17 april finance transformation webinar

7/27/2019 17 April Finance Transformation Webinar

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The global body for professional accountants

Hello!


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Finance Transformation:

expert insights onshared services andoutsourcing.


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An honest conversation.


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1. There is no turning back

from shared services andoutsourcing.

It is an idea whose time has

come

Peter Moller, Partner, DeloitteConsulting


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2. Different approaches to

finance transformation areevident.

Shared services and outsourcing

is supporting a wide range of

business objectives from the quickwins to the game changers

Claudio Altini, Director,

Sourcing Advisory, KPMG


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3. Transformation ambition and

sourcing strategy are linked.

We see an entirely new hybrid

organisation emerging with

innovation and end to endintegration

Austen McDonach, F&A Leader,

Europe, IBM Global Process

Services


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4. Cost remains the startingpoint.

Going in clients think they are

saving cost but losing control. They

get the cost advantage, but thenstart to realise that quality is rising

Chris Stancombe, Global Headof Finance and Accounting

Outsourcing, CapGemini


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5. Leaders differentiate

between provider capability.

The main reason we selected our

provider was the flexibility and

ability to create business solutionsto suit our organisation

Joanna Reynolds, Global

Shared Service Lead, Marsh and

Mclennan


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6. Transformation success

rests on change management.

The hardest part is the change

management. People dont know

what they dont know. And itsnever easy to take people on this

journeyGraham Russell, Director of

BPO, WPP Group


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7. Retained function is critical,

but it has been missed.

Its difficult to conceive you can get

a F&A operation to the right level

of efficiency and effectiveness

without consideration for theretained function

Anoop Sagoo, Senior

Executive, BPO, Accenture


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8. Buyer provider

relationships are misaligned.

For Pearson, cultural fit and

tough love were buying values in

our partner selectionJohn Ashworth, Head of

Finance Transformation,Pearson


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9. Service and service delivery.

Green SLAs across the board do

not necessarily mean you are a

happy customerPascal Henssen, Senior VP and

CEO Europe, Genpact


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Finance

Transformation:Focus on Value Assurance

Dealing with misalignment

of client and serviceprovider relationships


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15 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independentmember firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved

Curriculum vitae

Claudio Altini ACA, CA(SA)

Position Head of the Business Process Sourcing practice, KPMG in the

UK

Experience Claudio is an acknowledged expert in finance and HR functional

transformation, with broad experience in support functionreorganisation and re-engineering assignments, in both pan-

European shared service centre projects and business process

outsourcing projects.

Claudio advises diverse industries including media, telecoms,

automotive, IT, manufacturing, chemical distribution,pharmaceuticals, FMCG, leisure and central government.

Contact

details

[email protected]

+44 020 7311 8873


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To what extent is the spirit of the deal beingdelivered?

To what extent has the business case been achieved?

To what extent are contractual obligations

being met by both parties?

How well are services performing againstbusiness expectation?

Is the Client-Service Provider relationship/service

right for tomorrow?

How is the service perceived at the executiveand operational levels?

What mechanisms enable the contract to grow/

adapt with both the Client and Service Provider?

CONFLICT

Expectations not in line

with delivered services

nor with agreed

services

IRRELEVANT

Agreed services not

delivered and not

expected

WASTE

Services delivered

but not expected and

not agreed

Services agreedIn contract and

expected but notdelivered

Services agreedIn contract and

delivered but notexpected

Services expected

and delivered but

not agreed Incontract

In long term deals there is often a disconnect betweenexpectation and delivery....

Long term contracts need mechanisms to evolve as therelationship develops

Common Questions

To what extent are processes appropriate

and evolving to meet contractual needs?

To what extent are the capabilities able to

support the contract?

Outsourcing Relationships evolve


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Value Leakage is common

10-20%

Value Loss

Operational

Challenges

20-30%

Value Loss

Performance

Challenges

5-10%

Value Loss

Portfolio Management

Challenges

'Net' Value Gained Fromthe Outsourcing

Relationship

Total Potential Value GainedFrom the Outsourcing

Relationship

Efforts

Duplicated Resources

WastedProblems

Not

Managed

Performance

Not at

Expected

LevelsVendors

Deployed

Against

Conflicting

Or Wrong

GoalOpportunities

Untapped

Potential loss of outsourcing value from ineffective service provider governance


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Differentiation Domains..

