fundamentials of shared service operations
TRANSCRIPT
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Copyright 2007 by ScottMadden. All rights reserved.
September 16, 2007
Shared Services 101:
The Fundamentals of Designing,Building, and Implementing aShared Services Operation
Shared Services Summit West
2007
Las Vegas, Nevada
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Copyright 2007 by ScottMadden. All rights reserved.
Agenda
Chapter I. Introduction to ScottMadden, Inc. (ScottMadden)
Chapter II. Introduction to Shared Services
Chapter III. The ScottMadden Approach to Shared Services Implementation
Strategy Alignment and Project Planning
Current State Assessment
Model Design and Business Case Development Implementation Planning
Implementation and Transition
Chapter IV. Beyond Implementation The Outsourcing Process
Chapter V. ScottMaddens Shared Services Experience
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Participant Introductions
Name
Title
Company
Shared Services Description
Shared Services A,B,C
A. Planning stage
B. One year or less
C. One plus years of services
x Objective for Workshop
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Chapter I. Introduction to ScottMadden
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Introduction to ScottMadden
Who We Are
ScottMadden is a general management consulting firm founded in 1983
We started with a focus in energy and now have three primary practice areas
Shared services
Finance and accounting
Human resources
Information technology
Real estate and facilities Supply chain
Multi-function
Outsourcing advisory services
Energy gas/electric utilities
Our clients tell us that our service is unique in the quality of our consultants and the way that we:
Listen, are flexible, and provide a solution that fits not just the generic answer Put the clients best interest first
Maintain a relentless focus on results and customer satisfaction
Provide great value, getting the work done quickly and practically
Do it with our clients (instead of doing it to them)
Support them during implementation with expert resources
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What Our Clients Say
ScottMadden worked with us on infrastructure enhancement and cost reduction projects. Compared to other
consultants, ScottMadden does a great jobthey do projects with us, instead of to us. They dont try tosqueeze us into their solution or templateScottMadden has a strong focus on relationships and resultsinstead of sales. Director
They are extremely thorough; they understand and define the problem correctly; they combine the rightinformation and the right management thinking to help solve the problem. ScottMadden never does amechanical jobthey really make me a part of the solution so that I own it at the end of the day. Theirsolutions are not academic; they are pragmatic. Director
The big firms have no desire to learn our businessjust a desire to tell us what to do. ScottMadden has thedesire to understand our company. CIO
They are practical; we can put their recommendations into play right away. SVP
They dont just consult, they actually do the work and deliver product. ScottMadden delivers work products
that we are able to use. SVP
ScottMadden people can dive in, get the work done and deliver results in the time it would normally take us tointroduce consultants to our team. EVP
ScottMadden Provides An Exceptional Consulting ExperienceScottMadden Provides An Exceptional Consulting Experience
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About ScottMadden
Primary Practice Areas Capabilities
Strategy and Business Planning
Operations/Organization Design
Business Case Analysis
Project Planning and Management
Design and Implementation
Technology Support
Process Improvement and Cost Reduction
M&A Integration
Operational Audits
Employee Service Centers
Customer and Employee Surveys
Strategy and Business Planning
Operations/Organization Design
Business Case Analysis
Project Planning and Management
Design and Implementation
Technology Support
Process Improvement and Cost Reduction
M&A Integration
Operational Audits
Employee Service Centers
Customer and Employee Surveys
SharedShared
ServicesServices
EnergyEnergy
OutsourcingOutsourcing
AdvisoryAdvisoryServicesServices
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About ScottMadden (Contd)
Capabilities
SharedShared
ServicesServices
EnergyEnergy
OutsourcingOutsourcing
AdvisoryAdvisoryServicesServices
Readiness Assessment
Business Case Development
RFP Development
Technical Proposal Analysis
Financial Proposal Analysis
Base Case Development
Technical and Commercial Negotiations
Implementation Planning
Relationship Management Planning
Effectiveness Assessment
Readiness Assessment
Business Case Development
RFP Development
Technical Proposal Analysis
Financial Proposal Analysis
Base Case Development
Technical and Commercial Negotiations
Implementation Planning
Relationship Management Planning
Effectiveness Assessment
Primary Practice Areas
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A Sample of ScottMadden SharedServices Clients
Paper/Paper/Forest ProductsForest ProductsGeorgia-PacificMeadWestvacoWeyerhaeuser
EntertainmentEntertainmentTime Warner CableTurner Broadcasting System
PharmaceuticalsPharmaceuticalsPharmacia TransportationTransportationBurlington Northern Santa FeNorfolk SouthernUnion Pacific Railroad
TechnologyTechnologyEricssonLockheed MartinMicrosoft
SeagateSiemensSolectron OtherOther
Adidas
Bechtel
Fluor
Hospital Corporation of America
Johns Manville
Johnson Controls
Kerr-McGee Corporation
Michelin
NASA
NewellRubbermaid
Sara Lee
Woodruff Arts Center
TelecommunicationsTelecommunicationsAT&T
Bell AtlanticBellSouth
Southwestern Bell
WorldCom
EnergyEnergyCinergyLos Alamos National Lab/KSLMirantOglethorpe Power CorporationPlains All American PipelineProgress EnergySempra
Southern California Edison
Financial ServicesFinancial ServicesBlue Shield of California
International Monetary Fund
Unum Provident
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ScottMadden Value Proposition
We enable you to implementWe enable you to implement
change more efficiently and effectivelychange more efficiently and effectively
We enable you to implementWe enable you to implement
change more efficiently and effectivelychange more efficiently and effectively
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Chapter II. Introduction to Shared Services
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Shared Services Overview
What is Shared Services?
Under a shared services model, operating units outsource certain support functions to a centralizedsupport organization
Shared services organizations group essential business support functionssuch as informationtechnology, human resources, and financeas a business unit (or units) to serve the operating units of acorporation
Shared services is externally focused on their corporate customers, balancing the requirements of thebusiness units with the most efficient and effective delivery of services
In the most advanced models, the shared services organization runs as a business, offering competitiveservices at competitive prices to its internal customers
"Traditionally, our service organizations have been largely perceived by our customers (SBUs) to becosts instead of providers of value. This is the fundamental reason why we have put the shared servicesbusiness in place.
Ashok Arya, Principal Consultant of Dupont's Global Shared Services Business
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Benefits of Shared Services
Reduce Expenditures
Improve Operations
x Raises service levels bystandardizing processes to achieveworld-class results
x Identifies and eliminates non value-added processesx Focuses efforts of shared services staff on providing
cost-effective, high-quality servicex Improves qualitative customer satisfaction and
quantitative service measures
x Allows collection and analysis of standardizeddata across the organization
x Creates comparability across the organizationthrough consistent processes
x Enables better decisions to be made based onbetter information
x Adapts easily to growth, contraction or structuralchanges within the company
x Provides one-stop shopping for employees;clear and known point of contact
Efficiently serving the customer is the driving reasonto consider a shared services arrangement
Leverage Information
Shared services, if done right, is a source of competitive advantage for a business
x Removes duplicate processesand brings them together in one organization
x Eliminates redundant labor and systemscosts; aligns labor skills and costs withspecific task types
x Creates awareness of costs for internalservices, shaping usage behavior
x Enables company to retain internal control ofcore functions while still maximizing costefficiency
x Reduces costs by 20% to 50%
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Benefits of Shared Services (Contd)
Driving Forces forDriving Forces for
Shared ServicesShared Services
Competition is demandingcontinuous cost reduction insupport services
Not only transactions, butalso for knowledge-basedactivities
Demands by business units for
improved service havedramatically increased
24/7 availability
Customized services atcommodity prices
Technology has been the greatenabler
Low-cost, reliable
communications
Shared data bases
Web-enabled self-service
Outsourcing options haveexpanded
The emergence of BusinessProcess Outsourcing (BPO)provides additional deliveryoptions
Percentof
BaselineCosts
Time
100%
Start-upStart-up
< 1 year< 1 yearMaturityMaturity
5+ years5+ yearsGrowthGrowth
1 to 5 years1 to 5 years
Step 1: Formation Centralization Consolidation
10-20% Reduction Economies of
scale Elimination of
redundantoverhead costs
Step 2: Operation Service level
agreements Unit pricing Monthly invoices Performance
measurement
15-30% Reduction Reduced demand Standardization
of service levels Process
standardization
Step 3: Refinement Process
improvement Reengineering
25-40% Reduction Minimizing
exceptions orcustomization
Improving hand-offs andinterfaces
Processsimplification
Outsourcingalliances
Step 4: Innovation Web-enabled Self-service Six Sigma
processes
Unlimited Opportunity Paperless Virtual service
center Global low cost
alternatives Strategic
outsourcing
Phases of Shared Services Development
0%
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Shared Services Overview
SHARED SERVICES
DECENTRALIZED CENTRALIZEDService CultureService Culture
Efficient Delivery ModelEfficient Delivery Model
Best PracticesBest Practices
Independent EntityIndependent Entity
Redundant
Inefficient
Non-Standardized
Unresponsive
Detached fromBusiness
Inflexible
CustomerCustomerFocusedFocused
BusinessBusinessIntelligentIntelligent
EconomiesEconomiesof Scaleof Scale
StandardizedStandardizedProcessesProcesses
Shared Services is not the same as centralization!
