Moving From Shared Services to GBS – What Does World-class ... · considering moving . from...

November 12-14, 2017Bellagio Resort & Casino, Las Vegas

Moving From Shared Services to GBS – What Does World-class Look Like?

Penny Weller, PhD, CMAThe Hackett Group


Moving From Shared Services to GBS – What Does World-class Look Like?Shared Services is a successful, twenty+ year old concept that has worked exceptionally well for many functions including finance, HR, IT, and procurement. What happens when multiple shared services come together to leverage skills, technology and service management? Organizations are now benefiting with a compelling business case for enhanced savings and strategic alignment in an operating model called Global Business Services (GBS). In this session you will learn:• Why so many companies are moving from shared services to GBS• Which functions are most likely to embrace GBS and to what extent• Why moving to GBS can be so political and how to offset those concerns• How to build a culture within shared services that will help position your

organization to move to a GBS


Background:• The Hackett Group: Senior Director, Advisory services and CGBS Certification

Program • Pfizer: Director, Performance Management• Pfizer (formerly Pharmacia): Director, Finance Shared Services• Motorola-certified Black Belt• PhD dissertation: Financial & Business Performance, Malcolm Baldrige National

Quality Award Recipients

Penny Weller, PhD, CMAGlobal Business Services Advisory, North America Operations [email protected]

www.thehackettgroup.comhttp://www.thehackettgroup.com/studies/

mailto:[email protected]

http://www.thehackettgroup.com/

http://www.thehackettgroup.com/studies/


Contents

• Hackett Overview• Why so many companies are considering moving from shared

services to GBS• Which functions are most likely to embrace GBS and to what extent• Why moving to GBS can be so political and how to offset those

concerns• How to build a culture within shared services that will help position

your organization to move to a GBS


87%of the

Fortune 100

87%of the

DAX 30

58%of the

FTSE 100

93%of the

Dow Jones Industrials

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Benchmarking EPM, ERP & Analytics

Business Transformation

Defines World-class

performance

Transforms performance into

World class

Designs and implements best

practice technology capabilities

Provides ongoing insights into World-class performance

infused with “actionable” advice

Advisory & Research

Membership

The Hackett Group’s Solution Offerings


EFFICIENCY Operating cost improvement

Productivity improvement

Quality improvement

Customer service improvement

EFFECTIVENESS Alignment with corporate and

business unit strategic goals

Enterprise agility contribution

Enterprise compliance with financial, operational rules and regulations

Delivery of competitive advantage by reducing operating cost

Competitive advantage through high-quality services

Competitive advantage through business partnering

2X improvements in customer service productivity

93% of World-class GBS rated as effective or highly effective in enterprise agility

What World Class GBS Do Differently:

World-class GBS


Contents






GBS is well understood and has buy in from everyone

GBS is a complex, powerful organization capable of providing exceptional service while focusing on cost, quality and productivity improvements

Reality:Myth:


Global Business Services Myth # 3GBS is a natural evolution from shared services

GBS takes a strong commitment and focus to engage employees, leadership, and the businesses they serve in a dedicated approach to operational excellence

Reality:Myth:


Global Business Services Myth # 2 GBS has been in place a long time and has a well-understood framework

While shared services has been around since the 90s, customer engagement, an end-to-end process ownership model, and a full GBS perspective is fairly recent

Reality:Myth:


Global Business Services Myth # 4

GBS is accepted by everyone within the organization

GBS is very political; i.e., especially as you broaden the scope end-to-end. Some see GBS as a threat

Reality:Myth:


OperationalExcellence

Strategic Enablement

ComplexityReduction

CustomerIntimacy

Strategic Choices


Risk & Controls

Compliance Focus

Cost Focus

World-class KPIs

Operational Excellence

Focus

Quality

Customer Focus

Service Design

Primary & Secondary Reasons


Source: The Hackett Group Digital Service Delivery Model, 2017

Average initial savings over base (vs. 20% Peer)

More effective at contributing to enterprise agility

More effective in meeting customer intimacy goals

35% 2X 3X


Business Unit #1 Business Unit #2 Business Unit #3

Shared Services

Economies of scale and skill

Improved cost and efficiency

Improved reporting & details

Leveraged technology

Customer-centric focus and controls


A Shared Services is a functional operating model to organize, deliver, and continuously improve internal business services.

