Successful Change Mangement in Shared Services

The Journey to World-Class

How to Successfully Run a Change Management CampaignSuccessful Change Management in Shared Services

Presented to:Shared Services for the Public Sector

Penny Weller, PhD, CMASenior DirectorThe Hackett Group

May 5, 2008

Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett Group.

Page 2Finance Shared Services© 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Copyright © 2008 The Hackett Group, Inc. All rights reserved. World-Class Defined and Enabled.

Agenda

The Hackett Group defines world-classWhat is shared services and why are so many organizations implementing? What is shared services and why are so many organizations implementing? How have shared service organizations matured?What are the key trends in shared services?Should shared services be mandated?How to effectively manage change regardless of your decision

Everyone knows the value but how do you get business unit commitment and internal respect– Everyone knows the value but how do you get business unit commitment and internal respect– Getting over the ‘tipping point’ from resistance to a shared vision– The power of metrics


Section One

The Hackett Group defines world-classWhat is shared services and why are so many

i ti i l ti ? organizations implementing? How have shared service organizations matured?What are the key trends in shared services?Should shared services be mandated?H t ff ti l h dl How to effectively manage change regardless of your decision


The Hackett Group defines and enables world-class performance

The use of our intellectual capital enables our clients to implement change to affect their ability to attain and sustain

ld l fworld-class performance– We provide strategic advice and implementation assistance based

on 4,000 benchmarks with leading global companies – Our implementation tools allow our clients to achieve results from

proven best practices of world class companiesproven best practices of world-class companies

Our recommendations address both efficiency and effectiveness of world-class performanceOur efforts have delivered over $90 billion in sustainable cost Our efforts have delivered over $90 billion in sustainable cost savings and $25 billion of improved cash flow improvement through REL, our working capital group for clients across the globeOperating in the Americas Europe and Asia we have served Operating in the Americas, Europe and Asia, we have served clients in 66 countries

Our unique intellectual capital is unparalleled in driving successful performance improvement


Hackett insights are based on work with 2,700 of the world’s leading companiescompanies

97%of the Dow Jones of the Dow Jones

Industrials

73%of the Fortune 100

88%of the Dow Jones

Global Titans

73%of the DAX 30

45%of the FTSE 100


Hackett Value Grid™ − the foundation for how Hackett defines world-class performanceworld class performance

Hackett Value Grid™ (Finance Example)

EFFECTIVENESS

Days sales outstandingDays payables outstanding

EFFICIENCY

Overall function cost as a % of revenue

Accounts payable rework rateCustomer billing rework rateAccuracy of forecasts and analysisFunctional role in strategic

Process cost as a % of revenueTechnology cost per function FTEStaffing levels by processCycle times and iterationsUnit cost of transactionsFunctional role in strategic

decision makingPercent of time analytic focus in on proactive decision makingPercent of time spent collecting and compiling data for analysis

Unit cost of transactionsUtilization of self-service for inquiryApplication complexityAutomation of transactions

and compiling data for analysisPercent of analysts with acumen to function as business partners

Reliance on spreadsheetsPercent of business reports distributed electronically


The cost gap between world-class and average performance has increased by 48% over the last 3 yearsincreased by 48% over the last 3 years

World-class companies are widening their t d t th h

G&A Cost Gap (in millions)$128 0 cost advantage through:

– Process simplification and standardization– Global process sourcing

Offshoring$86.2

$128.0

Shared Service CentersOutsourcing

– Leveraging “emerging” technologies…Imaging and workflowDecision support

$21.5$32.0

$43.1

$64.0

Decision supportWireless technologies

…while also reducing platform & application complexity through standardization

$5 billion companyrevenues



2005 2007

What actions have you taken?


Does being world-class matter?

World-class are $6.3 million

in savings per $1 billion $1.7 million

in savings per 10,000 $1.9 million

in cost savings per

5%

investing more in IT

$8,701$9,19851%

g pof revenue

1.24% 9%

g pemployees

1,9951,822

23%

g p$1 billion of spend

0 63%

0.82%

0.61%

0.63%

Overall IT costper end user

Median WC

Overall Finance costas a % of revenue

Median WC

Overall HR costper employee

Median WC

Overall Procurement cost as a % of spend

Median WC

What are your performance improvement opportunities?


Hackett 2007 Functional Performance Data - Select SG&A Functions

World-class Finance organizations continue to differentiate themselves from the peer groupthemselves from the peer group

• ERP implementation• Beginnings of shared services

Shift from mainframe to client

• Refinement of shared services• Advent of web and self-service

Data warehousing increasing

• Maturing shared services • Globalization

Focus on planning and analysis

Finance cost as a percent of revenue

1.90%

1.40%1.50%

• Shift from mainframe to client server

• Data warehousing increasing• Sarbanes-Oxley

• Focus on planning and analysis

1.40%

1.08%1.24%

1.00%

0.74%0.61%

1992 1994 1996 1998 2000 2002 2004 2005 2006 2007


1992 1994 1996 1998 2000 2002 2004 2005 2006 2007Peer Group World-Class 2007 Finance Benchmark

While world-class firms utilize less labor overall, they minimize relative spending in transactional processesrelative spending in transactional processes

1.24%

0.61%

Labor lelement0.90%Labor element

0.47%


2007 Finance Benchmark

World-class Finance How do they do it - SimplificationHow do they do it Simplification

38% fewer bank accounts 22.4Number of databases, 2007

37% fewer total tax returns53% fewer legal entities57% fewer business performance reports 61%p pproduced routinelySignificantly fewer databases of key information

%

8.7

83%

10.0

83%

1.7

Customer Supplier

World-ClassPeer Group



World-class FinanceHow do they do it - StandardizationHow do they do it Standardization

Business supported by a single ERPPercent of business performance reports generated from a central

50.0%

62.1%data repository, 2007

80%

69%

Peer Group World-Class Peer Group World-Class


2007 BOOK OF NUMBERS™ Research Series: Performance Metrics and Practices of World-Class Finance Organizations2007 Finance Benchmark

World-class Finance How do they do it – Technology LeverageHow do they do it Technology Leverage

Transactions performed electronically – Purchase to Pay

83%Transactions performed 83%76%

Transactions performed electronically – Order to Cash

52%

33%34%

25%

45%

16%

Purchase orders Payments made


Orders received Invoices sent




World-class Finance How do they do it – Technology Leverage extending to self serviceHow do they do it Technology Leverage extending to self service

Percent of companies with a high degree of self-service

126%

70%

122%

71% 72%

126%

31%

122%

32%260%

20%

Payroll Time and attendance Expense reports




Finance is being transformed…..

Traditional Finance Emerging Finance

Analytical

Process & Technology Enablers

servicesAnalyticalservices

Transactionalservices

Transactional Shared ServicesTransactional services

services

Focus Managing The Numbers Focus Managing The Business


Focus – Managing The Numbers Focus – Managing The Business

“The secret of world-class companies’ success—basically, their ability to do more with less lies in getting the mix right: their ability to do more with less—lies in getting the mix right: streamlining processes, embedding controls within the processes, eliminating or reducing manual handoffs, and l i th f ti lit f t h l ti l t d i i leveraging the functionality of technology are essential to driving higher quality and lower overall costs.”

Profile of World-Class FinanceProfile of World Class Finance


Section Two




What is Shared Services? (Definition)

Shared Services is an approach (operating model) used by organizations around the globe to organize and deliver internal support services more efficiently and the globe to organize and deliver internal support services more efficiently and effectively.

