the 7 habits of highly effective shared service centers

North America | Latin America | Europe | Middle East | Africa | AsiaNorth America | Latin America | Europe | Middle East | Africa | Asia©Chazey Partners 2016 2

The senior staff you meet at the introductory meeting will be

integral to the project, driving content and available for your

questions

Operationally delivered and consulted numerous programs

globally, over the last 25 years in both public and private sectors

Chazey Partners is a Practitioners-led Global Management Advisory Business, specializing in Business Transformation of Support Functions, including implementing and optimizing Shared Services & Outsourcing Operating Models, and targeted Technology Enablement

Strategic advice Business case development Support from concept to

realization Project management End-to-end implementation For new, existing and mature

Shared Services Organizations

Service Offerings

Finance & Accounting Human Resources Information Technology Procurement Corporate Planning Facilities Management OfficeAdministrationistration Legal Tax Marketing & Communications Other Support Services

Functional Coverage

Our hands-on approach is delivered by our seasoned

practitioners who have ‘lived and breathed’ a great number of

projects

Robust knowledge Transfer & Client-focused approach to

ensure the optimum sustainability of the solution

Who We Are


Global Operations

Who We Are: Founded 2006 • Global offices headquartered in California • Over 50 full-time and 70 specialist resources

What We Do: Evaluations and Assessments • Strategic Advice • Project Management • Business Continuity

Where We Focus: Transformation of Finance • Human Resources • IT • Procurement • Facilities • Other Functions

The Chazey Difference: Practitioners first • Staff Continuity• Knowledge Transfer • Client Engagement in Transformation


OUR CLIENTS

WHERE HAVE WE COME FROM

Who We Have Worked With


Breakout Session

• Form a group of 4 different organizations

• Briefly introduce your current operation/SSC (scope, FTEs, years of operation, etc.) 2 minutes per person

• Share 2 strengths and 2 challenges of your operation 5 minutes per person

2 Challenges• Organization• Client• Technology• Processes

2 Strengths• Organization• Client• Technology• Processes

Introduction• Business• Maturity• Processes• Employees/FTEs


Level 1

Level 2

Level 3

Level 4

Level 5

Decentralization•Local needs•Duplicated Efforts•Poor central controls•Multiple platforms

Centralization•Consistent controls•Limited scope•Labor arbitrage•Lift & Shift•Single instance of ERP

SSC•Client Management •Process Efficiency•Standardization•Improved Controls•Increased Scope

Global Services• Governance Model•End-to-end process•Multifunctional scope•Hybrid Model

Integrated Services

•Value-add•Analytics•Data Intelligence•Business Partner

Operating Model Maturity Level

Saving opportunities can vary from 20-40 % depending on the implementation and successof the model adopted

Evolution of Shared Services


Tendency 7:Outsourcing

Decentralization•Local needs•Duplicated Efforts•Poor central controls•Multiple platforms

Centralization•Consistent controls•Limited scope•Labor arbitrage•Lift & Shift•Single instance of ERP

Operating Model Maturity Level

Tendency 2: Consolidation

Tendency 3:Labor arbitrage

Tendency 4:Processes end-to-end

Tendency 5:Client Management

Bene

fits A

chie

ved

Tendency 1:ERP

Implementation

Tendency 8:Value-added processes

Tendency 9:Business Partners

Tendency 6:Multifunctional

services

Problem 2: Inefficient processes

Problem 3: Lack of customer

focus

Problem 1: Ineffiicient labor

Problem 4: High level of exceptions Problem 5:

Shadow systems and processes

Problem 6: Lack of vision and

insight

POTENTIAL BUSINESS

VALUE

SSC OPPORTUNITY

Challenges facing SSCs

SSC•Client Management •Process Efficiency•Standardization•Improved Controls•Increased Scope

Global Services• Governance Model•End-to-end process•Multifunctional scope•Hybrid Model

