-house and outsourcing, not aligned
Location Integrated global footprint best placed for
labour, cost and expertise Many sites not integrated
Continuous
improvement
Enterprise-wide CI with common
budget and tools CI specific to function/BU
The culture aspect and why it is difficult to get right?
Shared
culture
Company
SSC Location
Outsourcing vs Shared Services
Supplier
maturity
Competition for
talent
Access to best
practice
Focus on core
competence
Economies
of scale
Flexibility
Management of
risk
Breadth of
services
Managing
attrition
Competitive
advantage
Pro Con
Captive vs Outsourcing The reality: More and more organisations are adopting hybrid models using both options
Segmentation
Rationale Model Example
• Desire to hold complex or high-end or
sensitive activities in-house
• Sometimes, inability to get business buy-
in to outsource
• Commonly, IT is outsourced
Competition
Management
Description
• Usage of both in-house
as well as outsourced
models – each in a
clearly defined area
• Axa
• Prudential
• BP
• Create competitive tension to improve
performance
• Reducing risk
• Cater to variable demand
• Usage of both in-house
as well as outsourced
models – in overlapping
areas
• American Express
• Dell
• Leverage local knowledge and local
presence to best manage outsourcers
• In-house entity manages
relationship with
outsourcers
• Ameriprise Financial
Standardisation first and then shared services?
Goal
Now
What is a realistic timetable to have the program implemented?
Step 1
(6-8 weeks) Step 2
(10-12 weeks) Step 3
(2-3 month) Step 4
(2-3 month) Step 5
(2-3 month)*
Step 6
Vision and business
drivers
Functional scope
Design principles
Sourcing strategy
High level benefit
case
Determine baseline
Agree local/central
process split
Governance and
leadership model
Prepare high level
road map
Business case
Location
determination
Organisational
structure
Organisational
design
Governance
framework
Process definition
and documentation
Design enabling
technologies
Site selection
and fit out
Change &
communication
Implementation
planning
Detailed process
and activity design
Testing and cut-over
planning
Training programme
and material
Implement people
plans
Knowledge transfer
Manage transition
and relationships
Solutions go-live
Re-engineering
opportunities
Post go-live
stabilisation
Continuous
improvement
Opportunity
assessment Strategy
(feasibility)
Design
Build
Implementation
Transition
Optimisation
Degree of GBS
integration
Process
documentation
Enabling technology
implementation
* Per unit/cluster
What will be the implementation costs and ROI?
Annual savings
“One time” and
annual costs
Experience tells us:
• Payback time of 2.5-3.5 years
• Single biggest cost is the
organisational transformation
Experience tells us:
• Labour arbitrage is the key driver
• Do not include more then 5% efficiency YoY when
implemented
• Multiple functions adds complexity but drives additional
benefit
© 2013 Deloitte LLP. All rights reserved
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally
separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
Deloitte LLP is the United Kingdom member firm of DTTL.
This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular
circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte LLP would be
pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss
occasioned to any person acting or refraining from action as a result of any material in this publication.
© 2013 Deloitte LLP. All rights reserved.
Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ,
United Kingdom. Tel: +44 (0) 20 7936 3000 Fax: +44 (0) 20 7583 1198.
Annual Shared Services & BPO Conference 2013 14
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