The Global Process Owner manual

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TheGlobal Process Owner manual

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The role of GPO, and what should be on (and off!) the job description

The role of the Global Process Owner (GPO) is indeed to own the process, across the footprint of the business, and to drive process improvement, in such a way that supports the organization’s objectives and gives the business the highest level of efficiency possible. The GPO is responsible for bringing the process to “full maturity.” The GPO is responsible for managing their role such that improvements are deployed and soon become “business as usual,” continuing to evolve into the future.

The footprint of many organizations that have the scale to warrant a GPO, is global. Therefore, the remit of a GPO’s role should be global.

The parameters of the job are usually “end to end,” although there may be justification (based on the maturity of the process or the scale of the organization) for owning the process within the function, eg the procurement part of P2P or the accounts payables part of P2P. This sub-process model is generally considered quite efficient, as long as the GPO group is aligned, and work collaboratively towards common goals, and report into the same person.

The focus of a GPO is process improvement. Let’s break it down:

IntroductionThis document is designed to further the understanding of the GPO role and its position in the organization, and the methods available to realize objectives.

These finding are from the consolidated the discussions held at the GPO Summit London

Insights are from a range of experienced, new and aspiring process owners.

Comments or feedback welcome: email [email protected]

© Copyright sharedserviceslink.com Ltd 2014. No copy or visuals can be used without the written permission of sharedserviceslink.com Ltd. The idea of this document belongs to sharedserviceslink.com Ltd and cannot be re-created in whole or part without the written permission of sharedserviceslink.com Ltd.

Part 1

Create• Process strategy – Setting out the process that is right for the business, based on overall business objectives. This

takes into account the current vs. the ideal process, captures best practices, and plots points on the road map forthe journey towards the ideal state.

• Engage – The GPO is responsible for seeing that the business understands the value of the role and theimportance of process improvement. This means the GPO is required to “sell the vision” of the role, ensuring, ofcourse, that the vision aligns with that of senior management.

• Service design and process mapping and design – This encompasses process mapping of all global processeswithin their function, and designing a process that will best suit the business, including the technology solutionsneeded to support the process.

• Process improvement – Taking a key role in evaluating the measures needed to improve a process, ie anefficiency methodology (like Lean) or a process automation program (like workflow), guiding the program fromthe evaluation to innovation and implementation.

• Control assessment - Within the Create phase, critical focus should be on an end-to-end control assessment,evaluating any organizational weaknesses and gaps across the interaction points. If done correctly in this earlystage, the GPO can assess and address risk mitigation and related organizational goals in the Deploy andOperate stages. Two distinct elements of control are the need for end-to-end process control assessment by aGPO and the ability to control the process through governance.

Deploy• Change management – As and when a change in process occurs, the GPO would lead the communications

effort to drive that change, and set up a framework with local managers to oversee the adoption of that change.• PMO instigation - This stage would also include critical stakeholder appointment, PMO instigation, key initiative

prioritization, resource alignment, and strengthening and reengineering allocation.

Operate• Process compliance and control – The GPO should be the “go to” person for any requests for changes to the

process. A GPO would have a governance process in place (see Part 3) to carry a request through to a decision.In broad terms, no change to a GPO’s process should happen without the GPO’s consent.The operational phase would include specific attention to:• Functional silos through governance model execution• End-to-end efficiency through continuous process improvement• Increased economies of scale leverage• End-to-end root issue identification• Redesign of the end-to-end process through innovation

Not in the job description1 Delivery of the service.

It is generally agreed that the GPO should not be responsible for the actual day-to-day running of the operation (ie the management of accounts payable or record to report). This may be different for a GPO where there isn’t the scale to justify an investment in two roles – one for managing the operations and one for improving the process.

2 Project implementation. Although a GPO should be involved in overseeing the implementation of a project that affects their process, he or she should not be involved in the actual hands-on project work.

3 Technical support. Any support required by a user when using an enabling technology, initially owned by the GPO, should now be provided by IT.

4 Tactical remediation. A breakage within the process, requiring a short-term fix, is considered to be an area outside the scope of a GPO. The GPO is responsible for examining the root causes of problems, and overseeing the implementation of mid- to long-term solutions.


Reporting lines – what does the optimum GPO structure look like?

Reporting lines are not predictable for a GPO, largely because the GPO’s scope is usually not functional, and the role is global. Therefore, the GPO could reasonably report into HQ, the shared services, the GBS, or the function.

Whomever the GPO reports into, that person should ideally be C level or report directly into C level. At the very least a GPO’s boss should have a strong and heard voice in the organization.

A GPO may find he or she reports into two people – a functional lead, like the CFO, and the GBS: or, two functional heads, like the Head of Accounts Payable and the Head of Procurement, if the GPO has an end to end remit.

