Trends and Best Practices in Shared Services

Trends and Best Practices
in Global Shared Services
June 25th 2014

Agenda
Introductions
Global Trends in Shared Services
How is Shared Services Evolving?
Critical Success Factors
Client Interaction Framework
©Chazey Partners 2014 North America | Latin America | Europe | Middle East | Africa | Asia 2
Introductions
PHIL SEARLE CHAS MOORE

CEO & Founder Managing Director
Global/Americas North America (West)
Tel: (408) 402-3008 Tel: (250) 469-4168
philsearle@chazeypartners.com chasmoore@chazeypartners.com
Phil has more than 20 years of experience in Finance, Chas has 19 years of experience in business leadership,
Shared Services, Technology and Outsourcing. Prior to his management and Shared Services implementations. He
current role, he was Group VP and CFO of Cendant TDS leverages his extensive experience in healthcare and
International, which encompassed all areas of Finance industry to help teams innovate effective and realistic
across four continents, including Decision Support, solutions for complex industries. Prior to his recent
Financial Planning & Analysis, Controllership and Financial assignments he was the Interior Health Business Support
plus certain HR Shared Services. Director for Corporate Initiatives leading Shared Services
Phil was granted O1 visa status by the US government in implementations involving the Canadian healthcare sector.
2008 which resulted in him gaining accelerated Green Card Prior to the formation of Interior Health, Chas was the CFO
status in 2009 through the “Extraordinary Ability” of one of the 18 predecessor organizations.
classification. This classification is for In addition to his Canadian assignments, Chas provides
“ability…demonstrated by sustained national or subject matter and technical expertise to American clients
international acclaim” and was based on Phil’s unique and holds a US work visa. He has extensive experience in
experience in Shared Services and Outsourcing. Phil also project management, business case development,
was issued a C10 visa by the Canadian federal government mentoring & coaching, and public speaking, including
in 2010; this visa is only granted where there is “significant facilitation at several international Shared Services events.
benefit to Canada" [R205(a) CEC C10]. Chas is a Chartered Professional Accountant, Chartered
Phil is a Chartered Accountant and has a BA Honors Degree Accountant, and has a BSc Degree in Microbiology from the
in Economics from the University of Exeter. He is a member University of British Columbia.
of Financial Executives International (FEI).
Agenda
Global Trends in Shared Services
General Trends in Shared Services (i)
• Shared Services and Outsourcing initiatives typically result in "cost savings of 20%-50% on
processes in scope” (Hfs-PWC report June 2012)
• "In today's business environment, nine out of every ten enterprises have shared services
and 97 percent manage outsourcing relationships". (Hfs-PWC report June 2012)
• Multi-process Shared Services much more a reality today
• Captive vs Outsource, On-shore vs Near-shore vs Off-shore
• Continued increase in scale and up the value chain in Shared Services (e.g. O2C, Reporting,
Policy)
• Technology options continue to grow (e.g. document management, approvals, user self-
service, ERP, open architecture, software-as-a-service, “cloud computing”, etc)
• Now much more end-to-end “wing-to-wing” process focused
General Trends in Shared Services (ii)
• Data privacy and security a big issue

• Recession had the effect of bringing Shared Services to the Top Table. Less so
outsourcing which suffered significantly over this period. But what happens next?
• Politics around offshoring jobs has been an issue for years, but has not stopped the
trend (captive and BPO), although slowed for a while
• As well as need to manage costs and working capital, biggest concern in last couple of
years has been about needing visibility and control – the “classic” centralized vs
decentralized dichotomy
• Multi-functional Shared Services now really starting to happen after years of this being
in the textbooks
• Large scale, multi-tower outsourcing simply hasn’t happened, despite what many
predicted. However, there is some movement back to try to achieve this again.
• Selective outsourcing (which actually never went away) is the trend
General Trends in Shared Services (iii)
• “Innovative outsourcing” has not happened? “Lift and Shift” did. Partly due to client
requirements. However, there is a new emphasis on this.
• “Quick fixes” are not the solution. Right direction, adapted to each organization’s
unique requirements
• Global Business Services growing and developing. Also more focused on being a key
support for enablement and delivery of business strategic goals
• “Big data” and Data Analytics now a key “outut” from Shared Services/Business Services
– feeding the business the data and information to support growth.
• Ultimately this is “all about the business”. This, despite its name sometimes, is not an
“industry” but more of a service delivery option – a means to an end
General Trends in Shared Services (iv)
100%
Phases of Shared Services
% of Baseline Costs
0%
Time
Maturity 5+ years
• Innovation – really customer focussed, end-to-end, six sigma processes
• Automation – ERP, web-enabled, self-service,
• Value – really customer focussed. Supporting achievement of business strategic goals
• Scope – multi process/multi functional
• Further cost reduction - unlimited opportunity through paperless, virtual service centre, global
low cost alternatives, strategic outsourcing
General Trends in Shared Services (v)
General Trends in Shared Services (vi)
• 100% of the top quartile companies worldwide use Shared Services