Integrated Services

•Value-add•Analytics•Data Intelligence•Business Partner


Consistent end-to-end

process

Evolution of services Service internal

customer as if external client

Technology Utilization

Skilled workforce

Flexible Operating

Model

Continuous Improvement

The 7 Habits of Effective SSCs

+

1

23

4

56

77 Habits of

Effective SSCs


#1 Consistent End-to-End Process

Procurement

Supply Management Master Data Purchasing

Admin

Receipt of goods and

services

Invoice Processing

Reimburse-ment

Bill Payment

Client Management

Period close and reporting

Establish policies and procedures

purchases from suppliers

Supplier set-up, cancellation

and modification

Manage and administer

supplier contracts


services

Receipt and validation of

invoices

Application and approval ,

disbursement and processing

advances

Generate payment

documents

Support providers and

internal customers

Reconciliations and

adjustments

Approval of the purchase request

Master data review and

maintenanceCreation of

purchase order

Identification and resolution

of issues

Registration of exceptions:

urgent/missing documentation

Submission and approval of expenses

Set-up Disbursement

Manage internal and

external auditAP aging analysis

Negotiation and selection of suppliers

Management reporting

Monitoring and maintaining

purchase orders

Periodic assessment of

supplier performance

Resolution of price/quantity

differences

Submission and control of advances

Approve disbursement

Customer satisfication review and

management

AP Reconciliations

Maintenance of purchase

requisitionsIntercompany

billings

Manage declined

paymentsIntercompany

account reconciliations


#1 Consistent End-to-End Process

Procurement

Supply Management Master Data Purchasing

Admin


services

Invoice Processing

Reimburse-ment Bill Payment Client

ManagementPeriod close

and reporting

Establish policies and procedures

purchases from suppliers

Supplier set-up, cancellation

and modification

Manage and administer

supplier contracts


services

Receipt and validation of

invoices

Application and approval ,

disbursement and processing

advances

Generate payment

documents

Support providers and

internal customers

Reconciliations and

adjustments

Approval of the purchase request

Master data review and

maintenanceCreation of

purchase order

Identification and resolution

of issues

Registration of exceptions:

urgent/missing documentation

Submission and approval of expenses

Set-up disbursement

Manage internal and

external auditAP aging analysis

Negotiation and selection of suppliers

Management reporting

Monitoring and maintaining

purchase orders

Periodic assessment of

supplier performance

Resolution of price/quantity

differences

Submission and control of advances

Approve disbursement

Customer satisfication review and

management

AP reconciliations

Maintenance of purchase

requisitionsIntercompany

billings

Manage declined

paymentsIntercompany

account reconciliations


#1 Consistent End-to-End process

SSC Director

P2P O2C R2R Hire to Retire

Advantages Disadvantages

High efficiency Difficult to recruit function leaders

Promotes standardization Major change management

Promotes cross-training and automation

Complexity of understanding customer

Capture synergies and improves customer service

Business Unit #1Business Unit #2Business Unit #3Business Unit #4

Payments Bills OrdersPurchases

Collection & Application Billing CreditsSales Orders

Retirement Staffing Personnel Admin

Recruitment and Selection

Reports Monthly Close ReconciliationsJournalEntries

• Integrated model

• Improved processes

• Value-add services due to analytics and inisght

• More than just cost savings


#2 Evolution of services

SSC service offering s are growing beyond traditional “back office” processes and incorporating Administration, Purchases, Legal, Marketing, Logistics and others.

SSC Tradicional SSC Multifuncional

IT Finance HR

IT

Finance

HR

Purchases

Admin

Legal

Logistics

Marketing

Sales

Effective SSCs:

Functions -Stable operations -Common support areas

Support of Senior Management-Executive buy-in-Mulitple stakeholders-Big bang vs. evolutionary

Planning -Defined Scope -Single center, Multiple center, Hub and spoke? -Center of Excellence?