A Global Business Services (GBS) is a global(enterprise-wide), multi-functional model used to organize, deliver and continuously improve internal business services provided to support valueproducing processes and business units.

VALUE


Revenue, Gross Margin, Operating Profit

Earnings Per Share, Return on Equity, Return on Assets

Service, Cost &Strategic Enablement

Performance Motivators Work Distribution

Sales / Marketing / Operations

Business Strategy

Service Delivery

Service Management

Protection / Performance/ Culture

Enterprise / Portfolio Strategy

BUSI

NES

S U

NIT

SG

BS /

SHAR

ED

SER

VIC

ESC

OR

POR

ATE

Leveraging

Tran

sact

ions

Kno

wle

dge

What Can Be Done in GBS?


Sales / Marketing / Operations

Business Strategy

Service Delivery

Service Management

Protection / Performance / Culture

Enterprise / Portfolio Strategy

BUSI

NES

S U

NIT

SG

BS /

SHAR

ED

SER

VIC

ESC

OR

POR

ATE

High Volume Efficiency Focused Repetitive Activity High Automation Easily Measured Performance Consistent Requirements Cross Enterprise Integration Common Technology Platform

Enterprise Fiduciary Strategic Confidential Companywide Compliance Statutory And Regulatory

Customer Intimacy Innovative Business Unit Competitive Advantage Continuous Operations Analytical Diagnostic Business Unit Specific Knowledge

Business Unit Unique Processes Local Market Driven Processes Business Unit Business

Intelligence High Automation

Leveraged Skills Project / Issue Driven High Cost Skills High Demand Skills Common Analytics

High Level Analysis Investor Relations Processes High Security Processes High Risk Processes

Transactions Knowledge


Finance Executive & Corporate ServicesHuman Resources Sales & MarketingInformation Technology Legal, Engineering, R&DProcurement Real Estate, FacilitiesSupply Chain Supply Chain, Logistics

Global Business Services

FinanceHuman ResourcesInformation TechnologyProcurementSupply Chain

FunctionalShared Services

Accounts Payable Cash ApplicationFixed Assets Intercompany AccountingContact Center Time & AttendanceTravel Expense PayrollCredit Order Management

Processes within Shared Services

Scope of Global Business Services


Multi-function End-to-end Process Ownership Service Management Enterprise Standards Technology Integration Centers of Excellence Captive Plus Delivery Model

Agility Innovation Commercial Profile Customer-centric Mindset

Function Aggregation

Multi-function Shared Services

Integrated Services

Function Transactional

Excellence

Business Services

Excellence

Enterprise Strategic

Enablement

Single-function Transactional Standardization Regional Consolidation Transactional Automation

Focus

Value

Stage

2

Stage

1

Stage

3

54%

39%

7%

Source: The Hackett Group’s Global Business Services (GBS) performance study, 2017

Three-Stage GBS Model


GBS Value

Operational Performance

Cost Saving

Customer Service

Employee Satisfaction

Risk Management

Enterprise Value

Stage 3 GBS organizations have the capability to deliver sustained improvement across all six value levers year over year

Stage 1 GBS deliver one-time cost savings and operational performance improvement through consolidation, labor arbitrage and functional standardization

Stage 2 GBS deliver one-time cost savings and operational performance improvement by integrating end-to-end process and significantly improving customer service and employee empowerment


Contents







84%

43%55%

26%37%

84%

41%59%

22%

48%

77%

40%51%

22%

53%

79%

38%52%

27%

50%

Finance Information Technology Human Resources Direct Procurement Indirect Procurement