InfrastructureInfrastructure
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Potential Shared Services Offerings
Human Resources
Payroll
Compensation
Records management
Benefits administration
Training and development
Relocation services
Travel and expense
Labor relations
Policies and procedures
Finance
General ledger
Accounts payable/receivable
Planning and budgeting
Internal audit
Tax cash management
Foreign exchange
Customer Service
Call centers
Returns processing
Credit and collections
Order management
Legal/CorporateAffairs/Administrative Services
Litigation support and coordination
Communication services
Environmental, health and safety
Insurance
Regulatory compliance
Media relations
Security
Travel
Real estate
Facilities
Fleet management
Information Services
Standards
Technology planning and development
Desktop support
Applications development
Data center operations
Application maintenance
Telecommunications
Hardware and software
Acquisition
Logistics/Materials Management
Strategic sourcing
Procurement
Warehousing
Inventory management
Transportation
Source: Shared Services: Better Service at Lower Cost ChrisRutledge; www.sharedxpertise.org; ScottMadden
http://www.sharedxpertise.org/http://www.sharedxpertise.org/http://www.sharedxpertise.org/ -
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INFRASTRUCTURE
Productsand
Services
ActivityBased
Costing
C
hargebackand
Billing
ServiceLevel
Agreements
Performance
M
anagementand
Reporting
Customer
Account
Management
Business ProcessesBusiness Processes
TechnologyTechnology
GovernanceGovernance
STRATEGYSTRATEGY
StructureStructure
Shared Services Infrastructure
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Chapter III. The ScottMadden Approach to Shared ServicesImplementation
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Shared Services Implementation
Case for Change Phase ICase for Change Phase I Implementation Phase IIImplementation Phase II
Step 1Step 1Strategy Alignment andStrategy Alignment and
Project PlanningProject Planning
Step 2Step 2Current StateCurrent StateAssessmentAssessment
Step 3Step 3Model Design andModel Design andBusiness CaseBusiness Case
DevelopmentDevelopment
Step 1Step 1Implementation PlanningImplementation Planning
Step 2Step 2Implementation andImplementation and
TransitionTransition
a. Strategy alignmentassessment
a. Organizations andresponsibilities
a. New operating model a. Detailedimplementation plan
a. Execution ofimplementation plan
b. Preliminary changemanagement planning
b. Products, services, andprocesses
b. Business case b. Detailed changemanagement plan
b. Service levelagreements andcontinuousimprovement
c. Project planning c. Customers anddemographics
c. High-levelimplementation plan
c. Project management c. Pricing and charging
d. Communication plan d. Supporting telecomand technology
d. Go/no go decision d. Marketing
e. Costs e. Transitionmanagement
f. Executive summary f. Risk management
Four to twelve weeks Three to twelve months
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Implementing Shared Services Keys to Success
Shared services implementations require significant integration and coordination to ensure success.
Listed below are key elements that are essential to implementations, but frequently forgotten orignored:
Proper executive-level sponsorship with support organizations and operating units
Well-articulated drivers for implementing shared services
Detailed business case that specifies qualitative and quantitative benefits
Comprehensive, integrated, phased implementation plan
Customer and corporate (HR and IT, for example) input and buy-in
Governance
Scope agreement
Service levels
Operating model
Managing impact
Matching positions and skill sets Willingness to transition current employees out and hire new, properly skilled employees
Leveraging and integrating technology
Streamlining and reworking processes to fit shared services
Leveraging internal resources to design and build
Marketing and communicating the concept
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Shared Services Implementation Phase I, Step 1: StrategyAlignment and Project Planning
Strategy Alignment and Project
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Strategy Alignment and ProjectPlanningPhase I, Step 1
Case for Change Phase I Implementation Phase II
Step 1Step 1Strategy Alignment andStrategy Alignment and
Project PlanningProject Planning
Step 2Step 2Current StateCurrent StateAssessmentAssessment
Step 3Step 3Model Design andModel Design and
Business CaseBusiness CaseDevelopmentDevelopment
Step 1Step 1Implementation PlanningImplementation Planning
Step 2Step 2Implementation andImplementation and
TransitionTransition
a. Strategy alignmentassessment
a. Organizations andresponsibilities
a. New operating model a. Detailedimplementation plan
a. Execution ofimplementation plan
b. Preliminary change
management planning
b. Products, services, and
processes
b. Business case b. Detailed change
management plan
b. Service level
agreements andcontinuousimprovement
c. Project planning c. Customers anddemographics
c. High-levelimplementation plan
c. Project management c. Pricing and charging
d. Communication plan d. Supporting telecomand technology
d. Go/no go decision d. Marketing
e. Costs e. Transitionmanagement
f. Executive summary f. Risk management
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I.1.a Strategy AlignmentThe Importance of Strategy
To be a strategic partner, a shared services function and its professionals must comprehend exactlywhat capabilities drive successful strategy implementation in their companies and how the functionaffects those capabilities Key Purposes of Strategy
Articulates the future direction for the business or group Allocates scarce resources Enunciates promises Creates sustained competitive advantage
Key Questions What is the corporate strategy?
The marketplace Competitive advantage What is the corporate philosophy?
Autonomy versus control Entrepreneurship versus staying between the lines Accountability for results
What are the business unit strategies? Marketplace Independence versus interdependence
What has been tried in shared services and either succeeded or failed? Approach
Understand the corporate visionwhat it says andwhat it means Be involved in business unit planningunderstand their strategies and critical success factors Discuss with stakeholders the definition of success for shared services and what shared services
should do to support the corporate vision Incorporate learnings into shared services strategy development
If a shared services function cannot demonstrate its value in implementing company strategy, it faces
more scrutiny for being outsourced
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Strategy AlignmentAssessment
Reponses Relevant to Shared Services
Organization
Assess and build sponsorship for change
Sharpen focus of operational business units
Place support services in shared serviceorganization
Orient as customer service organization with otherbusiness units as customers
Processes Redesign the service delivery model
Standardize processes
Reengineer service processes
People
Define new skills
Reselect the staff
Train service providers
Tools
Leverage existing technology
Use technology to facilitate servicerequest/fulfillment
Automate information retrieval and communication
Automate performance reporting to speedimprovement
Example Corporate Strategy OptionsExample Corporate Strategy Options
Reduce costs of support servicesReduce costs of support services
Improve quality of support servicesImprove quality of support services
Improve business unit performanceImprove business unit performance
Gear organization for mergers and acquisitionsGear organization for mergers and acquisitions
Is a shared services approach
consistent with corporate,business unit, functional (HR, IT,Finance, etc.), and otherstrategies?
