driving transformation through operational excellence

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Confidential © 2011 WNS Global Services | www.wns.com April 2011, Melbourne Transforming SSC’s: Moving up the Maturity Curve Driving Transformation through Operational Excellence

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Transforming SSC’s:Moving up the Maturity Curve

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Page 1: Driving Transformation Through Operational Excellence

Confidential © 2011 WNS Global Services | www.wns.com

April 2011, Melbourne

Transforming SSC’s: Moving up the Maturity Curve

Driving Transformationthrough Operational Excellence

Page 2: Driving Transformation Through Operational Excellence

1Confidential © 2011 WNS Global Services | www.wns.com

Overview

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Key questions Shared Services Centers (SSCs) answering everyday

How do I reduce the cost of delivering Shared Services?How do I go from “good” to “better” and from “better” to “best”?How do I increase both efficiency and effectiveness of my shared services center?How do I embrace technology and what technology should I be considering?How do I retain staff and provide a meaningful career path?How do I provide more strategic value to the enterprise as against being a mere transaction processing hub?

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Polling Question

On a scale of 1 to 5, where – 1 stands for least mature (primarily a transaction

processing hub, non-standard processes, multiple ERP’s, etc.)

and – 5 stands for most mature (adds strategic value to the

enterprise, participates in enterprise wide planning and risk management, provides actionable insights, impacts business outcomes, provides an exciting career option, etc.)

Where would you rate your current shared services set up or third party outsourcing program?

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OverviewWhat is the Shared Services Maturity Curve?

Depicts the degree of evolution of a SSC within an enterprise

Normatively, SSC evolve according to a predictable maturity curve…– Common set of repeatable patterns that can be

seen across organizations– Similar evolutional domains including strategy,

operating model / process, technology, governance / controls, organizational development

Majority of SSC’s only attaining the first level of maturity– Focused on consolidation & standardization that

yields reduced costs and some levels of scale, efficiency, and standardization

– Operate as “cost center” with continued pressures to innovate, improve efficiencies while reducing costs

Maturity Curve suggests SSC’s are leaving significant opportunities for improvement untapped… not to mention the ability to reposition the SSC as a strategic asset.

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OverviewWhat is the Finance Shared Services Maturity Model?

Tool, meant to objectively assess the current state of the SSCAllows SSCs to compare themselves with the “best in class” and also define its own target stateMechanism, for determining the potential of the Shared Services operationsBased on 5 key dimensions & 36 sub-dimensions– Operating Model & Processes

□ Scope, Span, Standardization, Knowledge Mgmt.

– Technology Enablement & Optimization□ System standardization, Consolidation, Workflow, Self-

Service

– Operational Controls & Service Delivery□ Governance, Process Controls, Reporting, Business

Intelligence, Performance Management, Benchmarking– Organizational Development

□ Org Structure, Staffing, Incentives, Career Management, Development and Retention

– Strategic Business Value□ Strategic Planning, Customer and Vendor satisfaction, Risk

Management, Actionable Insights

Provides a guideline for deriving a “roadmap to maturity”

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OverviewFinance Maturity Model – Used as an Assessment Tool

Based on input across the 5 key dimensions & 36 sub-dimensions, the model indicates your organization’s maturity rating on a scale of 0 – 4.

Capability LevelCurrent

CapabilityTarget

CapabilityMedian

Operating Model / Processes 1.50 3.50 2.50Technology Enablement & Optimization 1.70 3.00 2.50Operational Controls & Service Delivery 1.50 3.50 3.00Organizational Development 1.25 3.00 2.00

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OverviewFinance Maturity Model – Data Collection Template (sample)

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Moving up the Maturity Curve

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Moving up the Maturity CurveLeverage the Domain Specific Maturity Models

Source to Procure Maturity Model

Tactical Collaborative Strategic Value Creation

Spend visibility >75%Spend under management >75%<10% Suppliers for 80% of spendCatalog based buying 50+%PO Cycle Time 1dayeSourcing adoption >75%

Spend visibility 50-75%Spend under management 50-75%10-20% suppliers for 80% of spendCatalog buying 25-50%

PO Cycle Time 3-5 dayseSourcing adoption 50-75%

Spend visibility <50%Spend under management ~50%20-30% Suppliers for 80% of spendCatalog buying <25%PO Cycle Time 5 -10dayseSourcing adoption <50%

Low spend visibilityDecentralized sourcingFragmented supplier baseNo catalog buyingPO Cycle Time > 10 days

Direct and Indirect Spend

Level 1

Level 2

Level 3

Level 4

Level of Effectiveness (Quality and Business Impact)

