Presented at the IAOP Sydney meeting Feb. '13. An overview developed by Accenture of the evolution of Shared Services. It talks to - geographic, Operating Model and Organisation trends; - characteristics of the different models - sourcing models - High performance characteristics

1. The Evolution towards
Integrated Business Services
Russell Ives
Managing Director,
BPO Australia & New Zealand,
Accenture
IAOP 6 February 2013

2. Copyright © 2013 Accenture 1
Shared Service Trends
The shared services industry has been experiencing a number of common
trends since the GFC.
Geographic Trends
§ More companies are using a “hub-
and-spoke” model to satisfy local
needs while leveraging global
advantages
§ The value advantage of “greenfield”
locations (away from the head
office) is being increasingly
pursued
§ Global companies are deploying
captive operations in locations that
were used primarily by outsourcers
in the past
§ Captive Shared Services
operations are being outsourced to
leverage existing infrastructure in
new geographies
§ The war for talent is driving the
development of emerging service
delivery markets around the world
Organisation Trends
§ High performance Shared Services
organizations manage true end-to-
end processes with global process
owners
§ Customer demand management
capability is trending upward,
particularly in a global model
§ Functional leaders are taking on
cross-function processes (such as
CRM) to achieve multi-function
synergies
§ Shared Services are increasingly
organized as an independent entity,
on par with the operating units
served
§ Shared Services leaders are
developing outsourcer
management skills to achieve
optimal hybrid service delivery
capabilities
Operating Model Trends
§ Shared Services increasingly
operate as high performance
businesses in their own right
§ Shared Services are delivering
more market competitive services to
survive
§ Client intimacy is driving the need
for a Shared Services interface
between the BUs and transaction
centers
§ Shared Services is moving up the
value chain, closer to the end
customer
§ Hybrid outsourced / captive models
are being used to optimize geo /
process benefits
§ Function-specific Shared Services
models are increasingly moving to
Multi-function models

3. Copyright © 2013 Accenture 2
Shared Service Models
The shared services operating models are evolving to meet these trends
• Classic back-office scale
functions delivered at
lower cost
• Align on client service
expectations with SLAs
and joint responsibilities
• From BU silos to
functional silos still
creates non-standard
processes
LevelofPartnershipwiththeBusiness*
Value Delivered to Corporation
Fin HR
1. Discrete Shared
Services
IT
• Greater end-to-end process control
and delivery of mid-office as well
as back-office services
• Evolve partnership through
demand planning and global
business strategy support
• Greater agility through end-to-end
process ownership and fewer
delivery partners
GBS Lead
3. Global
Business Services (GBS)
Americas EMEA APAC
IT
HR
FIN
Global Service Management
Global Delivery Network
Global Process Owners
• Increased cross-functional integration
to deliver greater business value
• Full front-to-back office integration
places client experience at the center
• Maximum agility through location
agnostic integrated services and
partners
• IBS is C-suite led and has end-to-end
decision rights over budget and all
resources
4. Integrated
Business Services (IBS)
IBS Lead
Americas EMEA APAC
Employee Services
Supplier Services
Commercial Services
Integrated Service Management
Integrated Delivery Network
Global Service Owners
Financial Services
Service Innovation
Analytic Services
• Added skill functions and cross-
functional synergies enhance the
business case
• Increase client centricity through
cross-functional priority
management
• Increased leverage achieved
through a common service
delivery framework
2. Multi-Function
Shared Services (MFSS)
Americas EMEA APAC
IT IT
MFSS Lead
Common Service Management
HR HR
FIN FIN
IT
HR
FIN
MFSS LeadMFSS Lead

4. Copyright © 2013 Accenture 3
Shared Service Model Characteristics
Five characteristics highlight the changing demands and objectives
From back-office single function service
organizations to business strategy enablers led by C
suite executives
Strategic elevation
From a process centric
organization to a customer
service orientated organization
Client centricity
From process excellence to
sustained culture of productivity
End-to-end governance
From captive SSO to an optimized
global hybrid delivery network
Global agility
From back-office transactions to
high value business services
Service value orientation
HIGHER SPEED TO
ADOPT CHANGE
FURTHER COST
REDUCTION
CUSTOMER
SATISFACTION
BUSINESS
PARTNERSHIP
INCREASED
TRANSPARENCY
Delivery Model Characteristics
Value Drivers
CFO
COO
CEO
Low
Cost
High
Service
Joint
Incentives
Regional
Global
“Glocal” Budget
Process
Scale
Skill
Business
Outcomes
People
IBS
GBS
MFSS
SSC

