Innovatively Managing the Business Process to Create Excellence
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Transcript of Innovatively Managing the Business Process to Create Excellence
1June 25 and 26
Hyatt Regency, Santa Clara, Calif.
Innovatively Managing the Business Process to Create Excellence
2
TCS Public
A 60,000 Feet View of a Business Process…
Supplier Process Consumer
Data Data
DataData
Infrastructure
Process
People
Applications
People
Infrastructure
Process
People
Applications
People
Infrastructure
Process
People
Applications
PeopleSession Focus
3
TCS Public
…Helps Identify Opportunities to Drive Optimization…
Analyze
Digitize
Technology Interfaces
Optimize
Data
Human Application
Interface
Application - Application Interface
Application Performance
Process Value StreamMapping
Error Analysis &Prediction
Prioritization & Simplicity Analysis
BusinessData
Operations Metrics
4June 25 and 26
Hyatt Regency, Santa Clara, Calif.
Industry Expert Talk
Copyright © 2013 Information Services Group, Inc. All Rights Reserved. No part of this document may be reproduced in any form or by any electronic or mechanical means,
including information storage and retrieval devices or systems, without prior written permission from Information Services Group, Inc.
Innovation & Excellence in Operations
Peter LauerPartner – Head Business Advisory Services North America (BPO)peter.lauer2isg-one.com June 25, 2013
The Journey to Date
© 2013 Information Services Group, Inc. All Rights Reserved 6
Inform Services
Provider Research: Tailored research about provider capabilities and industry trends.
Mark-to-Market: Leveraging ISG’s 14,000 contract database to gauge market-current contract pricing and terms & conditions
Assess Services
Benchmarking: Comparing client IT delivery costs to peer costs and provider pricing, and recommending improvement opportunities
Process Analysis: Detailed workflow review of IT processes and practices, comparing to industry best practices
Design Services
Sourcing Strategies: Determining the best mix of sourcing for IT services . . . retained, shared services, and outsourcing based on financial, organizational, and risk considerations.
Target Operating Model: Designing the elements of the optimal end state for IT service delivery, and laying out the roadmap to reach the targeted end state.
Execute Services
Transaction Support: Developing RFPs, managing response process, supporting provider due diligence and selection.
Renegotiation: Evaluating the pricing and SLAs of renewing contracts.
Transition: Applying ISG’s Transition Framework for successful migration to a new service provider
Operate Services
Governance Advisory: Standing up the organization and processes for effective oversight of providers, and training client staff to implement and sustain processes.
Governance Managed Services: Providing resources and tools to support client’s “commodity” governance processes.
IT Consumption Management: Providing insights for optimal cost, compliance, and risk management of IT assets
PMO Services: Support of project portfolio management with tools , best practices, and project tracking technologies.
*Representative list of ISG services; those most used by ITO clients
800+ professionals
20+ years in business
21 countries
1,000+ clients
75% of Fortune 100
5,000+ engagements
Power of One . . .
About ISG
ISG Brings Deep Experience and Specific Services to Support Clients with their IT and Business Process Strategies
© 2013 Information Services Group, Inc. All Rights Reserved 7
Lots of Issues on the “C” suite Heat Map. Many of these issues have lots of players opining from north to south, east and west.
Issues that are on the Desk of “C” Suite
Innovation
Big DataCollaboration
CLOUD
IT Consumerization GreenLabor
Arbitrage
RISKTalent
Management
IT with processes?
Security
Business UnitAlignment
Business EnablerVs.
Business InhibitorCOST
Self-Funding Models
Sustainability
& AnalyticsRegulators
Automation
Supplier Concentration
© 2013 Information Services Group, Inc. All Rights Reserved 8
WSJ Marketplace in 2012
► “Innovation” used 33,528 times in quarterly & annual reports last year
► 255 books published in the last 90 days (2012) with the word Innovation in the title
► 43% of surveyed execs state they have a Chief Innovation Officer or similar role
► 28% of business schools use the word in their mission statement
► So. . . What does it mean? ISG had a look at what it means!
“You Call That Innovation?” – Word in danger of becoming a business jargon cliché (if it’s not already).
© 2013 Information Services Group, Inc. All Rights Reserved 9
Business drivers, investment, organizational alignment and disciplined execution must all exist for innovation to occur.