Typical bosses of GPOs include:

• Global Services Owner

• Global Business Services Lead

• Global Head of Shared Services

• Chief Procurement Officer and Head of Accounts Payable (if P2P)

• Chief Financial Officer or Chief Accounting Officer

• Corporate Controller

• CIO

Because it is unlikely that a GPO manages a team, their location is not dictated by the location of their reports. This means they can sit in the place that best serves them – either within the function, the shared services or GBS, or within the company HQ.

A GPO is often part of a GPO “family” which is a framework of all the GPOs in the business, all service owners and all process managers (often providing regional support for the GPO). The location of this framework will have influence over the location choice for a GPO. It is productive to have the GPO based near the “seat of power.”

Should the GBS be providing the GPO’s budget, it would make business sense to have the GPO sit within the GBS, and reporting to the GBS lead.

A GPO could be based in:

• The function itself

• HQ

• Center of excellence

• Shared services or global business services

• Business process outsourcer

Because of the global reach of the GPO role, it is generally accepted that a GPO will travel extensively and often.


Part 2

Power and Influence - How deep does ownership go?

There needs to be a system in place which enables the GPO to drive improvements and programs that support the GPO’s overall objective.

However, depending on an organization’s process maturity, culture, and general approach to making decisions, GPOs will have varying degrees of systematic power and influence.

In order to ensure that the role of the GPO is not undermined, that the GPO is aware of all changes that happen, and that process improvement put in place by the GPO is followed, there must be a repeatable, predictable and recognized system in place.

Operating CommitteeAll change requests come to the GPO. The GPO augments these aggregate change requests with their own requests, and defines the changes. The GPO gathers this information through “push and pull methods” such as:1 Examining data mining information, exposing necessary change2 Gathering monthly data governance reports3 Working closely with Internal Audit4 Making available, and gathering, process change request forms

The Operating Committee, consisting of GPOs, then proposes the recommendations to the Global Steering Committee, based on some of the following criteria:• Does the change align with the corporate, GBS and functional goals?• What are the associated risks?• Do we have the internal capabilities to implement?• What is the business case, and what value will be created?• What resource availability exists (from the PMO or local resource)?• What will the impact of the change be on KPIs?• Does the change contribute to continuous improvement?• Can the change only be made locally or can it be applied globally?• Is there a legal imperative?• What is the impact on IT?• How does the change effect control and compliance?• Will the service delivery model be effected?• Is the change request forbidden according to our policy (ie requesting to have non PO as standard)?

Executive/Global Steering CommitteeThe shortlisted projects are then put forward as a recommendation to a multi-functional steering committee, in order to qualify for funding.

The GPO will sit on the Global Steering Committee along with heads of functions, the GBS lead and sometimes an IT representative and Internal Audit. Should the Global Steering Committee refuse a recommendation, there needs to be a route for the GPO to follow to escalate this, and re-apply.

Once a change request is approved or a project is signed off, and resource is allocated, then the initiative moves into project mode and the change is deployed by either IT, the business or the PMO.

Once the change request is indeed accepted, the global process documentation will need to be re-drafted.

The following is an example of a system that supports efficient governance and decision making, concerning project and change prioritization:


Part 3

The GPO’s relationship with IT and HR

The relationship with IT

Often a GPO’s KPIs will depend on the implementation or optimization of enabling technologies. Therefore, the GPO should have a clear process to follow for accessing IT budget, or working with IT.

Without an IT budget, or access to the budget, or influence over how the budget is spent, the impact that a GPO might have on certain KPIs could be limited.

Whether a GPO has its own budget, or access to one, will vary from company to company, however, setting up a budgetary process which is predictable, repeatable, and sensible is important for empowering the GPO.

It will vary across organizations as to whether the savings delivered by an IT program initiated by a GPO can be re-invested into future GPO programs. At some organizations, the policy exists whereby, for every $30 million saved, $10 million can be re-invested.

The GPO will be keenly aware of the process requirements for any enabling technologies, and needs to be able to propose, prioritize, influence, and stop projects.

The relationship with HR

When rolling out process rules, policies or change, HR appears to have a limited role. Instead it is the business units themselves who have more of a play in seeing that its employees are adhering to the process rules.

Business units can help manage process compliance through reporting league tables (exposing who is compliant, and who is not). Also the GPO might look to report on this across the business units.