It generally involves removing work activities from business units, and standardi ing & consolidating the a in hich those ser ices are deli ered to standardizing & consolidating the way in which those services are delivered to provide value to the business units in the form of reduced overall G&A costs and increased service performance.

The actual operating model is so much more….


Accounts PayableExample Example…

Separate Location

Separate LocationSeparate Location

Shared Services

Economies of scaleImprove overall cost and efficiencyImprove controlsImprove controlsImprove reportingEnhance staff skills and knowledgeLeverage technology


(imaging, workflow, electronic invoicing)

World-Class Finance Shared Services

CustomersStrategic Alignment/

Partnering Employees BusinessUnits Suppliers

People/Organization Shared Services Operations People/Organization

PCustomer Hire Account

t Procure

Shared Services Operations

Process toCash

to Retire

to Report

ToPay

Technology Technology Leverage


Finance Shared Services – Operating PrinciplesPeople and Process

Competency development with growth opportunities and skill development

Strategy, Partnering, and Technology

Comprehensive enterprise-wide strategy and plan with expected business demands, geographies and process scope Streamlined organization with increased spans

of control Managed as an ‘independent business’End-to-end workflows designed for efficiency

geographies, and process scope Formal governance supports strategic initiatives including roles, responsibilities and issue resolution process Metrics program to inspire staff and report as and high team integration

Continuous improvement cultureEmbraced change and process management Service Level Agreements and internal billing to

Metrics program to inspire staff and report as well as market value to key stakeholdersCommon database architectureLeveraged technology; enhanced self-service, automated parallel processes embedded Se ce e e g ee e ts a d te a b g to

drive desired behaviorsMandated or phased in within three years

automated parallel processes, embedded controls and exception reporting


Shared Services - so much more than “centralization”…

Staff Supplier/PartnerSupplier/Partner

Shared ServicesBusiness Unit – Corporate Centralized Processing

Cost CenterControls

Functional Specialist

ppBusinessValueService ProviderAll i t C t

ppBusinessValueService ProviderAll i t C tAllegiance to Departments

Functional Organization Bureaucracy

“My Job Performance”

Allegiance to CustomersPooled ResourcesEconomies of ScaleMeasures and Rewards

Allegiance to CustomersPooled ResourcesEconomies of ScaleMeasures and RewardsMy Job Performance

“Not My Job”Entitlement

Up the Ladder

Measures and Rewards“How Can I Help?”AccountabilityTwo-way Responsibility

Measures and Rewards“How Can I Help?”AccountabilityTwo-way Responsibility

One-way Feedback Metric-CentricPassion for Process Metric-CentricPassion for Process


‘Corporate with a Heart’ - ‘Strong Business Partner’ – ‘Pride of Ownership and Delivery’

World-class organizations use shared services to a greater extent in many processes

95 0%

many processesShared service utilization

67.4%63 8%

71.2%

92.9% 89.7% 90.0%

73.5%

95.0%

63.8%

28 0%

40.0%

58.4%51.8%

15.6%

28.0%25.5%

AP T&E Billing Credit General accounting

Tax mgmt Technology portfolio

Peer Group World-class


Source: Hackett SG&A Benchmark Population 2007

Critical success factors for setting up a shared services

100%

92%Top management support

67%

66%

83%

92%

Embedding a culture of "ContinuousImprovement"

Recruiting appropriate employees forthe SSC

53%

67%

75%Governance of SSO / SSO-Customerrelationship

Improvement

59%

53%

50%

58%

Emphasizing a mentality of "ChangeManagement"

Communicating the project goals toemployees early and often

41%

59%

50%Quick wins in order to build momentum

g

Peer Gro p World Class


Peer Group World-Class2007 Finance Shared Services Performance Study

Greatest risks when setting up a shared services

70%

67%

100%Lack of business unit support

41%

59%

58%

67%

IT problems

Poor service quality

65%

50%

50%

Lack of decision-making authority on

Failure to transition work effectively

30%

30%

25%Business activities are interruptedduring implementation

g ythe service-delivery platform

43%

25%Lack of employee support

Peer Group World-Class


2007 Finance Shared Services Performance Study

Tools with the highest optimization effect

44%

83%Continuous improvement / qualityprogram

65%

75%

83%Single integrated ERP platform

46%

58%

75%

Standard chart of accounts

End-to-end process design

28%

31%

42%Measurement intensive KPI reporting

13%

33%Extensive staff training

World-Class

Peer Group



Shared Services enables world-class performance

38% More Training60% Less Transactional Processing Staff63% Fewer Errors in Billing

Error Rates Hours of Training

100% More Mature Balanced 5% More Technology

Transaction Processing Staff

Finance 100% More Mature Balanced Scorecard Programs

5% More Technology Investment

Finance

B l d S dT h l S d

Peer groupWorld-class


Balanced ScorecardTechnology Spend

Shared services decisions “F ti l A l i ”“Functional Analysis”

How am I performing compared to peers? Develop the business case well enough to achieve

executive and business unit support

“Location Assessment”What location best meets my organization

today and into the future?

“Insource or Outsource”

today and into the future?

“Size of the Prize”How big is the Opportunity from

Insource or OutsourceShould I implement a shared services strategy with my internal team or partner with an outside

organization?

How big is the Opportunity from Shared Services?

“Process Transformation”How do I design my processes to take

advantage of best practices? How to measure


g psuccess? KPIs, Scorecards

Reasons for selecting the SSC location

20% 20% 20%

15% 15%

18%

15%

10% 10% 10% 10%

15% 15%

12%

15%

1%

5%

Labor arbitrage Employee skills /languages

Low risks Exceptionalinfrastructure

Culturally acceptable Time zone availability Existing facility




World-class shared services

1. Leadership support and execution2. Passion around process3. Customer respect4 Sourcing and technology4. Sourcing and technology5. People-driven culture


1. Leadership support and execution

Project plan accepted at the topWalk the talk– don’t “back down” – acknowledge as a key initiative

Build “tension” – stretch goalsBuild tension stretch goals– Performance gaps– Make the “tough” decisions– Sense of urgencySense of urgency

Assign “stars” – transformation team, global process owners


2. Passion around process

Metric-centric: (scorecards, strategy maps)– Quality, Cost, Deliveryy y

Benchmark End-to-end process designVal e ideas and creati itValue ideas and creativity– Quick wins!

Continuous improvement– 6 Sigma, LEAN– Activity based management Qu

ality

Time


Finance Shared Services – Savings without a formal continuous i t d lt i l

Achieved

improvement process and culture in placePlanned

6%

9%

14%

9%6%

11%

25%

6%

31%

31%52% 31%52%

69% of SSOs plan to save 20% or more costs69% of SSOs plan to save 20% or more costs 46% of SSOs have saved 20% or more costs46% of SSOs have saved 20% or more costs69% of SSOs plan to save 20% or more costs69% of SSOs plan to save 20% or more costs

21 to 40%41 to 60%>60% 11 to 20% 1 to 10%

46% of SSOs have saved 20% or more costs46% of SSOs have saved 20% or more costs

No Change



A5

Finance Shared Services – Savings with formal continuous i t d lt i l

Achieved

improvement process and culture in placePlanned

2%

16%7%5%

16%19%

5%

30%

45%45%55%

77% of SSOs plan to save 20% or more costs77% of SSOs plan to save 20% or more costs 81% of SSOs have saved 20% or more costs81% of SSOs have saved 20% or more costs77% of SSOs plan to save 20% or more costs77% of SSOs plan to save 20% or more costs