Key finding – the Need for a Climate for Innovation
Assessing
TechnicalInnovation
ProcessInnovation
BusinessInnovation
Need to Innovat
e
Ability to Innovate
Managing the Innovation
Model
► Involves Risk / Requires Investment Win/win implies that lose/lose is possible Requires active risk management Need for a unified operating model
► Requires Change and Discipline Change management is key Target measurable and verifiable metrics
that bring business value New learning “how do we do this”
► Occurs Over Time Provide incentive for long-term mutual
benefit rather than the “quick hit” Improvements in the maturity of the
organization & relationship results in an improved ability to innovate
© 2013 Information Services Group, Inc. All Rights Reserved 10
Pace of Learning < Pace of Change2
In today’s market, the pace of change exceeds our pace of learning. The divide is noticeable and increasing at an alarming rate
BusinessAlignment
We may endup here
Today’sBusiness Practices
We arehere
GrowingMisalignment
Tech
nolo
gy a
nd P
roce
ss C
apab
ility
Cli
ent
req
uir
eme
nts
Time
learningx
© 2013 Information Services Group, Inc. All Rights Reserved 11
Varying models of operational delivery
Successful models requires careful consideration of the critical areas noted below to understand the impact to achieving the desired business objectives . Innovative models tend to be over to the right with gain and value sharing between organizations
Source? Optimization? Incremental? Transformation? Other?
The Strategy may include numerous solution considerations that are aligned to meet the objectives.
The new wave• Importance of
Software, Platforms,
• Labor Automation,• Scalability• Improved
efficiencies• Outcome based
Processing• Business evolution• Unified operating
model
© 2013 Information Services Group, Inc. All Rights Reserved 12
Operating Model Levers
There are a number of considerations that relate to key factors when transitioning or operating a particular model.
Automation
Efficiency
Low Risk profile
Transparent single operating model
HighLow
Effectiveness
Variable pricing
Outcome Based
Governance
Continued improvement
Client Supplier partnership
Service level for operating model
Gain Share
Automation
Efficiency
Low Risk Profile
Transparent single operating model
HighLow
Effectiveness
Variable pricing
Outcome Based
Governance
Continued improvement
Client Supplier partnership
Service level for operating model
Gain Share
Automation
Efficiency
Low Risk Profile
Transparent single operating model
HighLow
Effectiveness
Variable pricing
Outcome Based
Governance
Continued improvement
Client Supplier partnership
Service level for operating model
Gain Share
1990- early 2000 Current Innovative Model
© 2013 Information Services Group, Inc. All Rights Reserved 13
Gen 2 Characteristics
Gen 1 Characteristics
What is the big deal?
Think of the market progression from the left hand side of the chart to the right traditional models more focused on cost cutting though labor arbitrage to Gen 2 which is focused more on Labor Automation and Innovation
► 15%-30% cost take out
► Model is scalable to the extent that you can scale labor
► Custom/complex, legacy :“Your mess for less”
► Access to Low Cost Labor necessary to provide continuous value
► Revenue/Profit correlated to People
► 60%-80% cost take out
► Model is scalable and is largely independent of labor growth
► Transformative – New way of doing business, access to “Rocket Scientists” who can codify manual processes
► Revenue/Profit NOT correlated to People
► Outcome based approach
Generation 2Labor Automation
Innovation
Generation 1Traditional Model
© 2013 Information Services Group, Inc. All Rights Reserved 14
Revenue Cycle
Accounting & Reporting
Corporate Services& Mgmt.
DisbursementsT& E Reimbursement
CreditOrder Management
Billing / Invoicing
Accounts Payable
Fixed Assets
Cash Apps / Accounts ReceivableCollections
Cost Accounting
General AccountingProject Accounting
External Reporting
Strategic Planning Support
Outlook/Interim Forecast
Bus. Performance Anals. & Rpting
New Business/Pricing Analysis
Treasury ManagementAudit and Risk Mgmt.
Tax Actng, Filing & Rprting
Budgeting
M&A Management
Cost Analysis
Tax Planning & Regulatory
FinancialPlanning & Analysis
Decision Support
Payroll*
* Payroll may report to CFO or HR
High
Ent
erpr
ise
Val
ue A
dded
Basic HighComplexity of Interaction
We are becoming more innovative an the bottom of the scale but need to grow more upstream
Process Level Perspective: F&A Services
Strong retained candidate Possible Sourcing/SSC candidate Strong Automation/sourcing candidate
Suitability For Sourcing
Functions
FUNCTIONAL AUTOMATION
Processes Undergoing Automation and Innovation
Inno
vatio
n is
requ
ired
to m
ove
furth
er u
p th
e va
lue ch
ain
© 2013 Information Services Group, Inc. All Rights Reserved 15
The maturity model shows the back office service (F&A, HR, IT etc) in varying states of development.
ISG Maturity Model for Target Operating Models
Non-existent
No strategic operating model or global processes in place
Basic
Reduce costs distributed services• Consolidate
• Economies of scale
• Staff Aug related
• Everyone for themselves
• Enterprise Process maturity LOW
Marketplace
Reduce costs and improve service quality• Focus on reducing
costs
• Full governance in place
• Chargeback process
• Based on metrics and measurement
• Harmonization of processes/policy
• Global processes created for the enterprise
Unified Operating Model
Back Office service seen as a single operating model• Collaborative
partnerships
• Mix of out tasking, sourcing, shared Services
• Business units see operations as a single entity
• Continuous improvement is life
• Service integration maturity
• Global processes adopted by business Units
Advanced
Cost reduction while creates new and improved services. • Analytics led analysis
and design for new and improved processes
• Focus on Automation
• Best of Breed service in each function
• Service Integration
• Gain share
• Value sharing
• All parties collaborate to generate new efficiencies and automation
• Harmonization of systems
• Enterprise and SSC partner to improve enterprise processes
World Class
Developed strong efficiency, has a high level of automation and focuses on creating working capital• Very strong
partnership with multiple supplier/BU teams to create value
• Gain and value sharing
• Focus on generating working capital
• Investing in creating innovation
• Strong level of re-investment in the organization
• Innovative by nature
• Enterprise and SSC partner to create innovation throughout organization
Level5
Level4
Level2
Level0
Level1
Level3
As we move up the levels of maturity we see the development on a unified operating mode, harmonization of processes/systems and innovation.
