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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
GBS Market and
Maturity Assessment
Analysis: Nordic
Perspective
GBS Roadmap: Driving Value and
Performance
Don Ryan, KPMG LLP
Adrian Baldwin, GSK
28 April 2015
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Session organization
Breakout #4: Show me the money Financial
Benefits – 30 minutes and Group
Discussion
■ Case examples, dollars amounts, scale
issues – magnitude of returns in relation to
the maturity model
Break out session #5: What moves the
Needle – Drivers and Outcomes – 30
Minutes and Group Exercise
Roundtable #1: Building a better GBS – 60
minutes
■ Four groups: How can GBS support each
business critical objective. Examples of
outcomes and financial benefits.
■ Each group takes 2 categories – but we
can change these depending on what the
group wants. Each group takes 2
categories to discuss.
– Brand Support and Risk Reduction
– M and A support
– Process efficiency (both in GBS and
across retained functions)
– Customer Experience and Interaction
(Overall and as service by GBS)
Breakout #2: GBS Maturity Assessment
Review and Case Example by GSK – 30
minutes
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Breakout #2:
Reviewing maturity
assessment results
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It’s a new day
REDUCED COST STRUCTURE
OF OPERATIONS
87%
IMPROVED QUALITY OF
OPERATIONAL DATA TO DRIVE
MANAGEMENT DECISIONS
88%
BETTER USE OF AUTOMATION
TO REDUCE RELIANCE ON
MANUAL LABOR
82%
GREATER SCALABILITY
OF OPERATIONS
84%
IT ENABLED BUSINESS
PROCESSES TO PROVIDE
SOLUTIONS, NOT TECHNOLOGY
80%
Source: HfS research
Organizations say that all these
factors are important or critical to
the success of the GBS program
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
What is Global Business Services (GBS)?
An integrated platform to deliver enterprise business services
Drives efficiency and business outcomes
Evolves with the market and company needs
Key Capabilities:
■ Multi-functional business
processes
■ Multi-channel service delivery –
outsourced, shared services and
centers of excellence
■ Process ownership and
management
■ Common information technology
■ Enterprise-wide governance
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Maturity survey analysis: The Nordics view
Europe includes Nordics (30 Plus companies surveyed)
Europe Nordic
79% over
10k
employees
35% one
ERP
91% Process
OwnersMultiplier
Effect of
Technology
& Talent
75% over
10k
employees
43% one
ERP
93% Process
OwnersMultiplier
Effect of
Technology
& Talent
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Maturity survey analysis: The Nordics view
■ 50% started since 2010
■ 44% greater than 250 FTE in shared services
■ 60% use outsourcing with finance and IT
Remit of GBS owners Operating Model and Coverage
0% 20% 40% 60%
Operational
Strategic in function
Strategic cross function
Global
European wide
Nordic wide
Country wide
0% 20% 40% 60% 80% 100%
Finance
HR
IS/IT
Procurement & Sourcing
Customer Services
Real Estate
Predominantly run out of nearshorecenter/s
Predominantly run out of offshorecenter/s
Predominantly run out ofScandinavia
Run from various sites around theworld
Operating Model
Coverage
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Maturity survey analysis: The Nordics view
Analytics
0% 10% 20% 30% 40% 50%
GBS is not involved in data and analytics services
GBS is currently planning and building a data and analytics reporting service
GBS delivers basic data and analytics reporting (standard packages) and providesperiodic and ad-hoc analysis for customers
GBS delivers advanced data and analytics reporting and diagnostic analysis, andidentifies future operational reporting proactively based on the frequency and
importance of business needs
Analytics
Process Focus
0% 10% 20% 30% 40%
Business processes are managed solely within functionaldelivery teams, discrete to a function
Fragmented process ownership, but with informal peer-to-peer networking
Process owners exist and manage global process forselect processes, applied in functional silos
Functionally oriented process owners exist to managemost global processes
Global process ownership incorporating both the GBS andnon-GBS portion of an end to end process
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What do our clients say
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
GBS is enabled and optimized by multiple dimensions
CHANGE AND PROGRAM MANAGEMENTA focused, holistic approach for getting the people and the enterprise ready, willing, and able to fully adopt and sustain changes through targeted strategies promoting understanding, buy-in
and ownership. Change management helps to achieve greater realization of expected benefits, reduce resistance, and mitigate risks that might undermine the value of the initiative
OPERATIONAL EXCELLENCEOn-going focus on problem solving, improvement, and GBS transformation outputs toward delivering high quality, seamless, and consistent business solutions
COMMERCIAL PERSPECTIVE
Customer relationship model defining the way GBS
operates “like a business”, and engages with
customers
DELIVERY AND SOURCING STRATEGY
The defined strategic intent of the GBS
organization, its purpose and relationship to the
overall enterprise
SERVICE PORTFOLIO
Definition of the breadth, depth, geographic
reach of services provided by GBS
TALENT MANAGEMENT
Flexible, integrated enterprise talent management
model designed to attract, retain and engage
resources
ENABLING TECHNOLOGY
Common technology platform across ERP, applications, and
tools to enable standardized services
TAX AND RISK OPTIMIZATION
Monitor and manage change and regulations,
including fiscal, legal, and tax
DATA AND ANALYTICS
Enhanced value through the capture, collection,
analysis and visualization predictive and
prescriptive analytics
PROCESS EXCELLENCE
Deployment of end-to-end service s with
focus on quality, continuous improvement and
innovation
ENTERPRISE SERVICE GOVERNANCE
An integrated way of working to engage with
stakeholders and manage overall service
delivery
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
GBS maturity survey dimension parameters
Delivery and Sourcing
StrategyLittle or no alignment between GBS and corporate missions,
strategy and planning.
Bi-directional formulation of strategy & planning between GBS,
functional, BU and corporate management
GBS operates on multiple IT systems for each GBS customer.GBS operates on a single instance ERP across enterprise with
standard enabling technologies. Enabling Technology
GBS delivery groups are aligned singularly to functional leadership.
Functions are responsible for all aspects of process development,
performance management and
talent management.
GBS serves as an independent operating unit on par with other
Functions/BUs providing output based services to Functions/BUs
based on policy and requirementsEnterprise Governance
Decentralized service delivery model with single function Multi-functional, multi-channel service delivery modelServices Portfolio
GBS provides transaction processing and staff mix and skills reflect
this narrow focus
Broad talent management practices ensure GBS people and
leaders are recognized for their insight, innovation and customer-
orientation. Talent Management
No formal analysis of service supply-demand.
Formal supply-demand of services is used to optimize
consumption and evaluate service sourcing. Formal analytics in
place. Commercial Orientation
Business processes are managed solely within their delivery teams,
which are discrete to a function and/or geography.
