shared services for higher education


Who We Are

Agenda


Chazey Partners is a practitioners-led global management

advisory business. We bring together a unique wealth of experience, empowering our clients to strive for world class excellence through

Business Transformation, Shared Services & Outsourcing and Technology Enablement

We have operationally delivered and consulted on numerous programs globally, over the last 20 years, in the US, Canada, Latin America, UK, Ireland, Continental Europe, India, Singapore, Australia, China, Middle East and Africa

Our end-to-end capability offers advice, guidance and implementation expertise, covering strategy setting and business case production, program management, implementation and process optimization

Who We Are · Overview


Who We Are · Services Portfolio

FINANCE & ACCOUNTING ●

HUMAN RESOURCES ●

INFORMATION TECHNOLOGY

● PROCUREMENT

● TRAVEL & EXPENSES

● CONTACT CENTRES

Expertise In Public Sector & Private Sector

INVENTORY & LOGISTICS ●

STAT & TAX COMPLIANCE ●

SUPPLY CHAIN ●

LEGAL SERVICES ●

FACILITIES MANAGEMENT ●

MARKETING BACKOFFICE

BUSINESS TRANSFORMATION

− SHARED SERVICES & OUTSOURCING

− TECHNOLOGY ENABLEMENT

− BUSINESS CONTINUITY

− CHANGE MANAGEMENT

− LEAN SIX SIGMA

Functional Breadth of Experience

Other Supporting Services


Who We Have Worked With

OUR CLIENTS

WHERE HAVE WE COME FROM


Agenda

What is Shared Services?


What Exactly is Shared Services?

Shared Services …is the organization that provides non-core Services to the

“business”, employing a specialist team, geographically unconstrained, and focusing on the requirements of the internal customer/client. This involves a philosophy and approach totally unlike traditional “corporate”-driven centralization.

The goal of Shared Services is to provide high quality, non-core, but

mission critical, services (which can include both repetitive common processes and more specialized professional services) to the business at lower cost and more efficiently than the business could otherwise provide for itself.

Shared Services achieves cost savings and higher quality of service

by leveraging organizational re-alignment, economies of scale, technology, lower cost locations, standardized end-to-end processes and best practice.


Structures have Benefits & Challenges

Remote from business

Unresponsive and inflexible

No Business/ Operational control over costs

Viewed as central overhead

Prevalence of shadow operations

Centralized

Challenges

Disparate processes

Multiple standards

Duplication of effort

Different control environments

High cost and costs unclear across the business

Not scalable

Decentralized

Challenges

Responsive to Business and Operational needs

Business/ Operations control decisions

Customized solutions to meet Business/ Operational requirements

Benefits Shared

Highly client focused

Commercially driven

Service Partnership Agreements

Clear unit costs

Flexible delivery

Clear understanding of drivers and activities

Common systems and support

Consistent standards and controls

Tight control environment

Economies of scale

Benefits


ATTRIBUTE SHARED SERVICES CENTRALIZATION

Accountability Operating Unit “Corporate”

Key Performance Target

Service excellence and continuous improvement

Cost reduction and central control


Widespread Rare

Classification An independent unit

Another corporate function

Responsibility Partnership Demarcation

Shared Services vs. Centralization


Achieve the Triple Benefits of Shared Services

Higher Quality

Lower Costs

Improved Control


Agenda

Trends in Shared Services


General Trends in Shared Services (1/2)

• Shared Services Concept started in mid 1980’s. Concept initially driven by private sector multinationals

• Shared Services and Outsourcing initiatives typically result in "cost savings of 20%-50% on processes in scope” (Hfs-PWC report June 2012)

• "In today's business environment, nine out of every ten enterprises have shared services". (Hfs-PWC report June 2012)

• 100% of Hackett’s top quartile benchmarked enterprises leverage Shared Services (Hackett 2013)

• New adopters are moving directly to multifunctional as part of their implementation strategy (Deloitte, 2013 Global Shared Services Survey, February 2013)


General Trends in Shared Services (2/2)

• Higher quality, not just cost, important reason for business units to opt in to Shared Services (Deloitte, 2013 Global Shared Services Survey, February 2013)

• Evolution to a Global Business Services model (The Hackett Group,

2012 survey of SSON members)

• “Moving up the value chain” evolving away from a focus on transaction processing and data input toward more strategic activities

• More prevalent today in midsized companies and businesses, not confined to larger multi-nationals

• Captive v Outsource, On-shore v Near-shore v Off-shore • Significant focus and growth in the Public Sector globally


Why not? Has worked well in the Private Sector for 20+ years, and is also working in the Public Sector today.