• Hackett study found that Shared Services has proven to be a business strategy for controlling costs,
quality and risk.
• 90% of Fortune 500 companies use Shared Services

• “In today's business environment, nine out of every ten enterprises have shared services and 97
percent manage outsourcing relationships". (HfS-PWC report June 2012)
• 60% of companies deliver Cost reduction greater than 35%

• Savings range between 20% and 90%
• Shared Services is THE key enabler for world class functional performance
• Supports business transformation across all functions and processes
Shared Service Maturity: Country/Regional
Maturity of Shared Service Centers

10
6
Maturity Index
Private
5
Public
4
0
US Canada UK Europe Latin America
Shared Service Maturity: Country
Maturity of Shared Service Centers

10
7
Maturity Index
5
Private
4 Public
Agenda
How is Shared Services Evolving?
How Is Shared Services Evolving?
Scope Expansion & Value Multi-Functional Shared

Creation Services
Global Business Services Integrated Business Services
Technology Enablers BPO Trends
Shared Services Evolution - Scope Expansion
The Potential Scope of Shared Services
CUSTOMER LEGAL/CORPO
FINANCE HR IT PROCUREMENT SUPPLY CHAIN
SERVICE RATE AFFAIRS
•Accounts Payable •Payroll •Desktop Support •Call Centers •Travel Services •Transportation &
•Billing/Accounts •Travel & Expense •Application •Credit & •Real Estate Logistics
Receivable •Compensation Maintenance Collections •Facilities/Site •Strategic Sourcing
•General Ledger Administration •Telecommunicati •Order Services •Warehousing
•Consolidations •Benefits ons Management •Fleet •Inventory
•External Administration •Hardware & •Returns Management Management
Reporting •Records Software Processing •Security •Vendor
•Planning and Management •Application •Communication Management
Budgeting •Training & Development Services
•Treasury/Cash Development •Data Center •Environment,
Management •Relocation Operations Health & Safety
•Internal Audit Services •Standards •Regulatory
•Tax •Evaluation •Technology Compliance
•Foreign Exchange Planning/Review Planning & •Public
•Policies & Development Affairs/Media
•Business Support
Analysis Procedures •Acquisition Relations
•Labor Relations Support •Litigation Support
•Financial
Reporting •Recruiting/New •IT Security & Coordination
•Project Hire On-boarding •Insurance
Accounting •Headcount •Mailroom
•Cost Accounting Reporting •Grants
•Lockbox Services •Succession Management
Planning •Health Clinics/Day
•Records
Management •Employee Care Centers
Recognition •Corporate Brand
•International
System Compliance
Accounting
•Engineering
•Subsidiary
Management
•Emergency
Management
Moving Up The Value Chain
Professional/Technical
• Corporate Purchasing
• Revenue Accounting
• Statutory Accounting
Transactional/Administrative
• Credit
• General Accounting
• Cash Management
• Fixed Assets
• Trade Compliance
• Accounts Payable
• Tax Compliance
• Inter-company Accounting
• Month-end Close Reporting
• Billing
• Collections
• Accounts Receivable Example for Finance
• T&E Management
• Claims Processing
Multifunctional Shared Services
What Does “Multifunctional” Shared Services Mean?
What Are The Possible Routes to Multifunctional?
While “multifunctional” shared services has been recommended in the textbooks for decades, in reality
the experience has often been single functional shared services that has been the initial way forward
for many enterprises.
As shared services has proved its worth in practice enterprises have often then sought to expand scope
and “bolt on” additional service lines (both up the value chain and into new functions). This has seen a
more “evolutionary” move to multifunctional shared services than what might be called “big bang”,
although more “big bang” examples today (e.g. in Public Sector).
But the pace has varied quite considerably, with some enterprises starting with a single function but
then very quickly moving to a more multifunctional structure.
True Multifunctional has often been supported by/reflected in the establishment of a “Global Business
Services” or “GBS” function or Business Unit
Global Business Services (GBS)
A KPMG/HfS Research survey last year indicated that 60% of organizations with “mature operational service
frameworks” are planning to move to a Global Business Services (GBS) model, while the Shared Services &
Outsourcing Network’s 2013 membership survey found that the single most important future potential of
Shared Services was “shifting to a GBS model.”
START WITH “BUSINESS SERVICES” - THEN GO “GLOBAL”
While the principles of “Global” services still have a lot in common with traditional Shared Services,
GBS takes services delivery to another level by:
1. shifting to “business services”, which implies a more holistic support of the organization
2. leveraging “global” – as in capability, process ownership, delivery strategy, and footprint
3. unleashing the power of analytics
MULTIFUNCTION OR SINGLE FUNCTION?
Hackett Group (2012 survey of SSON members) found that finance is the most
common function in today’s GBS, with 84 percent of survey participants reporting
that their GBS has finance services with Human Resources being the next at 45
percent of the companies surveyed.
Challenges to Moving Functions into
a GBS Environment
Not having
Functional silos
common cross
for processes
functional tools
execution
and approaches
Attracting and Lack of a shared