Global process ownership incorporating both the GBS and non-
GBS portion of an end to end process. Process Excellence
Information is created and distributed through a combination of static
reporting and limited ad-hoc requests; analysis is performed on as-
needed basis.
Dynamic reporting, with predictive modeling provide users with
prescriptive analysis of real time data from internal and external
sourcesData & Analytics
Absence of organizational flexibility and senior management
ownership
High degree of management buy-in and formal processes for
driving GBS acceptance in the organizationChange Management
Assurance reporting requirements are not included in service
provider contracts, and no coordination occurs with providers on
assurance related matters
Assurance reporting with impact to the organization's financial
reporting, operational, and compliance objectives with due
diligence occurring for new and existing providersRisk and Tax Optimization
Lo
w
Hig
h
1 3 5
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Mapping results against the GBS maturity results: Nordics
SCALED
Functionally oriented
Global shared service model
Variation around processes, tech and governance
standardization
Se
rvic
e D
eli
ve
ry M
an
ag
em
en
t M
atu
rity
Strategic
Multi-functional, multi-channel service delivery model
Provides transactional and analytic services
Managed through integrated, outcome-oriented governance
Synced end-to-end
Integrated
Enterprise wide multi-functional service
delivery platform
Coordinated processes, technology, governance, and multi-
channel delivery for scale and adaptability
SUB-SCALED
Consolidated delivery model
Leverage economies of scale for highly transactional services
Shared services or outsourcing typically on a single-function
FRAGMENTED
Decentralized service delivery model
Duplicative functions, processes, and technology
Little central control and governance over business support
services
Cu
sto
me
r F
oc
us
Levels of Maturity
1
2
3
4
5
Nordic Sector
Aspirational Average 3.8
Current State Aspirational State
# 1
1.8
# 1
NA
# 2
2.2
# 2
NA
# 3
2.9
# 3
3.4
# 4
1.9
# 4
3.0# 5
2.9
# 5
4.2
# 6
1.9
# 6
2.8
# 7
3.4
# 7
3.9
# 8
1.9
# 8
3.4
# 12
4.4
# 9
3.1
# 9
3.6
# 10
1.9
# 10
3.1
# 11
2.7
# 11
3.5
# 12
3.9
Nordic Sector Current
Average 2.8
# 13
3.1
# 13
2.2
# 14
3.6
# 14
2.1
# 15
5.0
# 15
4.0
# 16
3.7
# 16
3.1
# 17
3.3
# 17
2.8
Europe Current
Average 3.0
Europe Aspirational
Average 3.9
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
GBS maturity survey results: Europe
Aspirational
LEGEND
Current
Overall.
Average 100
companies
Average Best in
Class
(3 or more
process or gov.)
1 3 5
Data & Analytics
Lo
w
Hig
h3.72.3
Enabling Technology
Lo
w
Hig
h3.0 4.1
Talent Management
Lo
w
Hig
h3.82.7
Services Portfolio
Lo
w
Hig
h3.4
Delivery and Sourcing Strategy
Lo
w
Hig
h4.33.3
Risk and Tax Optimization
Lo
w
Hig
hEnterprise
Governance
Lo
w
Hig
h3.82.9
Process Excellence
Lo
w
Hig
h4.03.0
Commercial Orientation
Lo
w
Hig
h4.03.0
Change Management
Lo
w
Hig
h4.12.9
3.24
.2
3.8
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
GBS maturity survey results: Nordics
1 3 5
3.92.7
3.62.4
3.0
4.23.1
2.9
3.72.8
3.2 4.0
3.72.6
3.82.9
3.8Aspirational
LEGEND
Current
Average Best in
Class
Data & Analytics
Lo
w
Enabling Technology
Lo
w
Enterprise
Governance
Lo
w
Talent Management
Lo
w
Process Excellence
Lo
w
Change Management
Lo
w
Services Portfolio
Lo
w
Delivery and Sourcing Strategy
Lo
w
Risk and Tax Optimization
Lo
w
Commercial Orientation
Lo
w
Hig
hH
igh
Hig
hH
igh
Hig
hH
igh
Hig
hH
igh
Hig
hH
igh
2.9
3.6
3.9
Overall.
Average 100
companies
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Where do we focus?
Key
Drivers
Key Drivers to Maturity among all
companies
■ Strategy
■ Governance
■ Process Excellence
■ Risk Management
Nordic maturity also
driven by
■ Enabling Technology
■ Talent
Data and Analytics linked to
■ Consistent and enhanced
customer and brand
experience
■ Rick and Compliance
Management
GBS organizations
distinguished by
■ High Degree of focus on
governance, commercial
orientation and service
portfolio/strategy
Key Linkages
■ Commercial
Orientation and
Governance
■ Risk/Compliance
and Strategy
Companies at highest levels of
maturity
■ Align the operating model to
mitigate overall business risk and
ensure compliance
■ Unlock the power of data &
analytics to drive greater insight
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
What maturity looks like and how to achieve
Action Plan
Delivery and
Sourcing Strategy
■ Use outsourcing partners to give access to
technology enablers and leading practices
■ Identify a champion at senior level to help gain
alignment with Executive objectives
■ Monitor & report benefits to increase GBS buy-in
■ GBS strategy tied directly to overall
corporate strategy
■ Mix of captive and outsourcing to have the
best labor arbitrage and value delivery
Enabling
Technology
■ Rationalize existing systems
■ Invest in technology led process improvements and
innovations
■ Create dedicated IT organization and/ or CoE to
support GBS
■ One ERP system with 2 or less instances
■ Use of Enterprise Service management for
non-IT governance activities
■ Automation in all possible parts of a process
Governance
■ Formalize, regularize and document all governance
practices
■ Drive an overall functional expansion and
transformation agenda within GBS
■ Single governance structure with head of
GBS reporting to COO or CEO
■ COO or other C-level management are
process owners or sponsors
Services Portfolio
■ Expand functional scope and BU coverage
■ Extend to cross functional end to end process
opportunities
■ OH functions are delivered by GBS; IT is in GBS
■ A large majority of back office operations
are standardized, transactional services
■ GBS provides five or more services
Desired State
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What maturity looks like and how to achieve
Action Plan
Talent
■ Assess workforce capabilities across employee
lifecycle and form clear career paths
■ Enable cross-training and placement across
functions and processes, regular staff rotation
■ Talent management tailored to operations
■ Turnover less than 15% per year
■ Continuous learning and development, robust
training, knowledge management and
collaboration are part of GBS culture
Commercial
Orientation
■ Invest in GBS brand building activities
■ Perform benchmarking on price and performance
against third party providers
■ Measure SLAs that cover more than just
operational/ cost metrics, focus on performance
■ Operate GBS like an independent business
unit with P&L
■ Services as competitive as a third party
provider
Process
Excellence
■ Empower process owners to design and manage
end to end processes; hire black belts
■ Perform process benchmarking with peers
■ Regularly report productivity gains to
demonstrate GBS benefits
■ Process owners with complete ownership
■ At least 5% efficiency improvement YoY
■ Process optimization using lean/six sigma
expertise. Change management and
corporate gov to drive transformation agenda
Data and
Analytics
■ Invest in predictive analytics, state of art tools
■ Talent management tailored to D&A needs
■ Leverage third party services and resources
wherever possible
■ Provide services to GBS and across
functions to help drive better and faster
business decisions leading to better
outcomes
Desired State
What we do at GSK...
