Evolution of Shared Services, IAOP, Sydney, 6 Feb 132. Shared Service Trends
The shared services industry has been experiencing a number of common
trends since the GFC.
Geographic Trends Operating Model Trends Organisation Trends
§ More companies are using a “hub- § Shared Services increasingly § High performance Shared Services
and-spoke” model to satisfy local operate as high performance organizations manage true end-to-
needs while leveraging global businesses in their own right end processes with global process
advantages owners
§ Shared Services are delivering
§ The value advantage of “greenfield” more market competitive services to § Customer demand management
locations (away from the head survive capability is trending upward,
office) is being increasingly particularly in a global model
§ Client intimacy is driving the need
pursued
for a Shared Services interface § Functional leaders are taking on
§ Global companies are deploying between the BUs and transaction cross-function processes (such as
captive operations in locations that centers CRM) to achieve multi-function
were used primarily by outsourcers synergies
§ Shared Services is moving up the
in the past
value chain, closer to the end § Shared Services are increasingly
§ Captive Shared Services customer organized as an independent entity,
operations are being outsourced to on par with the operating units
§ Hybrid outsourced / captive models
leverage existing infrastructure in served
are being used to optimize geo /
new geographies
process benefits § Shared Services leaders are
§ The war for talent is driving the developing outsourcer
§ Function-specific Shared Services
development of emerging service
models are increasingly moving to management skills to achieve
delivery markets around the world optimal hybrid service delivery
Multi-function models
capabilities
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3. Shared Service Models
The shared services operating models are evolving to meet these trends
Level of Partnership with the Business*
IBS Lead
Commercial Services
Supplier Services
GBS Lead
Employee Services
FIN Financial Services
MFSS Lead MFSS Lead MFSS Lead HR Analytic Services
IT Americas EMEA APAC
FIN FIN FIN
Americas EMEA APAC
HR HR HR Service Innovation
Fin HR IT
IT IT IT Global Process Owners Global Service Owners
Americas EMEA APAC Global Delivery Network Integrated Delivery Network
Common Service Management Global Service Management Integrated Service Management
1. Discrete Shared 2. Multi-Function 3. Global 4. Integrated
Services Shared Services (MFSS) Business Services (GBS) Business Services (IBS)
Value Delivered to Corporation
• Classic back-office scale • Added skill functions and cross- • Greater end-to-end process control • Increased cross-functional integration
functions delivered at functional synergies enhance the and delivery of mid-office as well to deliver greater business value
lower cost business case as back-office services • Full front-to-back office integration
• Align on client service • Increase client centricity through • Evolve partnership through places client experience at the center
expectations with SLAs cross-functional priority demand planning and global • Maximum agility through location
and joint responsibilities management business strategy support agnostic integrated services and
• From BU silos to • Increased leverage achieved • Greater agility through end-to-end partners
functional silos still through a common service process ownership and fewer • IBS is C-suite led and has end-to-end
creates non-standard delivery framework delivery partners decision rights over budget and all
processes resources
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4. Shared Service Model Characteristics
Five characteristics highlight the changing demands and objectives
Strategic elevation
From back-office single function service
organizations to business strategy enablers led by C
INCREASED suite executives CUSTOMER
TRANSPARENCY SATISFACTION
CEO
COO
Service value orientation Client centricity
From back-office transactions to From a process centric
Business CFO Joint
high value business services High Incentives organization to a customer
Outcomes
Skill service orientated organization
Low Service
Scale
Cost
SSC
Regional Process
MFSS
FURTHER COST Global People HIGHER SPEED TO
REDUCTION ADOPT CHANGE
GBS
“Glocal” Budget
IBS
Global agility End-to-end governance
From captive SSO to an optimized From process excellence to
global hybrid delivery network BUSINESS sustained culture of productivity
PARTNERSHIP
Value Drivers
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Delivery Model Characteristics
5. Shared Service Model Characteristics
Five characteristics provide comparison between the four models
Global Business Integrated
Characteristic Discrete Multi-Function
Services Business Services
One SSO leader over Global GBS leader IBS leader is a C level
A different SSO leader
1. Strategic multiple functions, owning end-to-end exec responsible for a
for each tower, reporting
Elevation below C level leader
reporting directly to a C processes and reporting separate BU and
level leader directly to C suite strategic pillar
2. Service Added skill functions and Greater end-to-end Increased cross-process
Classic back-office scale
cross-functional process control and integration to deliver
Value functions delivered at
synergies enhance the delivery of higher order more business
Orientation lower cost
business case services, i.e., analytics innovation
Evolve partnership
Full front-to-back office
Align on client service Increase client centricity through demand
3. Client planning and global