...transform an outsourcing

relationship to a real partnership.....

generally support constantimprovement

Foundation Domains

... must be in place forbasic

expectations of outsourcingrelationship to be met ...... the modusoperandi of the contract

A Route to Optimising the Outsourcing Relationship....Value Assurance

A framework for the holistic review of contracts, service performance,expectations and level of partnership in outsourcing arrangements


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Performance

Excessive number of performancemetrics

- Administrative burden- Barrier to global process

standardisation

Opportunities to optimiseperformance metrics

- Metrics often not end to end, outputfocused or aligned to business

objectives

Challenges with the credibility ofperformance metrics.

- Insufficient pre-contract base-lining.- Frustration that SLAs do not reflect

reality

Process

Drive towards Global ProcessStandardisation

- Key to achieving next level of benefits- Global Process Ownership

Need for Collaborative Approach

- Providers struggling to independentlyoptimise processes

Completeness of scope and scaleincrease chances of success.

- Hand offs and process breaks limitend to end optimisation.

Price & Commercials

Source of next wave of savings

unclear- Productivity commitments often do not

reflect reality

- Capital investment continue to be achallenge

Desire to drive fixed to variable costs

- Client desire for increased flexibilityand reduced volume commitments

- Transaction pricing constrained byprocess standardization

Opportunities for greater alignment ofincentives

- e.g. outcomes based gain share

Value Assurance

Insights from Recent Engagements


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Plan & Potential

Performance against objectives

- Business case cost reductionobjectives typically achieved

- Process standardisation objectivesmore challenging

Forward Planning

- Overarching strategy and vision forBPO relationships often not clearlydefined or communicated.

Challenges in delivering Innovation

- Turning contractual obligations intotangible improvements

People & Governance

Challenges with clients ability toadopt and implement change globally

- Next level of savings and benefitsrequire significant change

Alignment of local and globalobjectives key to success of a BPO

relationship

- Service providers often struggle withmixed messages

Global Business Services

- Centralization and integration ofsupport services to drive value anddeliver business strategy

Perception

Opportunities to better communicatesuccesses

- Negative perceptions often amplified furtheraway from the operation.

Change management is key to the success

of a BPO relationship.

- Negative perceptions often linked to a needfor improved change and stakeholder

management

Value Assurance

Insights from Recent Engagements


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Nine Factors to Successful Relationship Governance

It is never too late to establish a leading practice outsourcing governance team; a lack of governance

erodes the deal value by as much as 15 to 20 percent.

Realise that effective operating managers usually dont make effective governance executives.

Shadow organisations likely exist in your organisation creating redundancies and increasing costs.Root out these teams and right-size your organisation.

Outsourcing governance teams should ebb and flow as needs change throughout the transitionand ongoing, or steady-state, phase. Make sure your teams flex and contract accordingly.

Learn how to track the value of your outsourcing relationship. Focus on the what and not the how.

Make sure your enterprise business intelligence and knowledge management initiatives include all thedata and information related to outsourced processes, and that its tracked throughout the lifecycle of

the relationship.

Track and measure internal client satisfaction. Keeping an open dialogue and obtaining regularfeedback from internal clients is key to managing expectations.

Ensure you and your provider have aligned goals, or risk failure to deliver on the intent of the deal.

Determine your organisations level of trust toward its provider.Do whatever is necessary to maintain or regain trust to avoid diminishing value.


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KPMG Advisory ServicesThe information contained herein is of a general nature and is not intended to address the

circumstances of any particular individual or entity. Although we endeavour to provideaccurate and timely information, there can be no guarantee that such information is accurate

as of the date it is received or that it will continue to be accurate in the future. No one shouldact on such information without appropriate professional advice after a thorough examination

of the particular situation.

2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLPand a member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (KPMG International), a Swiss entity. All rights reserved.

The KPMG name, logo and cutting through complexity are registered trademarks or

trademarks of KPMG International Cooperative (KPMG International).

Thank you!

[email protected]

+44 (0)20 7311 8873


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Questions.


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Thanks!


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17 april finance transformation webinar

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