Pharmaceuticals
We develop and make medicines
to treat a range of conditions
including: respiratory diseases,
cancer, heart disease, epilepsy,
bacterial and viral infections
such as HIV and lupus, and
skin conditions like psoriasis.
Consumer Healthcare
We make innovative consumer
products in four categories of
Total Wellness, Skin Health,
Oral Care and Nutrition. Our
portfolio includes well-known
brands such as: Horlicks,
Panadol and Sensodyne.
Vaccines
We research and make
vaccines for children and
adults that protect against
infectious diseases, including:
influenza, rotavirus, cervical
cancer, measles, mumps,
rubella, hepatitis, polio,
tetanus and meningitis.
Implementing a GBS Operating model in GSK18
Background to Core Business Services
19GSK At a glance
2000 2005 2008 2010 2013 2015
Merger
GlaxoWellcome
& SmithKline
Beecham
1st IT Centre
Poland
2nd IT Centre
Malaysia
•Bill Louv
Appointed
CIO/SVP CBS
BSCs Open
West London
North America
Functional BSCs
incorporated
Malaysia
Poland
Costa Rica
CBS Portfolio
Critical Measures
Enabling Processes & Customer
Kuala Lumpur
Costa Rica
North Carolina
West LondonPoland
Philadelphia
Global Business Services journey
Business
Partners and
Centres of
Excellence
Third Party
Providers
Captive
Business
Service
Centres
CBS – Core Business Services three-tier delivery model captive
Implementing a GBS Operating model in GSK 20
GBS Demographic Assessment
Total number of GBS employees in your company ~ 10000
Total number of GBS Centers 5 BSCs + 2-3 major locations
Regions of OperationsNorth America, Europe,
South America, Asia Pacific
Regions of Opportunity Middle East and Africa
Key Factors - GBS Assessment Industry Best Practices
Number of ERP
system4-5 1 – 3
Number of ERP
system instances>10 1 to 5
Functional areas
within GBS
Finance,
Indirect Procurement,
WREF
IT
>5
Continuing to Roll out global ERP
22
Goal:
SCALE+STANDARISATION+SPEED
CBS Principles
provide guidance how people
work and connect, how
services are to be
constructed and how they
should improve
CBS Governance
framework ensuring proper
decision making process and
decision flow across services
in CBS
CBS Capabilities
CBS capabilities required to
operate within service
system
Playbooks – created by doing best practices how to identify opportunities, migrate, stabilise, optimise,
transform and operate services in the ecosystem with the use of CBS toolkits
BSC Places
and People
Service Standards
& Enabling Processes Opportunity
Identification
GSK Change
Framework (ADP)
Customer
Excellence
CBS Infrastructure, Frameworks & Toolkits
Global Business Services journey
Service System highlights
Implementing a GBS Operating model in GSK
CBS Service Portfolio
Introduction to the CBS Service Portfolio
Purpose : A selection of reasons
Definition
– The CBS Service Portfolio is the agreed single list of services provided by CBS, described and
organised in a way which is meaningful to stakeholders and ultimately customers.
Benefits
– For Customers:
– It populates the Service Gateway with quality Service links for the GSK population.
– For Stakeholders:
– It enables greater visibility of CBS services and ultimately explains which services are
available
– For Service Line Owners and Service Owners:
– Can manage service information in one place within a common framework
– For CBS LT & Governance
– Supports the creation of a common and consistent language and approach for CBS
– Supports the move towards service-orientation and end to end services
– Clear accountability and success measures
CBS Service PortfolioCustomers & Service Owners defined the Portfolio in 2012. Continually Evolving
How many
Services?
How to describe
them?
What to call them?
How to group them?
Who owns what?
Focus Groups
One on One
Surveys
Task “sorting”
June 2012
7 Service Groups
36 Service Lines
280 Services
August 2014
13 Service Groups
49 Service Lines
300 Services
Introduction to the CBS Service Portfolio
Jan 2015
14 Service Groups
56 Service Lines
(10 Not CBS)
300+ Services
Service Portfolio Structure
Service Group - A logical grouping of Service Lines.
Service Line – Has an accountable owner although services
might be across functions.
Represents a logical grouping of like services (usually in the
eye of the Customer) to a significant number of customers
and/or in an area of significant value to GSK that resonates with
senior stakeholders.
Service - Has clear functional accountability
Represents a service provision to a significant
number of customers and is comprised of a
significant variety and volume of processes or tasks
required to deliver the Service based on the
customer needs and value to customers.
Service Gateway Entry : Links to customer
consumable resources. Policies, requests (e.g.