Is the corporatestrategy clear and
has it been
communicated?
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Cost Reduction
x Focus on cost
x Consolidate and
standardizex Reduce fixed cost
base, mainly throughstaff reductions
Reengineering and
ProductivityEnhancement
x Focus on process
x Reduce/eliminatenon value-addedactivities
x Reduce errors and
increase rework
x More timeliness andaccuracy ofinformation
Value Creation and
Continuous
Improvement
x Focus on value
x Leverage sharedservices network andexpertise
x Create new servicesthat enable businesstransformation
TimeTime
Benefit
Benefit
Integrated Strategic
Service Delivery
x Focus on strategicbusiness drivers
x Create strategicpartnerships
x Ensure seamlessintegration ofoutsourcing
x Enable a virtualorganization
Strategy AlignmentStrategic Direction
More Than Cost Reduction
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Strategy AlignmentConstraints
Organization Is there support for this project? (At corporate? At business unit? In functional area?)
How successful have similar projects been?
Is a major organizational change realistic?
Is adequate funding available?
Would corporate leadership support an outsourcing option?
Processes Are current service processes broken?
Will process participants support change?
Are processes in need of improvement?
Can the number of processes supporting a service/product be reduced?
People
Will corporate policies allow reductions and/or redeployments of staff?
Is there budget for extensive retraining programs?
Can new staff with needed skills be hired?
Tools
What are the limitations of the current technology architecture?
Is the IT organization capable and available to implement supporting technology?
AssessmentAssessment
NoNo MaybeMaybe YesYes
OrganizationOrganization
ProcessesProcesses
PeoplePeople
ToolsTools
I 1 b Preliminary Change
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Project ManagementAccountability Integration Plan Management Resources
I.1.b Preliminary ChangeManagement PlanningElements of Change Management
Organization Development
Role/Responsibilities Rewards Processes
Training/Education
Risk ManagementAssessment
Mitigation Monitoring
Marketing
Value Promise Brand Constituent Assessment Collateral Material Rollout Communication Plan
Audiences Development Messages Rollout
SponsorshipAssessment Development Maintenance
SuccessfulSuccessful
Transition/Transition/
ImplementationImplementation
Preliminary Change
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Preliminary ChangeManagement PlanningEarly Change Management Assessments
Who currently supports this project?
How steady is that support?
Who must support this project to be successful?
Who are the important stakeholders?
What has been communicated to date on prospective project?
What, how, and when will we communicate to those who must assist with planning?
StakeholderStakeholder PositionPosition AssessmentAssessment CommentsComments ActionsActions
John Welch Chief Executive Officer Positive Mr. Welch led development of a newcorporate strategy to make business unitsmore efficient
Joseph Novator Chief, Administrative Officer Positive Mr. Novator initiated the idea of developingshared services
Mark Peoples SVP, Human Resources Neutral Mr. Peoples has expressed doubts about theutility of shared services and theorganizations ability to adopt this level ofchange
Mr. Novator to meet with himbi-weekly to provideinformation and discussconcerns
Bill Gates Chief Information Officer Negative Mr. Gates believes that IT is over tasked andcannot provide adequate support forimplementation
Propose alterations to ITpriorities to free resources tosupport implementation
Jerry Levinson President, ManufacturingBusiness Unit
Neutral Mr. Levinson is reluctant to give up hissupport service(s) for fear of losing control
Mr. Novator to meet with himbi-weekly to provideinformation and discussconcerns
Example of Sponsor Assessment
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I.1.c Project PlanningObjectives and Core Team
Objectives for project planning in Step 1:
Review project objectives and planning assumptions
Establish a meeting schedule to collect information
Current organization, responsibilities,services, processes, service providers,customers, and costs
Existing technology architectures,databases, and software applications
Determine core team members and roles
Schedule working groups with core team to developnew operating model design options
Set up tentative meeting schedule with seniormanagement to:
Receive approval to proceed with project
Solicit budget to complete Phase I planning
Schedule business case presentation
briefing
If known, develop overall schedule of planning andimplementation to make a tentative go live date
Typical Core Team
Leader who ideally:
Understands shared services
Is experienced with managing people and projectsagood team builder
Understands financing within corporation
Can operate comfortably across functions andbusinesses (not necessarily experienced in sharedservice function to be implemented)
Other members
Leaders from relevant support services
Manager(s) from business units/customer groups
Human resources representative
Information technology manager
Manager who understands change management and
training development Organization development professional who can assist
with process analysis and reengineering
Others relevant to specific situation
Project planning provides the roadmap that the core team will use to develop acomprehensive business case and preliminary implementation plan
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Project PlanningExample Summary Project Plan
TaskTask Week 1Week 1 Week 2Week 2 Week 3Week 3 Week 4Week 4
Step 1 Strategy Assessment and Project Planning
Review project objectives and planning assumptions
Discuss corporate strategy and develop plan
Sponsor assessment and other change management planning
Select core team for planning
Step 2 Develop Current State
Comprehensive document review
Meet with service providers
Gather background and benchmark information
Interview selected customers
Meet with other stakeholders
Meet with information technology managers
Meet with information technology SMEs
Meet with selected service SMEs
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I.1.d Communication Plan
AudienceAudience MessageMessage MediumMedium FromFrom WhenWhen ApprovalsApprovals
St t Ali t d P j t
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Strategy Alignment and ProjectPlanning Exercise
Answer and/or discuss the following elements related to launching a shared services operation:
What is the strategy for the shared services operation?
What elements of this strategy are consistent with the strategy of the corporation? The corporationsbusiness units?
What elements of the strategy are inconsistent with the strategy of the corporation? The corporationsbusiness units?
If there are other shared services operations within the corporation, how is your groups strategyconsistent and inconsistent with that of other shared services groups?
What can be done to improve the alignment of your shared services strategy with the direction set bycorporate, the business units, and other shared services groups?
