clive corscadden & rajesh chopra - shared services virtualization

CSC Proprietary and Confidential

SHARED SERVICES VIRTUALIZATION:

DON’T LET THE SUN GO DOWN ON ME.

Clive Corscadden, Partner

Rajesh Chopra, Partner

March 25, 2010

4/1/2010 BE10_0103 2© 2010 Computer Sciences Corporation

What We Heard?

• We have further cost optimization challenges to address?

• Our business requires agility?

• We currently have centralization of our finance functions and are evaluating Shared Services?

• We have a current BPO contract coming up for renewal and would like to understand comparative levels of SSO structure/efficiency.

• We have been using SSO for a number of years, but would like to understand where to go from here in terms of process, people, & technology efficiencies.

• How can SSO be expanded efficiently to add more services?

• We are in M&A mode, what should our M&A framework look like?

• How to develop processes which can scale based on business/customer requirements?

What are your challenges?


Cost Optimization and Business Responsiveness Chall enge

• With the change in global economic situation, companies are focused on furthering business cost optimization by increasing business operation efficiencies and effectiveness

• Shared Services Organizations (SSO) have a track record in reducing business operations cost and enhancing productivity

• New locations on the globe are becoming viable locations for captive centers

• To enable SSO’s to meet new business needs, there is a need to transform current state SSO’s to a “Virtualized Shared Services Organization”


Resources Under Resources Under One OrganizationOne Organization

Process Process StandardizationStandardization

People, Process, People, Process, Technology Technology IntegrationIntegration

People, Process,People, Process,Technology ElasticityTechnology Elasticity

VA

LUE

/CO

ST

RA

TIO

S

Shared Services Maturity Levels

CONSOLIDATION

STANDARIZATION

OPTIMIZATION

VIRTUALIZATION

• Improve business responsiveness through scalability and SSO agility

• SSO leader reports to CFO/COO

• Global support with regional focus

• Global labor integration and employee rotation programs

• Shared services catalog• Leverage latest technology

including Cloud and Collaboration

• Leveraged SSO/BPO model

• Balanced scorecards integrated to customer strategy

• Performance metrics available via SSO dashboard

• Focused on brining few processes and technology under one roof

• Viewed as part of Corporate centralization

• Disparate IT Systems• Funded by Corporate• Reactive performance

management

• Focused on standardization of policies, procedures, and technology

• Informal Governance Board• Multiple systems in use by

customers• Customer relationship

managers identified• Some performance

reporting• Technology metrics

monitoring

• Integration of optimized processes, technology, and organization

• Balance between SSO & outsourcing

• SSO leader selected from BU’s

• Standardized enterprise system

• Integrated Contact Center• Balanced Scorecards• Detailed SLA’s• Variable Pricing• Formal Governance Board• People, Process,

Technology metrics identified to measure SLA’s

Shared Service Life Cycle ModelSSC Evolution Stages


How Do You Get to a Virtualized SSO?

While most of the basic features will remain the same for SSO’s, building Elasticity within people, process, and technology areas are critical for transformation to a virtual SSO

Process• Developing a SSO

Catalog of Services

• Standardized global business processes

• Designing SSO processes to support current and future processes

• SSO performance measurement

People• Alliance with global BPO

providers

• Appointment of global SSC executive reporting to COO/CFO

• Corporate Employee SSO Rotation Program

• Shared Services Center of Excellence (COE)

• Establishing a formal SSO governance board

Technology• Deployment of global collaboration

technology • Use of Cloud computing services (Pay as

you go)• Continuous update of latest technology

advances to enhance productivity

Invoicing, Billing, Contact Center, Expenses, HR, IT Help Desk, Property

Management Payroll, Financial Processing,General Accounting

FP&A, Invoice Analytics, Global Tax Services, Credit and Collections, Global

Sourcing, Procurement

Seasonal Marketing and Finance Support, R&D Services, Cloud Services,

Collaboration Services

Commodity Services

Complex Services


Process Elasticity

People Elasticity

Technology Elasticity

Transactional

People and Process Elasticity: Shared Services Center of Excellence

SSO Center of Excellence organization will monitor and improve the performance of current services while delivering additional processes/services for the business stakeholders

People Elasticity

•Global Labor market strategy/BPO Alignment

•SSO resource rotational program

Process Elasticity

•Developing and maintaining on-line Shared Services Catalog

•Shared Services Performance/Cost Improvement Processes

High

Low

Ela

stic

ityComplex Services

Invoicing, Billing, HR Processing, Payroll, IT Helpdesk

Collaboration Services, Web Hosting

Seasonal Support

Marketing

Sales Programs

Reporting

Analytics

FP&A

R&D

High


Technology Elasticity: Cloud Computing

SSO Processes Business Needs

Record to Report Services

Purchase to Pay Services

Order to Cash Services

Sales & Marketing

Reporting & AnalyticsTax & Treasury

ServicesHR Services Payroll Services

Software as a Service (SAAS) Platform as a Service (PAAS)