5. Copyright © 2013 Accenture 4
Shared Service Model Characteristics
Five characteristics provide comparison between the four models
Characteristic Discrete Multi-Function
Global Business
Services
Integrated
Business Services
1. Strategic
Elevation
A different SSO leader
for each tower, reporting
below C level leader
One SSO leader over
multiple functions,
reporting directly to a C
level leader
Global GBS leader
owning end-to-end
processes and reporting
directly to C suite
IBS leader is a C level
exec responsible for a
separate BU and
strategic pillar
2. Service
Value
Orientation
Classic back-office scale
functions delivered at
lower cost
Added skill functions and
cross-functional
synergies enhance the
business case
Greater end-to-end
process control and
delivery of higher order
services, i.e., analytics
Increased cross-process
integration to deliver
more business
innovation
3. Client
Centricity
Align on client service
expectations with SLAs
and joint responsibilities
Increase client centricity
through cross-functional
priority management
Evolve partnership
through demand
planning and global
business strategy
support
Full front-to-back office
integration places the
client experience at the
center
4. End-to-End
Governance
Decision rights are
limited to SSO processes
without front-end process
control
MFSS leader has
decision rights over
service management
approach
GBS leader has decision
rights over the service
delivery approach
IBS leader has end-to-
end decision rights over
budget and all resources
5. Global
Agility
From BU silos to
functional silos still
results in lack of
standardization
Increased agility
achieved through a
common service delivery
framework
Greater agility through
end-to-end process
ownership and fewer
delivery partners
Maximum agility through
location agnostic
integrated services and
partners

6. Copyright © 2013 Accenture 5
Evolving the Shared Service Model
Sustained service excellence and continuous improvement are critical
RangeofBenefits
Integrated Business Services
Consolidation
Reorganization and de-layering
New Location
Wage and real estate arbitrage
Re-engineering
Simplified/standardized
systems/processes
SLAs
Clear two-way services agreed
by clients
Performance Mgt
Metrics, Targets, Scorecards
Service/Cost Transparency
Global End-to-End Process
Service Management
Visibility, Governance
End-to-End Governance
All Resources
Lack of Clarity
Services, Costs
Corp. Culture
Tenure, wages,
back-office mentality
Exceptions Increase
Shadow Cost Increase
Many organizations stop
here leaving value behind
and decreasing the
likelihood of sustainability
and scalability
Benefits of centralization
recede due to lack of
shared accountability for
performance and increase
in shadow cost over time
Global Agility
Leverage Captive and Partner
Network
Underleveraged Talent and/or
High Turnover
Service Value Orientation
Complex, Value-Added Services
Shadow Organizations
Re-emerging
Client Centricity
Value as defined by clients
Eroding Customer
Satisfaction
Same broken process for
less
Continuous
Improvement
Centralization Shared Services
Redundant
activities
Sustainable Productivity and
Innovation Culture Change

7. Copyright © 2013 Accenture 6
Sourcing for Shared Services
Alternative sourcing models can be used
ObjectiveBenefits
Service Provider
provides management
layer, organisation
retains staff in current
locations.
Similar to outsourcing
model with option for
transition back from
Service Provider at end
of period.
Combination of shared
services and outsourcing with
one or multiple partners.
The allocation of services
between parties based on
skills and complexity.
+ Maximises value by optimising
sourcing models
+ Focuses on total value than
rather than capacity or cost
+ Balances risk across the
delivery portfolio
- Requires increased SSC &
BPO maturity to design and
manage
- Organisation, suppliers and
captives need to be aligned
around overall business
objectives
Build Operate Transfer
(BOT)
HybridManagement
Services
+ As per outsourcing
+ Leverage providers
expertise in
establishment in new
processes & locations
+ Increased perception of
ownership due to
option to transition in-
house
- Additional ‘transtiion
back’ phase with
additional risk, cost,
time
Shared Services
functions retained in
house, onshore or
offshore.
Organisation maintains
responsibility for
delivering outcomes.
+ Perceived lowest cost
of operation
+ Maximum organisation
control
+ Organisation IP
retained
- Additional management
focus required
- Investment and change
risk born by
organisation
- Longer time to lower
total benefit
Captive
+ Leverage skills for
design & management
+ Aligned management
incentives with provider
investment
+ Maintains high degree
of control
- Lack of offshore
leverage
- Existing delivery skills
- Potential for conflicting
goals
Service Provider
provides management,
delivery teams and
facilities and may
provide enabling tools.
+ Investment shared with
provider
+ Shorter time to benefit
+ Transfer of operating and
financial risk
+ Shift to variable cost
- Significant organisation
change
- Perceived loss of control
- New model of
accountability
Outsourced
Challenges

8. Copyright © 2013 Accenture 7
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.
End to end
approach
Take a holistic
approach to the scope
of the BPO relationship
Collaborative BPO
governance
Adopt a partnership-
based approach to
governance
Change management
a priority
Drive strong
transformational capability
Balanced purchasing
decision
Focus on benefits beyond
cost reduction
Business
outcome focus
Target strategic
business outcomes
Domain expertise and analytics
Contextualize data through domain
expertise and analytics
Retained organization
transformation
Align the retained
organization with the
outsourced processes
Technology as an
enabler
Emphasize benefits of
technology in the BPO
relationship
90% of high-
performers
consider process
excellence
important (vs 60%)
85% of high-
performers consider
provider a strategic
partner (vs 40%)
90% of high-
performers consider
change management
important strategic
partner (vs 60%)
70% of high-performers
focus on benefits
beyond cost (vs 25%)
60% of high-
performers use
‘business impact’
targets (vs 50%)
50% of high-performers
recognise the value of
information in generating
benefits (vs 25%)
50% of high-performers
optimised their retained
organisation (vs 30%)
40% of high-performers
leveraged their
providers technology
(vs 25%)
www.accenture.com/highperformancebpo

9. The Evolution towards
Integrated Business Services
russell.ives@accenture.com