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Shared Services Implementation Phase I, Step 2: CurrentState Assessment
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Current StatePhase I, Step 2
Case for Change Phase ICase for Change Phase I Implementation Phase IIImplementation Phase II
Step 1Step 1Strategy Alignment andStrategy Alignment and
Project PlanningProject Planning
Step 2Step 2Current StateCurrent StateAssessmentAssessment
Step 3Step 3Model Design andModel Design andBusiness CaseBusiness Case
DevelopmentDevelopment
Step 1Step 1Implementation PlanningImplementation Planning
Step 2Step 2Implementation andImplementation and
TransitionTransition
a. Strategy alignmentassessment
a. Organizations andresponsibilities
a. New operating model a. Detailedimplementation plan
a. Execution ofimplementation plan
b. Preliminary change
management planning
b. Products, services, and
processes
b. Business case b. Detailed change
management plan
b. Service level
agreements andcontinuousimprovement
c. Project planning c. Customers anddemographics
c. High-levelimplementation plan
c. Projectmanagement
c. Pricing and charging
d. Communication plan d. Supporting telecomand technology
d. Go/no go decision d. Marketing
e. Costs e. Transitionmanagement
f. Executive summary f. Risk management
I.2.a Organizations and
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I.2.a Organizations andResponsibilitiesProcess
ChiefInformation
OfficerCIO
Planning,Coordination and
Research
ApplicationsBusinessSolutions
Network andInfrastructure
IT Help Desk
IT planning,programming andbudgeting
Research
Controls applicationdevelopmentresources
Coordinatescontracts for similarrequirements inbusinesses
Led by a businessperson
Responsible to SMT foreffective informationsystems
Coordinates andimplements business/ITstrategy
Provides projectmanagement ofprojects from an ITperspective
Project managersreport to businessaccountablemanagers forprojects
Managescontractorsassigned toprojects
Installs andmanages serversand security
Manages desktopprofiles
Managesdevelopment, testand productionenvironments
Manages test labs
Provides how tosupport for widelyused applications
Provides problemresolution
Manages securityaccounts includinglog-ons, roles,permissions andpasswords
WebCoordination
Led by businessperson who overseasweb management
Edits organization andcontent for corporation
Assists offices andbranches to developweb pages and links
Coordinates webstandards throughoutcorporation
CIO
Network andInfrastructure
Help DeskBusinessSolutions
ApplicationsWeb
Coordination
Planning andPolicy
1 Supervisor
2 Staff2 Contractor
7 Supervisor
0 Staff
2 Supervisor
8 Staff16 Contractor
2 Supervisor
5 Staff10 Contractor
1 Supervisor
4 Staff27 Contractor
3 Staff
Organization Role ResponsibilitiesCorporate ITCIO Oversight of corporate information
systems Develop and implement standards
Run configuration control board Standardize web applications
Manufacturing business unit IT Provide information technology sup portto business processes
Provide requirements for applications Maintain business-specific applications
Retailing business unit IT Develop and maintain retail salesdatabases and application
Implement applications to satisfy retail sales and corporatereporting
Develop forecasting techniques to provide inputs tomanufacturing
Etc
Etc
Etc
Interview managers and subject matter expertsto:
Determine organization structure, roles andresponsibilities
Compare roles and responsibilities at variouslevels and in various locations of theorganization
Analyze overlaps and gaps in responsibilities
Collect the numbers of FTEs performing variouswork activities
Example of Staffing Organization Chart
Example of Functional Organization Chart
Example of Roles/Responsibilities Comparison
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Organizations and ResponsibilitiesWork Activity Collection
HR Service Work Activity
Strat Spec T/P C/D Total
1. Benefits/Group Insurance a.) Health & Welfare 0%b.) Life Insurance Program 0%
c.) LOA/STD/LTD 0%
d.) 401(k)/Savings 0%
e.) Pension/Retirement 0%
f.) Severance Planning 0%
g.) Executive Deferred Compensation 0%
h.) Compliance 0%
i.) Reporting/Billing 0%
j.) Tuition Reimbursement 0%
k.) Service Awards 0%
l.) Childcare Centers 0%
m.) Vendor Management 0%
0%
2. Learning and a.) Career Ladder/Succession Planning 0%
Development b.) Training Design 0%
2.) Non-clinical courses 0%
c.) Training Coordination 0%
2.) Non-clinical courses 0%
d.) Training Delivery 0%
2.) Non-clinical courses 0%
e.) Organizational Development 0%
f.) Performance Management/Evaluation 0%
g.) Consulting 0%
h.) Vendor Management 0%
0%
3. Recruiting a.) External Recruiting 0%
b.) Internal Staffing 0%
c.) Workforce Planning 0%
d.) Relocation 0%
e.) Outplacement Services 0%
f.) Terminations 0%
g.) New Hire Process 0%
h.) Vendor Management 0%
0%
Organizations and
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Organizations andResponsibilitiesAssess Skills of the Organization
Human resources are the most important ingredient for improving performance through shared services
Skills must be assessed to establish a basis for conducting gap analysis with a new shared services model
Example Template for Current Skills Assessment Summary
Positions and position descriptions will be established in the new operating model
Assessment of current skills will be helpful in determining the need for new training and/or new staff
NameName Position/GradePosition/Grade Current DutiesCurrent Duties Unique SkillsUnique Skills CommentsComments
I.2.b Products, Services, and
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I.2.b Products, Services, andProcessesProcess and Examples
Develop information on what the organizationproduces and how it is delivered
At right is an example of HR services withdetails and process implications
This information is used to identify:
Potential services and processesthat might be moved to sharedservices
Relative complexity of variousservices
Disconnects and overlaps, whichmay be present in service processes
Determine the volumes associated withpertinent services, for example:
Number of database transactions
Number of forms fulfillment actions
Number of mailings
Number of checks Number of invoices
Number of vouchers
Etc.
Service Service Elements Process Implications
Payroll - Copies of pay stubs & inquiries- Garnishment fee guidelines
- Deduction guidelines
- Payroll tax guidelines
- Pay period/day information
- Employment verification &earnings reporting
- W-4, W-2 administration
- Canadian equivalents (T-1 andT-4)
- Self service securityauthorization
- Forms reductions in processes
- Ensuring information is inknowledge base
Reporting - Call center performance - Call center statistics for 3/27
Maintaining employeerecords
- Benefits enrollment
- Performance history
- Tax forms (W-2, T-4)
- Document management
- What must be retained?
- Paper or electronic retention?
Basic benefitsadministration and callrouting to vendors
- Migration to new processes - Knowledge base content,escalation rules/path
On-line access to policy andprocess
- - Employee self service andknowledge base
Table Oct-99 Sep-99 Aug-99 Jul-99 Jun-99 Average Time Min/mo Hrs/year Percent
General deductions 17420 15776 10985 13911 14831 14585 3 43754 8751 32%
Employment 5044 10855 2541 2872 4497 5162 5 25809 5162 19%
Job 3953 4719 2164 2795 3058 3338 5 16689 3338 12%
State tax 963 731 625 738 1057 823 10 8228 1646 6%
Direct deposit 2375 1904 1610 976 1226 1618 5 8091 1618 6%
Federal taxdata 869 697 594 712 980 770 10 7704 1541 6%
Garnishmentschedule 178 635 150 572 110 329 20 6580 1316 5%
Personal data 1950 1442 1068 1047 946 1291 5 6453 1291 5%
Garnishmentdeduction 370 254 336 328 322 20 6440 1288 5%
Local tax 262 164 117 146 358 209 10 2094 419 2%
Emerg contact 454 463 307 375 415 403 5 2014 403 1%
Emerg phone 106 175 131 195 243 170 5 850 170 1%
Empl deductions 179 224 108 72 107 138 5 690 138 0%
Job Earnings Dist 126 122 102 92 145 117 5 587 117 0%
Add'l pay data 63 80 107 215 109 115 5 574 115 0%
Can taxdata 21 25 40 139 55 56 10 560 112 0%
Garnishmentrule 154 121 55 45 93 94 5 468 94 0%
Personal phone 106 67 47 41 51 62 5 312 62 0%
Employment Phone 105 12 4 14 9 29 5 144 29 0%
Employees 26900 26900 20200 20200 20200 22880 27608
1206.6503 0.5801204Hrs/1000 Employees FTE/1000 Employees
Product/Service Volume Duration FTE CommentsQuestions regarding payroll 100 / day 5 minutes 1.2 Volume increases by 30
% in January and June
due to pay rate changes
PeopleSoft profile
transaction
5 / day 10 minutes 0.1
Example of Service Analysis
Example of HRIS Transaction Volumes/Level of Effort
Example of Volumes/Level of Effort
I.2.c Customers and
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I.2.c Customers andDemographicsProcess and Examples
Interview managers and customers to determine:
Customer groups and service requirements
Communications means with groups
Products/services by customer group to be provided
Other special considerations for each customer group
Interview customers themselves to:
Baseline customer service quality
Satisfaction with services, products, andresponsiveness
Ideas for improvement
Attitudes concerning proposed changes
Special requirements to provide service under anew model
Production Employees
Baseline Operations
Approximately
1,700
Seasonal Production Employees
Approximately
8,000-10,000 at one time on studio lots
70,000 different employees per year
Stores Part-time Employees
Approximately
3,000-5,000
(additional during holiday sales season)
Services Provided by SSC
Pay
Benefits through unions
Limited HR services
Services Provided by SSC
Pay
Benefits through unions
Limited HR services
Overhead Employees
Approximately
6,500
Services Provided by SSC
Pay
Benefits
Full HR services
Stable Workforce Seasonal Workforce
Employee populations vary with the season and are complex
Dental(DMO,
PDO)
HMO
Non
Contributory
Contributory
POS
ThriftPlan
GroupLIfe
FSA
Travel
LTD
Pension
Unemployment
VOE
TravelAccident
AD&D
Motion Picture
KVI
Aetna/US Healthcare
CIGNA
Oxford
UnitedHealthcare
Blue Cross Blue Shield
Hartford Life
Time Warner
Prudential
Fidelity
Ultralink (32 HMO in 32 states)
Zurich
Frick Company
Other
Ultralink mitigates the complex landscape of corporate vendors .Non UnionUnionNot provided
Example of Employee Demographics Related to HR Shared ServicesCenter
Example of Benefits Third Party Providers Currently Delivering Service
I.2.d Supporting Telecom and
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I.2.d Supporting Telecom andTechnologyAssessment Process
Resources
Determine the attitude, availability, and capabilities ofthe information technology (IT) organization that wouldsupport implementation
Investigate competing projects and their demands andtimelines
Technology landscape
Determine network type and relative capacity forexpansion
Local area network
Wide area network Extranets
Security approaches and requirements at a high level
Databases
ERPs
Relevant databases, which might includefinancial management, human resourcesinformation systems, logistics, procurement,and others
Unique, application-specific databases
Software standards
Network
Databases
Operating systems
Office suites
Technology landscape (Contd)
Applications pertinent to proposed shared services Automatic call distributors (ACD)
Interactive voice response (IVR) systems
Case management or customer relationshipmanagement systems (CMS/CRM)
Knowledge bases
Portals
Search engines
Other service support software, examples include:
HR
Recruiting software
Compensation planning
Workforce management
Finance and accounting
AP management
AR management
General ledger Etc.