Significant funding issues today … everywhere. Shared Services can deliver potential “triple benefit” of efficiency/effectiveness/control

Some of the same basic challenges and significant opportunities around implementing Shared Services in the Private Sector are also there in the Public Sector….but need to be adapted and applied differently.

Cost savings from the “back office” can be used to fund core and front line services.

In terms of the Public Sector (and it is just the same in the Private Sector) one needs to determine what needs to be physically close to the internal “customer” or “client” vs what can be done remotely.

Why Shared Services in Public Sector? (1/2)


Why Shared Services in Public Sector? (2/2)

Need to think about who your “client” is – internal and external. Also need

to think about “students/residents/taxpayers” as key stakeholders.

Although Public Sector adoption of shared services has grown, the results

achieved do not yet approach those in the Private Sector (see next slide)

While the Private Sector has embraced shared services over the past 20 years

plus, the Public Sector has, until recently, been slower to do the same.

Shared services increasingly seen as part of the solution to the new socio-

economic challenges such as the impact of an ageing population, restricted

funding, increased international competition, and a more difficult economic

environment.

North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2014 17

Outcomes of Shared Services & Outsourcing Programs in the Public Sector

0%

20%

40%

60%

80%

100%

Finance operatingcosts

Finance operatingefficiency

Overall businessperformanceimprovement

Strong positive impact (greaterthat 20%)

Modest positive impact (+6% to+20%)

Minimal impact (-5% to +5%)

Modest negative impact (-6% to-20%)

Severe negative impact (greaterthan -20%)

Source: HfS Research and ACCA Global, 2012; N = 14 public sector organizations


Some Shared Services Examples in Public Sector


Shared Service Maturity: Country/Regional

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Maturity of Shared Service Centers

Private

Public


Shared Service Maturity: Country

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Maturity of Shared Service Centers

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Public


Agenda

Higher Education Focus


Increasingly competitive marketplace for students (both local and international), research funding, infrastructure funding and various other scarce resources.

With the escalating cost-containment pressures, higher education institutions” must start working together to attain academic and operational excellence”. (Accenture, September 2013)

The private institutions, except for grants provided by the federal government for research, are to some extent less dependent on government funding. However, many private institutions saw their endowment values decrease as a direct result of the recession, and the private institutions also responded by increasing student fees.

Increasing student fees alone has not been sufficient to close the budget at many Universities and Colleges, and these institutions are looking to shared services to help them close the budget gap, increase efficiencies and provide better service.

Importance to Higher Education (1/3)



• Efficiency/effectiveness of “back office” operations is now really a pre-requisite, and not a “nice to have”, for any organization/enterprise, in Private or Public sectors.

• According to a TIME magazine and Carnegie Corporation 2012 survey, 96% of

the American public and senior administrators at US colleges and universities said “higher education is in crisis”. Some unique challenges namely managing “politics” and workforce, territorial and governance issues, different funding sources, and unique change management. Harvard 2013 Summit: “As shared services gains traction in higher education, more knowledge is needed on how to navigate the intricacies of introducing new governance models and technologies within institutional environments”



“I see shared services as something that is inevitable,” said Rowan Miranda, associate vice president for finance at the University of Michigan. “It’s the next logical influx of thinking in the business world brought into higher education.” Recent backlash from Faculty at the University of Michigan highlights the importance of engaging key stakeholders and internal customers at the beginning of the initiative and providing open communication channels throughout the entire process.


Shared Services Examples in Higher Education (1/6)

Below is a list of Institutions showing where they are in their Shared Services journey.

Source: University of Kansas Shared Service website


Shared services already underway pre recession at many Universities, e.g. Yale University, Harvard College, University of Michigan, University of Illinois & Cornell.

UC Berkeley administration division began in 2008 to move to a shared services model for HR, and successfully opened its center on July 1, 2010. In 2012 the University approved a project to implement shared services for finance, research, information technology and human resources.

As part of its Synergy Initiative, CSU’s Procure to Pay (P2P) Shared Services Initiative seeks to leverage the success of implementing CSU’s Common Financial System and improve the efficiency and effectiveness of processes to purchase and pay for goods and services.

The Yale Finance shared service center was formed in January 2010, to take repeatable common work out of departments. The center was formed through the consolidation of three pre-existing service units. The center provides Financial Management and transaction processing for procurement, accounting, accounts payable and client accounts.