21 to 40%41 to 60%>60% 11 to 20% 1 to 10%

81% of SSOs have saved 20% or more costs81% of SSOs have saved 20% or more costs

No Change



A6

With Quality Program - Lower Accounts Payable Cost

Accounts PayableProcess Cost per invoiceProcess Cost per invoice

$4.30

$2.6838%

With Quality Program

Without Quality Program


Source Hackett Process Benchmark Research

End-to-end process design

Organization appoints global end-to-end process owners within shared i h h ibilit f t d di ti d services who have responsibility for process standardization and process

direction on a global basis– develop targets– accountable for process p– measure success


End-to-end: Key Reasons to Implement

40

45

50 Leverage technology

Align with business strategy

30

35

40 COMPLIANCE ISSUES

Optimizing talent

ENTERPRISE TRANSFORMATION

20

25ENTERPRISE TRANSFORMATION

REDUCE COST & FTE

Reduce infrastructure costs

5

10

15Reduce infrastructure costs

Working capital

QUICK WINS

0

5

First Reason Second Reason

Standardize services

Scalability


2008 Finance Shared Services End-to-End Study

End-to-end: Key Challenges

60

70

40

50 Business case supportCOMPANY CULTUREDecentralized processes

20

30

pNon-standard processesTop leadership supportMultiple operating systems

10

20 p p g ySense of urgencyStrategic direction

0First Reason Second Reason Not a Reason


2008 Finance Shared Services End-to-End Study

3. Customer respect – internal partnerships

Service Level Agreements – two way relationshipMarket the center – clear messaging - ‘VALUE MARKETING”Market the center clear messaging VALUE MARKETINGConnections – integrate with other initiatives and teams, customer councils, governance

Invite self and promote contributionsInvite self and promote contributions

Alignment of functional priorities with businessCustomer surveys – leader involvementComplaints are gift


Organizations utilizing Service Level Agreements (SLAs) have lower costs per transactioncosts per transaction

Accounts PayableCost per invoice

Travel Expense Cost per record (1st Quartile)p

(1st Quartile)Cost pe eco d ( Qua t e)

$6.03

72%

$1.56

$1.6872%

$.8744%

>60% SLAUtilization

<20% SLA Utilization >60% SLAUtilization

<20% SLA Utilization



Definition: Service Level Agreement

A Service Level Agreements (“SLA”) is a management tool primarily to manage expectations for service delivery It is a A Service Level Agreements (“SLA”) is a management tool

primarily to manage expectations for service delivery It is a primarily to manage expectations for service delivery. It is a partnership agreement between an internal service provider

(Shared Service) and its customers (Business Unit).

primarily to manage expectations for service delivery. It is a partnership agreement between an internal service provider

(Shared Service) and its customers (Business Unit).


Objectives of Service Level Agreements

Describe service offerings – scope of workClarify roles and responsibilitiesClarify roles and responsibilities– Shared Service– Customers

Set mutual expectationsp– Establish “partnership”– Definition of service quality

Reaffirm the commitment to serviceEstablish metrics and performance standardsDefine billing process“Stake in the ground” for cost reduction or improved effectivenessStake in the ground for cost reduction or improved effectivenessGovernance and issue resolution


Common Characteristics of SLAs

Tied to organization’s strategy and customer needs“Two way” street roles and accountabilitiesTwo-way street – roles and accountabilitiesMeasurable with defined process boundariesSLA and costs typically reviewed annuallyFlexible Catalyst for change and improvements


Typical Components of a Service Level Agreement

Services Provided– A comprehensive description of the services

provided

Customer Commitment– A comprehensive outline of customer

requirements that will enable the provider to providedCustomer Service

– An outline of how the provider organization will service the customer, specifically detailing the contacts for services, and hours of availability

requirements that will enable the provider to meet specified performance level commitments

Process Improvement– A description of process improvement initiatives

to be undertaken by the provider, customer or , yCost Information

– A description of the proposed charges for services provided. This should increase transparency, clearly specify cost drivers and b k d h i b i

y p ,jointly, for the term of the agreement, and the expected benefits associated with these improvements

Issue Resolution / Escalation ProcessA tli f h i d di t ill break down charges on a service-by-service

basisExternal Benchmarks

– A comparison of current performance services levels and cost against external benchmarks

– An outline of how issues and disagreements will be resolved between the provider and the customer

– Specify the escalation process within the Shared Service Center and through the levels and cost against external benchmarks

Performance-Level Commitments– Commitments by the provider based on Key

Performance Indicators (KPI)

governance structureTerms

– The length of time over which the agreement is enforced


4. Sourcing and technology

Focus on reducing business complexityAlignment of functional priorities with businessL i ROI t h l f b th t ti i Leveraging ROI on technology for both transaction processing as well as information access


5. People-driven cultureClear purpose and mission

– Engagement

Create the culture – Encourage risk taking– Celebrate success

Formal change managementg gFormal process managementMetrics that focus on desired behaviors –

fperformanceCommitment to invest in people


Degreed and Certified Shared Services’ Employees

100%

80%

100% 100%

50%

40%48% 50% 50%

60%

30%

20% 20%25%

Management Degreed ManagementAdvanced Degreed

ManagementCertification

Professional Degreed Professional AdvancedDegreed

ProfessionalCertification

Clerical Degreed




Finance Shared Services – Level of Success in Targeted Benefits

3%

Improve Service, Quality, Accuracy and Timeliness

Group Similar Tasks and Expertise for a Critical Mass

2%7%

Corporate Strategy

1%

45%52%51%

27%

45%40%

Reduce Headcount and Salary/WagesReduce Administration CostsReduce Redundant Tasks

LowMedium World-ClassHigh None

72%

y gReduce Administration CostsReduce Redundant Tasks

12%

37%

5% 7%

40%

13%

46%

53%

49%

38%


46%2007 Finance Shared Services Performance Study

Result of SSO Implementation

Productivity Customer ServiceQuality

10% 9%1%

13%

13%

1%9%4%

16%

3% 7%11%

25%21%

25%

23%

17%

89% of companies saw more 89% of companies saw more 79% of companies saw more 79% of companies saw more

34%35%

23%

23%

89% of companies saw more than 10% of productivity

improvement

89% of companies saw more than 10% of productivity

improvement82% of companies saw more

than 10% of quality improvement82% of companies saw more

than 10% of quality improvement

79% of companies saw more than 10% of customer service

improvement

79% of companies saw more than 10% of customer service

improvement

21 to 40%41 to 60% World-Class>60% 11 to 20% 1 to 10% No Change Negative Impact


g g p


Accounts Payable process cost as a percent of revenueProcess cost = labor and outsourcing costs Process cost labor and outsourcing costs

0.394%Accounts Payable Accounts Payable Process Cost Process Cost Accounts Payable Accounts Payable –– Process Cost Process Cost

0.035%0.055%

0.022%0.048% 0.055%

Accounts PayableAccounts Payable

1st Quartile Median 100% Shared Services > 75% 0 - 25% None

Process cost with various levels of shared services


2007 Finance Hackett Functional Benchmark

Travel Expense Reporting process cost as a percent of revenueProcess cost = labor and outsourcing costs Process cost labor and outsourcing costs

0.180%

Travel Expense Reporting Travel Expense Reporting Process Cost Process Cost Travel Expense Reporting Travel Expense Reporting –– Process Cost Process Cost