Telecom
PBX system features and capacity
Local and long distance providers and services
How are current technology capabilities being used to support existing service processes?
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I.2.e Current CostsCategories
Service delivery costs
Plot FTEs performing each service process that wouldlikely be moved to shared services
Determine average loaded employee costs by FTE level
Determine total costs of each process and service
Include costs of processes currently outsourced orpartially outsourced
Facilities costs
If significant facilities will be made available by movingservices from business units, determine cost per squarefoot and total footage used
Calculate the overall costs allocated to each service asappropriate
Technology
Determine pertinent telecom, infrastructure or softwarelicensing costs directly supporting service processes
Allocate costs as appropriate where item is notdedicated to providing relevant service
Telecom charges, if significant and expected to change
Other costs
Vendor costs, as appropriate
Overhead management costs
Administrative support for relevant services
Costs for postage, publishing, advertising, recordsstorage, forms production, etc. if not included in othercosts
Tally pertinent recurring costs and costs trends, if available, to provide proposed services
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Cost AnalysisMethodology
Direct HR Costs(All costs charged to HR cost centers)
Corporate
Utilities
GlobalEnterprises
Indirect HR Costs(HR costs charged to non-HR cost centers)
Notes: 1. HR costs = Costs to administer and deliver HR services to Corporate and Business Unit customers
HR Cost?
Total HRCosts
Labor CostAnalysis
Accounting(Non-Labor)
CostAnalysis
HR Costs by Service
Benefits
WorkforceDevelopment andTraining
Recruiting andStaffing
Employee Relationsand EEO
PayrollCompensationSpecial Projects
Time mapped to activitiesbased on interviews
Costs developed from timeallocations, salary informationand standard loadings
Activities mapped to services Costs for management,
ongoing HRIS support andother support activities spreadamong services based on laborpercentage
Costs mapped to servicesbased on reviews of accountsand interviews
Costs not mapped directly toservices allocated based onlabor percentage
No
Yes
HR Costs by
Business
Corporate Energy Utilities Global Enterprises
HR Costs by Type
Direct Indirect
Corporate
Utilities
GlobalEnterprises
ExcludeNon-HRCosts
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Cost AnalysisMethodology (Contd)
Many HR employees participate in the delivery of more than one service to customers
Utilize interviews to estimate the percentage of time employees spent on various HR services Develop a comprehensive list of HR services and activities to collect employee time allocation information
Labor Cost Analysis Methodology
Develop HRServicePortfolio
Develop HRLabor Cost
Model
ConductInterviews
Populate LaborCost Model
Calculate LaborCosts
Analyze DataInputs and
Costs
Employees
Salaries
Business unit and costcenter affiliation
Allocation of time to HRservices
Allocate time of HRstaff across services
Determine labor costtype
Direct Indirect
Input raw data By business
By service
By activity type
By cost type
Labor Cost Analysis Key Elements
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Cost AnalysisMethodology (Contd)
2003 Budget
2002 Actuals
ReviewTransactionDetail For
2002Accounts
Identify HRand Non-HRCosts in HRand Non-HRAccounts
Build Non-Labor Model
AllocateDirect and
Indirect Coststo Services
PopulateNon-LaborCost Model
and CalculateHR Costs
Analyze DataInputs and
Costs
Acquire CostDetail for AllHR Accounts
By business By service
By cost type
Direct HR costsincurred by HRcost centers
Indirect costsincurred by non-HR cost centers
Review2003 Budget
for Anomalies
Identify Non-HR AccountsPotentially
Harboring HRCosts
Use actual financials to sort costs
Use budgets to identify and adjust for any upcoming projects or other anomalies in the data Obtain budget and actual information for all HR cost centers, accounts, and sub-accounts
Review transaction-level detail for all actual HR expenditures
Transaction-level detail is useful in classifying expenses by service when the account or sub-account could apply to more than one service
Accounting (Non-Labor) Cost Analysis Methodology
Non-Labor Cost Analysis Key Elements
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I.2.f Current StateExecutive Summary
Step 2.a: Organizations and responsibilities
Sponsorship and support Current organization, functions, and
numbers
Roles and responsibilities
Step 2.b: Products, services, and processes
Customer, service provider, corporate,and business unit service preferencesand concerns
Volumes and levels of effort to provideexisting services
Step 2.c: Customer demographics andrequirements
Customer groups and relevant services
Capabilities of customer groups
Common service requirements
Special service requirements
Step 2.d: Supporting telecom and technologies
Supporting technology landscape Supporting resourcescapability and
availability
Step 2.e: Costs
Service delivery costs
Facilities
Technology
Other costs
Efficiencies that can be gained by reorganizing
Products, services, and processes that can bebetter accomplished for all business units
Processes that can be reengineered andautomated for increased efficiency
Opportunities to reduce costs
IMPROVEMENT OPPORTUNITIESIMPROVEMENT OPPORTUNITIES
Current State Assessment
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Current State AssessmentExercise
Answer and/or discuss the following elements related to analyzing current operations:
What indirect functions or resources are providing services that augment or duplicate the services of yourfunction? Which activities provided by these indirect functions are candidates for shared services? Why?
What technologies exist within or outside your function that might be applicable to the shared servicesorganization? How might you evaluate these technologies?
What are the key categories of non-labor costs that might be impacted (positively or negatively) byimplementing (or improving) shared services?
