Shared Services Defined

(1)

Shared Services 101

(2)

Shared Services Defined

Combines the Best of Both Models:

•  Standardization eliminates redundancy

•  Consolidation into service centers leverages economies of scale

•  Retained organization redesign satisfies local or unique requirements

•  Service Level Agreements (SLAs) drive shared responsibility for results

•  Focused on client service and cost management

The objective of Shared Services is to optimize the delivery of cost-

effective, flexible, quality services to all “clients”.

Shared Services

Model Centralized

Model

Distributed Model

Service / Responsiveness

Scale & Efficiency

(3)

Where does the value come from?

Shared

Services

Value

Economies of Scale

Flexibility Standardization

Consolidated functions and processes

eliminate redundancies and minimize the cost of transaction processing activities

Flexible infrastructure that acts as a services utility to “supply” customers on

“demand” and allow operating departments to “plug into” the infrastructure when

reorganizing

Standardized practices and compatible data:

provide a common language to diverse operating units, facilitate analytical decision- making

Economies of Skill

Centers of excellence allow for the

development of specialized skills which can be leveraged across the organization

(4)

Shared Services

Core Capabilities

Definition:

Shared Services is a model in which a stand alone organization performs both customer

facing and/or back office services on behalf of its customers, which may include

employees, agencies, vendors, citizens, and students.

Strategy

and

Vision

3. Customer

Relationship

Management

1. Service

Management

7. Management

Processes

6. Enabling

Technologies &

Infrastructure

4. Performance

Management

5. Process

Standardization

2. Governance

Model

(5)

Service Management & Culture

Customer involvement and shared responsibility

•  Governance model with

involvement of the customer from strategic level to day-to-day operational level

•  Two way SLA’s including expectations on the customer

•  Dedicated process development teams involving representatives from the customer

Clarity for the users

•  Single point of contact within Shared Services through web, mail and phone. It’s clear how to contact the SSC and issues will be tracked

•  Processes well defined end-to- end with clear understanding of who’s doing what activities and when

Professionalism and transparency

•  Professional arms length relationship with

–  SLAs

–  Transparent pricing –  Service and performance

reporting

–  Clear scope of activities

Service culture and true partner to the business

•  Shared Services vision and strategy coordinated with the group strategy

•  Inclusive governance model

•  End-to-end focus to avoid sub- optimization

•  Deliberate service culture built into the performance

management framework

(6)

Frustrated Workforce

Back-office mentality, tenure wages

Governance Model

Independent, linked to customers

Performance Mgmt.

Self-directed workteams,

scorecards

Consolidation

Re-organization and de-layering

New Location Wage and real estate arbitrage

Re-engineering Simplified, standardized system/process

Service Mgmt.

Clear 2-way SLAs agreed by clients

Customer Relationship

Mgmt.

Metrics-driven case management

Lack of Clarity

Unclear ownership,

costs, responsibilities

Exceptions Increase

Increasing cycle times,

shadow organizations

drive up cost

Transition from Centralization to Full Value of Shared Services Many

organizations stop here leaving value behind and decreasing the likelihood of

sustainability and scalability

CENTRALIZATION SHARED SERVICES

RANGE OF BENEFITS

NOTE: Benefit ranges are illustrative.

Enabling Technologies

Case Mgmt., Doc.

Mgmt., Self-Service

Continuous Improvement

Poor Customer

Service

Multiple points of contact,

delayed responses

How does Shared Services deliver value differently

from Centralization?

(7)

What are the typical benefits from Shared

Services?

Benefits

Financial

Benefits

Employee

Benefits

Customer

(Agency, Department, Vendor, or Citizen)

Benefits

 Labor related savings from economies of scale

 Non-labor Savings (e.g., procurement spend, real estate)

 Better career options (e.g., in new org and in the State)

 More autonomy (e.g., less supervisors per employee)

 High-performance culture (i.e., metrics driven)

 Faster transaction response time (e.g., shorter cycle-times)

 Responsiveness (e.g., calls/email tracked & answered)

 Fewer errors (e.g., standard processes)

Reduce Risk/

Improve

Compliance

 Clear accountability (e.g., service level agreements)

 Simplified audits (e.g., through enabling technology)

 Increased control & visibility (e.g., standard reporting)

(8)

What can be “Shared?”

1.  Remote – Can the process be completed without “in-

person“ contact or by providing remote access to the

data/information?

2.  Repeatable & Rules-based – Can a standardized,

rules-based policy framework be implemented to

handle the transaction?

