The Common Challenges of Common Practices: Tips for Effectively Moving to a Shared Services Center

© 2014 eprentise. All rights reserved.
The Common Challenges of
Common Practices:
Tips for Effectively Moving to a
Shared Services Center
Helene Abrams
CEO
eprentise
habrams@eprentise.com

Learning Objectives
After completion of this program you will be able to:
 Objective 1: Learn the mechanics of running a single global instance
in a shared services center operation.
 Objective 2: Understand common business processes and how they
are implemented.
 Objective 3: Explore real-world examples of and lessons learned
from shared service center operations.
| 2

Agenda
 Introduction
 What is a Shared Services Center?
 How Shared Services Centers Operate
 Common Challenges
 Critical Success Factors for Gaining Efficiencies and Streamlining Operations
 Roadmap for Implementation
 Case Studies
 Conclusion
| 3

eprentise Can… …So Our Customers Can:
 Consolidate Multiple EBS Instances
 Change Underlying Structures and
Configurations
 Chart of Accounts, Other Flexfields
 Inventory Organizations
 Operating Groups, Legal Entities,
Ledgers
 Calendars
 Costing Methods
 Resolve Duplicates, Change Sequences,
IDs
 Separate Data
: Transformation Software for E-Business Suite
 Reduce Operating Costs and Increase
Efficiencies
 Shared Services
 Data Centers
 Adapt to Change
 Align with New Business Initiatives
 Mergers, Acquisitions, Divestitures
 Pattern-Based Strategies
 Make ERP an Adaptive
Technology
 Avoid a Reimplementation
 Reduce Complexity and Control Risk
 Improve Business Continuity, Service
Quality and Compliance
 Establish Data Quality Standards and a
Single Source of Truth
Company Overview: Incorporated 2007  Helene Abrams, CEO
| 4

What is a Shared Services Center?
An operational entity which performs all of the non-core
business processes for all of the divisions within an enterprise
so that companies can:
• Focus on core business competencies
• Reduce costs and gain economies of scale
• Standardize business processes
• Implement better controls
Provisioning of services by one part of the organization and its
shared use by the rest, who fund this service.
| 5

Incentives & Drivers of Global Operations
Consolidate repetitive data-centric processes to
support migration to a shared services center or a
centralized data center
Generate financial reports directly from the system of
record
Reduce operating and maintenance costs to improve
the bottom line
Create a single source of truth to improve business
processes and business intelligence
Enable revenue optimization whenever and wherever
possible to improve the top line
Capitalize on enterprise-wide synergies to leverage
purchasing and to better understand customers
Obtain access to new markets and the opportunity to
scale the business
| 6

How Shared Services Centers Operate
Select locations with lower labor costs, different time
zones
Operates as a separate profit center
 Transaction processing is the main revenue generator, not a support
function.
Recognizes economies of scale
 High volume of transactions
 Ability to transact across businesses
 Accommodates local and statutory requirements
 Centralizes expertise in various areas
| 7

Example Shared Services Center Functions
| 8
AP Invoicing
Purchasing
Credit Card
Reconciliation
Warranty
Tracking
Procurement
General
Accounting
Billing
Credit and
Collections
Taxes
Statutory
Reporting
Travel &
Expenses
Finance
Payroll
Processing
Benefit
Management
Time and
Labor
Reporting
HR and Payroll

R12 Was Designed for Shared Service Center Operations
Operating Units (OUs)
Responsibilities
Multiple Organizations Access Control
Subledger Accounting
Subledger Users are assigned responsibilities
Ledger Sets
Legal Entities
Customer and supplier bank accounts
| 9

Common Challenges for Shared Service Center Operations
Global Standardization
 Data
 Common Definitions
 Redundancy
 Business Processes
Localizations
Alignment of business initiatives
Governance, Controls
Increasing Costs
Global Support
Downtime
| 10

Global Standardization
Business and implementation differences exist among
different installations and need to be maintained
Different calendars, currencies, and charts of accounts are
difficult to reconcile
One-to one relationship between each set of subledgers
(purchasing, payables) in Oracle Applications
No cross-instance functionality
MOAC functionality doesn’t enforce standards
Oracle Applications consolidate only at General Ledger
Level
| 11