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Shared Services Implementation Phase I, Step 3: Model Design andBusiness Case Development
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Model Design and Business CasePhase I, Step 3
Case for Change Phase ICase for Change Phase I Implementation Phase IIImplementation Phase II
Step 1Step 1Strategy Alignment andStrategy Alignment and
Project PlanningProject Planning
Step 2Step 2Current StateCurrent StateAssessmentAssessment
Step 3Step 3Model Design andModel Design and
Business CaseBusiness CaseDevelopmentDevelopment
Step 1Step 1Implementation PlanningImplementation Planning
Step 2Step 2Implementation andImplementation and
TransitionTransition
a. Strategy alignmentassessment
a. Organizations andresponsibilities
a. New operating model a. Detailedimplementation plan
a. Execution ofimplementation plan
b. Preliminary change
management planning
b. Products, services, and
processes
b. Business case b. Detailed change
management plan
b. Service level
agreements andcontinuousimprovement
c. Project planning c. Customers anddemographics
c. High-levelimplementation plan
c. Project management c. Pricing and charging
d. Communication plan d. Supporting telecomand technology
d. Go/no go decision d. Marketing
e. Costs e. Transitionmanagement
f. Executive summary f. Risk management
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I.3.a New Operating ModelElements
Organization
Functional organization
elements of the organizationand responsibilities
Staffing organizationtypes and numbers of staff andreporting relationships
Functional organizationelements of the organizationand responsibilities
Roles and responsibilities
Internal roles and responsibilities
Service tiers
Support functions External relationships
Roles and responsibilities of partners
Processes
Processes to provide each service
Service delivery processes
Communications of requests
Documentation and management of requests
Fulfillment processes and procedures
Closure of requests
Communications processes
Escalation processes
Continuous improvement processes
Governance and pricing/charging
People
Skills required for new service delivery processes
Position descriptions
Training requirements
Tools
High-level supporting technology functional requirements
Communications
Requests management
Knowledge management
Self service
Telecom architecture
Technology architecture
User interfaces
Applications
Databases
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New Operating ModelDevelopment Process
Core TeamCore TeamxTeam reviews best practices and delivery optionsTeam reviews best practices and delivery optionsxThrough working group sessions:Through working group sessions:
Reviews strategy and current stateReviews strategy and current state
Discusses options for designDiscusses options for design Selects criteria for services in scopeSelects criteria for services in scope Tentatively selects services and delivery methodsTentatively selects services and delivery methods Discusses service conceptsDiscusses service concepts Outlines tentative organization that supports conceptsOutlines tentative organization that supports concepts Reviews governance and funding optionsReviews governance and funding options Tentatively selects governance and funding approachesTentatively selects governance and funding approaches Delegates detailed work to sub-teams or groupsDelegates detailed work to sub-teams or groups
xAfter iterative exchanges with sub-teams, conducts decision meeting:After iterative exchanges with sub-teams, conducts decision meeting: Reviews operating model optionsReviews operating model options Develops operating model recommendation for which business caseDevelops operating model recommendation for which business case
will be developedwill be developed
Process Sub-teamProcess Sub-teamxThrough working group sessionsThrough working group sessions
Proposes service delivery processesProposes service delivery processes Proposes escalation processesProposes escalation processes From volumes and levels of effort, estimates staffing numbersFrom volumes and levels of effort, estimates staffing numbers Outlines staff functionsOutlines staff functions Develops high-level performance metricsDevelops high-level performance metrics Provides inputs to staffing sub-teamProvides inputs to staffing sub-team
Model Designx Organizationx Processesx Peoplex Tools
Model Designx Organizationx Processesx Peoplex Tools
Technology TeamTechnology TeamxThrough working group sessionsThrough working group sessions
With process sub-team develops functional telecom requirementsWith process sub-team develops functional telecom requirements With process sub-team develops functional technology requirementsWith process sub-team develops functional technology requirements Develops tentative technology architectureDevelops tentative technology architecture Develops telecom and technology requirements lists with estimatedDevelops telecom and technology requirements lists with estimated
costscosts
Staffing Sub-teamStaffing Sub-teamxThrough collaboration with core teamThrough collaboration with core team
Develops staffing conceptsDevelops staffing concepts Begins background work onBegins background work on
sourcing optionssourcing optionsxThrough collaboration with processThrough collaboration with process
sub-teamsub-team Develops staff positionsDevelops staff positions Begins developing basis forBegins developing basis for
position descriptionsposition descriptions
Facilities Sub-teamFacilities Sub-teamxThrough collaboration with core teamThrough collaboration with core team
Develops high-level facilitiesDevelops high-level facilitiesrequirementsrequirements
Develops options for locating theDevelops options for locating thenew organizationnew organization
Change Management Sub-teamChange Management Sub-teamxThrough collaboration with core teamThrough collaboration with core team
Performs risk analysis ofPerforms risk analysis ofOperating Model optionsOperating Model options
Analyzes communicationsAnalyzes communicationsimplicationsimplications
Continues sponsorshipContinues sponsorshipcultivationcultivation
Begins development ofBegins development ofmarketing strategymarketing strategy
Model design is aniterative process
throughimplementation
SMEs andcustomers provide
inputs to refinedesign
Note: Planning can beconducted as a larger core
team or with sub-teams
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New Operating ModelKey Questions for New Model Design
Organization
Could one business service organization provideservices for all other units?
Can centralization provide scale that improves servicequality?
Which organization option most aligns with strategy?
What are the realistic location options?
Processes
Is your strategy to reduce costs, improve service orboth?
What services are similar and duplicated in more thanone business unit?
What services can be standardized or simplified andcentralized?
What services have greatest impact on businessperformance?
What services are most in need of improvement?
How can processes be improved to speed service,improve quality and/or reduce costs?
Will you use tiered service groups to provide service?
Is your strategy incremental implementation or the bigbang?
Which functional area can be implemented most simply?
Processes (Contd)
What governance approaches are most appropriate? What method should be used for funding?
When will this model be implemented?
Can services and/or customer groups be phased?
What performance will you measure?
People
Who, when, and how will service providers communicatewith customers?
How many people are needed for service delivery?
What skills are required to administer services in the newmodel?
Tools
What services will be provided through self service?Through human assistance? Via telephone? Via theweb? Via e-mail?
How can customer access to information and services befacilitated?
How do you manage requests and improveaccountability for quality and service?
How can information and processes be automaticallyprovided to service providers?
How will you measure performance?
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New Operating ModelTips for Developing
Determine the services that can be better provided via ashared services model
Example criteria
Services required by multiple business units
Services that can be standardized or can beautomatically tailored for customer groups
Higher volume services where scale canprovide some efficiencies or greater depth ofservice
Services that can leverage technology
investments for better service and/or greaterefficiency
Study best practice information on shared servicesdelivery options
Consider a tiered service delivery approach
Design service from customers perspectives
Reengineer and standardize processes to extentpractical
Automate reengineered processes within cultural andbudgetary constraints
Outline the shared services organization
Provide chart of key functions with estimate of FTEs
Outline the key responsibilities at corporate, sharedservices, and in the business units
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New Operating ModelTips for Developing (Contd)
Describe service delivery processes, flows, andescalations
Describe how requests for services are communicatedand managed to fulfillment
Diagram the service flows by type service requested
Using volumes of services to be delivered, estimate thenumber of service representatives needed
Volumes multiplied by service times yields total time toprovide service
Translate hours into staffing requirements
Benchmark rules of thumb can be used in lieu ofcalculated volumes, durations, and FTEs
Study technology options to automate new serviceprocesses
Technologies can usually be phased in
Technology can be used to provide service directly, routerequests, move information, eliminate duplicate dataentry, monitor service, and assist management
Develop high-level functional requirements fortechnologies
Outline functional requirements of technologies to
support service delivery and fulfillment processes
Estimate costs of new services model