0.004% 0.009%0.001% 0.003%

0.010%

Accounts PayableAccounts Payable

1st Quartile Median 100% Shared Services > 75% 0 - 25% None

Process cost with various levels of shared services


2007 Finance Hackett Functional Benchmark

Section Three




Four stages in the development of Shared Services

Consolidation

• Focused on bringing processes and systems under one roof

Standardization• Focused on standardization of

policies, procedures and technologyO i f i i i

Optimization• Integration of optimized processes,

technology and organizationHi h d f i

Virtualization• Leverage advanced technologies• Physical location(s) less important

1 2 3 4

• Located near Corporate or major customer

• Viewed as part of Corporate

• Centralization rather than true shared services

• Outsourcing of non-core activities• Informal Governance Board• Multiple systems in use by customers• Customer relationship managers

identified

• High degree of process improvement• Continuous improvement embedded• Move to optimal location(s)• Selective outsourcing • Standardized enterprise system

• Contact Centers established to support stakeholder inquiries

• Continuous re-invention• Expansion of services / scope

including expertise services

• Disparate IT systems

• Relationship with Customers characterized by anger and conflict

• Silo based organization

• Cost focused - clerical skills and

• Contact embedded in functions, some use of Contact Centers in selected functions

• Team based organization around process, sub-functions, or applications

• Use of imaging; workflow & other enabling IT tools

• Customer focused; self-directed teams

• Contact Center

• Open for competition with external providers; outsource where not best-in-class; external profit center approach

• Balanced scorecards integrated with customer strategy

Cost focused clerical skills and processing efficiency

• Scope restricted to transactional processes

• Funded by Corporate

• Functional experts• Some performance reporting• Service offerings defined; charge

backs established

• Balanced Scorecards• Detailed SLA • Variable pricing• Formal Governance Board• End to end process design

• Menu pricing• SLA / strong customer focus• Governance Board stresses

expansion of SSC model• Growth oriented business model to

leverage scalep g leverage scale• Marketing & Business Development

team• R&D: new service offering

development• Optimal organizational structure


Many have achieved initial success - what’s next ?

Expanding scope of servicesExpanding geographies and sourcing solutions

World ClassOutsourcing / OffshoringGlobal hubs / Regional centersCompetency centers

World-Class

Vi t li ti

Standardize

Process Management &

Technology

Offshoring Outsourcing

Virtualization‘location neutral’

ConsolidateStandardize gy

Leverage

|-----Optimization -----|


Section Four




Finance Shared Services – Moving Up The Value Chain

Strategy

Decision Support

Transactions

Shared Service Organizations are eliminating work as they deliver benefits, and are taking on additional responsibility for decision support activities

Eliminate . . . Automate . . . Offshore


responsibility for decision support activities

With decision support processes being added to the mix, a new chapter is being written in the history of shared serviceschapter is being written in the history of shared services

Historically, the shared services story has essentially been the consolidation of transactional processestransactional processesThat story is changing; increasing numbers of companies are moving higher-value finance processes, such as performance reporting and business analysis, i t h d i i tiinto shared services organizationsMoving activities performed in shared services further up the value chain is a core element of the emerging finance delivery model


2007 BOOK OF NUMBERS™ Research Series: Performance Metrics and Practices of World-Class Finance Organizations

Scope of Finance Shared Services – Decision Support

Today Future

50%Business 75%Business

0%

20%

30%Outlook / InterimForecasting

PerformanceReporting

41%

26%

75%Cost Analysis

PerformanceAnalysis

0%

20%

25%BusinessPerformance

Analysis 41%

50%

63%

Business

Cost Accounting

0%

0%

20%

20%

Budgeting

Cost Analysis

25%

41%

38%

50%

Budgeting

PerformanceReporting

3%

10%Cost Accounting

Peer Group World Class

22%

25%Outlook / InterimForecasting



Peer Group World-Class Peer Group World-Class


Section Five




Organizations with mandated shared services have lower cost per transaction in AP and Fixed Assetstransaction in AP and Fixed Assets

Accounts PayableTotal Cost per invoice

Fixed AssetsCost per asset record (median)p

(median)Cost pe asset eco d ( ed a )

$10.64$35.88

$4.4758%

$7.0380%

Mandated Not Mandated MandatedNot Mandated



Organizations with mandated shared services have higher utilization of SLAs and conduct customer satisfaction surveys more oftenSLAs and conduct customer satisfaction surveys more often

Service Level Agreementsin place

Conduct customer satisfaction surveysp y

72.7%61.6%

37.5%39%

16.7% 77%67%

MandatedNot Mandated MandatedNot Mandated



Organizations with mandated shared services support higher technology standardization and an independent mindsettechnology standardization and an independent mindset

Adopted common database across applications

Manage center like an independent businesspp p

40.0%80.0%

12.5% 84%

0.0% 100%




Organizations with mandated shared services met planned savings more frequently and support a distinct culturemore frequently and support a distinct culture

Having shared services has met planned savings

Support a separate and distinct culturep g

83.3%92.3%

66.7% 20% 66.7% 28%




Organizations with mandated shared services evaluate outsourcing less often and perform external benchmarks more frequentlyoften and perform external benchmarks more frequently

Shared services periodicallyevaluates outsourcing

Performs process benchmarking on a regular basisg on a regular basis

57.1%69.2%

30.8% 46%

37.5% 46%





Shared services publish performance metrics to customers

Major changes are agreed upon with customers before implementationp

61.5%92.9%

19%75.0% 19%

25.0%59%





Having shared services has met planned savings

Support a separate and distinct culturep g

83.3%92.3%

66.7% 20% 66.7% 28%




Organizations with mandated shared services support higher technology standardization and an independent mindsettechnology standardization and an independent mindset

Adopted common database across applications

Manage center like an independent businesspp p

40.0%80.0%

12.5% 84%

0.0% 100%




Organizations with mandated shared services have higher utilization of SLAs and conduct customer satisfaction surveys more oftenSLAs and conduct customer satisfaction surveys more often

Service Level Agreementsin place

Conduct customer satisfaction surveysp y

72.7%61.6%

37.5%39%

16.7% 77%67%




Section Six




Change management

Span of ControlAccounts Payable (Median)

12 0

Travel Expense Reports per FTE(1st Quartile)

26 667

8.83

12.0

26%

26,667

5,461 79%5,461

With Change Management

Program

Without ChangeManagement

Program

With Change Management

Program

Without ChangeManagement

Program



Change Management Process

AssessmentClassify each business change (new modified retired)Classify each business change (new, modified, retired)Identify effect of each change (workload, skills, level of responsibility)Identify action for managing change (communications, job alignment, training, end-user support)Based on assessment develop plans –

– Communications– Job Alignment– Training– End-user Support

Note: Support from change must come from the highest levels of the organization to be effectiveGovernance must transcend politics, administrations, and you…


Governance must transcend politics, administrations, and you…

Change Management

Implementing the change – developed a viable plan – high-level plan, detailed project plan, new org charts, considered salary impactsp j p , g , y pInvolved staff in developing the plan

– Reception to ideas from lower-level managers– Team meetings to keep all staff involved and to listen to their suggestionsTeam meetings to keep all staff involved and to listen to their suggestions– Foster an environment where even the lowest classification of staff feel empowers to make

suggestions

Sell the plan to upper managementp pp gEnsure all staff are aware of the organization’s objectives through routine communicationsAdmit that change can create other problems it may not be smooth sailing for a Admit that change can create other problems – it may not be smooth sailing for a whilePromote opportunities for managers to meet with executive leadership


Change Management

When necessary, remove managers that create roadblocks to changeProvide as much training as possibleProvide as much training as possibleGive staff opportunity to work on new projects