purchasing). Etc. 1000’s of entries exist with
accountable owners
Introduction to the CBS Service Portfolio
14 Service Groups & 56 Service Lines
• Consumer Health IT Business Partner Services
• R&D IT Business Partner Services
• GMS IT Business Partner Services
• GSF IT Business Partner Services
Business Unit IT
• Access Management
• Service Desks, Help and Search
Getting Help
• BSC Network
• Mergers, Acquisitions and Divestments
• Service Development
• Services in Transition to Portfolio
CBS Capability
• Business Analytics (Draft)
• Collaboration
• Controlled Document Management
• Data Management (Draft)
• Global Digital Services
Team and Business
Employment Matters
• Joining GSK
• Learning Services
• Leaving GSK
• Pay & Benefits
• People Policies
• HR Operations (non-CBS)
• Global ERP
• Global R&D Systems
• Global Support Function Systems
• Make, Test and Move Systems
• Market & Sell Systems
• Middleware/Integration (MW/I)
IT Application Services
• Corporate Finance Services
• Management Reporting
• Order to Cash
• R2R - Month End Close & Exports
• Supply Chain Accounting
• Tax & Stats
Finance for Finance
• Connect to Applications
• Connect to GSK Facilities
• Facilities Infrastructure Services
• IT Hosting Services
• IT System Security
Infrastructure
• Personal Computing & Mobile Devices
• Telephony
Telephony and Personal Computing
• Printing and Scanning
• Real Estate Services
• Scientific Services
• Workplace & Amenity Services
Site Workplace
• Meetings & Events
Meetings and Events
• Invoice to Pay
• Purchase of Goods & Services
• Sourcing Support
• Supplier Diversity
• Supplier Relationship Management
• Third Party Risk Management
Procure to Pay
• Compliance and Control (Assurance) (non-CBS)
Compliance and Assurance
• GMS Supply Chain Services
• Pharmaceuticals
• R&D Services
• GSF Services
Non-CBS Business Services
14 Service Groups & 56 Service Lines
• Consumer Health IT Business Partner Services
• R&D IT Business Partner Services
• GMS IT Business Partner Services
• GSF IT Business Partner Services
Business Unit IT
• Access Management
• Service Desks, Help and Search
Getting Help
• BSC Network
• Mergers, Acquisitions and Divestments
• Service Development
• Services in Transition to Portfolio
CBS Capability
• Business Analytics (Draft)
• Collaboration
• Controlled Document Management
• Data Management (Draft)
• Global Digital Services
Team and Business
Employment Matters
• Joining GSK
• Learning Services
• Leaving GSK
• Pay & Benefits
• People Policies
• HR Operations (non-CBS)
• Global ERP
• Global R&D Systems
• Global Support Function Systems
• Make, Test and Move Systems
• Market & Sell Systems
• Middleware/Integration (MW/I)
IT Application Services
• Corporate Finance Services
• Management Reporting
• Order to Cash
• R2R - Month End Close & Exports
• Supply Chain Accounting
• Tax & Stats
Finance for Finance
• Connect to Applications
• Connect to GSK Facilities
• Facilities Infrastructure Services
• IT Hosting Services
• IT System Security
Infrastructure
• Personal Computing & Mobile Devices
• Telephony
Telephony and Personal Computing
• Printing and Scanning
• Real Estate Services
• Scientific Services
• Workplace & Amenity Services
Site Workplace
• Meetings & Events
Meetings and Events
• Invoice to Pay
• Purchase of Goods & Services
• Sourcing Support
• Supplier Diversity
• Supplier Relationship Management
• Third Party Risk Management
Procure to Pay
• Compliance and Control (Assurance) (non-CBS)
Compliance and Assurance
• GMS Supply Chain Services
• Pharmaceuticals
• R&D Services
• GSF Services
Non-CBS Business Services
Owner
Owner
Owner
Owner
Owner
Owner
Owner
Owner
Selected solutions
28
CLICK
CHAT
CALL
TALK
Enhanced CBS Search
Easier navigation
External and Mobile compatibility
Single point of access
Central place to manage requests,
receive alerts
Service Gateway
Easily accessible via the Service Gateway
External & mobile chat capabilities Real-time help via online chat
Get help while continuing work
‘Live Help’
Live analyst assistance available via ‘Ask
CBS’ Single internal and external phone number
to access all services
‘Single Access Number’
Education on self-help
Provide service improvement feedback Face-to-face service
Get help and advice in person
Access to expert resource
‘Help Lounge’
Customer Experience Highlights
Implementing a GBS Operating model in GSK
Quarterly
Service Board
Monthly Service
Operations
Board
CBS Regional
Service Forums
Summary of CBS Service Governance Model
CBS Regional
Service ForumsCBS Regional
Service Forums
CBS Service Board - will be operated quarterly with
a very clear focus on service strategy and
performance oversight. The board will also look to
ensure we are focusing key ‘intervention’ resources on
the right priorities for CBS
Service Operations Board – will be ran monthly to manage
escalated service operational issues, be proactive around
reviewing the critical measures and act as sound board for
potential changes to the CBS service model i.e. ways of work
and CBS service offerings
SLO Regional Forums - operated where we have a
critical mass of service line owners and service managers.
They will look at ensuring we cross-pollinate best practice
between the services and identify common issues that
should be raised to the Ops Board.
Organisational momentum around Strategy
30
A3 Implement Common Service StandardsI. Performance Gaps and
Targets
IV.This Year’s Action Plan
II. Reflection on Previous
Activities
III. Rationale for This Year’s
Activities
V.Follow Up/Unresolved
Issues
III.Rationale for this year’s activities
V.Follow up / Unresolved Issues
.
II.Reflection on previous activities
I. Performance Gaps and Targets IV.This Year’s Action Plan
CBS?? 2014?? Strategy?? Deployment?? ?? -‐?? Summary?? Pack?? ?? Version?? 1.0?? February?? 2014??
A3: Transform Current
Services
LT Sponsor: Phil Priest
Owner: Neil Serjeant, Esteban Coronado
Contact: George Mitchell
50 % of CBS services in
BSCs - 2014
10 Lean Diagnostics -
2013
SPM deployed with variable
results
45 % of services in
BSCs - 2013
Most Finance
Migrations require
Stabilization
5 Service Lines stabilized, optimized or transformed by
December 2014
2013 2014
Goals Activities D J F M A M J J A S O N D
Creation of Play Books
Identify Opportunities
Assessment &
Prioritization
Migration
Stabilization
Optimization
Identify
opportunities
Stabilize FS Europe
Optimize ES
Opportunity 3 (? EIS)
Opportunity 4
Opportunity 5
= Completed Milestone = Missed Milestone = Future Milestone
2
Return
Date: Oct
13 A3 Transform Current Services
I. Performance Gaps and
Targets
II. Reflection on Previous
Activities
III. Rationale for This Year’s
Activities
IV.This Year’s Action
Plan
V.Follow Up/Unresolved
Issues1. Resourcing and capability for each initiative within A32. Buy in and alignment
a. Within CBS, e.g. SD vs SLO vs GPO.b. Within Service Development, e.g. this A3 vs
Programme Management vs Initiatives.c. Within Service Lines or Functions, e.g. SLOs vs
GPOs vs functional)3. How to design the Transformation Process (Transform Future
Services WIG) - Q2 2014 under an initiative4. How does this Strategic WIG work with the Strategic WIG on Asia
– potential future dependency depending on next two months on Asia
1. Service Lines in the BSCs are delivered at inconsistent levels of performance2. Need to deliver consistent benefits as part of the rationale of creating BSCsLead measures
1) % Services1) Baselined2) Planned3) Delivered
Lag measure1) % of services delivering targeted
improvementBenefits:1) Targeted services stabilized, optimized
and/or transformed.2) Improved Service Development project
alignment, project management and benefits realization
On-Track Target at Risk Target Missed
1. SIMPLE: The Strategy Framework clearly articulates a compelling
vision that creates excitement and commitment among staff.