Tally software purchase, licensing and maintenance, andimplementation costs
New Operating Model Example HR
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p g pHRChannels of Service Delivery
While delivery models will vary, most models rely on a fairly consistent make-up of channels. Theseinclude channels for the delivery of customer-specific products and services, administrative andtransactional products and services, skill-based products and services, and governance/policyproducts and services. Each channel serves specific constituencies
ChannelChannel Types of Products andTypes of Products andServicesServices
Examples of ProductsExamples of Productsand Servicesand Services
Primary CustomersPrimary Customers Typical StaffTypical Staff
Operating Unit HR Unique, customer-specific x Workforce planningx Change managementx Organization designx Employee relations
x Program implementation
x BU managementx BU employees
Mid- to senior-levelgeneralist with breadth ofHR knowledge
Self-Service and EmployeeService Center
Transactional andadministrative
x Benefit and HR questionsx Benefits and payroll
enrollmentx Indicative datax Standard and ad hoc
reporting
x BU managementx Employees
Entry-level employees withstrong customer serviceskills and technologyproficiency; typically no HRknowledge required
Centers of Excellence Skill -based x Recruiting/staffingx Compensation surveys
and job evaluationx Organizationdevelopment
x Training
x BU HRx Employee Service Center
x Corporate HR
Mid-level associates withdepth in one HR functionalarea
Corporate HR Enterprise-wide HR strategy,governance, policy, andstandards
x Compensationphilosophy
x Job evaluation processdesign
x Benefits program designx Diversity policies
x Centers of Excellencex Executives
Senior-level professionalswith strong depth in one ormore HR function areas
N O ti M d l E l HR
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Service Center
New Operating Model Example HROperational View of Service Delivery
Shared services
Transactions
Information and tools
Routine services
Administrative support
Key Attributes:Key Attributes:
Service structuredService structuredand delivered basedand delivered basedon type of workon type of workperformedperformed
LeveragesLeveragescentralized andcentralized anddecentralizeddecentralizedcomponentscomponents
Heightens focus onHeightens focus onthe customerthe customer
Increases serviceIncreases servicedelivery at entry ordelivery at entry orlower service tierslower service tiers
LeveragesLeveragestechnologiestechnologies
Focuses onFocuses onproactive analysisproactive analysisand responsesand responses
Defines servicesDefines servicesclearly and basesclearly and basesservices onservices oncustomer needscustomer needs
Customer-facing
Consulting services Liaison to Centers of
Excellence, as appropriate
Business Partners
Design programs
Deliver services to businessunits
Tier 3 support for service center
Policies and governance
Centers of Excellence
Line Managers
Employees
Policies/governance
CorporateAssistedSupport
Tier 1
Tier 2
Data Warehouse/Knowledgebase
InteractiveVoice
Response
Self-Service
Tier 0
Customers Service Interface/Service Delivery Strategies,Programs and Policies
Vendors
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HRCustomer View of Service Delivery
75-90%
Tier 1
x Tier 0 activities for thosewithout computer access
x Basic transactions not yetoffered in tier 0
x Basic assistancex Application assistance
x Basic activities not yetoffered in tier 0
x Basic assistancex Application assistance
x Data changesx Enrollmentx Policy/program infox Payroll/timesheet datax Referrals
x Policy/program infox HRIS reportingx Advanced services
dispatchx ReferralsTier 0
5-10% Tier 2
x Policy interpretation
x Complex issue assistancex Problem resolution
x Policy interpretation
x Complex issueassistance
x BU program design
Tier 3
x Exceptions for corporate-wide programs
x Corporate program redesign
x Exceptions forcorporate-wideprograms
x Corporate programredesign
0-5%
Employee/Retiree Manager
Centers of Expertise/ESC
Corporate HR
escalation
escalation
escalation
?
ew pera ng o e xamp e HR
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HRShared Services Scope
Corporate HRCorporate HR Line Managers and BusinessLine Managers and BusinessUnit HRUnit HR
Centers of ExcellenceCenters of Excellence Self Service and HR Service CenterSelf Service and HR Service Center
Compensation Establish policies and procedures
Design corporate-widecompensation programs
Develop compensations policiesand procedures
Design job evaluation process
Design and oversee salaryplanning process
Apply compensation programs,policies, and procedures
Advise management oncompensation issues
Design specialty compensationprograms within establishedguidelines
Evaluate jobs
Conduct salary surveys
Communicate regarding comp-ensation issues, policies, etc.
Answer advanced compensationquestions
Answer basic compensation questions
Process and track stock options
Run and distribute compensation reports
Benefits Design benefit programs
Develop benefits policies andprocedures
Select benefit vendors
Negotiate contracts with benefitvendors
Establish severance programs
Apply benefits programs, policies,and procedures
Advise management on benefitsissues
Advise management onseverance issues
Request and deliver severancepackages
Manage vendors and reconcilevendor bills
Create severance packages
Perform plan discrimination testing
Answer advanced benefitsquestions
Answer basic benefits questions
Look up employee benefits information
Execute employee benefits changes
Administer leaves of absence
Conduct annual open enrollment
Run and distribute benefits reports
Run retirement calculations
Staffing Design staffing policies
Develop staffing policies andprocedures
Develop workforce planningprocess
Manage and assist with selection
processAdvise management on staffing
issues
Select staffing-related vendors
Manage vendors and reconcilevendor bills
Develop staffing processes andtools
Create and coordinate recruitingcommunication materials
Manage job descriptions
Answer advanced staffingquestions
Process job requisitions
Answer basic staffing questions
Look up staffing information
Process candidate recruitment expenses
Coordinate background and referencechecks for candidates
Receive and scan resumes into recruitingsoftware
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HRShared Services Scope (Contd)
Corporate HRCorporate HR Line Managers and BusinessLine Managers and BusinessUnit HRUnit HR
Centers of ExcellenceCenters of Excellence Self Service and HR Service CenterSelf Service and HR Service Center
Organization,Development,andTraining
Develop enterprise core values Design succession planning
process and tools Design performance review
process and tools
Define enterprise training priorities
Define tuition reimbursementprogram
Advise managers on organization,development, and trainingprograms
Conduct workforce planning
Conduct succession planning
Identify local training needs andarrange for training
Assist managers withdevelopment planning
Coordinate and manage training(non-technical) vendors
Develop training programsAnswer advanced organization,
development, and trainingquestions
Answer basic organization, development,and training questions
Look up organization, development, andtraining information
Enroll employees in training programs
Maintain training catalog
Administer tuition reimbursement
Payroll Develop payroll policies andprocedures
Manage vendors and reconcilevendor bills
Perform tax reporting
Maintain accountability forseverance plan payments
Answer advanced payrollquestions
Answer basic payroll questions Look up payroll information Input payroll data into system
Run and distribute payroll reports
Employee
Relations
Define overarching payroll policies
Define labor relations strategies Design EEO programs and
policies
Adapt overarching employee
policies to local conditions withinset guidelines Serve as employee advocate
Advise managers on employeerelations issues
Deliver new hire orientationprograms
Oversee EEO investigations
Lead labor negotiations
Conduct exit interviews
Coordinate and manage vendors,
including EAP, EEO investigations,and relocationAdminister expatriate services
Answer basic employee relations
questions Look up employee relations information Enter employee indicative data updates Maintain personnel files Process verification of employment
requests
New Operating Model Example Finance and Acco nting
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Finance and AccountingOperational View of Service Delivery
Employees
Service Center
Picture
F&ATeam
Picture
F&ATeamDecentralized F&A
Self-Sufficiency Service Interface/Service Delivery Financial Strategy and Policies
Centers of Expertise Corporate F&A
x Self-service
x Deliver central F&Aservices to businessunits and corporate
x Tier 2 for Service Center
x
Support thecorporate customer
x Develop andmaintain financialstrategies andpolicies
x Provide financialoversightx Customer-facing
x Financial consulting support
x Liaison to centers of expertise,
as appropriate
x
Transaction processingx Questions
x Routine problem solving
x Administrative support
x Self-service
x Forecasting,budgeting,analyzing, and
managing financialresources
Line Managers
Traditional Shared Services
ExpandedSharedServices
New Operating Model Example Finance and Accounting
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Finance and AccountingShared Services Scope
FunctionFunction CorporateCorporate COECOE Service CenterService Center DecentralizedDecentralized
Accounts Payable Little involvement Problem solving Processing, support Direct work to servicecenter, provide liaison toCOEAccounts Receivable Problem solving Processing, support
Payroll Problem solving Processing, support
General Ledger Problem solving Processing, support
Tax Accounting andReporting
Tax strategy and policy Provide service forcorporate, support field
Make routine tax filings Ensure compliance
Financial Reporting Set requirements Design reporting structureand formats
Provide financial reports(int. and ext.)
