SHARED SERVICES AND OUTSOURCING NETWORK (SSON)

Shared Services & Outsourcing Excellence Awards 2012

“Excellence In Culture Creation”

WINNER: NASA Shared Services Center

The winning application for “Excellence In Culture Creation”

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General Information Your Contact Details Company Name Name Title Select the Industry which best describes your business (Please select One)

Fast Moving Consumer Goods Retail Food and Beverage Financial Services Public Sector (Government & Non Profit) Pharmaceuticals & Healthcare Manufacturing Technology, Media & Telecommunications Other – Please Specify

Your Shared Services Organization (SSO) Head Office of SSO – City/Country Number of Staff (Full Time Equivalents Date Shared Service Operations Started (MM/DD/YY) Awards Previously Received for Shared Services and related Awards Shared Service Centers – Geographic Location This application represents Shared Service Centers (SSC) located in the following geographic area:

Asia/Pacific Europe Latin/South America Middle-East/Africa North America/Canada

Specific Country/Countries *** Entries will be accepted for any regional award program on the proviso that either your SSO and/or majority of recipients of your services are based in that region *** Customer Information – Scope of SSC / BPO For all the business units served by the SSC applying for this award:

NASA Shared Services Center

Rebecca Dubuisson

Director, Business and Administration Office

Stennis Space Center, Miss., USA

143 Civil Servants, 445 Contractors, Total = 588

03/01/06

2011: Winner of the Government Customer Support Excellence Award (GCSEA) in the Technical Excellence Category; 2010: Corporate Executive Board “Force of Ideas” Award Winner for Shared Services Performance Measurement; 2009: Best New Captive Services Organization Network (SSON) Excellence Award; 2007: Runner-up, Shared Services and Outsourcing Network (SSON), Best New Shared Services Organization

United States of America

NASA Headquarters and ten Field Centers – in the areas of: Human Resources, Procurement, Financial Management, Information Technology, and Business Services Support

The winning application for “Excellence In Culture Creation”

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Number of business units served + Number of Employees Number of Countries you are Servicing

What is the strategic growth or transition plan of your SSC for the future? For Example Expansion of services to more locations/introduction of new services/outsourcing existing services etc. NASA created the NASA Shared Services Center to reduce support costs, standardize processes, and redirect resources to support the President’s Vision for Space Exploration. The NSSC’s mission is to provide timely, accurate, high-quality, cost-effective, and customer-focused support for selected NASA business and technical services to customers located at ten NASA Centers across the United States. Fulfilling this mission demands a focus on both expanding the service offerings of the NSSC and continually improving our execution of existing service offerings. NASA and the NSSC continually seek out opportunities to expand the service offerings of the NSSC that free Agency resources that can be redirected to NASA’s mission to pioneer the future of space exploration, scientific discovery, and aeronautics research. These service offerings may be complementary to existing service offerings or may be low-volume services that are more cost-effectively performed when centralized. Currently transitioning to the NSSC are the Enterprise Service Desk (a consolidation of numerous IT Service Desks across the Agency) and the Enterprise Service Catalogue (a single catalogue for Agency IT Services). Equally important is our ability to continually improve our delivery of existing service offerings and demonstrate improvements that are meaningful to our stakeholders – customer satisfaction, cost, timeliness, quality, and quantity. The NSSC targets these service aspects in a number of ways: optimizing processes, reducing overhead, broadening the service base, and marketing approved capabilities to other federal agencies. The NSSC’s Balanced Scorecard is the NSSC’s Strategic Plan for future development and communicates strategic goals, maps tactical objectives to each goal, and identifies targets for tracking progress. The Scorecard focuses on four areas:

1. Customer Confidence and Loyalty 2. Increasing Financial Performance to deliver cost savings to the Agency 3. Providing Unparalleled Service 4. Promoting Investment in Employees

18,000 NASA Civil Servants and 30,000 NASA Contractors

One – United States of America

The winning application for “Excellence In Culture Creation”

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What Services do you provide in your SSC today? 1.