Lawrence Berkeley National Laboratory has had an HR Service Center since 2011, and is looking to expand scope of services provided.



The University of California has begun implementation of a University System Wide Shared Services center called UCPath for HR and Payroll.

In 2009, the University of North Carolina (UNC) reviewed areas for potential cost reduction and increased efficiency across the university. The report identified a “top ten” list of initiatives that the University should consider to achieve those objectives

As of January 2013, Chancellor Randy Woodson and the team implementing shared services at NC, announced that they would be moving forward to streamline business services. They will organize new Business Operations Centers (BOCs) around specific finance and human resource services, including:

Travel

Recruitment and Selection

Time Reporting

Purchase to Payment

Position Administration

Accounts Receivable



Cornell University implemented the Administrative Streamlining Program, an initiative that included the creation of seven regional Financial Transaction Centers (FTCs) in 2010, replacing the thirty-plus Business Service Centers that previously existed. Work also included standardization of FTC transactions and processes. The FTCs process standard financial transactions such as travel reimbursement, accounts payable, procurement card transactions, cash management and vendor establishment.

Below is a projected cost savings from the initiative for fiscal years 2010/11 through to 2014/15, with actual savings shown for fiscals 2011/12 and 2012/13.



The University of Florida’s Institute of Food and Agricultural Services (IFAS) shared service centers work in partnership with IFAS academic departments by providing timely, professional business support thus allowing departments to focus on delivering teaching, research, and extension programs. The Shared Service Center consolidates and streamlines the administrative functions such as Human Resources, Finance and Accounting, and Grants Management.

They have two shared service centers that service the following departments:

Fifield Shared Service Center: Environmental Horticulture, Horticultural Sciences, Plant Pathology

McCarty Shared Service Center: Agronomy, IFAS Statistics, Food and Resource Economics, Family Youth and Community Sciences, Soil and Water Science, Public Issues Education Center, IFAS IT, Senior VP



The University of Kansas’ Campus Administration & Operations SSC was due to begin operations on Monday, April 7, 2014 and their Biobehavioral & Social Research SSC officially began operations on Monday, February 3, 2014. Their intent is to create another six SSCs before the end of fiscal 2016. Below is a diagram of the services that will be provided.



Agenda

Critical Success Factors & Best Practices


Client • Service orientation in place • Structured way of dealing with customers • Customer satisfaction levels understood • SPAs in place • Reality versus perception • Account management

Process • Processes documented • Standardized, controlled & repeatable activity • Recharging methodology • Benchmarking – internal/external • Metrics: Control Based; (ii) Efficiency &

Effectiveness

Technology • ERP implemented • Document Scanning Solution • Workflow • Automated Payments • Elimination of Side Systems • Self services tools • Automated Score Cards

People • Skilled Leadership in place – do not compromise on

competencies • Team shape & stability – process shaped/spans of

control/staff – perm v temps • Team members – culture, values & behavioral competencies

assessed • Team morale, reward & retention • Working environment conducive to team working

Typical Focus: Technology & Process, sometimes on the People …but Client-focus is often missing


Client Interaction Framework

Account Management

• SSO to client; via reporting, interaction, escalation & communication

Client Contact Management

• Client to SSO; to manage and resolve queries and drive learning/improvement


• SPAs are 2-way agreements clarifying both SSO services and client inputs

Client Feedback

• Client satisfaction continuously monitored both informally and formally

Continuous Improvement

• Mechanisms to identify the areas for improvement and to develop solutions

Process Control Database

• Documents end-to-end SSO processes; highlights activity of both SSO & client

Performance Measurement

• Comprehensive KPIs, measures and metrics framework, SSO & client

Performance Reporting

• Process performance will be reviewed monthly by SSO and client

Recharging Methodology

• Define basis for charging for SSO services to turn consumers into clients


Other Best Practices (1/4)

Project Approach and Scope • What to include in-scope needs to consider functions, processes, sub-processes,

locations, regions, operating units and entities • It is really important to distinguish between “solutions” vs “quick fixes”. • Opportunity to “globalize” and expand scope across silos/borders • Multifunctional now often the chosen way to proceed, especially in the Public Sector • Consider how far up the value chain you want to go • Remember always that the project does not end with “go-live”

Standardization • Can improve service levels and minimize costly exceptions • Enables scalability and automation • Tightens the internal control environment • Assign end-to-end process owners • Break down silos • Distinguish between “wants” vs “needs” • But remember there are always valid “exceptions”