2. SPECIFIC: Strategy Roadmaps link strategic goals to specific initiatives
and time-based milestones, helping staff prioritise their actions.
2014 2015 2016
Optimize Services
Customer agreed service improvements
■ Build CBS Nervous System Embed CBS Nervous Systems
Leverage the BSCs
Asia Business Services
Finance Migrations
Reduce Complexity
■ Customer agreed service
improvements
■ Customer agreed service
improvements
■
■
■ Transform current services
■
■Asia Business Services
Finance Migrations■
■
Transform New Services■ Transform New Services■ Transform New Services■
■ Application Rationalization
■ Implement ERP
■ Application Rationalization
■ Implement ERP
■ Application Rationalization
■ Implement ERP
2015 2016
3. ACTION ORIENTED: One-page (A3) Action Plans provide visibility into
well-described, scoped, planned, and resourced activities to execute the
strategy.
4. VISIBLE MEASURES: Performance Dashboards are highly visible, widely
communicated, and reviewed regularly to track plan delivery and identify any
support required to course correct, if needed.
Service System highlights
Implementing a GBS Operating model in GSK
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Breakout #4:
Show me the money:
Quantifying the cost and
value of moving up the
maturity curve
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Show me the $$, €€, ££
Cost savings potential with improved GBS maturity
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
<10% 10-20% 21-30% 31-40% 40%+
Typical Cost Savings, Levels 1-2 to 3, Level 3 to 4-5
Level 1-2 to 3 Level 3 to 4-5
Slightly higher cost savings are typically
achieved in the early stages of GBS
maturity
■ Low hanging fruit
■ Divestitures, layoffs, shut-downs,
consolidation
■ First time labor arbitrage benefits
■ Relocation to lower cost markets
Cost savings level out and/or decline at higher
stages of GBS maturity
■ But “above the line” benefits increase
GBS organizations must strive to achieve
benefits beyond just cost savings at higher
levels of maturity or risk “hitting a wall” and
potentially regressing
18% L1/L2 to L3
16% L3 to L4/L5
7% to 8% increase in
Cash Flow overall
33© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Factors that drive cost savings
0% 10% 20% 30%
Labor arbitrage (captive)
Staff mix / spans of control
Rationalization of ERPplatforms
Scale economies
Rationalization of third partyproviders
Standardization &simplification
Labor arbitrage (outsourced)
Implementation of enablingtechnologies
Cross-functional processimplementation
Level 3 to 4-5 Level 1-2 to 3
■ Many factors drive cost savings as
GBS maturity increases
■ Labor arbitrage is predominant driver
for initial cost savings at lower levels
of maturity
■ Cross-functional process
implementation and end-to-end
process ownership drives savings as
organizations become more mature
■ Implementing enabling technologies
also important as maturity increases
34© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Beyond cost: Additional value drivers sought & achieved
1,00 2,00 3,00 4,00 5,00
Improving consistency of the employee experience
Drive improved cash flow or balance sheet performance
Better use and development of talent
Greater infrastructure scalability
Greater organizational flexibility
Improving consistency of the customer experience
Creating platform for innovation & continuous improvement
Increased quality of services provided to business
Transparency & greater control of financial / ops risks
Use of advanced predictive D&A tools to support GBS
Implementation of true end-to-end processes
Stronger governance and compliance
1=Low Importance, Very Unlikely achieved, 5=High importance, Very likely achieved
Importance 3 to 4-5 Importance 1-2 to 3
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Possible Case Study – How do we think of Benefits - $10B Firm
OH percentage Impacted
Saving Percentage
due to SS
Information & Technology 3.5%
L1 to L2: 20% to 25%
L4 to L5: 50% to 75%
Penetration by year – 25% up to
100% over 5 years
L1/ L2 to L3: 15% to 25%
……………..
L3 to L4/ L5: 50% + (cumulative)
Finance 1.5%
Human Resources 1.0%
Procurement 1.5%
Facilities 3%
Other indirect Cost 1.5%
$0 $200 000 000 $400 000 000 $600 000 000
Year 1
Year 2
Year 3
Year 4
Below Line Savings
L4 to L5 L3 to L4 L1/2 to L3
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Above line benefits can dwarf labor and outsourcing benefits
Above line benefits associated with cash flow increases, revenue growth, acquisition integration
associated with process improvement may more than double any hard core OH cost savings
2015 20192016 2017 2018
Principles: 2015 Critical Service Improvements
(Repeated from 2012, 2013 & 2014)
– Formal agreement of Improvements between CBS Service Line and
Customer/Stakeholder
– Measure/s to be improved
– Clear Targets with timeframes for delivery
– Clear operational measure definitions
– Transparency of progress
CBS and Critical Measures Programme
Voice of Customer Improvements (Customer Satisfaction)
– Mergers Acquisitions & Divestment engagements
– Global Digital services from 50% to 90% Customer Satisfaction
Cost reduction and avoidance
– Printing Services (2013) : 25 % Reduction in Total Cost of Ownership (TCO)
– Windows XP decommissioning accelerated to avoid additional cost of support
– Real Estate Rationalization – Year on Year Savings to CAPEX and OPEX
– 25% Reduction in fees for late Credit Card (Expense) payments
– Lab Services : 20% increase in Chemical Re-use
Service Improvement
– Networks : Reduce High Business Impact Outage hours by 15%
– Multiple examples of reduction in Backlogs (CRs), Cycle times & Issue Volumes
– Joiners & Leavers Right First Time (IT Accounts, Security Badges etc.) – Year on Year Improvements
– % Overdue Debt Reduction & Paid on Time measures
Other
– Site Services : Reduction in CO2 Emissions year on year
Both Effectiveness and Efficiency Measures – A Selection from 2013 & 2014
Presentation title 38
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Break out session #5:
What moves the needle:
Drivers and outcomes
What do you do first to
drive maturity and
business value?
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Why GBS matters to support corporate goals
■ Companies are looking at growth
again but want to use their cash in a
prudent manner.
■ Cost optimization and moving away
from non-core businesses are
primary business drivers at this time
■ Costs extraction remains a primary
value driver for many organizations,
yet many struggle to identify ways
to continue to optimize and improve
their operating models to deliver
greater benefits
DEALS & DEAL MAKERS
Rising Optimism Fuels Deal
Rebound
At the current pace, M&A volume for the full
year would exceed $3.7 trillion, making it the
second-biggest year in history
By Dana Cimilluca, Dana Mattioli and Shayndi Raice
April 8, 2015 8:18 p.m. ET
Takeovers are booming as companies gain
more confidence about the economy, use
stockpiles of cash to reach for future growth
and get boosts from low interest rates and the
surging stock market.