STEERING COMMITTEE HEAD

HEAD OF PROCUREMENT HEAD OF AP HEAD OF FINANCE

EXECUTIVE STEERING COMMITTEE – RESPONSIBLE FOR VISION AND DECISIONS

E2E GPO1 (P2P) E2E GPO 2 (T2E) E2E GPO 3 (T2P)

OPERATING COMMITTEE – RESPONSIBLE FOR STRATEGY AND ROLLOUT

WORKING GROUP P2P WORKING GROUP T2E WORKING GROUP T2P

WORKING GROUP – RESPONSIBLE FOR EXECUTION


Part 4

The GPO’s relationship with shared services, the BPO and the business

Most shared services organizations in 2014 have a relationship with an outsourcer. It is important therefore, for GPOs to manage their relationships with the BPO, the shared services organization and the business.

Looking at the BPO relationship, the GPO should look to project manage the GPO on the BPO side. It is ideally a collaborative relationship in which initiatives are worked on in a formal, structured, documented manner.

One advantage of working with a BPO is their access to other clients, and it is generally assumed that a BPO would be able to share best practices on process ownership with the client.

Before you go into a contract, you are in a strong position to meet your future GPO partner and ensure, if you like them, that they are named in the contract. Also, pre contract, it is useful to understand the approach used by the outsourcer to manage a process improvement program. Take time to examine their project documentation and understand their project approach. Before signing the contract, see that the BPO SLAs and targets are aligned with the GPO’s targets and deliverables.

Plan to have regular (monthly or quarterly) reviews with your outsourcer, and measure your BPO GPO in the same way that you are measured.

The important part of the shared services/BPO GPO relationship is securing a sense of responsibility, and ensuring there is a solid reporting structure. You will be relying on the judgment of your BPO’s GPO, so arrange to meet them, if at all possible, before you have finalized the contract, to ensure you can have confidence in them.

The relationship is inherently different from having a traditional BPO Relationship Manager, and is indeed enhanced by the ownership model.

Part 5

What makes a great GPO? - What does success look like for a GPO?

GPOs need to possess an array of skills. They should have subject matter expertise, so they engender credibility with their peers, and they need to know how to initiate and run a project. A GPO must be a natural problem solver, a first class communicator, able to “sell” a vision, and stand toe-to-toe with the most senior individuals in the organization.

An effective GPO will likely have the following qualities:

• Vision, which they will be able to articulate at all levels of the business• A passion for the process and for improvement• A natural authority• Be naturally innovative• Be an excellent listener and communicator

It is useful for the GPO to:

1 Understand who the key influencers are, and appreciate the political component of the role

2 Lead process design, assess useful key metrics, be a critical thinker, and be very comfortable “living in the details” of the process

3 Be respectful of internal and external controls

4 Be a functional expert, have process expertise and IT awareness, and possibly have Lean skills


Part 6

What are the ideal metrics for GPO success?

A GPO will want to know what success looks like, and how progress towards that success is measured through the KPIs and then validated by the PMOs. Therefore it is critical, from the point of creation of the GPO role, and at appropriate review gateways, to have a baseline measure, and ensure the metrics:

• Are aligned with the corporate strategy• Factor in risk and control aspects• Are both financial and non-financial in scope• Will be articulated in a GPO Scorecard

Part 7


Customer satisfactionArguably, the most important metrics for a GPO are related to customer satisfaction. There must be a clear understanding of how customer satisfaction is measured, and the method for gathering the data must be “intuitive” (as easy as navigating through Amazon.com).

Standardization and efficiencyThere is a strong case to suggest this should cover the end-to-end process. And as for process KPIs, the general consensus seems to be that 100% is not always desired - that last 2 or 3% could consume 50% of a GPO’s time.Possible areas to measure include:• Process steps reduction• System/tools adoption• Compliance/exceptions• Cycle time reduction• Straight through processing• Electronic vs. manual

Operational qualityPossible areas to measure include:• Reject rates• Call center support

Value realizationThis metric helps ensure that what the GPO is doing does indeed involve value creation and risk mitigation (a business aspect that is difficult to measure).Possible areas to measure include:• Error rates reduction• PO penetration• Supplier rationalization• Customer satisfaction• Early payment discounts• Duplicate payment identification

A scorecard is a common tool by which a GPO can be measured. GPOs are in strong positions to self-measure, and it’s important for GPOs to have periodic check-ins with the senior team to report back on their scorecard.In order for the senior management team to remain engaged, on board and providing the GPO’s endeavours a much needed momentum, the GPO should look to see the metrics and KPIs align with what is important to the senior management team.

SummaryThe GPO role is still nascent. Fifty per cent of GPOs stepped into their roles in the last 12 months.* The role will vary depending on: the size of the organization, (a smaller company might allow a GPO to focus on operations as well as process strategy, or might allow a GPO to run two end-to-end areas like purchase-to-pay and order-to-cash); the maturity of the shared services organization; and the end-to-end scope within the role.

This Manual is designed to serve as a tool to help GPOs further the value that comes with the inception and development of their role.

*Data from sharedserviceslink’s GPO Summit - September 2014, London

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The Global Process Owner manual