Centralized Service Offering

2. Is this process Outsourced?

3. Fully Automated?

(F) Accounts Payable x Accounts Receivable x Auditing Benefits and Rewards Administration x Budgeting x Business Performance Analysis x Business Performance Reporting x Call Centers: Employees, Suppliers, Customers

x

Call Centers: IT Help Desk x Collections x Cost Accounting x Credit Customer Billing x Employee Data Management x External Reporting Facilities and Real Estate Fixed Assets Forecasting General Accounting (G/L, I/Co. Inventory) x Management Reporting Payroll x Planning Purchase Order Processing Staffing Services x Supplier Management Tax Services x Time & Attendance x Travel Expense x Treasury Workforce Development Other: Grants Processing x Other: Training Reimbursements x Other: Enterprise Software Licensing and Seat Management

x

The winning application for “Excellence In Culture Creation”

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Excellence In Culture Creation

Your Story

Strategy Describe the background on why you wanted or needed to make this change or improvement in the culture of your organization or for creating a new culture

• What culture did you start off with? – Please describe what you were trying to change or create – what was your vision?

• What was the business objective and/or the reason for changing or creating a culture? • Were you creating or changing culture in your Shared Services organization or within the wider

business – or both? • Please specifically describe and quantify the benefit that you were trying to achieve through this

culture creation, whether cost savings, efficiency improvement, increase in Customer or Employee satisfaction etc.

Fifty-two services across four lines of business (Human Resources, Financial Management, Procurement, and Information Technology) were transitioned from the NASA Centers to the NASA Shared Services Center (NSSC) during our first three years of operations. Each stakeholder group was expecting improvements in customer satisfaction, cost, timeliness, quality, and quantity in each service. To expedite the transition of a service, the NSSC adopted a model of “lift and shift” where minimal re-engineering was performed prior to transition. While this significantly shortened the time to transition the services, it also resulted in service delivery processes that were disjointed and contained manual and unnecessary steps, often with overtime hours worked to perform these tasks. This resulted in a culture of “working hard” with little focus on “working smarter.” Since inception, the NSSC deployed numerous mechanisms to understand our effectiveness in Service Delivery. The Broad-Based Customer Satisfaction Survey, the Performance and Utilization Report, and the Quarterly Customer Satisfaction Surveys provide significant information. When the results of the 2008 Broad-Based Customer Satisfaction Survey showed the NSSC experiencing declines in customer satisfaction in nine of 13 services, it was clear that we needed to deliver more to our customers, and that it was time to “work smarter.”

The winning application for “Excellence In Culture Creation”

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Change Methodology

Tell us how you created the new culture

• What were the specific steps you took to create or change the culture? • How long did it take? – What was the timeframe and the stages • Who worked on the culture change? Were consultants or specialists used? • Were Customers involved in changing or creating the new culture? What was their role? • Did you use your own Branding? What was it’s impact? What other tools did you use? • Please provide some examples of what you did to foster and build a sense of culture across your

shared services functions and within the wider business? Establishing the Framework. This first phase of the culture change involved setting key objectives, identifying the Lean Six Sigma (L6S) Black Belts, and defining the L6S Tools and Techniques. The NSSC defined five key objectives for our CI program, and L6S was selected as the CI methodology based on its scalability, tool set, and disciplined approach to the NSSC’s products and services, based on our customers’ expectations and requirements. The key objectives are:

1. Satisfy customers effectively and efficiently by removing wasteful and/or non-value-added activities, decreasing defects, and improving cycle time

2. Boost execution through a common methodology, teamwork, and communication 3. Develop and empower leaders, enabling them to produce better products and services

delivered faster and at a lower cost 4. Drive a performance-based culture based on

o Fact-driven decision making, verification of causes and solutions o Process Management based on metrics (focus on variation/defects, less on

averages) o Process oriented, across departmental silos o Measurable results, accountability o Align actions with strategy