Business Process Standardization
Key components to
successfully managing
change on a global scale
| 12

Critical Success Factors for Gaining Efficiencies and
Streamlining Operations
Single Global Instance
Common Global Chart of Accounts
Standard Calendar
Shared Master Data
Common Configurations
Elimination of Silos
 Ledgers, Legal Entities, Operating Units, Inventory Orgs
| 13

Things to Think About When Establishing a Vision for
Shared Services
What is the governance model?
What type of functions, processes and services?
How many processes ?
What is our approach?
What are the economics?
How long will it take?
What type of culture and organization do we want?
How will it impact the rest of the organization?
How will it meet stakeholder’s requirements and be measured?
| 14

© 2014 eprentise. All rights reserved.© 2013 eprentise. All rights reserved.
Three Traditional Shared Services Organization
Models
Corporate
Service
Center
B.U.B.U.B.U.
Regional
Service
Center
B.U.B.U.
Regional
Service
Center
B.U.B.U.
Company
A/P
“Center of
Excellence”
B.U.
Corporate
Accounting
“Center of Excellence”
Company
B.U.
Corporate
| 15

Roadmap for Implementation
Step 1: Determine what processes the SSC will
cover
 Identify processes and data that can be shared across
the enterprise
 Standardize common business processes, workflows
 Identify common data
| 16

Step 2: Measure Current Operating Costs
 Benchmark existing processes
 Identify metrics for best practices
 Compare existing to best practices
 Determine opportunities for saving
| 17

Determine Current Practices and Costs
| 18

Measure Against Best Industry Practices
Benchmark
High
Benchmark
Median
CCI w/o TGIF
& CHG $1.81
Benchmark
Low
Best Practice
CHG $4.40
TGIF $4.12
CCI $2.39
CTG $1.74#
CMG $1.69#
Accounts Payable Cost
per Invoice Processed
$16.63
$3.93
$1.35
$0.80
Benchmark
Low
Benchmark
Median
CCI w/o TGIF
& CHG 30,575
Benchmark
High
CHG 11,303
TGIF 14,562
CCI 23,765
CMG 36,181**#
CTG 53,148**#
Invoices Processed per
Accounts Payable FTE
5,333
17,793
41,388
* Per 1991 Shared Service Study
** Invoices are processed by CCI FTEs which are not reflected in CTG and CMG headcounts
# Business units receive a bill from CCI A/P in addition to performing some of their own A/P
Unit Cost and Productivity Comparison Accounts Payable
| 19

Resource Distribution
Other
(13%)
Personnel
(64%)
Systems
(23%)
Benchmark Low
Company ABC
Other
(24%)
Personnel
(64%)
Systems
(19%)
Personnel
Systems
Other
TGIF
61%
22%
17%
CMG
61%
21%
18%
CHG
63%
1%
36%
CTG
48%
14%
38%
Headcount Distribution
Exempt
(20%)
Non-Exempt
(80%)
Benchmark Low
Company ABC
Exempt
(29%)
Non-Exempt
(66%)
Contract
(5%)
Exempt
Non-Exempt
Contract
TGIF
10%
84%
6%
CMG
37%
54%
9%
CHG
41%
59%
0%
CTG
51%
49%
0%
| 20
Measure Against Best Industry Practices
Accounts Payable Supplemental Analysis Accounts Payable

Step 3: Set up a Service Level Agreement
 Identify resources
 People
 Infrastructure
 Determine operating costs
 What volume can you handle?
 Are there special requirements?
 Determine unit prices
 Determine service levels and fees
 Timing (close cycle)
 Volume
 Develop change management, issue resolution, and escalation
processes
| 21

Step 4: Initiate Preparation Project
 Set up infrastructure
 Consolidate instances
 Implement common chart of accounts
 Implement common calendar
 Merge ledgers, operating units, inventory orgs
 Set up secondary ledgers and ledger sets
 Regulatory and Statutory Reporting
 Adjusting Ledgers
 Set up MOAC
| 22