– Combined seasoned veterans with less experienced innovative staff

Prepare with the project team– Assess the change– Assess the culture

Manage the strategy– Develop and manage the plan– Track / report readiness– Develop the training strategy


Change Management

Reinforce / Support– Celebrate success– Analyze feedback and prepare to manage resistance

End User Assessment -- End user inventory assessment– End-user identificationEnd user identification– Skills Gap analysis


Senior Executive’s Role

The change and impact on the organizationWhy is this system / change necessary present the benefitsWhy is this system / change necessary – present the benefitsAlign the change with the vision / mission and strategic direction of the organizationIdentify business risks of not changingOffer a broad overview of how the organization will transform – what & whenMake sure the organization knows this will happen – not an option


Management’s Role

Provide the ‘what’s in it for me’ information -- how will roles change?How will I get the training to do my new job (will I be able to do the job)?How will I get the training to do my new job (will I be able to do the job)?Ask for employee’s ideas / suggestions for implementing the changeProvide timely and accurate status


Additional ContentChange Management in Shared Services: IntroductionWhat Changes with Shared ServicesTransition Vs TransformationTransition Vs TransformationChallenges for Change Management

– Typical Issues that Arise in Change Project LifecycleI li ti f Ch ll M i Sh d S i C t– Implications of Challenges: Managing Shared Service Center

– Change Management Within The Business Cycle– Change Management Strategy: Process


Additional Content - ContinuedFramework for Change Management in Shared Services

– A Generic Business Unit Transition Plan– Change Management Activities Across the Shared Services Lifecycle– Shared Services Initiative Project Structure– Client-Side Business Change: Team Structure and Activities– Phases Involved in Planning The Change– Planning For Change– Planning For Change– High Level Transition and Transformation Scheduling

Key Success FactorsP f MPerformance Measurement


Change Management in Shared Services: IntroductionChange management is a critical part of a project that leads, manages and enables people to accept new processes, technologies, systems, structures and values

The focus of change management is to address the people and organizational factors The focus of change management is to address the people and organizational factors that will both drive and obstruct change throughout the organization

– Over 80 percent of projects fail when Organization Transition Issues are not addressed

Th lti t l f h i iti ti i t i th i ti i The ultimate goal of any change initiative is to ensure everyone in the organization is ready, willing, and able to appropriately perform their role in the new environment

In the context of a Shared Services program, the goals of change management include:p g g g g– Minimizing disruption to the organization during transition– Guiding the people directly impacted by the movement to the Shared Services model through the change– Establishing the right kind of leadership and structure to support the Shared Services organization's

objectives– Creating the demand for Shared Services– Services among its internal customers


Source: http://www.accenture.com/NR/rdonlyres/43AE308C-1904-453D-8C3B-43B50CD04F6B/0/120168_ManagingShared_v9.pdf

Change Management in Shared Services - Cont’d..

Shared Services change management programs encompass many elements, including– Communication & Sponsorship– Ownership and Accountabilityp y– Workforce transition and Training– Change readiness & Implementation– Rollout and Stabilization

Two main things change in a Shared Services program– The delivery of in-scope services from a Shared Services operation, working with a customer/supplier

orientated culture, based on common best practices often with employee and manager, self service and , p p y g ,automated reporting. This involves setting up a new operation to deliver the services; often in a new location with new systems and a customer service orientation. This aspect is referred to as the Transition to Shared ServicesA f f ‘ t i d i ti ’ l dd d ti it i t f th f tli Thi i l – A new focus for ‘retained organization’ on value added activity in support of the frontline. This involves working with the business to reposition the role of Finance, HR, etc. and the associated changes to organization structures and skills within the retained functions. This aspect is referred to as the Transformation of the retained function


Source: http://www.outsourcingleadership.com/VolumeThree.pdf


Transition Vs Transformation

Transition is defined as the program of work required to finalize the design, manage the

procurement; build and implement the agreed multifunctional shared service

T f ti i d fi d th ti iti i d t li d i th k f th Transformation is defined as the activities required to align and improve the work of the

retained HR and Finance functions in each department and also to provide a program

office support to manage both the transition and transformation activities

The key activities are shown in the table on the next slide



Challenges for Change ManagementTh t f th h l d ith th l it f th Sh d S i The nature of the change, coupled with the complexity of the Shared Services implementation, gives rise to a range of change management challenges, including:

– Lack of visible sponsorship: The change is not perceived to be important or even happeningU l i ff i d i i ki R d d f i l i ddi i l i & – Unclear, ineffective decision-making process: Reduced pace of implementation; additional cost: time & rework; Lack of vision, direction and focus. Lack of buy-in; other priorities to be made

– The right people aren't involved: Delayed decision making; no sense of urgency; rework required by additional resources. Failure to remove organisational barriers. Project delays and could ultimately failadditional resources. Failure to remove organisational barriers. Project delays and could ultimately fail

– Not anticipating and pro-actively managing people issues: Increased resistance; attrition; employee relations issues

– Skills for new/changed jobs or roles are assumed and not tested/assessed: Training effort insufficient –additional effort required/reduced service level; unmanaged staff expectations

– Planned organisational rationalization is not achieved: Staff are retained without a real need– Finance/HR resistant to letting go of certain current responsibilities which may in future be no longer theirs– Reluctance to change behavior: Temporary double effort; benefits aren't reached (as quickly).

Underestimating the time and effort required to make the change stick– Lack of baseline/ metrics/ system to measure progress


Typical Issues to Arise in Change Project Lifecycle


Typical Issues to Arise in Change Project Lifecycle – Cont’d..


Typical Issues to Arise in Change Project Lifecycle – Cont’d..


Implications of Challenges: Managing Shared Service Center

Managing the effective planning of the potential redeployment, relocation and release of staff

Scheduling change to minimize the impact on the business units to enable maintenance of business as usual

Ensuring effective transition of individual business units to a new structureEnsuring effective transition of individual business units to a new structure

Building involvement in the development and delivery of SSC to create the understanding of the need for changeunderstanding of the need for change

Engaging with impacted staff to involve them in the process of transition

Managing effective two-way communication with all stakeholders during the projecta ag g e ect e t o ay co u cat o t a sta e o de s du g t e p oject

Embedding the cultural change and ways of working associated with a shift to a more customer focused support service


Change Management Within The Business Cycle


Source: http://www.sharedservices.qld.gov.au/Publications/Documents/ssi_changemanagementframeworkjun07.pdf

Change Management Within The Business Cycle: ImplicationsThe Shared Service Initiative involves significant reforms to establish Shared Services, standard processes and systems that will help achieve the vision of high-quality cost-effective corporate serviceseffective corporate services

To do this, change management objectives and strategies must be embedded within the business cycle of Shared Service providersbus ess cyc e o S a ed Se ce p o de s

The improvement cycle is critical due to the dynamic nature of change. – Change activities should be continually assessed through results and stakeholder feedback. This

information is used to evaluate and improve change activities, and reassess objectives and approaches

Strong relationships with key Stakeholders are needed to identify and address unforeseen and emerging issues


Change Management Strategy: Process


Change Management Strategy

The SSI Change Management Framework provides strategic directions and

approaches that guide operational change management planning for the SSI,

and for specific SSI projects and business units

Operational change management planning is highly tailored to different

stakeholders’ specific needs and interests and specific organisational contexts

Successful change management methods and information about stakeholders’

needs can then inform regular revisions of the SSI Change Management

Framework

This provides a process for knowledge management, innovation and

continuous improvement of SSI change management


p g g

Framework for Change Management in Shared Services


Change Management FrameworkThe extent of the change (both actual and perceived) and the implications are significantThe purpose of Change Management Framework is to outline an approach and methodology to manage all the complex work-streams and the numerous stakeholders involved in successfully moving to a Shared Service operation