Source: http://www.wsj.com/articles/rising-optimism-fuels-deal-rebound-1428538721 –
4/9/2015
41© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Cost remains a priority for GBS organizations,
but value and innovation are also expected
42© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Mature strategy and service portfolio can drive GBS development
89% had a strong strategy function
92% had a large service portfolio
Of all GBS
with strong
process
ownership
83% had a strong strategy function
87% had a large service portfolio
Of all GBS
with strong
commercial
orientation
89% had a strong strategy function
86% had a large service portfolio
Of all GBS
with strong
talent
management
92% had a strong strategy function
90% had a large service portfolio
Of all GBS
with strong
governance
processes
43
Transform
Optimise
Continuous improvement
Culture
Collaboration
Equipment &
Safety
Future services –beyond the current scope
Transform end to end service to drive
enterprise value
Embed capabilities and optimise end-to-end
process efficiency to drive business value
Provide expert consultancy on services and
processes to remove variation and complexity
Practicing ADP, innovative, vibrant, service oriented and
rewarding culture
Provide collaborative management support structure,
technologies and tools with smart working setup
Provide necessary office equipment and take additional steps to
ensure safety
Implementing a GBS Operating model in GSK
Business Service Centres offering
Future services –beyond the current scope
44
Business Service Centres as Conversion machineses
Assessment
and
Design
Migrate
Services to
the BSC
Operate
Service
Service
IN
Service
OUT
Convert
Service
Outsource /
Keep it in-
house
Identify which
services for
conversion
Migrate
selected
services /
functions to
the BSCs
Continuous
Improvement
Commoditise,
Standardize,
Simplify,
Eliminate,
Lean it
Prepare
service for
outsourcing
Service Lifecycle
Implementing a GBS Operating model in GSK
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Roundtable #1:
Building a better GBS to
Support Higher Level
Objectives – Moving
beyond cost reduction
• Brand Support and Risk
Reduction
• M & A support
• Process efficiency
• Customer Experience and
Interaction
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Beyond cost savings
Unlock the Power of
Data & Analytics
■ Increase sophistication and
centralize DA (remove duplicate
systems, add tracking where
needed, one ERP system,
process requests faster, ability to
track process breakdown utilizing
analytics, identify missing process
controls)
■ Common platforms and common
processes and capabilities
Mitigate Overall Business Risk &
Ensure Compliance
■ Proactive vs reactive response to
regulatory demands
■ Global repository of regulatory
requirements (tracking, reporting,
and process driven common
response to regulatory mandates)
Achieve Excellence & Consistency
in Customer Experience
■ Ensure consistent experience to
the customer (uniform and
consistent methods and platforms
to respond to customer requests)
■ Utilize VOC and validate using
internal DA information
■ Implement user satisfaction
Indexes
Build Internal Repository of High
Quality Talent
■ Build professionals within GBS
that can be sourced out to the
other business functions and
train/provide services – source of
internal high quality talent
■ Establish a clearer career path for
GBS professionals
■ Leverage skills & build training
Increase Effectiveness
& Ability to Scale
■ Need to be able to provide
effective services, effective
outcomes. i.e., Integrate project
management to deploy lean six
sigma and continuous
improvement and effectiveness of
delivery goes up due to
centralized leadership of the
different functions
Establish a Consistent Brand
Experience
■ Improve competitive position
■ Support consistency of global
brand experience
Enhance Sophistication &
Collaboration
■ Mind shift in terms of
professionalism. GBS
organizations have much higher
level of expectation in terms of it
being a provider of choice, and a
lever for cost competitiveness
■ Share skills and knowledge
across the organization
■ End to end process
standardization for non
standardized products/services
and business units
■ Process owners identification and
accountability
■ Process controls and continues
process improvement
■ Process automation
Drive Process Excellence
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
4
Key value drivers reported
Align the operating model for
efficiency and effectiveness
– Relative Importance –
Drive growth & realize
synergies from acquisitionsHighLow
Drive growth in
emerging markets2Low
Low
Optimize the global
operations footprint
4Low
Connect, collaborate and mine
data to drive greater insightLow 3
Protect the Brand and foster a
common customer experienceLow 2
Drive process excellence
and collaborationLow 4
Build internal repository of
high quality talentLow 3
4
2
2
4
2
4
High
High
High
High
High
High
High
Europe Nordic
3
3
3
48© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
One of the strongest
conclusions from the
research is that ‘top
performers’ – companies
driving the strongest growth
and profitability have cracked
the code on leveraging
technology and talent more
effectively than their peers.
Investments in the right technology and talent contribute
to growth
■ Demonstrate Competitive Differentiation
■ Transform Data into Significant Value
■ Leverage Emerging Technology
■ Accelerate Product Development Cycles
■ Create a ‘Market of One’
■ Create New Roles to Accelerate Growth
■ Maintain a 360˚ View of Competitive Threats
■ Extraordinary Ability to Attract & Retain Talent
How to think of value added benefits:
Factors Driving Growth
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Where’s the value in the future?
LABOR ARBITRAGE
CHARACTERISTICS
LABOR AUTOMATION
CHARACTERISTICS
cost take out for relevant functions
40%-75%15%-30%
Model is scalable and is
largely independent of labor growth
Transformative– New way of
doing business
Access to“Rocket Scientists”
who can codify manual processes
Revenue/Profit NOT correlated
to People
cost take out
Model is scalable to the extent
that you can scale labor
Custom/complex, legacy:our mess for less
Access to Low Cost Labor necessary
to provide continuous value
Revenue/Profit correlated
to People
50© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The Four Sectors – Everyone does two
M and A – Tone
• Many industries are
consolidating including Pharma
• GBS as leverage point for time to
benefit
• Increase ROI
• GBS Driving new opportunities –
the art of the possible
Brand and Risk – Don
• GBS as underlying service platform
• How do we quantify brand and risk
benefits
• Importance of standardization across
all geographies
• Underlying importance of data and
analytics in GBS to support brand
Customer Experience and Sales
Support – Joakim
• Marketing and sales will spend
more on technology services
than IT in 2 years
• How does GBS move from back
office to front office
• What services move first
• What are the benefits to overall
customer experience and
marketing strategy
Process Excellence – Lars
• Role of process owners beyond GBS
in driving process excellence
• Benefits of process ownership and
excellence to support retained
function delivery such as product
delivery and development
• Overall corporate reorientation when
GBS drives process ownership
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No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Our client was in a divestiture scenario resulting in the split of its two unique business divisions – medical devices and
pharma. This divestiture resulted in a transition service agreement (TSA) for two years, with the medical device company
providing back office support for the new pharma company. The pharma company needed to redefine themselves quickly
as at the end of two years the back office support TSA would expire – with all people, process, and technology support from
the medical device company terminating. Based on the maturity assessment results, KPMG was asked to support GBS
transformation initiatives across enabling technology, services portfolio, process ownership & optimization, and talent
management.