integration places the
expectations with SLAs through cross-functional
Centricity and joint responsibilities priority management business strategy
client experience at the
center
support
Decision rights are MFSS leader has
GBS leader has decision IBS leader has end-to-
4. End-to-End limited to SSO processes decision rights over
rights over the service end decision rights over
Governance without front-end process service management
delivery approach budget and all resources
control approach
From BU silos to Increased agility Greater agility through Maximum agility through
5. Global functional silos still achieved through a end-to-end process location agnostic
Agility results in lack of common service delivery ownership and fewer integrated services and
standardization framework delivery partners partners
Copyright © 2013 Accenture 4
6. Evolving the Shared Service Model
Sustained service excellence and continuous improvement are critical
Client Centricity
Value as defined by clients
Sustainable Productivity and
Innovation Culture Change
End-to-End Governance
All Resources
Many organizations stop Service Value Orientation
Complex, Value-Added Services
here leaving value behind Global End-to-End Process
and decreasing the Service Management Global Agility
Leverage Captive and Partner
likelihood of sustainability Visibility, Governance Network
and scalability
Service/Cost Transparency Redundant
activities Underleveraged Talent and/or
Performance Mgt High Turnover
Range of Benefits
Metrics, Targets, Scorecards
us Shadow Organizations
inuo SLAs Re-emerging
Cont vement
o Clear two-way services agreed
Re-engineering Impr by clients
Simplified/standardized Benefits of centralization
systems/processes Lack of Clarity
Services, Costs recede due to lack of Eroding Customer
Corp. Culture shared accountability for Satisfaction
New Location Tenure, wages, performance and increase Same broken process for
Wage and real estate arbitrage back-office mentality less
in shadow cost over time
Exceptions Increase
Consolidation
Reorganization and de-layering Shadow Cost Increase
Centralization Shared Services Integrated Business Services
Copyright © 2013 Accenture 5
7. Sourcing for Shared Services
Alternative sourcing models can be used
Captive Management Outsourced Build Operate Transfer Hybrid
Services (BOT)
Shared Services Service Provider Service Provider Similar to outsourcing Combination of shared
functions retained in provides management provides management, model with option for services and outsourcing with
Objective
house, onshore or layer, organisation delivery teams and transition back from one or multiple partners.
offshore. retains staff in current facilities and may Service Provider at end The allocation of services
Organisation maintains locations. provide enabling tools. of period. between parties based on
responsibility for skills and complexity.
delivering outcomes.
+ Perceived lowest cost + Leverage skills for + Investment shared with + As per outsourcing + Maximises value by optimising
Benefits
of operation design & management provider + Leverage providers sourcing models
+ Maximum organisation + Aligned management + Shorter time to benefit expertise in + Focuses on total value than
control incentives with provider + Transfer of operating and establishment in new rather than capacity or cost
+ Organisation IP investment financial risk processes & locations + Balances risk across the
retained + Maintains high degree + Shift to variable cost + Increased perception of delivery portfolio
Challenges
- Additional management of control ownership due to - Requires increased SSC &
- Significant organisation option to transition in-
focus required - Lack of offshore change BPO maturity to design and
leverage house manage
- Investment and change - Perceived loss of control
risk born by - Existing delivery skills - Additional ‘transtiion - Organisation, suppliers and
organisation - New model of back’ phase with captives need to be aligned
- Potential for conflicting accountability additional risk, cost,
- Longer time to lower goals around overall business
time objectives
total benefit
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8. High Performance BPO Characteristics
With London School of Economics and Everest Group we surveyed BPO innovators
across all industries to identify 8 core management behaviors and practices.
Change management Domain expertise and analytics
Collaborative BPO a priority Contextualize data through domain
governance Drive strong expertise and analytics
Adopt a partnership- transformational capability 50% of high-performers
based approach to 90% of high- recognise the value of
governance performers consider information in generating
85% of high-
change management Balanced purchasing benefits (vs 25%) Retained organization
important strategic decision
performers consider partner (vs 60%)
transformation
provider a strategic Focus on benefits beyond Align the retained
partner (vs 40%) cost reduction organization with the
70% of high-performers outsourced processes
focus on benefits 50% of high-performers
End to end beyond cost (vs 25%) optimised their retained
organisation (vs 30%)
approach
Take a holistic
approach to the scope
of the BPO relationship Business Technology as an
90% of high- outcome focus enabler
performers Target strategic Emphasize benefits of
consider process business outcomes technology in the BPO
excellence 60% of high- relationship
important (vs 60%) performers use 40% of high-performers
‘business impact’ leveraged their
targets (vs 50%) providers technology
(vs 25%)
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