Program Management

Organizational Change Management

Quality Assurance

Analysis Design Construct Implement

Operate

BOC Strategy Approach

Back Office Cooperative Service Strategy

Develop Business Case

Create Detailed Implementation Plan

Execute Plan and Manage Risk

Analysis

Meeting Discussion• Our Understanding

• Shared Services Methodology

☞ Step I – Determine Back Office Cooperative Service Strategy

☞ Step II – Develop Business Case

☞ Step III – Create Detailed Implementation Plan

☞ Step IV – Execute Plan and Manage Risk

• Case Studies

• Next Steps

Appendix • A – Sample Workproducts and Deliverables• B – Sample Tatum Staff Profiles

The Tatum Shared Services Methodology is focused on bringing the best solution to the Back Office Cooperative. The first stage of the methodology is an Analysis leading to the business case for Shared Servics. As shown in Exhibit 3, our approach is based on a Shared Services Methodology that has been tailored to meet the needs of the BOC and the institutions that it supports.

BOC requires skilled and experienced people in non-profit, program management, shared services, business workflow, change management, and facilities to implement a new SSC. This step is for the first stage in this initiative.

Consisting of five key stages, our approach starts by analyzing the current state and then progresses through the design, construction and implementation of the future, shared services state. The approach ends with an operate stage that provides for ongoing management of the shared services environment.

For the BOC, we recognize that no shared services infrastructure exists today. Our analysis step will be focused on the current member organizations’ support and how to craft a strategy to meet the needs of the different groups.

Analysis: During the Phase, data is gathered and analyzed to gain an understanding of the current state. Data needed during this stage.

• Financial • Operational Statistics • People and Labor • Policies and Procedures

• The primary outcome of this component will be the strategy, organization structure, delivery model and business case for developing a shared service approach.

• The Back Office Cooperative was formed by eight local not- for-profits to defray costs of commonly purchase services

• The cooperative governed by an oversight board and recently installed CEO and is organized as a self-funded cooperative to share benefits among member firms

• A shared purchased function has been established and is functioning for the benefits of members

• Additional services are planned including health insurance and risk management

• The BOC is contemplating a shared services organization to support members and affiliates with HR, legal, IT and administrative support functions

OVERVIEW METHODOLOGY

OUR UNDERSTANDING

Organizational Model ExamplesStep I - Objectives and Key Questions

Objectives:

• Define the organization and structure of the BOC• Set cost and service targets for members and affiliates• Determine required core service offerings• BOC Board directives

Questions:

• What is the role of the BOC to the members and affiliates?

• What are the financial targets, funding strategy and return on the services investment?

• How will the longer term member organizations’ strategic direction influence the role of the corporate center?

• What policy changes are required at each of the members to incent the members to use the BOC services?

• What is the message to the member organizations and public at large?

• What will be the long and short term impacts of the venture to member organizations?

• Are organizations required to participate and how will you incent those entities?

Implementation PlanningStep 3 - Objectives and Key Questions

Objectives:

• Prioritize improvement opportunities • Develop comprehensive implementation plan• Design change management program

Questions:

• What is the one-time cost of implementation?

• How quickly can BOC implement the proposed changes?

• How do we manage the transition while Members migrate services and people?

• How do we build flexibility to pursue other opportunities for BOC services and new affiliates?

• Have we created a communications plan that addresses all stakeholder audiences and their issues/concerns?

Members and Affiliates negotiate the services they needStep 2 - Objectives and Key Questions

Objectives:• Identify cost baseline and savings opportunities• Define operating relationship among BOC, members, and affiliates• Determine investments and cost of service delivery• Identify anticipated employee issues

Questions:

• Can members reduce their current cost structure?

• What do the members need from BOC?

• What services will the members choose to provide for themselves?

• How ready are members and affiliates to take on this change?

• What are the benchmarks to measure BOC against to determine succes?

• How will BOC maintain financial control with greater member autonomy?

• How will shared services demonstrate and report their value to the members and affiliates?

• What employee issues or concerns do we anticipate and how do we leverage communications to address them?

Develop Back Office Cooperative Strategy - Step I Develop Business Case - Step II Create Detailed Implementation Plan - Step III

Intergrated Organization Activist Cooperative Consultative Group

BOC Vision and Strategy

Challenge plans, direction and decisions by members

Active resource allocation

Corporate policy setting

Build leadership talent

Split functions—strong bias towards

BU but maintain some scale-

intensive activities in center, e.g.

Transactional (AP, Benefits Admin)

Corporate Vision

Monitor financial resultsManage Corporate Portfolio

Limited — identify obvious areas for “arms - length” synergies.

Only basic “governance” funtion

• Financial Reporting• Audit• Procurement• HR decision making

All other functions to members and affiliates

BOC vision and strategy

Set detailed operational/financial targets and close monitoring with Members.

Integrated planning with membersEstablish shared organization and resources between members

Provide common, shared services

• HR• Accounting• Legal• Finance• IT• Procurement

Finance

Sourcing

Legal

Other (Insurance, Risk, Energy, etc.)

FUNCTION

Services

MembersIT

IMPLEMENTATIONPLANNING

ImplementationIssues

Team Charter

DetailedImplementation

Work Plan

QUICK WINS

Quick withOpportunities

Weekly StatusReports

CHANGEMANAGEMENT

OrganizationalStructure

TechnologyTools

RedesignProcess

PerformanceMetrics

BOCBOARD

USERS OF BOCSERVICES

Governance Control(Not Optional)

• Management cost not allocated

Optional Services

• Service Catalog

• SLAs

• Market Pricing

• Metric and Measures

Required Services

• Major Transactions

• Competitive Issues & Litigations

• Cash Management Balance Sheet Management

• Compensation Strategy

BoardCharter

StatusReports

RiskManagement

ProjectInvestment