Global
pharma
company1The client was looking to accelerate growth and increase profitability by re-allocating resources to GBS in order to focus
investment on marketing, sales, and new products in high growth markets. Initial conversations focused on a finance
transformation initiative involving global process and technology changes – the project quickly evolved to GBS on a broader
scale. With KPMG’s support, GBS represented an opportunity for the client to take finance, customer service, logistics, and
other services to the ‘next level’ through the development of a network of global and regional centers, providing seamless
global services to the client’s growing global enterprise.
Global
consumer
products
company2The client’s global leadership established a strategic priority to leverage their global scale by centralizing non-core activities,
allowing the local businesses to focus on where they can most add value. As the company has a highly global and diverse
geographical presence, many projects had been initiated on a local or regional basis with limited alignment to a global way
of working. The implementation of a GBS organization would maximize the value available from the in-flight projects by
executing in a globally consistent way, and using the GBS organization as a competitive strength. Using experts from across
our business, KPMG was engaged in the high level design, detailed design and implementation of the client’s GBS
organization, working on all aspects of the operating model.
Global
beverage
company3KPMG was awarded the GBS transformation advisory role in January 2014 for a duration of 3 years. We worked as one
Corporate management consultant team and presented a global KPMG team with representation from the U.K., U.S. and
Asia Pac. Client’s GBS function is a hybrid model evolving from a single Finance function to potentially expanding into
Procurement, HR, and Supply Chain. We are investing in deploying the KPMG 6Ps methodology and Managed
Governance Services (MGS) as tools to support the client GBS operations and foster optimal efficiency of center
operations.
Global
oil and gas
company4Our client established a Global Business Services organization consisting of Finance, Workplace and Travel, HR, IT and IM
services and mobilized a 3-year program to increase capability and service levels and reduce costs. The program was made
up of 30 strategic initiatives delivered through 80+ projects in over 20 country-clusters. KPMG was asked to support the
design and delivery; and approached this task with a ‘customer centric’ team based in Europe and North America, supported
by KPMG’s Global PMO capability from India.
Global
consumer
company5
What GBS looks like
52© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Key Details
Model &
Sourcing
Hybrid model (captive and
outsourced)
Centers5 (BPO – San Jose, Dalian, Naga,
Krakow, COE –Chicago)
Rationale
Developed a Global Finance, HR,
and Ops strategy and supporting
Target Operating Model (TOM) to
support the company as it
transitions away from the existing
TSA support.
Benefits
■ Leading practice operating
model, contracting structure (for
outsourcing), process design
and desktop procedures
■ Deep functional end-to-end
process and training
knowledge.
Themes
Current state environment was
fragmented and disparate highly
decentralized and non-
standardized.
NagaDalian
Procurement
Finance
HR
IT
Other
In Scope Processes/Support
Finance
■ Commercial Finance Strategy & Role/Org. Design
■ Financial Services and COE Deployment
■ Intl. & Fed. Tax, Income/Franchise, GTC CoE Ops.
■ Finance TOM Design and Implementation
■ Outsourcing Governance COE
■ Finance and Ops Training Strategy/Design/ Development
■ Finance COE & Shared Services
Procurement
■ P2P
■ Alignment of people/process/technology within the
procurement function
■ Process design of “direct” and “in-direct”
procurement/standardization/documentation of SOPs
HR■ Strategy/TOM development
■ Organizational realignment and hiring of new FTEs
■ HR/Payroll Change Management
■ HR/Payroll Outsourcing (NgA)/ Implementation
IT
(localization)
■ Application Alignment/Rationalization
■ Concur T&E and Payroll IT Deployment Support
■ Controls Framework
■ Finance/Payroll Application Rationalization &
Deployment Planning
■ Ops TOM/SAP Process Alignment &Documentation
■ Finance TOM/SAP Process Alignment and
Documentation/Technology Support
■ E2E Testing/Simulation/User Readiness
■ SAP Process (US/PR) Documentation
■ New Global ERP System
■ Operations Technology Support
Other
■ Bus. Supp. TOM development/Process Design
■ Outsourcing (IBM)
■ Bus. Supp. Process/ Documentation Governance
■ Bus. Supp. Training Strategy/Design/Development
■ SAP Remediation
■ Bus. Supp. Control Framework
■ E2E Testing, Simulation and User Readiness
■ Implementation PMO/Hypercare
■ Tax Strategy/TOM/Process Development
■ Outsourcing Governance Model Design & Develop
■ Outsourcing COE Design & Deploy
■ Managed Governance Services
■ Ops Strategy/ TOM Development/ Process Design
■ Trade Compliance
■ Regulatory Technology Enablement
■ Regulatory Process Optimization
■ Regulatory Project Management
■ Income/Franchise Tax, Direct/Indirect Tax TOM
■ Deploy centrally managed/leveraged, standard process
via Outsourcing, Shared Services & CoEs across Finance,
Ops and HR
■ User Stability/Process Remediation
Chicago
San Jose
Krakow
Global or Regional Centers Planned Additional Sites
Other Observations
Governance ■ End-to-end design and development of process and outsourcing governance.
Distinguishing
Characteristics
■ 2 year TSA to support technology and process infrastructure with former parent organization created urgency
for implementation.
■ Current state environment was fragmented and disparate (organization, processes, technology platforms),
highly decentralized/non-standardized
What GBS looks like
53© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Key Details
Model &
Sourcing
Hybrid model (captive and
outsourced)
Centers
3 (Global – Mumbai,
Regional – Mexico City,
Warsaw)
Rationale
■ Simplifying and
standardizing how work
gets done
■ Reducing structural costs
increasing gross and
operating profit
■ Building on client’s current
position to enhance its
leading market share
positions
Benefits
■ Global workflow
efficiencies, more effective
internal controls,
enhanced business
partnering, deeper levels
of expertise and
organizational capability
Mexico City
Warsaw In Scope Processes/Support
Finance
■ Accounts Payable and T&E
■ Credit to Cash (Credit, Collections,
Deductions, etc.)
■ Record to Report (General Accounting, Cost
Accounting, Fixed Assets, Reporting, etc.)