© 2013 Information Services Group, Inc. All Rights Reserved 16
Pace of Learning < Pace of Change2
In today’s market, the pace of change exceeds our pace of learning. The divide is noticeable and increasing at an alarming rate
BusinessAlignment
Where we may end up
Today’sBusiness Practices
GrowingMisalignment
Tech
nolo
gy a
nd P
roce
ss C
apab
ility
Cli
ent
req
uir
eme
nts
Time
learning
xx
We need to drive to here
New pace of learning
© 2013 Information Services Group, Inc. All Rights Reserved 17
The cycle we to see
Review
Analyze
HarmonizeInnovate
Evolve
Innovation is a continuous cycle not just a straight line journey
Continuous review of the operations “what is working what is not”
Analyze the current operation
Harmonize policies, processes and systems
Innovate. Focus on developing efficiencies, automation and to create
working capital
Continue to evolve the service over time
© 2013 Information Services Group, Inc. All Rights Reserved 18
“Labor arbitrage or just cost savings is not the goal any more!!”
“Back office operations need to be seen as a single entity delivering services to the enterprise”
“This means all parties need to collaborate and drive change developing greater efficiencies, automation and creating working capital to re-invest in the organization”
“This is the goal of innovation ”
Final thoughts!
www.isg-one.com
© 2013 Information Services Group, Inc. All Rights Reserved 20
About ISG
© 2013 Information Services Group, Inc. All Rights Reserved 21
ISG BPO at a Glance
What is occurring in the market and where is the market headed?
How are we performing, how do we compare, and what are the opportunities for improvements?
What is the best way for us to improve and take advantage of opportunities?
How do we implement the
changes to realize value?
How do we sustain the value over
time?
Client Experience Data Bases and Information Sources
Advisory throughout Sourcing Lifecycle
14,000 sourcing contracts for T&Cs and pricing
12,000 benchmark projects, each with 500 to 3,000 data elements
Momentum ™ vertical sourcing research report
Sourcing Prevalence™ research
Provider Dynamic RFI™ used to survey over 100 providers about scale and scope of capabilities
AccessISG™ subscription and custom research
Annual service provider and client conferences
© 2013 Information Services Group, Inc. All Rights Reserved 22
Areas of BPO Expertise Finance and Accounting
Procurement
Human Resources
Call Centers
Legal Services
Print Services
Facilities Management
Document Management
Insurance-specific processes (policy admin, claims)
Specialized Services Mark-to-Market (M2M) review of
contract renegotiation pricing
AccessISG research subscription
Service provider portal
Momentum ™ research reports
Benchmarking
Asset monetization feasibility
City Risk Assessment
Major project health checks
Shared services design
Staff aug to managed services
Vendor management
Consumption and demand management
ISG Business Process Outsourcing Experience
ISG brings clients over 24 years of sourcing experience across multiple industries and around the globe. We have assisted clients with more than 1,200 BPO engagements, including more than 450 completed transactions. We bring to clients the tools, templates, methodologies, data, and best practices for BPO transactions that are successful and deliver the value that is possible
23June 25 and 26
Hyatt Regency, Santa Clara, Calif.
Customer Case Study: Conceptualizing and Deploying EDGE: an Innovative Optimization Framework
Kathleen DobbelsVice President and GBS Quality Leader, Nielsen
EDGE: AN INNOVATIVE OPTIMIZATION
FRAMEWORKAJITH THOMAS (TCS) & KATHLEEN DOBBELS (NIELSEN)
JUNE 25, 2013
25June 25 and 26
Hyatt Regency, Santa Clara, Calif.
Customer PoV: Optimizing the Business Process: Leveraging Operations Digitization
Adrian RoblesMD-Accounting, SCI Funeral Services
Leveraging Technology to Transform Our F&A Organization
Presented by: Adrian RoblesJune 25, 2013
Agenda
•Overview of SCI’s Business•Overview of SCI’s Transactional
Accounting Department•Our Transformation Journey
▫Accounts Payable▫Contract to Cash▫Payroll Services▫Trust Operations
•Tools & Technology Wish List
28
SummaryQ&A
Thank You
June 25 and 26Hyatt Regency, Santa Clara, Calif.
Thank YouThank You