– The diagram in the previous slide describes a framework for Change Management– The segments in the wheel describe the various components that fit together in order to support and deliver

the end result (i.e. the SSC vision and the transformed function)It is important that all segments are addressed in order to ensure the success of the Shared Service initiative– It is important that all segments are addressed in order to ensure the success of the Shared Service initiative

Culture– This includes confirming the case for change and how the Shared Service initiative will contribute to realizing

the organization's strategic goals and assessing the capacity and readiness of both individuals and the the organization s strategic goals, and assessing the capacity and readiness of both individuals and the organisation to assimilate change

– It is important to identify and articulate potential blockers and to agree strategies and plans to deal with these so that they do not derail the initiative

Organisation– This covers design of the new world, including the operating model, organizational structures, role definitions,

competency frameworks, and governance and decision making frameworksC h ld b t k t d i li ti d ff ti i t f b t th Sh d S i bilit d


– Care should be taken to design realistic and effective interfaces between the Shared Service capability and the retained organisation

Change Management Framework- Cont’d..LeadershipLeadership

– This activity aims to clarify how the organisation will be led, and to equip the leaders to carry out their leadership roles

– Specific activities include defining the role of the leadership team, how the leadership team will work p g p , ptogether both during implementation of Shared Services and subsequently, and the roles and responsibilities of individual leaders

– This activity may identify the need for training and coaching of leaders and potential leaders

People Capability– This activity aims to establish new skills and competencies required for the changed enterprise, and how to

meet those requirements, including skills audits, gap analysis, job and role definitions and career planningq , g , g p y , j p g– Involvement of those who will lead the new organization is key to the success of this activity

ExecutionThi ti it d li f th d l It i l d b th h d d li bl i th f f j t – This activity ensures delivery of the new model. It includes both hard deliverables in the form of project plans, milestones, progress reports and budget analysis, and soft deliverables in the form of communications and stakeholder management


Change Management Framework- Cont’d..

Continuous Improvement– This covers post change activities and includes frameworks and processes (e.g. performance

management, balanced score cards and reward alignment) to measure the effectiveness of the changes, and mechanisms to ensure that opportunities for further improvement are identified and actions are taken in a timely manner

– It is important to manage the expectations of all those impacted by the Shared Service initiative, so that they become accustomed to the idea that change will be a constant feature of the new model

Implementation map for the Change Management Framework– These various elements can be put together in a program change plan as shown in the next slide

– This transition plan is an example of how the various dimensions of the change wheel fit together– This transition plan is an example of how the various dimensions of the change wheel fit together

– A Process and Technology stream is included as an example for completeness, although this is not always included in a change management plan


A Generic Business Unit Transition Plan


Change Management Activities Across the Shared Services Lifecycle








Shared Service Initiative Project StructureDelivery side/Client side model:

– The model that is gaining acceptance within many organisations to construct a project or programme to deliver Shared Services is the “Delivery Side: Client Side” model. This model utilizes the Transition/Transformation work streams

– The Delivery Side team will be responsible for the Transition activities. Where the Shared Services are to be outsourced, the outsourcer is likely to take responsibility for the majority of the activities. For in-house S S f S SShared Services, often a Shared Services director will be appointed early in the program and that person will take responsibility for the transition activities

– The Client Side team will take responsibility for the Transformation activities. In some instances there will be several customers for the new Shared Services operations In this case there may be a central Client be several customers for the new Shared Services operations. In this case there may be a central Client Side team, with business unit teams

– Overall programme management is usually undertaken by the Client Side team, with input from the Delivery TeamTeam

– A sample Client Side business change team structure is shown in the next slideThe structure is for a typical large-scale Change Program and shows how the activities outlined in Change Management Framework can be organized


g g

Client-Side Business Change: Team Structure and Activities


Client-Side Business Change: Team Structure and Activities- Cont’d..Th C i ti k t i ibl f t k h ld t d The Communication work-stream is responsible for stakeholder management and communications at all levels within the organisation, and for liaising with external communications as appropriate

– This work-stream starts at the very beginning of the initiative and continues through its life and is typically supported by one FTE

The Business Change work stream is responsible for implementing the agreed The Business Change work-stream is responsible for implementing the agreed changes across a range of disciplines

– The work-stream kicks off with early-stage activities such as change readiness assessment, and continues through the main implementation activities. It is typically supported by a small team of 2-6 FTEs depending on the size of the initiative

The Training and User Support work-stream is responsible for delivering the one-off g pp p gand ongoing education and support necessitated by the changes

– It starts at the beginning of the initiative with planning and training needs/skills gap analysis, and continues through to post-Implementation support It is typically supported by one FTE


through to post-Implementation support. It is typically supported by one FTE

Phases Involved in Planning The Change


Planning For ChangeThe journey to Shared Services/BPO usually starts with a series of evaluations of the options, starting at a high level, with successive drill-downs into more detail as the opportunity and understanding develops

– The Planning snapshot on the previous slide has three Evaluation iterations (Research, Feasibility and St t )Strategy)

The Research stage is often undertaken to understand the potential that Shared Services/BPO has to offer; usually this is done by analyzing what other organisations have

i d d l i th t l i t th t it tiexperienced, and applying that learning to the current situation– If this research gives a convincing argument that Shared Services may be beneficial, then usually a feasibility

study is undertaken

A feasibility study is a relatively high level exercise which enables the organisation to A feasibility study is a relatively high-level exercise, which enables the organisation to understand the options, and the likely order of magnitude costs, benefits and business case

– It will usually focus more on the strategic drivers and options rather than on the detail of the Shared Services – It will usually focus more on the strategic drivers and options, rather than on the detail of the Shared Services solution. Assuming that the feasibility study is positive, and the organisation wants to proceed, then a more detailed strategy will be developed

– The Shared Services strategy articulates the end goal (operating model, process scope and outline design, sourcing financing)


sourcing, financing)

Planning For Change- Cont’d..Evaluation Phase: The work on Change Management is done in the Evaluate phase Evaluation Phase: The work on Change Management is done in the Evaluate phase as follows:

– General Change Management Activities: When the project is first established, a change management work stream will need to be created to handle the stakeholder management and communications activitywork stream will need to be created to handle the stakeholder management and communications activity

– Research: The research phase of any Shared Services programme is usually the first point at which the possible implications are first understood (for example, other companies may have experienced redundancies or other major change issues)

This is when the Change Management issues of stakeholder management and communication first need to be addressed, because although research work is often just exploratory in nature, people can still experience concern over the uncertainty and potential impact of the outcomes

– Feasibility Study: The feasibility study is a strategic stage – with the primary focus on understanding the Feasibility Study: The feasibility study is a strategic stage with the primary focus on understanding the business need, the high-level options, the likely shape of the operation (its scope, how it will work), the potential sourcing options, the likely risks, implementation options and timescales

– This stage is about the principles of Shared Services and the strategic fit – it is not about agreeing absolute detail (e.g. discussing the detailed scope of Shared Services, or which processes are in/out etc)