Infrastructure
Four main technology issues surrounding globalization:
 Availability
 Access/Security
 Performance
 Functionality
E-Business Suite Release 12 is designed to support a
global enterprise within a single instance, and it has
several features that enable sharing of data and facilitate
the globalization effort.
| 23

Technology - Availability
Prearranged level of operational performance during a
period of time
 Service level agreement or “three nines”/”five nines”
 To a user, it means the ability of the user community to access
the system
 Scheduled vs. Unscheduled downtime
 Maintenance
 Patches, configuration changes, etc. (reboot required)
 Hardware/software failure
 Environment anomaly
| 24

Example of Silos
Instance A B C D Distinct
Release 11.5.10.2 11.5.10 11.5.10.2 11.5.9 -
Size (GB) 1,425 548 61 96 -
Languages 4 2 1 1 4
Sets of Books 104 48 1 30 183
Calendars 10 7 1 1 19
Charts of Accounts 40 43 1 18 102
Legal Entities 120 48 0 47 215
Operating Units 121 49 0 47 217
Inv Orgs 137 50 1 48 236
Modules Installed 9 17 4 5 21
Security Rules on Value Set 13,012 300 15 153 13,480
Security Rules X Responsibilities 17,350 445 6 75 17,876
Cross Validation Rules 86,845 39,925 25 165 126,960
Currencies 56 28 1 28 64
EBS Users 43,986 30,494 247 3,023 N/A
Sets of Books, Legal Entities, OUs, and Inventory Orgs
Redundant and configured differently
Charts of Accounts and Calendars
Disparate and misaligned
Sets of Books – Difficult to comply with local and statutory regulatory requirements
Legal Entities – Easy to over- or under-pay taxes and misstate financial information
Operating Units – Difficult to leverage supplier relationships (terms, discounts, etc.)
Inventory Orgs – Impossible to know if a product is actually in stock (or where it is on the shelf)
Charts of Accounts – Reports and data extracts must be done 40 times
Calendars – With 10 calendars, the company is depreciating assets in 10 different ways and closing periods
at different times
Redundant Objects
Redundant Objects

Why Consolidate Instances?
Reduction in infrastructure
costs (hardware,
maintenance, licenses)
Reduction in personnel to
support multiple systems
Provision of better customer
service and the ability to
operate globally
Agility to grow and to
embrace new initiatives
Global
Reporting/
Analytics
Facilitate efficient and effective decision
making with timely and reliable fact based
information
Access real-time information
at consolidated level
Create Centralized Shared
Services (maintenance, setup,
centralized processing)
Eliminate duplicate
integrations and
interfaces
Lower license and support fees
Operation of a single business with
consistent data, streamlined processing and
the ability to leverage markets, suppliers of
other parts of the business
Consistent Business Processes
| 26

eprentise Consolidation Software
| 27

Changes Made Automatically During
Consolidation
Three Types of Changes:
Name
Changes
ID Changes
Synchronization
| 28

A Global Chart of Accounts
 Primary ledger is single source of truth
for all accounting, reconciliation, and
analytical reporting
 Consistency but flexibility to
accommodate different requirements
 External reporting without relying on a
separate financial consolidation system
 Drill down to individual transactions in
the subledgers without translation
 Transparency (3 - 5 years) to meet IFRS
standards and international auditing
requirements
 Common metrics and reporting
structures with common interpretation
Enterprise Visibility with Subledger Accounting and Secondary
Ledgers
| 29
 Accounting policies are
standardized across the
entire enterprise
 Data remains consistent and
has full drill-down and roll-
up capability, auditability,
and visibility into all of the
activity for the entire ledger
set
 Conversions not required
for data warehouse queries
 Facilitates the movement to
a shared service center
 Increases the level of
enterprise governance and
control of new code
combinations

FlexField Software to Change your EBS Chart of
Accounts
Map Segments and Values
or Code Combinations
Segment Mapping
Changes CCID everywhere
All setups
All subledgers
All history
Looks as though the
new chart of accounts
was part of the original
implementation
Full audit trail, drill
down, roll up
Built in exception
reporting
1 1 Mapping
M 1 Mapping
1 M Mapping
| 30