5. Deliver financial ROI where the program delivers net benefit from the beginning Training the Black Belts. To ensure that our CI activities were both continuous and quantitative, regardless of size or scope, we have two L6S certified Black Belts. These individuals received formal training that was delivered in phases. The first phase of the training was classroom training where they received instruction on the various tools and techniques to be deployed. After the first training, they were required to develop materials for and then conduct several L6S sessions. After completing the L6S session, their documentation and results were reviewed by the L6S Black Belt Instructor. After successfully conducting these sessions, they participated in a final week of training before receiving their Black Belt Certifications. Continuing Education is required for each Black Belt, and they are encouraged to mentor and train other employees as Green Belts. Today, we have added several dozen certified Green Belts to facilitate the L6S program. Lean Six Sigma Tools and Techniques. The NSSC defined eight key tools for our L6S program. They are: • Customer Surveying (Voice of the Customer) • Metric Identification and Collection • Baseline and Measuring Process Performance • Data-Based Decision Making (Analysis and Statistics) • Lean Process Flow and Value Analysis • Benchmarking “Best in Class” Companies • Risk Analysis and Assessment • Implementation Planning and Management

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Communicating the Value, Objectives, and Expectations. The second phase of the culture change involved the consistent understanding of the L6S objectives and implementation by all employees. The NSSC Executive Director announced the CI program to the employees in April 2009. Shortly thereafter, Acuity Institute was engaged to review our implementation of L6S and provide L6S training to every employee at the NSSC. Approximately 500 employees participated in a variety of training classes, starting with an eight-hour training class for the Senior Leadership Team, with more detailed training for the Service Delivery organizations. The focus of this training, and subsequent communications to employees, began establishing a culture where “Continuous Improvement is Everyone’s Responsibility.” This training is provided to each new employee and is available as self-paced training to all employees for their use at any time. Champions for Change. A significant component of the organizational change management was to identify CI Champions at every level in the organizations with a mission to communicate the “What’s In It For Me” messages. As CI Champions, Senior Managers demonstrated their commitment to CI through discussion groups, actively participating in identified CI initiatives, including CI goals and objectives in employee performance plans, recognizing employees that identified CI opportunities and then prioritized their work to realize these opportunities. Middle- and first-line managers shared these responsibilities but also held “Lunch and Learn” sessions with their groups to identify opportunities for improvement and share current and completed CI initiatives. Several individual contributors were identified as CI Champions prior to Implementation as they recognized the potential returns for themselves and for their team. Implementation of the Methodology. Implementation is the phase where employees would see their ideas for improvement become reality and is considered to be the most important phase of the cultural change. With training complete and Black Belts ready to go, it was time to embrace our first CI projects and, not surprisingly, NSSC employees provided numerous suggestions for consideration. Some suggestions required minimal time to implement and became a “Just Do It”; other suggestions were more complex, requiring input from multiple groups and organizations to plan the change. For the larger CI initiatives, a formal Charter is prepared identifying the Champion(s), Sponsor(s), Team Leader(s), Facilitator(s), Team Members, Problem Statement, Objectives / Deliverables, and Project Scope. The project Charter also documents the scope of the project and any Commandments (non-negotiable regulations, rules, policies, and/or procedures) and Monuments (infrastructure, systems that are fixed). Once approved, the Champion(s) and Sponsor(s) empower the team to define the ideal process and the “Path to Excellence.” Kaizen Events. The NSSC utilizes Kaizen Events to empower team members to closely examine how they currently perform the work, identify any steps that do not add value, and then use their creativity to define a better way to do their jobs. To allow the team to focus on their CI project objectives, the team members assemble off-site for a period of three to five days. The agenda and timeframe will vary slightly from project to project, but will always begin with a CI Project Kickoff and end with a CI Project Out-brief. The Kickoff is attended by the project Champion(s) and Sponsor(s) (typically members of senior management) and conveys the scope of the project, the goals for the Kaizen Event, and the desired outcomes for the project. The Out-brief is also attended by senior management, and the team members present the results of the event and the path forward for the project. During the event, the team will define and analyze the current state, construct both the future and ideal state, identify any barriers to implementation of the ideal state, and define the actions necessary to achieve the future/ideal state. Measuring the Results. Foundational to our approach to CI was the ability to demonstrate results to both our stakeholders and employees. Four key aspects (Customer Satisfaction, Quality, Timeliness, and Cost) are measured before and after the implementation of the future/ideal state. The key aspects are reported monthly to our stakeholders and are available to all employees via the NSSC internal Web site.