– The change management work will focus primarily on obtaining the buy-in of the executive team. This stage is about a strategic decision, so it is important to articulate the need for the change and the potential solution as well as the potential impact of the solution


potential solution, as well as the potential impact of the solution

Planning For Change- Cont’d..– Strategy: This stage is about developing a clear strategy for Shared Services. This Shared Services strategy

will articulate the future model and timing (including sourcing options in house or BPO) based on a detailed will articulate the future model and timing (including sourcing options in-house or BPO), based on a detailed understanding of the current metrics and a robust assessment of the available options for improvement

At the end of this phase the organisation will have a high-level blueprint of the processes, systems, commercial and operating models, plus a business case and an implementation approachIt is at the strategy stage that the real implications of Shared Services will become apparent. There will be clarity on the scope of services, organisation changes, changes to systems and processes, and the people impact such as possible redeployments and redundanciesChange management will focus on obtaining buy-in and managing expectations at all levels

The Implement phase:– The implementation activity in the Lifecycle usually takes one of two routes. Either ‘build and operate in-

house’ (Shared Services) or ‘outsource’ (BPO)– In the in-house model, the organisation will design and build the Shared Services operation, and then

transition and operate the service– With outsourcing, most of the build and design work is done by the outsourcer, and the organization's main

responsibility is to design and operate the retained function, and to ensure successful transition of the responsibility is to design and operate the retained function, and to ensure successful transition of the services to the new (outsourced) service provider

– In both cases, the change management activities are broadly similar, because they seek to reduce the risks associated with a shift to delivery of services by a different service provider (organisation or organisational entity)


entity)

Planning For Change- Cont’d..Detailed Design and B ild for Internal Shared Ser ices Detailed design for internal Detailed Design and Build for Internal Shared Services: Detailed design for internal Shared Services includes processes, organisation, systems, location etc. This work also includes detailed planning of the build and transition activity. The change management work in this stage seeks to address the following risks:

– Prior to transitionInsufficient engagement with stakeholders leading to a lack of buy-inInsufficient skills to support the project leading to increased costReliance on contractor staff, leading to a potential loss of knowledge and skillInsufficient input from business unit leading to an insufficient solutionTrade union/staff opposition and industrial action leading to disruption

– During transitionLoss of morale of staff leading to disruption of delivery of serviceI d t t f j b d ti l di t l f kill d k l dInadequate management of job reductions leading to a loss of skills and knowledgeReduction in the quality of service to end users leading to a disruption of frontline services

– Post transitionEnd user dissatisfaction with the end solution


End-user dissatisfaction with the end solution

Planning For Change- Cont’d..Detailed Design for Outsourced Shared Services: Where BPO is the chosen option the design and build activity is shared between the outsourcer and the customer. The outsourcer will design the Shared Services operation (often they will have an existing facility from which the services will be delivered). The customer will design the retained function and will be responsible for ensuring that the services are effectively transitioned to the outsourced service provider. The change management work in this stage seeks to address similar risks to those described for Internal Shared Services

– Post transitionEnd-user dissatisfaction with the end solution

– Business unit transition planning: For each business unit there are a series of activities required to manage the transition to the new delivery modelthe transition to the new delivery model

Change readiness assessmentBusiness unit impact profileEstablishing a change management network of resourcesCommunication and employee relations managementSelection, assessment and recruitmentRetention and ReleaseTraining – technical and non-technical


gCultural change – behavior and new ways of working

Planning For Change- Cont’d..

The Evolve phase: The evolution of the Shared Services starts with ‘Go Live’ Day 1 The Evolve phase: The evolution of the Shared Services starts with Go Live Day 1. Usually the service will not operate at the target level immediately, and so ‘bedding in’ and improving work is needed. Usually this is an on-going activity that never ends. Also, p g y g g y ,ongoing improvement work is required to meet changing customer needs, changing technology and the evolution of a customer service culture

– Operation: This phase is the ongoing management of the new arrangement. It is essential to ensure that the operating model continues to meet the agreed objectives and changing business needs. For Shared Services, this will include monitoring customer relationships, service levels, benchmarking, and continuous , g p , , g,improvement

Detailed Change Management plan: The high level scheduling of the transition and transformation activities is set out in the figure on the next slide. The transition and transformation journey begins with a common preparation stage


Planning For Change- Cont’d..

– Preparation: The key activities within this stage include:

Baselining of current services to establish volume data and current service levels

Baselining of the current technologies in scope to identify the interfaces required between any new

technology in the shared service and the legacy systems. The baselining will also allow the

technology and data migration paths to be mapped out. An audit of data will also be completed at

this stage to verify any clean up and archiving requirements prior to migration

A hi h l l l i t t t fi th h th t ti i t d i l i th A high level role impact assessment, to confirm the changes that are anticipated in roles in the

retained organisation and to identify the high level training and communication needs for retained

staff and customers (e.g. employees and line managers)( g p y g )

Stakeholder communications and engagement (including formal consultation with staff and

representatives impacted by the proposals)


High Level Transition and Transformation Scheduling


Planning For Change- Cont’d..Transition: The transition work-stream will be managed principally by either the outsource supplier (if that option is selected) or by the in-house Shared Service management team. The transition team will focus on these core activities:

– People Transition and Organisation Design: The Shared Service Centre management team will be responsible for completing any required formal or informal consultation and for finalizing the organisation design (team sizing and reporting relationships) on the back of agreed service levels and anticipated work volumes. They will also engage with in-scope staff on an individual by individual basis to handle any concerns or to explain options All final appointments or redeployment decisions will be to handle any concerns or to explain options. All final appointments or redeployment decisions will be managed during this period

– Manage Business as Usual: A key requirement during the transition period is to maintain business as usual so that customers are not adversely impacted by the cut-over to the new shared service. This will require a dedicated team to focus on the day to day service delivery challenges and to manage those employees who have transferred to the virtual shared service

– Build infrastructure and facilities: If the transition is to a new shared service facility (rather than a pre-existing site) then there will be a significant programme of activity to equip the agreed location with the existing site) then there will be a significant programme of activity to equip the agreed location with the physical infrastructure, technology and services to support the operations

– Cut-over and launch: The period leading up to the formal go-live of the service centre is a period of intense activity. A detailed process of managing the cut-over to the service centre requires a carefully


coordinated approach to gate criteria, stakeholder communications (including customers and third

Planning For Change- Cont’d..– party briefings and training in any new ways of working with the shared service), the migration of data and

documents to the new systems and the completion of all user acceptance testing of the service delivery processes and infrastructure (including all systems and knowledge management databases)

All service centre staff need to be trained to work with the technology and processes and also to adopt the required standards of customer service behavior

The precise nature of the go-live event whether it be a launch of all services on the same day or a phased launch by either process or customer location, will need to be agreed at the start of cut-over planning

– Stabilisation and performance improvement: Post go-live there will be a period where the operational teams will seek to stabilise services and manage outputs against the agreed service levels. This period will require a significant focus on fine tuning processes and systems to meet day to day operational requirements and also to drive cross-functional training amongst staff to build appropriate multi-skilling experience and capabilityp p y

After an initial period of operation the focus switches to driving out longer term performance improvement with prioritized initiatives to de-bottleneck activities or move to lower cost service delivery options (such as enhancing the manager or employee self service product range)


Planning For Change- Cont’d..Transformation: The activities within the Transformation work-stream are focused on aligning and improving the operation of the retained function around the launch of the Shared Service. Key activities include:

– Business readiness: The retained function will need to assess the impact (on their current organisational team and role design) of the transfer of transactional activity outside of their remit

There is normally a significant need to clean up and realign work priorities post Shared Services. There is also a i ifi t i ti d t ff t i d t k t h d f th t f isignificant communication and engagement effort required to prepare key customers ahead of the cut-over of services