Technology • Move to or at least towards a single ERP based platform • Incorporate workflow to allow seamless routing of requests, approvals and data across the

organization • Imaging technology such as scanning allows efficient adaptation of paperwork flow and

storage • Allowing user self-service (not “do-it-yourself”) permits the low risk, repetitive tasks to be

completed by the customer without interaction from a service representative • Change management and training is vital • Make sure that new technology is implemented as a business solution (and not simply a

technical) initiative

Location • A Shared Service “center” can result in economies of scale, better leverage and reduced cost

of labor • A number of location factors to consider: greenfield/brownfield, expertise of workers,

language/cultural requirements, time zone, political/economic stability, facilities, local government incentives, customer requirements

• Technology has enabled some degree of “virtual” working • But some things still need to remain local. Recognize this in design.



People/Organization • Senior level Executive sponsorship is key. Make sure that key executives understand

and support the roll-out. • Offer end-to-end services by provisioning as many non-core services as possible under

one organizational umbrella • Realignment can help remove silos and foster a strong shared service culture and team

spirit • Enables succession planning, job rotation, new opportunities and targeted and

consistent training programs

• Do not underestimate the change management required

• Consider a multi-faceted communication and advisory approach.

• Assign your best resources and people to the project.

• Make sure your team includes both academic and administrative resources and be prepared to travel to meet and work with users.

• Generate a culture of service and continuous improvement • Do things differently – that’s the whole point!



Outsourcing • Outsourcing less prevalent today in Public Sector • Attitude to outsourcing can depend on culture, risk sensitivity, level of development

and maturity of any existing shared service functions • Now more part of the “mix” with Global Business Services …And Finally • Keep working towards your goals and be relentless in pursuit of them. Shared

Services initiatives are a significant commitment both in terms of resources and energy.


Public Sector Lessons Learned (Research Based)

Agenda


Slide 39

1. STRATEGIC CONSIDERATIONS

• Shared Services is no longer a radical idea in the public sector, as the concept has been operating and proven in the private sector for 20 years, and now in the Public Sector for last 10 years

• Shared Services is moving from an opportunity to a necessity (US, Healthcare, Higher Education)

• Make It mandatory (at least initially, and within approved scope) and high profile (Canada, UK)

• Shared Services can work across operating units, functions, silos, countries and jurisdictions (US, Canada, Private, Latin America)

• Core challenges unchanged (Private)

• Not just transactional (Private)

• End-to-End, not Functional (Private)

Lessons Learned (1/3)


Slide 40

2. STRUCTURE

• Independence is important (UK)

• Governance matters (Canada, Private, UK)

• Create durable structures (Canada)

2. BUSINESS CASE

• Prepare Business Cases (Canada, UK)

• Recognize need for funding/investment (Canada, US, UK)

• Infrastructure can be enabler and barrier (Canada, Private, Latin America)

• Taxes matter (UK)



Slide 41

4. IMPLEMENTATION

• Prove the concept, achieve “quick wins”, do that which is foundational first (Canada, Private, UK)

• Co-locate staff where possible (Canada)

• Operate as a business (Canada and Global)

• Benchmark relentlessly (US, Canada, UK)

• Adapt rather than adopt (Canada, UK)

• Changing culture is challenging (US, Private, Europe)

• Multifunctional enabled by new technologies (Private)

• Outsourcing and off-shoring opportunity and risks (UK, Private)

• Delivery of Shared Services is not a core Government skill (UK)



The Chazey methodology and knowledge has been very valuable to Bimbo. The team's approach, experience, passion and commitment to adding value has been fantastic and the partnership approach working with a range of key internal stakeholders within our organization was very important during the project. I would highly recommend the Chazey team for any Shared Services Transformation assignment.

Gabriela Lopez Juarez Global Business Services Director Grupo Bimbo

“


The value Chazey Partners brought to the project was extremely important in the early, design and building stages. CCE had neither the resources nor the internal expertise to help us fully sell the concept internally. So Chazey’s expertise, know-how, and methodology were very valuable in guiding CCE. They also acted as a useful sounding board for any challenges faced. Fraser Kirk Global HR Transformation Programme Director Coca-Cola Enterprises Inc.

“


We were impressed by the Chazey team’s responsiveness and professionalism in reacting and managing this assignment at very short notice and with highly restricted timelines. The Study Report we received clearly reflected their depth of first-hand experience and knowledge. In addition, the quality of insight they brought to the assignment resulted in a Study Report which was clear, comprehensive and put us in a position to make a decision on a very sound base. Les Gill Senior Director, HR Shared Services Gilead Sciences, Inc.

“


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