Leve

l of E

ffici

ency

(Aut

omat

ion,

Pro

duct

ivity

)

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Moving up the Maturity CurveLeverage the Domain Specific Maturity Models

Procure-to-Pay Maturity Model

Tactical Collaborative Strategic Value Creation

100% Electronic Invoices

Supplier Self Service

Dynamic Discounting

Fraud prevention

Supplier OnBoarding

Vendor Portal

PO flip

Automated Matching

Online Dispute ResolutionKey from Image and OCR

Point to Point edi

Online Matching

Exception Management

Approval Workflow

Automated Reports

Centralized

Scan Invoices

Manual Indexing

Manual Approval

Cost Per InvoiceLevel 1

Level 2

Level 3

Level 4

Leve

l of E

ffici

ency

(Aut

omat

ion,

Pro

duct

ivity

)

Level of Effectiveness (Quality and Business Impact)

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Moving up the Maturity CurveLeverage the Domain Specific Maturity Models

Level 1

Level 2

Level 3

Level 4

Electronic Bill PresentmentCustomer PortalElectronic Sales Order MgmtCollection Workbench & Audit LogContact Management DatabaseView of Credit DemographicDigital Dashboard

Online Payments / EFTAutomated Cash Application algorithms Advanced Credit AnalyticsCredit Portfolio MgmtCash ForecastingIntegrated Dispute Management Tools

Collection Strategy EngineCustomer ProfitabilityPortfolio Risk Predictive AnalyticsCustomer Satisfaction

Centralized ARStandard Invoice Generation /Invoice / Remittance TrackingManual Collection /Contract Mgmt.Operating Measures / Metrics

Tactical Collaborative Strategic ValueCreation

Order to Cash Maturity Model

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Moving up the Maturity CurveLeverage the Domain Specific Maturity Models

Level 1

Level 2

Level 3

Level 4

Standardization of policies, practices, schedules

Sub-ledger to GL consolidation through automated batch data feeds

Template based transactional tasks (Journals , Reconciliations, etc)

Efficiency metrics – Revenue / Finance FTE, Finance back office cost as a percentage of revenue

Single Chart of Accounts and ERP

Online repository of policies, practices, schedules

Automated consolidation & reporting engine integrated with GL , drill down from GL to sub-ledgers

Automated reconciliations

Workflow for journal approval

Automated closing calendar and workflow

Effectiveness measures – Days to close (GL Close, consolidation, MD&A, earning release), %Finance Cost / Revenues, FTE/ Million $ Revenues, No of ERP / GL systems

Continuous forecasting and auditing capability and tools

Synchronization capability (GL, Sub-ledgers, Consolidation & Reporting Engine, etc)

User self-service capabilities for querying and reporting

Finance as the custodian of enterprise master data, business rules, hierarchies (automated master data management)

Business outcome measures –rolling forecast vs actuals (monthly, quarterly, annual)

Duration to complete strategic plan, annual plan and forecast

Multiple ERPs

Non standard Chart of Accounts

Business unit consolidation and reporting

Manual / non-standard reconciliation templates

Email / paper based workflows

Non-standard closing calendars

Operating metrics limited to timeliness and accuracy of transactions

Tactical Collaborative Strategic ValueCreation

Record to Report Maturity Model

%Finance Cost / Revenues

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Next Steps

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Next StepsWhere do I go from here?

Conduct a discovery session in which discrete opportunities are identified and preliminarily sized / evaluated

Get organizational buy-in from key stakeholders (Finance, IT, HR, BU, etc)

Consider a formal assessment through High Level Due Diligence:– Will unearth clear opportunities without significant

investment – Driven by industry practices & thought leadership,

specifically the Finance Shared Service Maturity Model

Establish a Program:– Leveraging existing SSC staff, technology and other

stakeholders – Formalize as the opportunities, roadmap, and business

case become clear (i.e. Detailed Due Diligence)– Create timelines, define roles, assign responsibilities– Plan the work and work the plan!

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15Confidential © 2011 WNS Global Services | www.wns.com

Polling Question

On a scale of 1 to 5, where – 1 stands for least mature (primarily a transaction

processing hub, non-standard processes, multiple ERP’s, etc.)

and – 5 stands for most mature (adds strategic value to the

enterprise, participates in enterprise wide planning and risk management, provides actionable insights, impacts business outcomes, provides an exciting career option, etc.)

Where would you rate your current shared services set up or third party outsourcing program?

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16Confidential © 2011 WNS Global Services | www.wns.com

Manish Vora

Head of Sales – APAC and Middle East

[email protected]

www.wns.com

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