% of GBS supporting each function (2014-2017)

2014 2015 2016 2017

70% 88%

Stage 1 Stage 2 Stage 3

31%44% 60% 19% 35% 40% 36%

61%90%

39% 63%90%

% of GBS supporting each function by GBS maturity stage (2017)

100%



30%

13% 14%

36%

19% 22%

31%

20% 24%29% 25% 25%

Order Management Supply Chain, Logistics &Transportation

Real Estate & FacilitiesManagement

2014 2015 2016 2017

30%

13% 14%

36%

19% 22%

31%

20% 24%29% 25% 25%

Order Management Supply Chain, Logistics &Transportation

Real Estate & FacilitiesManagement

2014 2015 2016 2017



Finance Example83%

76%63%

61%55%

51%51%50%

47%44%

38%37%

29%28%27%

22%20%

14%8%

42%

9%12%

15%20%

15%5%

43%38%

26%31%

25%43%

13%20%

12%24%

23%57%

54%26%

9%12%

21%18%

30%43%

6%13%

26%26%

38%20%

58%52%

61%54%

57%29%

38%32%

Accounts PayableTravel & Expense

Intercompany AccountingGeneral Ledger

Fixed Asset AccountingCash ApplicationCustomer Billing

Dispute ManagementCollections

CreditPayroll

Cost AccountingEnterprise Consolidation

Tax ManagementTreasury Management

Compliance ManagementExternal ReportingBusiness Analysis

Planning & Performance ManagementTOTAL

GBS BU Corporate Center


Contents






Governance consistently applied across functional shared services

Customer Experience improved while Focusing on productivity, cost, compliance

New capabilities, process standardization, end-to-end process design to enhance business outcomes

Key Focus Areas to Ensure Success


Consistent management guidance, setting cohesive policies and procedures, and assigning effective decision-rights (RACI)

Governance

Service Management

Service Delivery

Getting to the right tables


Capabilities enabling a GBS to align and optimize the delivery of work; strategy, design, transition, operation, and continual improvement

Governance

Service Management

Service Delivery


Demand management

Service portfolio

management

Financial management

Supply management

Service catalog

management

Supplier management

Service migration

management

Change management

Contact center management

Infrastructure management

Service continuity

management

Quality Improvement

Knowledge management

Service Strategy

Service Design

Service Transition

Service Operation

Continual Service

Improvement

Service Management Framework


0.35

0.39

0.47

0.53

0.53

0.54

0.55

0.60

0.61

0.65

0.68

0.69

0.73

Client Contact Center Management

Supplier Management

Knowledge Management

Service Migration Management

Service Portfolio Management

Change Management

Infrastructure Management

Service Demand Management

Service Catalogue Management

Quality Improvement

Service Continuity Management

Supply Management

Financial Management

Correlation coefficient

Capabilities and performance Strongest contribution

Weakestcontribution

Source: Global Business Services (GBS) Service Management performance study, 2011


Work delivered based on best practices process design and execution

Governance

Service Management

Service Delivery


Contents






Continuous ImprovementService StrategyVoice of the CustomerService Management

Service DesignChange ManagementMake It Easy To Do RightEnd-to-End Processes

KPIs and MeasurementGovernanceCelebrate SuccessToot Your Horn

It’s Really Not a Secret


Questions or Comments?


Hackett Performance Studies define and capture how World-class performing organizations are organized, governed, and their savings potential compared to their Peers. The study covers key concepts including service management, governance, performance achievements, technology, and KPIs to assess your performance objectives.

Participants in these studies will:• Learn how you compare with World-class / Top Performers• Receive presentation with key research findings and assessment of

your performance

• Participate by joining the Hackett Research Community

• http://www.thehackettgroup.com/research/studies/

• www.thehackettgroup.com or contact [email protected]

Free Studies

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Moving From Shared Services to GBS – What Does World-class ... · considering moving . from...

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