Organization Model-Breakdown silos-New org structure and reporting


Initial Intermediate Advanced

General Services

Communications Legal Travel Security Maintenance

Event Management Graphic Design Branding Public Relations

Campaign Management Health and Environmental

Security Risk Management

Finance and Accounting

Payables General Ledger Fixed Assets Accounts Receivable

Reporting Cost Accounting

Cumplimiento tributario Tesorería Planning Financiera

HR Payroll Compensation and Benefits Personnel Administration

Organizational Structure Q&A Recruitment & Hiring

Expatriates Services Personnel Development Medical Services

Information Services Helpdesk Infastructure Support Application Support

Development Telecommunications

Hardware y Software Acquisition

Customer Service Customer Support (local) Product Support Settlement

Internet/SupportE-mail Customer Support (International)

Call Center Dispatch

Purchasing Requisitions Purchase Orders

Indirect Purchasing Negotiations Inventory Management

Distribution/Logistics Master Data Management

Other Services Real Estate Facilities Fleet Management

Grants Management Disaster Recovery Restaurant services

Health Clinics Engineering Subsidiary Management

#2 Evolution of Services


#3 Service the Internal Customer as if an External Client

• Form a group of 4 different organizations – Different from the first group

• What are the main challenges faced with internal customers?2 minutes per person

• How do you manage customer service?5 minutes per person


Without CIF

• Lack of clarity on responsibilities• Perception vs. reality• Focus on negative aspects of

service• One-way communication• Strained relationships with

customers• Efforts required to

maintain/improve morale

With CIF

• Customer oriented• Defined delivery expectations• Peformance measurement and

reporting• Enhanced service delivery and

efficiency• Improved customer

relationships

Through a formal framework: The Customer Interaction Framework (CIF) distinguishes a Shared Services organization from simple act of centralization and fosters a spirit of partnership between the SSC and its clients.




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

Service Partnership Agreements• 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


• Is a single ERP platform required to run a SSC?

• What technology enablers are used in your SSC? • How do you use social in your SSC?

#4 Technology Utilization


Technology helps SSC provide effective, efficient service



Fuente: Global Report SSON 2016



• How was your SSC staffed?

• What core competencies have been determined? • What is your compensation strategy? Industry vs. SSC?

#5 Skilled Workforce



Effective Communicator

• Understands how to effectively communicate with audience

• Clearly explains information• Adapts style to situation

Takes Initiative• Makes good decisions in all situations• Accountable • Leader, who can influence others

Adapatable

• Keeps composure in stressful situations• Open to change• Can communicate with different personal

Problem Solver• Solution-oriented• Able to idnetify pertinent information of the problem

Functional Expert• Knowledge of required concept (Accounting, HR, etc.)• Understands processes (P2P)• Understands tools and systems (SAP, Oracle)

Results Oriented• Monitors progress against milestones and deadlines• Motivated to achieve objectives• Requires quality outputs

Compliant

• Adheres to policies, tasks and procedures• Encourages other to adhere


Quienes “solucionan Problems” identifican correctamente los desafíos mas críticos y desarrollan soluciones

efectivas que agregan el mas High valor a los clientes

Solucionar Prob-lemas

Orientación a Resultados

Comunicación Efectiva

Experto Funcional

Iniciativa Propia Adaptabilidad Cumple las reglas

40%

19%15%

11%8% 7% 7%

Problem Solver Results Oriented Communicator Functional Expert Takes Initiative Adaptable Compliant

The ability to correctly identify chal-lenges and develop effective solu-tions are the most valued by cus-

tomers.

n: 1.131 empleados de Shared ServicesFuente: CEB Prueba de Talento en Shared Services 2013

Although these skills help minimize risks, not considered to be as valuable

of those that create value through developing solutions

Key skills for value creation

MOST VALUABLE SKILLS



Actitud de Servicio

Comunicación Efectiva

Trabajo Bajo Presión

Cumplimiento de Tareas

Trabajo en Equipo

Solucionar Problemas

Iniciativa Propia

0 0.5 1 1.5 2 2.5 3 3.5 4

Juan Rodrígues- Gerente/Manager P2P

Escala de Evaluación: 1. -No Demostrado; 2.- En Desarrollo; 3.-Competente; 4.-Experto

Nombre/Name: Juan RodríguezUsuario/ID: FADG710123I18Postulado/Date: 14/05/2015Reclutado/Recruitment: N/A% Necesarias/ % Desired: 86.1 %% Compatibilidad Total/Compatibility %: 83.3 %


Takes Initiative

Problem Solver

Teamwork

Results Oriented

Handles Pressure

Effecitve Communicator

Service Oriented

Evaluation Scale: 1. – Not demonstrated; 2.- In development; 3.-Competent; 4.-Expert


Tech

nica

l Ski

lls

Management Skills

23 32 41

34 32 41

39 32 41Low Medium High

High

Medium

Low

The Competency Model allows a strategic map of what the skills required for each position/employee of a Shared Services Center to identify potential risks and establish training programs.