Calendar Change
| 31

Period Date Change - Impact on Journals
| 32

Insert New Dates
| 33

Merge Operating Units
| 34

Move Legal Entities to New Set of Books
| 35

Step 5: Roll out SSC Operations
 Establish standard business processes
 Set up governance and compliance controls
 Hire resources
 Develop training program
| 36

Process Standardization
The backbone of a globalization effort is the understanding
that business processes are intrinsically linked and not confined
to departmental, geographic, or organizational boundaries.
Shared services center as a way to standardize on common “global”
processes such as:
 Corporate treasury
 Invoice processing
 Receivables processing
 Sarbanes-Oxley Compliance
 Account maintenance
 Corporate reporting
 Expense processing
 HR maintenance
Costa Mesa
Kolkata
Nottingham
São Paulo
| 37

Governance
Effective management of shared enterprise assets is
necessary for an effective global strategy
 Collaboration
 Implementation of effective controls
Idea of the “benevolent dictatorship”
1. There can be no wavering about where the finish line is placed
(a single global instance)
2. Anything less than success or short of completion is not
acceptable (no special exceptions)
3. Obstructionism is not tolerated
| 38

Training and Communication
Effective globalization training has to take a more
personalized approach that seeks buy-in along
with providing information
 New skills
 New processes
 New functionality
 New regulations
A training manual alone is not enough to be
effective
| 39

Step 6: Measure Results
 Are you achieving the returns on investment?
 How close are you to best practices?
 What do you need to do to further reduce costs?
| 40

Where Do You Fit?
Headcount and Costs
Headcount per
$ Billion Sales
6.2-CTG 8.4
17.1
19.9
29.6
46.3
Cost as a Percent of Sales
Personnel
.027 - CTG
.030%
0.61%
.073%
.118%
.219%
Systems
.026%
.038%
.046%
.062%
.011%
Other
.013%
.028%
.035%
.089%
.006%
.126%
.153%
.209%
.355%
First
Quartile
Second
Quartile
Third
Quartile
Fourth
Quartile
First
Quartile
Second
Quartile
Third
Quartile
Fourth
Quartile
56.5 – CMG
67.9 – TGIF
77.8 – CHG
.244% – CMG
.249% – TGIF
.073% – CMG
.090% – TGIF
.141% – CHG .387% – CHG
.407% – TGIF
.002% - CHG
.008% - CTG
27.2 – CCI
.089% - CCI
.210% - CMG
.030% - CCI
.022% - CTG
.047%
.155% - CCI
.345% - CMG
.036% – CCI
.068% – TGIF
.062% – CHG
Accounts Payable Benchmark Results Accounts Payable
Total
.057% - CTG
| 41

Determine Opportunities for Cost Reduction
| 42
Company ABC Company ABC

A Case Study on Global Finance Transformation and Operations
at Experian
Globalization Best-of-breed
| 43

Experian – Global Finance Transformation
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
US
UK
France
Ireland
Oracle R12
Spain
Hong Kong
Ireland
Australia
N.Zealand*
Italy
Denmark
Norway
Sweden*
Finland*
Estonia*
India
France
Japan
China
Korea
Malaysia
Singapore
US
UK
S.Africa
Russia*
Morocco*
Netherlands
Germany
Austria
N.Zealand**
Sweden**
Estonia**
Bulgaria
Greece
Monaco
Belgium
Brazil
Mexico
Argentina
Turkey
UK Instance - Oracle 11i
US Instance - Oracle 11i
Oracle 11i
"UNIFY" Instance Single Global Instance
Oracle R12.0.6
US & UK
migrated to
"UNIFY"
instance
* GL Module Only
** Additional modules
Canada
Chile
Costa Rica
Gemstone
Start
Gemstone
Go-live
3 EBS instances converged
into a Single Global
Instance
Global COA / Processes
Regional Shared Service
Centers processing
Ongoing global roll out
 Single Global Instance
of Oracle EBS R12
 Global Chart of
Accounts
 Standard Finance
Processes
 Global Finance Shared
Services Organisation
 Three regional Finance
Shared Service Centres
 Global Hyperion EPM
& OBIEE fully
integrated with EBS
 Global Finance Center
of Excellence (COE)
| 44
Project Gemstone Goals