– Support to cut-over: During the complex cut-over of services to the shared service the retained function will need to play a key role in agreeing the sequence for transferring work and also the process whereby work in progress is managed thro gh to completion (either ithin the retained f nction or after transfer to Shared in progress is managed through to completion (either within the retained function or after transfer to Shared Services)

Whilst the training effort is usually greater in the transition team the retained function may well need to be trained in a number of new processes and in how to access and use any new technology There is always a need to train the number of new processes and in how to access and use any new technology. There is always a need to train the retained function in the contact points, account management activities, work hand-offs and issue escalation paths that will be needed to work effectively with the service centre

Furthermore, as work is transitioned to the service centre there will be a need to manage any redeployment activity in


a professional and sensitive manner

Planning For Change- Cont’d..– Manage business as usual: The transformation of the retained function may result in considerable internal g y

reorganization and re-planning of workWhilst this needs to be managed there is an equally important requirement that services are maintained to customers and business disruption is minimized. In many cases this requires the retained function to allocate full time responsibilities across its leadership team to provide dedicated focus on maintaining service delivery whilst other senior team members focus on running the transformation work

– Stabilisation and completion of realignment: The last two phases of activity during transformation are the stabilization of service within the retained function and also the completion of realignment of policies and stabilization of service within the retained function and also the completion of realignment of policies and procedures to reflect the benefits associated with the Shared Service model

Consequently during the period after go-live it should be anticipated that dedicated resources will be required to work with the shared service centre on process improvement activities (so that the voice of the retained function has an t t e s a ed se ce ce t e o p ocess p o e e t act t es (so t at t e o ce o t e eta ed u ct o as ainput into any redesigns or quick-fixes required) and also that the benefits are realised so that the Business Partners and Specialists are fully able to perform their new strategic and added-value roles effectively

– Programme and stakeholder management: Underpinning the work of both the Transition and Transformation teams is a dedicated Programme Office who will manage the integrated planning, risks and issues tracking and resolution and be responsible for benefits realization tracking and reporting. The Programme Office team will also prepare stakeholder briefing packs to facilitate the regular progress update

ith i t k h ld


process with senior stakeholders

Change Management for Shared Services: Key Success FactorsSuccessful Change Management solutions for Shared Services programs are generally punctuated by several key eventspunctuated by several key events

These events are milestones for helping the team to understand the organization's ability to change, build sponsorship and buy-in, build the Shared Services organization and prepare employees both in the operating units and Shared Services organization

Assess the organization's ability to change: The first key event is a change readiness assessment Before beginning the Shared Services work the team needs to understand the assessment. Before beginning the Shared Services work, the team needs to understand the organization's willingness and capacity to change

– Part of the assessment includes interviews and focus groups with key stakeholders. These sessions should explore past experiences with large scale change to develop the optimal change strategyexplore past experiences with large scale change to develop the optimal change strategy

Conduct Customer Values and Requirements workshops: Early in the program, Customer Values and Requirements workshops should be used to engage the future customers of the Shared Ser ices organi ationShared Services organization

– These workshops have two primary intentsTo involve customers in formulating a Shared Services solution that they will respect and put stock inTo educate them on the value of the solution


To educate them on the value of the solutionSource: http://www.accenture.com/NR/rdonlyres/43AE308C-1904-453D-8C3B-43B50CD04F6B/0/120168_ManagingShared_v9.pdf

Change Management for Shared Services: Key Success Factors – Cont’d..– A highly interactive format facilitates discussion about Shared Services, areas that may be candidates for

Shared Services the realities of the current organization the guiding principles for Shared Services and Shared Services, the realities of the current organization, the guiding principles for Shared Services and the constructs to adopt in the operating model (for example, governance)

– The outcomes from the workshops feed into the design of the Shared Services organization and also embody the inclusive nature of Shared Services throughout the development effort

Secure Shared Services Leaders early: The Shared Services Leaders need to participate in the Shared Service design work

– Doing so, allows the organization to draw on their entrepreneurial spirit to establish a new culture of a "front ffi hi h f i i ti “ Th f th i ti d i d t b l t d l office, high-performing organization.“ Therefore, the organization design needs to be completed early

enough to support recruiting the right talent for the leadership positions– Leadership ownership and involvement in and of itself is critical, but in addition, their hiring also signifies to

employees that the program is moving ahead and will not be postponed or tabled

Launch a sponsorship network: To build buy-in for the program, educate the operating units aboutShared Services and obtain feedback that strengthens the overall Shared Services Shared Services and obtain feedback that strengthens the overall Shared Services solution, organizations should form a network of operating unit representatives to advise the program

– These networks typically include a cross section of leaders within the organization who ultimately will be


yp y g ycustomers or stakeholders of the future Shared Services organization

Change Management for Shared Services: Key Success Factors – Cont’d..– The launch of this network is a key event in the ongoing sponsorship activities needed throughout all – The launch of this network is a key event in the ongoing sponsorship activities needed throughout all

phases of the program– The functional representatives can provide feedback on processes, software configuration, local legal and

regulatory requirements, communications and training. They can also help transition the local operating units into the Shared Services organization during the go-live period

– The network should meet monthly and have a clear set of agenda items to discuss– As there is an aspect of partnership between the Shared Services organization and the customers it serves,

it i i t t th t th Sh d S i j t t d t t t th hi t k h th i it is important that the Shared Services project team demonstrates to the sponsorship network how their feedback is incorporated into the Shared Services solution

Agree on an end-to-end training strategy: In many cases, the Shared Services employees ill b t th i ti A lt th ill d t b ild i t f kill d will be new to the organization. As a result, they will need to build a variety of skills and

experiences prior to go-live– A key event, therefore, is the development of a training strategy that provides a multi-faceted skill

d l t f ll l l f ldevelopment program for all levels of employees– A good Shared Services training strategy will include orientation activities, such as visits to operating units,

workshops on the unique qualities of Shared Services, process discussions to build end-to-end knowledge and systems training on any new hardware or software


y g y

– To achieve the highest possible level of readiness, participants should attend "Day-in-the-Life" training

Change Management for Shared Services: Key Success Factors – Cont’d..

sessions. These sessions simulate a process from end-to-end using all of the relevant technology enablers. For example, a call center representative receives and logs a service request in a case management system, which is then routed to an Accounts Payable clerk

– This training provides practice and reinforcement within a realistic environment. Day-in-the-Life training can g p p y ggreatly increase employee self confidence, readiness and retention

– While the development of the strategy is a key event, training itself will be an ongoing need in the Shared Services organization. To meet this need, the organizational structure should include an internal capacity to train and retrain employeestrain and retrain employees

– Plans for building the Training capacity should also be captured in the strategy– Lastly, it is important to provide training as necessary to the operating units– While Shared Services solutions generally move activities away from the operating units there are While Shared Services solutions generally move activities away from the operating units, there are

instances where tasks are changed or even added to their scope. These employees will need to be trained on how the processes have changed as well as how to interact with the Shared Services organization

– Therefore, plans for accommodating training at the operating unit level must also figure into the d l t f th d t d t i i t tdevelopment of the end-to end training strategy

Regardless of the individualized aspects of any Shared Services program, the above key events will be landmarks of all successful Change Management initiatives and

di l h ld b d fi d i dPage 122Finance Shared Services© 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

accordingly, should be defined in advance



Stakeholder CategoriesRelevant stakeholders from the categories below should be considered in Change Management planning for SSI projects


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