The winning application for “Excellence In Culture Creation”

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Complexity of Change

How complex was this culture change to make?

• Was there a resistance to the change? Which area(s) did it come from and how did you overcome it?

• How wide a change did you have to make? How many employees, business units, countries etc. were affected?

• Did you have a change management plan? Did the change prove more complex and difficult than you had thought? Describe how hard or easy it was to create the new culture – What were the main leadership challenges for you and the team?

The NSSC’s commitment to “Unparalleled Service” was established early on in the organization’s evolution, so there was not great resistance to the idea of moving to CI as a key element of the culture. However, the complexity of the change was related more to the tools the NSSC would choose to reinforce CI, and the change management plan the organization would use to ensure a successful implementation. Performance management had been a part of the NSSC’s way of doing business from the start. Service Level Indicators (SLIs) had been pre-established for every functional area, and success or failure to meet those metrics was to be reported to stakeholders on a monthly basis. However, management realized that the focus would need to shift from just meeting metrics to a broader emphasis on “working smarter” if the organization was to continue to make strides in its performance. Through the study of various possible industry techniques for implementing a culture of CI, and some earlier successes using the L6S model (pages 14 to 25), it was decided that L6S would be the NSSC’s methodology and tool of choice. In order for the new program to obtain the buy-in of employees, top management had to show its commitment to the program. The change management plan started with the Executive Director introducing the program to employees. It would impact every employee in every business unit, so all employees participated in the program’s initial introduction. Next, expert training was brought in from the outside, and all employees received L6S training. The training was customized appropriately for the various organizational areas, with those employees involved in the day-to-day delivery of services getting more detailed training. Some employees were chosen to receive Black Belt training and certification, and others were eventually trained for Green Belt certification. Additionally, the NSSC minimized the resistance to change through effective use of CI Champions across the organization, establishing a process for the employees to suggest improvements to their own work and recognizing the improvements and the employees who facilitated the change. The L6S approach to CI was eventually implemented across all activities in all lines of business. The success proved that complex change was achievable with a well-thought-out and masterfully-executed plan.

The winning application for “Excellence In Culture Creation”

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Benefits Achieved/Hard Improvements

How successful has the culture creation been?

• What has been the hard improvement vs. the original objective or aim? Please quantify cost reductions, efficiency improvements etc. with clear metrics. What is your measure of success?

• What has been the Customer and Employee reaction to the cultural shift? Please demonstrate any changes in Employee or Customer satisfaction or other measures of feedback including impact of change on the wider organization.

• Has the change had unexpected benefits on other areas, employees, processes? • What other benefits have arisen due to the new culture?

The NSSC’s implementation of CI through L6S has resulted in a culture shift that yielded measurable results, as represented in the following examples of process redesigns achieved through Kaizen Events and “Just Do It” projects. The report titled “Customer Contact Center – Customer Satisfaction Survey (2008-2011)” also shows a steady increase in overall customer satisfaction. Customer satisfaction rose from 87.81% in 2008 to 95.32% in 2011. Statistical Sampling for Domestic Travel Payments It was taking approximately five months from the close of an accounting month to fully complete the statistical sampling and audit of domestic travel payments for that month. This resulted in a delay in reporting findings to the NSSC Financial Accounting Branch. The process was examined and re-engineered during a Kaizen Event. Process improvements included eliminating manual steps to pull and forward data to Information Technology, and eliminating a quality review by using best practices of the audit team and updating the audit worksheet. Measurable results included the following improvements:

Original Process Revised Process Improvement Steps 56 20 62% Cycle Time (min.) 31125 30494 8% Touch Time (min.) 1283 316 75% First-Pass Yield 1.2% 15.5% 1274%

External Training Purchases Unclear roles and responsibilities, excessive process handoffs, and a single metric that covered all transaction submissions regardless of relevance or applicability were impacting the effectiveness of the Training Purchases staff. The process was examined and re-engineered during a Kaizen Event. Process improvements included instituting a paperless process, as well as reducing rework, handoffs, search and queue time, and multiple storage procedures. It also eliminated duplication by elimination of steps in the process. Measurable results included the following improvements:

Original Process Revised Process Improvement Steps 26 21 19% Cycle Time (min.) 8767 2053 76% Touch Time (min.) 225 140 38% First-Pass Yield 31% 92% 298%

The NSSC’s practice of L6S principles through the performance of Kaizen Events has yielded improvements in a number of other functional processes as well, including the following:

• Grants Administration • Drug Testing • Financial Reversals • Bill of Collection Waivers

The winning application for “Excellence In Culture Creation”

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In some cases employee suggestions required minimal time to implement and became “Just Do It” projects. A good example of this was when the NSSC Financial Management Division developed and implemented a process improvement to automate the population of the Intra-Governmental Payment and Collections (IPAC) Document Reference Number (DRN) entry into the financial accounting system in order to support the accounts receivable billing cycle. Prior to the automation of the IPAC DRN, the data processor was required to manually enter all DRN’s into the financial accounting system each month. The process improvement greatly reduced processing time and potential keying errors, creating greater efficiencies and increasing internal control. The automation of the entry into the accounting system has saved approximately 32 labor hours each month since September 2011. As of December 2011, NSSC has processed 3,547 transactions using the improved process.

The winning application for “Excellence In Culture Creation”

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Differentiators Why do you consider this culture creation to be Excellent?

• What differentiates your achievement over other organizations? The two most significant factors that differentiate the NSSC’s culture of excellence with regard to CI are the enthusiastic involvement of their talented employees, and the desire to always incorporate the “Voice of the Customer.” Every employee at the NSSC realizes they have a vested interest in continually improving the products and processes for which they are responsible, and they know that management stands behind them in their efforts. The importance of CI is emphasized and conveyed to employees in a number of ways. First, management has invested in their employees through a comprehensive world class L6S training program. Acuity Institute LLC, was brought in to provide the training. Acuity Institute has worked with many Fortune 500 companies and thousands of L6S practitioners in over 30 countries throughout the world. The training, which included employees across all lines of business at the NSSC, provided a clear message to employees that management was committed to their professional development and the L6S program. A second factor that underpins management’s commitment to continuous improvement through the L6S program is recognition. Employees are given opportunities to participate in a variety of Kaizen Events whereby they are empowered to examine their work and use their creativity to find ways to streamline processes and improve their products. Each event is initiated with a Project Kickoff, and concludes with a Project Out-brief attended by senior management. Employees are recognized for their efforts through their participation in these events and exposure to their senior management. The second factor impacting the NSSC’s success in CI involves the “Voice of the Customer.” The NSSC strives to always understand its customers’ perspective and needs. Surveying customers is one technique that the NSSC has used effectively to gather performance feedback from its customers. Broad Based Surveys were used early on to baseline performance in the various functional areas for continuous monitoring and comparison. The NSSC also makes use of event-driven surveys for a more focused assessment of timeliness, accuracy, quality, and overall effectiveness for high-volume activities. The NSSC uses other techniques, including face-to-face forums to gather feedback and better understand the needs of its customers. Functional managers and staff periodically visit the ten NASA Centers to maximize working relationships and to ensure that channels of communication are always open. The face-to-face meetings have produced excellent results. The NSSC also hosts face-to-face events at their facility to provide a forum for Center representatives to provide feedback on topics such as SLIs and metrics. This allows the NSSC to understand what is and is not working well for its customers so alternative approaches and solutions can be considered. The culture creation achieved by the NSSC through its CI program has resulted in dramatically improved performance as evidenced in the 2010 Broad-Based Survey, Kaizen Event summaries, and monthly Performance and Utilization Reports. This has translated into improved customer satisfaction as evidenced through the Customer Contact Center - Customer Satisfaction Survey (2008-2011).

The winning application for “Excellence In Culture Creation”

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Don’t forget to apply for an Award yourself.

The NSSC team with their award at Shared Services and Outsourcing Week 2012 in Orland, Florida.