3.  High Volume – Is there sufficient volume that would

drive economies of scale?

(9)

Record to

Report Revenue

Management

Procure to Pay Customer Care

Procurement Function Management

Sourcing Strategy

High potential for shared services Legend

High potential for retained organization Manage Supplier

Relationships

Perform Requisition &

Process PO Accounts Payable

Travel & Expense

Document Management

Compliance Management

Inquiry Management

Finance Function Management Planning , Resource Alloc. & Forecasting

Fixed Asset Accounting Intercompany

Accounting

Reconcile Accounts

Close Books &

Consolidate

Cost Accounting

Document Management

Revenue Planning

Manage Sales Orders

& Invoice Customer Credit & Collections

Cash Application

Cash Management Treasury

Tax

Document Management Accounting Policy,

Control & Audit

Accounts Receivable

Hire to Retire

HR Strategic Planning

Employee Services Compensation Administration Performance Management

Staffing Benefits & Pension

Administration Time Administration

Payroll Administration

Employee Data Management

Document Management

Learning Administration

Technology Services

IT Function Management Business Leadership

& Governance

End User Support Mainframe Operations

Application Maint./

Development Server Operations

Technical Support IT Strategic

Planning

Program Management Emerging

Tech. Research Supply Chain

SCM Function Management

Inventory Management Warehousing

& Distribution

Perform Management Reporting

Record Transactions

Transportation management

Revenue Function Management

Other

What is the typical scope of Shared Services

activities?

Real Estate &

Facilities Legal Communications

(10)

The Operating Model for true Shared Services emphasizes common,

rigorous service delivery management and process excellence.

Shared Services Operating Model

(11)

3-6 Months

Planning 6--9 Months

Assess

10-12 Weeks

Design Build Deploy

•  Define the Shared Services Vision and Strategic Objectives

•  Perform Data Collection and Benchmarking

•  Develop the Operating Model

•  Develop the

Implementation Plan

•  Develop the Business Case

•  Design the Business Processes

•  Design the Organization

•  Design the Enabling Technology

•  Select Location and Real Estate

•  Develop Hiring Plan and Recruit SS Leaders

•  Develop Communication Plan

•  Plan Workforce Transition

•  Develop Training Plan and Management Development Program

•  Design Facilities

•  Design Service Mgmt Framework

•  Develop Shared Services Mgmt Processes

•  Build Performance Support and Training Materials

•  Build-out Facility

•  Recruit Shared Services Personnel

•  Draft Service Level Agreements

•  Develop Key Performance Indicators

•  Develop / Deliver Build Communications

•  Build the Organization

•  Conduct Deployment Planning

•  Execute Deployment Plan

•  Confirm Service Level Agreements

•  Conduct Training and Work Shadowing

•  Develop / Deliver Deployment Communications

•  Test Shared Services Center Readiness

•  Execute Workforce Transition Plan

Wide Range 6-12+ Months

Implementation 9+ Months

Go / No-Go

What are the major steps?

(12)

Contact Center

Document Management Vendor Master Accounts

Payable

Travel &

Expense

Enabling Capabilities Functional Capabilities

Project Workstreams*

Process

Technology

People

Program

Program Management

*Note: The seven workstreams above are not intended to be interpreted as a project organization chart.

Project leadership must select the team composition appropriate for the implementation.

Change Management

Organization

Metrics

Infrastructure (Facilities)

Shared Services

Implementation Approach

(13)

Assessing the Change – Key Questions

Strategic Intent and

Vision

Fit with Other Change Initiatives

Shared Services Operating Model Scope of Shared

Services

Change Strategy

Business Case Implementation

Strategy

1.  Strategic Intent and Vision: What is the strategic intent of

establishing shared services cost reduction or more? Why change?

2.  Scope of Shared Services: What is the appropriate scope of Shared Services ? Which processes / sub-processes / activities?

3.  Fit with Other Change Initiatives: Where do overlaps exist? How will the initiatives be aligned? Will plans for current initiatives need to change?

4.  Shared Services Operating Model: What process, technology, and organization changes are required? How will services be sourced?

5.  Change Strategy: What should be communicated? How to engage - when and to whom? How will the organization adopt new ways of working?

6.  Implementation Strategy: What initiatives are required? How should the initiatives be sequenced? How is the program organized for

success?

7.  Business Case: What are the service and economic benefits? What level of investment will be required? What risks must be managed?

Shared Services Defined

Shared Services 101