ERP SoftwareReporting &

AnalyticsCRM/Other

SAAS

Web Application Platforms

Business Application Platforms

Collaboration Platforms

SSO Data Models

Cloud Data Models Security & Procedures Data Policies/Procedures

Data Retention

Infrastructure as a Services (IAAS)

Storage Provisioning OS Provisioning Network Provisioning CPU Provisioning

Fundamental Elements of Cloud Computing SSO Elasticity

• Technology elasticity will drive additional complex services within SSO’s

• SAAS (Software as a Service): ERP/Reporting & Analytics and other software vendors are building cloud offerings for their software, including vendors -Salesforce.com, Google, Microsoft, etc.

• PAAS (Platform as a Service): including messaging, identity management, file sharing, Web Applications

• IAAS (Infrastructure as a Service): ability to scale data centers, servers, and storage


CSC Total End-to-End Approach for a Shared Service Center Implementation

Implementation Audits

Organizational Change & Communication

Program Management

Reengineering Toolkit & Best-Practices Toolkit

Con

tinuo

us Im

prov

emen

t Pro

gram

s

Per

form

Aud

its

Legal & Fiscal & Social

Hig

h Im

pact

Per

form

. Aud

its

Pro

cess

Im

prov

emen

t

New

O

pera

ting

Mod

el

Easy Fix

Quick Hit

Major Opp

Sur

vey

Redesign Vis

ion

&S

trat

egy

Fea

sibi

lity

Stu

dies

&

Bus

ines

s C

ase

Bus

ines

s B

luep

rint

Realization

Information Technology

Management & Control Systems

Processes & Procedures

Organization & Skills

Implementation Project Management

Processes & Procedures

Information Technology

Ser

vice

Lev

el A

gree

men

t

Ser

vice

Man

agem

ent

Pro

cess

Map

ping

&

Bas

elin

ing

Location StudyKnowledge Transfer

LocalRedeployment


High Performing Virtualized Shared Services Are Ach ieved Through a Number of Good Practices …

GETTING THE BASICS RIGHT

Processes & KPIs

Technology & Systems

SSC Organization

Customer Service Focus

People & Culture

Leadership

CSC SHARED SERVICES PERFORMANCE MODEL

Leadership• Clarity of SS vision• Clarity of goals & objectives• Clarity of priorities • Active Steering Group• Use of SS champions• Conflict resolution strategy

People & Culture• Quality of staff• Structured recruitment• Broad based training• Structured knowledge transfer• Cross-team working• High staff morale• Performance & reward

processes• Location & environment

SSC Organization• Clarity of reporting lines• Revised roles for local

Finance • Local country SS focal points• Distinct migration teams• Distinct support functions –

HR/IT• Communication processes

Processes• Elastic processes design &

implementation approach• Clarity of roles & responsibilities• Performance targets & process

metrics• Monitoring of process defects• Continuous process improvement

culture

Technology & Systems v/c• Cloud technology• Collaboration technology• Underlying technology supports/

enables designed processes• Use of self-service• Use of automation tools• SSC organization dashboard

Customer Service Focus• Regular interactions with countries• Pro-active and joint working• Monitoring of phone systems• Calls & query logging• Publication of KPIs• Use of SLAs• Customer service training

PERFORMANCE FACTORS


CSC’s Global SSO Assessment FrameworkA rigorous, highly quantitative, five-step assessment process is used to determine what processes should be included in the Virtualized Shared Services or BPO Model

Shared S

ervices

Service CharacteristicsDelivery Model Leverage Points

• High volume• Standard requirements• Common across locations, ex.:

––

• “Uniform” services: common enterprise systems and practices

• Unique• Discretionary• Face-to-face• Self-service, ex,:

––

• Low volume• Often discretionary• Unique service requirements, ex.:

––

• “Custom” services: business unit-specific product, customer, geography and sales channel

Center of Scale

Field

Center of Expertise

• Reducing cost through• Centralization• Standardization• Technology• Outsourcing

• Reducing cost through• Leveraging field staff

across locations and capabilities

• Standardization• Technology

• Leveraging expert advice across the company

Unique

Shared

Unique

Common Systems

UniqueCorporate

Understand Overall Strategic Context and Customer Needs

1 Identify What is Shareable2 Categorize Services by Type3

Decide Delivery Approach4 Summarize5

Corporate Center

Does the Activity Support CEO’s

Strategic Needs?

Yes

Embed in BU/Sector

Eliminate

YesIs It a Core Capability for a Business Unit toexecute its strategy?