Experian – Global Finance Transformation
Core Financials Other HR & Payroll
Purchasing Order Management HRMS
I-Procurement Advanced Pricing Self Service HR
Payables Service Contracts Passive Payroll
Receivables Project Billing Payroll
Advanced Collections Time & Labour Advanced Benefits
General Ledger AME Absence Management
Fixed Assets BRM Billing * I-Recruitment
Cash Management Oracle GRC
AGIS
I-Expenses
Note: Not all modules used by all countries
Oracle EBS – Modules implemented and planned *
| 45

GCS Support – Then and Now
3 Regional EBS instances.
Two located in UK, one
located in USA.
2 Regional support areas
 Functional / Development
teams in each location
 Break fix team in each
location
 Different support models in
place
 Knowledge base
decentralized
3 different EBS
infrastructure footprints
Duplicated DBA teams
Strategy and Support
leadership silo’d and
duplicated
Consolidation project to move
from 3 EBS to single global
instance, infrastructure located
in UK
Outsourced Break/Fix support
to support partner (TCS)
 Experian Development FTE’s
reduced
 Support presence included 3rd
shore (offshore center in Kolkata,
India).of support to a 24x7 model
 Support management centralized,
global incident system
implemented
Built out EBS Regression Test Bed
platform
Began formal Release Mgmt
process to include instance and
DBA resource utilization
management
Outsourced Support
Model transitions to
Service Level
Agreement (SLA) basis
Formal Change Process
put into effect –
simple change < 10
days,
Planned change > 10
days
Release Management
process furthered
 Instance refresh policy
established
 Configuration Mgmt
process furthered,
began use of
automation tool (i-
setup)
EBS Support
(Prior to Gemstone)
EBS Support
(Gemstone Go Live)
EBS Support / Strategy
(Gemstone 2yrs old)
(an Iterative Process)
| 46

Process Collaboration – How Do We Work Together?
Process Collaboration Matrix
Business Partners Global Corporate Systems
Business Process Process Owner Process Sponsor
GCS Process Partner /
SME
GCS Technology
Partner
BusinessIntelligence:
DataIntegration/MasterDataManagement
/Middleware:
DataWarehouse/DataDesignAuthority:
Order to Invoice NA: TBD NA: TBD GCS SME
LATAM: TBD LATAM: TBD GCS SME
UK&I / EMEA: TBD UK&I / EMEA: TBD GCS SME
APAC: TBD APAC: TBD GCS SME
Invoice to Cash TBD TBD GCS SME
Recruit to Retire NA: TBD TBD GCS SME
LATAM: TBD TBD GCS SME
UK&I / EMEA: TBD TBD GCS SME
APAC: TBD TBD GCS SME
Purchase to Pay TBD TBD GCS SME
Record to Report TBD TBD GCS SME
GRC TBD TBD GCS SME
Enterprise Performance
Management
TBD TBD TBD
| 47

Customer-focused organization
Establishes global processes and accessibility to data
Hastens incorporation of new business units
Improved access to consistent information
Enhanced ability to refocus business units from transactional processing to
analytical analysis
Focuses on core competencies
Eliminates silos, and assures that management everywhere is reading from the
same page
Number of control points in a process and the number of variations of a process
are greatly reduced, mitigating the risk of process error.
Drastic quality improvements
Leverage technology
Fewer customer contact points
Soft Benefits of Implementing Shared Service Centers
| 48

Questions?
| 49

© 2014 eprentise. All rights reserved.© 2013 eprentise. All rights reserved.| 50
Thank You!
- One World, One System, A Single Source of Truth -
Helene Abrams, CEO
www.eprentise.com
habrams@eprentise.com
Visit eprentise at booth 1033!

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