Knowledge• Tecnología• Accounting• Taxes• Languages

Behaviors• Takes initiative• Service-oriented• Team-oriented• Communicator




For key positions, it is important to provide salaries and benefits that competitive within the SSC market.

It is recommended that compensation ranges are established based on the SSC market rather than the other operations of the company.

Habilidades 264Especializadas Básicas EActividades IÉnfasis (+ -) +Relaciones Humanas 3Solución de Problems 87Standard DComplejidad de Análisis 3Énfasis (+-) +

33%

Responsabilidad 115Libertad de Actuar DÉnfasis (+-) +Magnitud 3Énfasis (+-) +Impacto CTOTAL PUNTOS HAY 466

Level PUNTOS HAY MIN 1er. Cuart

Medium

3er.Cuart MAX Prog Ampl

Min. Prom. Max.

1 305 354 410 12,405 13,500 15,430 16,433 17,202 50%

2 411 476 503 13,305 14,204 16,403 17,575 18,908 10% 50%

Valuación: Análista de Credits O2C


• What processes have you effectively outsourced to a BPO provider?

• What are the main advantages you have experienced? • What are the greatest challenges you have experienced?

#6 Flexible Operating Model


#6 Flexible Operating Model

In House Outsource Hybrid

+

The age dilemma is MAKE OR BUY?

The BPO market has grown significantly in the last decade covering financial , accounting, certain functions of HR and customer service.

Things to be considered: Cost vs. Control Level of maturity of processes Access to skilled labor Contract negotiation Time zone and language Transaction volume Flexibility demanded BPO risks Geographic coverage

CON

TRO

L S

trat

egic

IMPO

RTAN

CE O

F PR

OJE

CT

COSTLevel of INTERNAL SKILLS REQUIRED

EVALUATE OUTSOURCING

VS SSC

OUTSOURCE ALL

PROCESSES

ESTABLISH AGREEMENT WITH

OUTSOURCER

HANDLED INTERNALLY

IN SSC


#7 Continuous Improvement

Can a SSC really innovate?

• Without disrupting the business! – Maintain process controls• Without disrupting the customer!—Keep stakeholders happy• Without exceptions!– Focus on standardized operations• Without disrupting performance!– Achieve SLA standards• Without investment!– Enablement and effectiveness• Without additional resources!– Doing more with less• Without leadership!– Gaining buy-in and support

With all of these conditions… Is really possible?



What stops the innovation process?

• Fear of the unknown/unintended consequences• Obsession with risk management• Lack of scalability and scope• Focus on customer satisfaction• Lack of talent and appropriate skills of workforce• Rigid service level agreements• Limited use of technology and tools• Time and capacity restraints• Inability to think outside of the box


Recognize and RefineImplement PilotAssess and

Prioritize


Effective SSCs adopt innovation as a process rather within the SSC, this provides several opportunities and channels to capture new ideas:

INPUT

•Leadership•Surveys•KPIs and Benchmarks•HR•Methodology•Market research•Suggestion box/contests•Communities and forums

End-to-end process of INNOVATION

Concept

PMO SSC

OUTPUT

•ROI•Lessons Learned•Improved Service Delivery•Internal customer satisfaction•Direct and indirect impacts•Review of KPIs

How effective SSCs innovate?

PMO assigned to SSC to ensure commitment Implement ‘quick wins’ to provide credibility to the process RECOGNIZE ideas generated and implemented Assign BEST FUNCTIONAL MANAGERS to innovation Change management and senior management support Communicate and celebrate achievements


Questions?


Leverage our Experience for Your Success


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the 7 habits of highly effective shared service centers

Leadership & Management