shared services open forum april 9, 2008 sponsored by administrative senate
TRANSCRIPT
Shared Services Open Forum
April 9, 2008
Sponsored by Administrative Senate
Agenda
• Introducing Mark Hopton
• What is Shared Services?
• What does Shared Services mean for Ohio University?– Mark Howard - Accenture
• Current Efforts and Timeline
• Q&A
Introducing Mark Hopton
• Wickliffe, OH native
• Married
• Three children
• Community involvement
• American Greetings – SSC background
What is Shared Services?
• Business Process Re-engineering journey
• Shared Services is the destination
What Are Shared Services and What Are the Benefits?
Shared Services is a customer-focused organizational structure and service model that provides back-office support primarily to internal customers and
eliminates redundant processes, systems, and organizations.
• Standardization of processes and systems
• Increased levels of automation
• Reduction or containment of costs
• Improved controls
• Enhanced service levels
• Access to new technologies
• Optimization of skills/capabilities
Shared Services Enables
• Built upon standard processes, policies, and systems
• Focuses on delivering excellent customer service
• Strives for continuous improvement
• Run as a separate organization
• Enabled by emerging technologies
Key Shared Services Attributes
Adopted from Oracle Presentation Shared Services in Higher Ed
Of Course, Higher Education has a Definition
Shared services combine the non-competing administrative and business support functions of colleges and universities on a
collaborative basis. The services may include a wide range of technical and functional business processes agreed upon for inclusion by the
participating institutions who mutually benefit by realizing cost savings, improved access to technologies, and enhanced levels of service.
By combining their resources, shared services institutions reap the full advantages of technologies that might be too costly if purchased on their own while realizing efficiencies in staffing and improved customer service
through the collaboration.
The shared services model allows institutions to focus more of their resources on their core competencies of teaching, research and
service rather than technology services that are critical, but serve rather than drive their missions.
Adopted from Oracle Presentation Shared Services in Higher Ed
BPR Example
• Procure to Pay (P2P) - $1.6MM savings– Reduced invoice processing time from 44
days to minutes– Increased EIP rate from 2% to 87%– Decreased PO error rate from 80% to 0.7%– Increased cash discount $300K– Reduced expenses of faxing, bank fees,
postage and forms $200K
The Case for SSC
• Focus on processes and leverage technology
• Productivity increases• Responsible, accountable, accessible• Dramatic re-engineering of processes• Business professionals focus on strategic
initiatives• University-wide focus on education and
research
Ideal processes for Shared Services have low strategic impact and significant economies of
scale
Finance General Ledger Accounts Payable T&E Processing
Accounts Receivable Planning & Budgeting Purchasing
Cash Management Internal Audit
HumanResources
Payroll Processing Compensation Records
Hire to Retire Benefits Administration Training & Education
Travel & Expense Self Service
InformationServices
Standards Technology/ Development Desktop Support
Applications Development Data Center Operations Application Maintenance
Telecommunications Hardware & Software
Acquisition
LegalAffairs
Logistics/Materials
Management
Strategic Sourcing Asset
Management
Warehousing Inventory Management
Transportation
CustomerService
Call Centers Non-Emergency Service Calls
Credit & Collections
Order Management
Shared Services is often confused with the centralization of functions into one physical location. In fact, Shared Services is much more:
DistributedModel
Centralized Model Shared
ServicesModel
Sca
le &
Eff
icie
ncy
Service/Responsiveness
• Ruthless pursuit of process standardization enabling more efficient processing
• Customer-service oriented mindset• Back-office functions run as a front-office
(“run like a business”)• Service managed via Service Level
Agreements, “contracts” between operating units and the Shared Services organization
• Skilled and scarce resources leveraged across multiple operating units
• Operating units focusing on their core processes and analysis
Shared Services Objective
Only by addressing all three components ‘standardization, consolidation and re-engineering’, full benefits of implementing Shared Services can be achieved
• Establish a service culture• Organize around end-to-end processes• Implement best practice processes
“If a company simply consolidates to get the economies of scale, 50% of the savings are left of the table.”
- Hackett Research 2004
• Standardize processes and policies• Minimize number of different systems
• Reduce physical locations• Typically move to a low cost location• Streamline organization• Outsourcing/ Co-Sourcing
25%
50%
25%Re-engineering
Standardization
Consolidation/ Centralization
• Process oriented organization• Service culture through service level
agreements• Independent legal entity
• Single vendor master data base• Central shared service center• Moving to a low cost site• Reduced finance staff and
management layers
• Investment in leading-edge IT capabilities
• Implement global SAP standard• Automation of core processes
ExamplesComponents
• Establish a service culture• Organize around end-to-end processes• Implement best practice processes
Split of Savings
As-Is
Administration
Transactions
Decision support
SSC provides countries with more time for decision support; continuous improvement in the SSC secures efficiency in transactions
Local F&A
Reduction of transactional
processes
Focus on decision support
Administration
Transaction
Local F&A SSC
Decision support
To-Be
Decision support
Automation
Administration
Economies-of-scale by standardization and
centralization
Efficiency and continuous improvement through
automation
SSC
Benefits of Shared Services
Strategic
Scalable platform for future growth, improved capability to integrate new businesses
Business focus on core competencies New business models enablement Achieve process and systems
standardization
Efficiency / Speed
Reduced cycle times: e.g. Close, Authorizations, Credit evaluation, Billing, Sourcing
Timely financial analysis and reporting enablement
Speed up solution gathering of complex financial issues (legal, tax)
Quality
Consistency and integrity of data and structures of all units across Europe
Improved satisfaction of internal customers through defined SLAs
Improved information for decision making
Enhanced focus on business unit operations and client satisfaction
Reduced error rates - quality at source
Shared Services provides a variety of highly valuable intangible benefits that are not quantified in the business case
Intangible Benefits
3-5 Months 6-12+ Months
Assess Design Build Deploy
• Design the Business Processes• Design the Organization• Design the Enabling Technology• Select Location and Real Estate• Develop Hiring Plan and Recruit
Shared Services Leaders• Refine Communications Plan• Create Workforce Transition
Plan• Develop Training Plan and
Management Development Program
• Design Facilities• Design Service Management
Approach Details
• Develop Service Management Processes
• Build Performance Support and Training Materials
• Build-out Facility• Recruit Shared Services
Personnel• Create Service Level
Agreements• Develop Key Performance
Indicators• Develop / Deliver Build
Communications• Build the Organization• Conduct Deployment Planning
• Execute Deployment Plan• Confirm Service Level
Agreements• Conduct Training and Work
Shadowing• Develop / Deliver Deployment
Communications• Test Shared Service Center
Readiness• Execute Workforce Transition
Plan
2-16 months
Typically Shared Services Projects have 4 Phases:
• Shared Services Vision• Scope of Shared Services• Current State Analysis• Benchmarking/ Opportunity
Assessment (done)• High Level Operating Model• Process Split Definition • Change Management
Strategy• Business Case• Implementation Roadmap
Typical Shared Services Road Map
NOTE: Timeframes above are illustrative and vary depending on organization size, Shared Services scope, global vs. regional objectives, Greenfield vs. Brownfield, ERP solution status, etc.
Program-, migration- and change management (ongoing)
Pilot
Group 2
Group 3
Curre
nt P
roje
ct F
ocus
ManagementCheckpoint=
10-14 Weeks
Next Steps
• Project Team Kick-off – 4/9/08
• Executive Leadership Team – 4/08
• Hackett Benchmarking Workshops– 5/08
• Prioritize Scope – 6/08
• Process Re-engineering – 9/08
• Leverage Technology - TBD
Questions?