NoDo Business Units Need This Service?

Does ServiceDemonstrate

Economies of Scale Across Bus?

No

No

Yes

Shared Services

Field COE

COS

Delivery Approach

No

Requires specializedknowledge?

SSO PPT

Availability?

Morecost effective

SSO?

Variableworkload?

Can offloadpeak?

Decision

Criteria?

Yes

Defineperformancerequirements

Potential Outsourcing

Opportunities

SSO (in-source/BPO)

Yes Yes Yes Yes

No No No No

No Yes

Decentralize Completely to

DivisionsEliminate

Centers of Expertise

Centers of Scale

Outsource“Field”

Shared Services Organization

• CBI (internal consulting)

• Corporate IS

• SHEA (Safety, Health, Environmental)

• Corporate Planning

• Facilities Services

• Engineering

• Finance

• Hospitality

• Human Resources

• Legal

• Pension Fund Investment

• Security Services Sourcing

Benefits:• Savings• Service improvement• Focus on strategic

Illustrative: (performed at detailed activity level)

Shared Services Assessment Process Overview


Leading SSO Practice Model

Leading Virtualized Shared Service models incorporate each of the following components to ensure alignment with Corporate Strategy

Strategy

Governance Structure

Foundational Items: – Business Processes– Service Level Agreements– Management tools & information– Customer Relationship Management– ABC costing– Chargeback approach

Performance Management

Technology

Products & Services

Business Case


Client Profile

Client Situation

• Aerospace and Defense company

• $11.7 Baillion in 2008 Revenue

• 42,000 employees

• The Shared Services strategy and design project was conducted simultaneously with a CSC led SAP global implementation and upgrade

• The Shared Services project focused on:

– Developing the vision and strategy for a global organization, covering the following functional areas:• Finance (G/L, A/P, Credit & Collection, A/R, Fixed Assets,

Project Accounting), Cash & Treasury Mgmt, Supply Chain, Indirect Procurement, HR and IT

– Recommending site locations and the use of existing facilities

– Designing specific processes to be included in the Centers based on CSC’s best practices

– Detailed business case

The client had made investments in a Shared Services Organization but had not yet realized the full benefits.

The Client needed to:

• Develop a global strategy for delivering support services

• Identify the specific functions and activities to be included within a Shared Service model in terms of Centers of Scale and Excellence

• Confirm use of existing sites or choose new sites for their Centers

• Optimize their processes as part of the move to Shared Services • CSC delivered a comprehensive plan that solidified the

vision and developed the strategy to create a unified, global Shared Services Organization.

• CSC also produced detailed future state process maps for the functional processes that will be handed by the Shared Service Centers.

Project Summary

Client Results

Case Study: Aerospace & Defense Shared Services Strategy & Design


Client Profile

Client Situation

• Hospitality Company

• $20 Billion+ in 2004 Revenue

• 50,000+ employees

• Project involved consolidation of thousands of individual custom hotel financial packages, Oracle instances and data marts onto one common instance

• 18 month project overall – covering visioning / strategy, through Blueprinting, Realization and finally Rollout phase

• Client sites had mostly individual financial and HR systems with no consolidation

• This made effective enterprise management of HR and Finance processes exceptionally inefficient and costly

• Reporting was via multiple systems to pull together monthly management reporting

• TCO was high due to the mosaic of systems

• $95M+ in overall savings from IT Support Cost Reduction and Backoffice headcount reduction

• Month end close reduced from 15-16 days down to 5 days

• Moved from thousands of disparate instances to a single consolidated Oracle ERP instance to centralize Financial processes and IT capabilities

• Reduced/”sun setted” IT TCO as the project removed multiple interfaces, ERP’s and legacy applications

• Provided “one version” of the truth for the organization

• Delivered global standard common processes underpinned by common master data

• Developed a Financial & HR Shared Service model to support the organizationProject Summary

Client Results

Case Study: SSO Process Optimization


CSC’s Key Contacts

• Clive CorscaddenPartnerCell: 508.615.8982Email: [email protected]

• Rajesh ChopraPartnerCell: 512.773.1155Email: [email protected]

• Steve LynchPrincipalCell: 719.650.3853Email: [email protected]

� Experienced consultants

� Focused on delivering business value … quickly

� Possess entire end-to-end solution capabilities

� Demonstrated and proven methodologies, tools and techniques

� Specific solution sets for varying client and industry needs

� Thought leaders and understanding of best practices

� Collaborative work style, fosters effective knowledge transfer

CSC Proprietary and Confidential

THANK YOU

Shared Services Virtualization

clive corscadden & rajesh chopra - shared services virtualization

Business

technology elasticity

business unit

case study

services

processes

centers

sso