Supply Chain
■ Supply Network Planning (Supply planning
and synchronization, Replenishment planning,
Inventory management, Co-Packing and
Export planning)
■ Transportation Management (Transportation
planning, Warehouse management, Co-
Packing and Contract Management)
■ Order to Invoice (Order Acquisition, Order
Processing, Customer Invoicing)
Other
■ Master Data Management
■ Analytics
■ Procurement
Other Observations
Governance
Developed new end-to-end governance design across new business service organization and as it
relates to ongoing project management. Including but not limited to development of controls,
committee structures, division of responsibility.
Distinguishing
Characteristics
Starting state was mostly decentralized operations, low organizational span of control, underutilized
labor arbitrage, lack of process standardization across subsidiaries, amount of manual intervention,
inefficient use of existing technology, and existing F&A SSC in place moving to globally integrated
GBS model.
Mumbai
Global or Regional Centers Planned Additional Sites
Supply Chain
Finance
HR
IT
Other
What GBS looks like
54© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Key Details
Model &
Sourcing
Hybrid model (captive and
outsourced)
Centers 3
Rationale
Development of a GBS
organization as a competitive
strength, with the
implementation of three
centers around the globe.
Benefits
■ Greater focus on
commercial activities by
markets
■ Enhanced information to
support decision making
■ Professional high quality
services
■ New/deeper functional
services
■ Lower cost
and clear transparency
India
Latin America
Europe In Scope Processes/Support
Finance
■ S2P (Finance) e.g., accounts payable, T&E
■ O2C (Finance) e.g., credit management,
collections
■ R2R
■ MDM
Procurement■ S2P (Procurement) e.g., contract and
catalogue management
■ Supply chain
HR
■ Payroll and benefits
■ Recruitment
■ Learning & Development
■ Training
■ Change management
■ Communication plans
IT■ Enabling IT for service delivery
■ Supporting multiple technology initiatives
■ Integrated information technology framework
Other
■ Standardization of E2E processes
■ O2C Front end (e.g., Telesales, Customer
contact)
■ Analytics and insights
■ Service management and governance
■ Support centre (service desk)
■ Business case development
■ Location analyses
■ PMO/TMO support
■ Transition support and global delivery center
setup support
Other Observations
Governance Service management end-to-end governance design across GBS organization
Distinguishing
Characteristics
The Stage Gate methodology that the client uses globally is being used to deploy each center and to
roll out additional services into the centers.
Global or Regional Centers Planned Additional Sites
Finance
HR
IT
Other
What GBS looks like
Procurement
55© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Key Details
Model &
Sourcing
Initial SSC first established in
Glasgow, in 1998, now
operates 7 shared service
centres across the globe for
finance & HR processes
Centers 7
Benefits
The plan, launched in 2005
was closed officially at the end
of 2010. Target of $800 million
in savings achieved. A major
factor has been improved
performance due to the
network of Business Service
Centres (SBSCs), creating
significant economies of scale
In Scope Processes/Support
Finance
60% of total Finance FTEs are in SSCs. AP, AR, GL, Record to Report, Group Reporting, Statutory
Accounts, Tax computations, Tax reports, Tax provisions, True ups, Trading settlements ($1bn per
day), Treasury back office (for 1200 legal entities), Data Management (600 people work in data
management at the SSC). MIS Scope: Preparation and analysis and contribution to decision making –
Monthly reporting prep, First cut forecasts, Spend analysis, Plan preparations and remodelling
Provides 50% of MIS to Europe for 30 countries, Compliance and Control focus on GRC (moved from
around 40% to 70% controls in SSC)
Procurement Contracting activity
HRIntegrated HR platform introduced across its centers in 2005, providing support for global HR queries
and transactions and outsourced selected employment services
IT
Outsourced IT infrastructure delivery to 3 primary vendors. Integrated 4 IT SSCs within the outsourced
vendor operations, cutting 3,000 jobs. Transferred 1,000 jobs and 400 contractors to the 3 vendors.
Retains only a 600 member team to oversee operations/manage vendors
Other
Downstream customer services. Continuous improvements (Sigma approach used in Finance
operations – improvements teams are based at the centres to share knowledge and experience, 300 –
400 green belts, 30 – 40 black belts
■ PMO/TMO support
Other Observations
Distinguishing
Characteristics
■ 70% in Manila & Chennai as low cost high skill centres; 20% in Krakow; 10% is in Glasgow as a
small scale, high skill, high cost centre. Scope is mandated
Krakow
Kuala
Lumpur
ManilaChennai
Guatemala
Glasgow
Cape Town
RIo
In-house SSC BPO
Procurement
Finance
HR
IT
Other
What GBS looks like
56© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Key Details
Model &
Sourcing
Hybrid model (captive and
outsourced): key partners –
Accenture, Capgemini,
HP/EDS, IBM, Unisys
Centers 10+
Rationale
Simplify and remove
unnecessary complexity,
standardize processes and
leverage global scale
internally as well as
externally
Benefits
■ Tangible improvements
in service operations
due to process
consolidation and
standardization.
■ Savings > cEUR500m to
date
Other Observations
Governance Chief Enterprise Support Officer initially reported directly to the CEO (now to the CFO)
Distinguishing
Characteristics
■ 10 year + implementation timeline – initially establishing functional SSCs and then more
latterly combining all of these into a single global entity. Heavy reliance on third parties
■ Transformation to get to current shared services landscape has seen radical simplification.
Highlights being: Moving from multiple legacy systems to 1 SAP system; Reducing
business units from over 200 to 25; Simplification of the middle management structure
In Scope Processes/Support
Finance
■ Purchase to pay
■ Record to report
■ Travel expenses
■ Bill to cash
■ Supply chain accounting
■ Corporate credit card
Procurement ■ Indirect procurement (Ariba)
HR
■ HR service desk
■ Payroll
■ Benefits
■ Learning
■ Recruitment
■ Performance management
■ Workforce administration
■ international mobility
■ Temporary labor
IT (localization)
■ Desktop services
■ Printer services
■ IT security
■ Server and storage management
■ Share point
■ Telephone and video conferencing
■ IT service desk and application support
■ Assurance
■ information delivery
■ Analytics support
■ Master data management
Other
■ Real estate
■ Building services
■ Facility services
■ Office supplies
■ Travel management
■ Fleet management
■ Audit
■ Legal
Tulsa
Manila
Dalian
Sao Paulo
Netherlands
Krakow
Bangalore
Santiago
In-house SSC BPO
What GBS looks like
Procurement
Finance
HR
IT
Other
58© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity.
Member firms of the KPMG network of independent firms are affiliated with KPMG
International. KPMG International provides no client services. No member firm has any
authority to obligate or bind KPMG International or any other member firm vis-à-vis
third parties, nor does KPMG International have any such authority to obligate or bind
any member firm. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or
trademarks of KPMG International.