maintaining key center
employee infrastructure
talent across functions
Inconsistent No cross-
approach to functional
customer Challenges process
service management
Integrated Business Services
SSOs are moving from the traditional shared service function Integrated Business
based models to become Services
independent, end-to-end service businesses.
• Putting processes into
the context of overall
business optimization
• End-to-end process
ownership
• Capable of handling
any “unique” customer
requirements within a
Strategic Business generally very
End-to-End Process
Standardization Support standardized end-to-
end process.
End-to-End Process
Standardization
Operational Excellence
Operational Excellence
Traditional Shared Services Integrated Business Services
Technology Enablers
Technology has provided

for process automation, Cloud Computing has
Today’s ERP systems can with examples including been embraced by Social media may offer
build a single business electronic invoicing, consumers across the SSOs a way to increase
platform that can document management, globe using email and collaboration with
leverage operational workflow, automatic other IT services that are customers, both
efficiency in an SSO matching and payment hosted on servers internally and externally
allocation tools, globally
automated
reconciliations and user
self-service
Leveraging new technologies to improve SSO operations and improve customer service
BPO Trends
Hybrid models are becoming more

commonplace with a mixture of
internal Shared Services supported
by third party BPO provision
“Lift & Shift” rather

than “Shift & Lift” Re-mapping service delivery locations:
• Many of the easily offshorable jobs have already gone.
• Additionally the number of jobs that might have been offshored
has been reduced by productivity improvements.
• Cost advantage to off-shoring is trending downwards. For
example, cost of employees in India was 80 percent less than
USA, and it is now 30-40 percent and narrowing.
• Employee turnover in the off-shoring companies has historically
been quite significant, in part due to some of the work being
repetitious
Agenda
Critical Success Factors
Typical Transformation Focus: Technology & Process,
sometimes on the People…but Client-focus is missing
Client Process
• Service orientation in place • Processes documented
• Structured way of dealing with customers • Standardized, controlled & repeatable activity
• Customer satisfaction levels understood • Recharging methodology
• SPAs in place • Benchmarking – internal/external
• Reality versus perception • Metrics: Control Based; (ii) Efficiency &
• Account management Effectiveness
Technology People
• ERP implemented • Skilled Leadership in place – do not compromise on
• Document Scanning Solution competencies
• Workflow • Team shape & stability – process shaped/spans of
• Automated Payments control/staff – perm v temps
• Elimination of Side Systems • Team members – culture, values & behavioral competencies
• Self services tools assessed
• Automated Score Cards • Team morale, reward & retention
• Working environment conducive to team working
No Customer, No Transformation
Scenario: “Management decides to reduce the hours of their help desk for their
information technology services.” What are the key drivers behind the decision?
Corporatization/Centralization:
• Users of service must accept corporate
direction Transformed Shared Services:
• Cost containment is prioritized over
performance • If consumers of service are unhappy, they’ll
leave
• Performance is prioritized over cost
containment
If your organization is not focused on the client, you either:

Do not have Will not
transformed or have transformation
Shared Services for long (it will fail)
Intangibles are as Important as Tangibles
The same service characterisic can be seen as an improvement or loss,

It depends on your perspective
What is potentially better: What is potentially worse:

• Cost savings • Slow response and recovery
• Standardized processes • Inflexibility
• Controllership • Risk of client working for SSO
• Common system • Lost decision rights
• Consistent process metrics • Additional bureaucracy
• Accessibility and quality of information • Disconnection from the business
• Customer service management • Lack of local personal support
• Quality in the process • Local desire to “touch everything”
To shape and influence this perspective, you need to a structured way to

manage your client relationships: the Client Interaction Framework
Agenda
Client Interaction Framework
Client Interaction Framework (CIF)
Account Client Contact Service Partnership

Management Management Agreements
• SSO to client; via reporting, • Client to SSO; to manage • SPAs are 2-way agreements
interaction, escalation & and resolve queries and clarifying both SSO services
communication drive learning/improvement and client inputs
Client Continuous Process Control

Feedback Improvement Database
• Client satisfaction • Mechanisms to identify the • Documents end-to-end SSO
continuously monitored areas for improvement and processes; highlights
both informally and formally to develop solutions activity of both SSO & client
Performance Performance Recharging