Maintain local distribution
Business Planning andBudgeting
Define corporate targets Provide service forcorporate, support field;maintain processes
No direct support Provide service for localcustomers
Property Accounting Set capitalization policy Provide service forcorporate and field
Ensure compliance
Financial Analysis andEvaluation
Set hurdle rates, othercorporate requirements
Design and maintainprocesses; provideservice for corporate,support for field
Provide consultingservice to local customers
Treasury (cash mgt.,bank relations, investorrelations)
Manage Corporate serves asCOE
Provide wire transfers Identify local needs
New Operating Model Example Finance and Accounting
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Finance and AccountingCommonalities
Shared services delivery frameworks are all customized to the needs of a company and its business;however, most leading models share certain philosophies and elements
The organization is externally or customer oriented, not internally or corporate services oriented
Both centralized and decentralized components exist
Decentralized largely focused on value-added advisement and/or consulting
Centralized focused on policy and program development, transactions and inquiries
More service delivery is provided at entry or lower service tiers
Integrated technologies are employed pervasively, including telephony, case management,knowledgebase, workflow, and document management
Paper is minimized
Individuals retrieve information and complete transactions via self service
Service centers cover large geographies (United States, Europe, Asia, etc.)
A recent survey by Deloitte reports that only seven percent of participants operate multiple servicecenters in a given country
Focus on metrics and measures for customer management, forecasting, process improvement, andproactive response to possible issues
Services are defined clearly and from the customers point of view
New Operating Model
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New Operating ModelSome Potential Supporting Technologies
Automatic Call Distributor (ACD) Handles queue management. Routes callers to available reps, including skill-basedrouting. Reports on queue time, call abandonment, caller volume per rep, etc.
800#/Interactive Voice Response System (IVR) Provides customers with access to information via the telephone.Provides menu options to callers and pulls information from back office systems such as the HRIS. Reports on callerselections. Can employ a variety of inbound and outbound call handling functions
Computer Telephony Integration Screen pops. Recognizes callers phone number and pulls up relevant information forcall reps while they are answering the phone. Used as a productivity enhancer
Case Management Provides caller history/information. Gives the rep information such as history, past calls, who theyspoke to, actions taken, status of their problem, etc. Tracks issue completion against established service levels
Knowledge Base Provides searchable information for call reps. Captures/interprets any policy information, requirementsanything the call rep must know to answer questions. Includes scripts for frequently asked questions. May also be usedas content on Intranet for direct customer access
Document Management Manages electronic receipt/filing/retrieval of documents. Routes documents for appropriatearchiving based on meta data (such as SS#, account #, etc.)
Employee/Manager Self Service Application and Workflow Technology Provides web front-end and back-endprocessing to enable customers to view/interact with back-end data via a pc, kiosk, etc. Includes filtering information toshow only permitted/applicable information
Web Content Management Software (portals) Serves to pull distributed data from a variety of sources into a standard
web presentation. Enables users to customize their own information, but present it in a standard, centrally supportedenvironment
Web Chat Allows customers to interact real time with a customer service rep over the web
Voice Over IP Enables call reps and customers to speak directly over the internet (bypassing telecomm costs) whilecustomers navigate the web site. Other applications can be customized to allow call rep to see what the customer sees
Wireless PDA Ports back office and web-based information to wireless personal digital assistants
Core HRIS/Payroll Systems Database-based systems used for core HR reporting and payroll functions
* other emerging technologies should be exploited as appropriate in the future
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New Operating ModelExample of a Web Enabled Architecture (HR)
Intranet Applications
KBDatabase
HRISExtract
ACD
CaseManagement
System
Knowledge Base
Self Service WebApplication
ESRsPC
HRIS
PBX
HRISBridge
Links KB
HR Web
E-mail
Phone Access
PC Access(Browser)
IVR/CTI
HRISDatabase
Web Server (s)
Security
TPPTPPTPPTPP
TPPTPPTPPTPPTPPTPP
Abbreviations
P BX = private branch exchange
IVR = interactive voice response system
CTI = computer telephony integration
ACD = automatic call distributor
CMS = case management system
KB = knowledge base
HRIS = human resource information system
TPP = t hi rd par ty p rovider
ESR = employee service representat ive
I 3 b Business Case
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I.3.b Business CaseMethodology
x Recommended go/no go decision
x Cash flow analysisx Expected paybackx Qualitative benefits
x One-time model implementation costs Labor Technology Equipment Facilities Outsourcing Training Consulting Transition (severance, marketing, etc.)
x Recurring model costs Labor Technology
x Current costsx Savings
x Governancex Service scope
x Organizationx Technology
Model OverviewModel Overview
CostsCosts
AnalysisAnalysis
RecommendationRecommendation
Business Case
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Business CaseAn Example of Qualitative Benefits (HR)
An Employee Service Center approach to employee service delivery differs from the currentapproach, characterized by face-to-face, personalized service. The service center would rely uponcentralized service expertise, heavily supported by technology. The benefits of this concept include:
One Stop Shopping the ESC provides a single point of contact for all employee service needs
Integrated Life Event Solutions improved customer service by emphasizing employee life events, notplan election modifications
Increased Availability both service center representatives and employee self service access areavailable beyond the 40 hour work week
Instant Access/Response employee services are as close as the nearest telephonethe service centerobjective is to resolve all issues during the initial customer contact
Accuracy and Consistency the technology employed within the service center will force thedissemination of consistent and accurate information
Accurate and Predictable Costs the service center makes it easier to put a price tag on employeeservices
Enabler of Strategic HR Role the ESC will free up HR personnel from the day-to-day service deliveryactivities to concentrate upon more strategic responsibilities
Employee Self-Reliance the ESC will assist in placing more responsibility on the employee for theirbenefits, administrative tasks and careers
Business Case
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Business CaseAn Example of Financial Benefits (HR)
Financial business case depends on savings from reductions in costs of service delivery
(in $000's) 2001 2002 2003 2004 2005 2006
Savings from Headcount Reduction1
860 1,350 1,350 1,350 1,350
Savings from (outsourcer) Reduction2
60 180 180 180 180
Total Savings 920 1,530 1,530 1,530 1,530
Capital Requirements3
181
O&M Requirements (000's)
HR ESC Personnel Wages4
43 645 722 722 722 722
Severance5
333
Other 489 176 89 89 89 89
Total O&M Requirements 532 1,154 811 811 811 811
Total Requirements (O&M + Capital) 713 1,154 811 811 811 811
Net Cash Savings (713) (234) 719 719 719 719
NPV at 10%
IRR
1 Compensation reflects 4 % merit increase and includes 35 % load factor for benefits2 (Outsourcer) work should not be taken by HRSSC3 Costs of scanners and scanning software is not included4 Headcount is reduced to 11, but mix changes to include a Supervisor and administrative assistant
ESR salaries are based on 28,000/year (includes 7 ESRs)5 Severance dates have been moved to Jun 30 and Aug 31
Severance pay assumes 1/2 of all 26 displaced employees, equal to 6 months compensation
September Business Case
1,042
44%
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I.3.c High-Level Implementation Plan
Realign Staff (Staged)
Implement New ServiceDelivery Model at Divisions(Staged)
Conduct Training and Re-skilling
Staff National Service Centerand COEs
Design (Update) and BuildCOE
Select and ImplementTechnologies
Design and Build NationalService Center
Finalize Plan
Gain Approval
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Activities
200820072006
Realign Staff (Staged)
Implement New ServiceDelivery Model at Divisions(Staged)
Conduct Training and Re-skilling
Staff National Service Centerand COEs
Design (Update) and BuildCOE
Select and ImplementTechnologies
Design and Build NationalService Center
Finalize Plan
Gain Approval
Q4Q3Q2Q1Q4Q3Q2Q1Q4Q3Activities
200820072006
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I.3.d Go/No Go Decision
SponsorsSponsors GoGo CautionsCautions No GoNo Go Action ItemsAction Items
Model Design and Business Case
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