Measurement Reporting Methodology
• Comprehensive KPIs, • Process performance will be • Define basis for charging for
measures and metrics reviewed monthly by SSO SSO services to turn
framework, SSO & client and client consumers into clients
About Chazey Partners…
Who We Are · Overview
Chazey Partners is a practitioners-led global management

advisory business. We bring together a unique wealth of experience,
empowering our clients to strive for world class excellence through
Business Transformation, Shared Services &
Outsourcing, Technology Enablement, Process
Enhancement and Corporate Strategy Optimization
We have operationally delivered and consulted numerous programs globally, over
the last 20 years, in the US, Canada, Latin America, UK, Ireland, Continental Europe,
India, Singapore, Australia, China, Middle East and Africa
Our end-to-end capability offers advice, guidance and implementation expertise,

covering strategy setting and business case production, to programs management,
implementation and process optimization
©Chazey Partners 2013

2014 North America | Latin America | Europe | Middle East | Africa | Asia 32
Who We Are · Services Portfolio
Functional Breadth of Other Supporting

Experience BUSINESS Services
TRANSFORMATION
−
FINANCE & ACCOUNTING INVENTORY & LOGISTICS
●
SHARED SERVICES ●
HUMAN RESOURCES & OUTSOURCING STAT & TAX COMPLIANCE
● − ●
INFORMATION TECHNOLOGY ENABLEMENT SUPPLY CHAIN
TECHNOLOGY ●
● − LEGAL SERVICES
PROCUREMENT OPERATION EMPOWERMENT ●
● − FACILITIES MANAGEMENT
TRAVEL & EXPENSES CHANGE MANAGEMENT ●
● MARKETING BACKOFFICE
CONTACT CENTRES −
LEAN SIX SIGMA
Expertise In Public Sector & Private Sector

Why Chazey Partners · Uniqueness
Effective Diagnostics & Unique Methodology

Blending more than two decades of experience to create a unique diagnostic based
methodology. This allows us to identify critical gaps, strength quotient, and materialize feasible
opportunities
Hands-On Approach of Seasoned Practitioners

Having “lived and breathed“ a great number of projects, we understand what it takes to
be successful. Our hands-on approach forms the cornerstone of our practice
Independent of Other Providers

Our solutions are unbiased and personalised, and are coupled with our value
enriching thought-leadership
Exceptional Project Payback

Liberating budget for core services, driving highly competitive ROI,
and compelling transformation timelines

Global Reach · Local Expertise
GLOBAL REACH
As one of the world’s leading niche management
consultancy firms specialised in Shared Services &
Outsourcing, we have offices located in nine major
countries around the world, including USA, Canada,
Argentina, Mexico, UK, Ireland, Cyprus, Singapore, and
South Africa.
LOCAL EXPERTISE
Hands-on experience in 100+ countries, influenced key
industry practices in diversified fields.
Our Leadership Team Exemplifies The Combined Value Of Global Reach And Local Expertise

Who We Have Worked With
OUR CLIENTS
WHERE HAVE WE COME FROM

Leverage Our Experience for Your Success
Contact us
enquiries@chazeypartners.com
www.chazeypartners.com

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Trends and Best Practices

in Global Shared Services

June 25th 2014

PHIL SEARLE CHAS MOORE

Global Trends in Shared Services

• Data privacy and security a big issue

• 100% of the top quartile companies worldwide use Shared Services

• 90% of Fortune 500 companies use Shared Services

• 60% of companies deliver Cost reduction greater than 35%

Maturity of Shared Service Centers

Maturity of Shared Service Centers

How is Shared Services Evolving?

Scope Expansion & Value Multi-Functional Shared

Global Business Services Integrated Business Services

Technology Enablers BPO Trends

What Does “Multifunctional” Shared Services Mean?

START WITH “BUSINESS SERVICES” - THEN GO “GLOBAL”

MULTIFUNCTION OR SINGLE FUNCTION?

Attracting and Lack of a shared

Traditional Shared Services Integrated Business Services

Technology has provided

Hybrid models are becoming more

“Lift & Shift” rather

Critical Success Factors

If your organization is not focused on the client, you either:

The same service characterisic can be seen as an improvement or loss,

What is potentially better: What is potentially worse:

To shape and influence this perspective, you need to a structured way to

Client Interaction Framework

Account Client Contact Service Partnership

Client Continuous Process Control

Performance Performance Recharging

Chazey Partners is a practitioners-led global management

Our end-to-end capability offers advice, guidance and implementation expertise,

©Chazey Partners 2013

Functional Breadth of Other Supporting

Expertise In Public Sector & Private Sector

Effective Diagnostics & Unique Methodology

Hands-On Approach of Seasoned Practitioners

Independent of Other Providers

Exceptional Project Payback

©Chazey Partners 2013

©Chazey Partners 2013

WHERE HAVE WE COME FROM

©Chazey Partners 2013

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