“Creating A More Educated Georgia”

USG Shared Services StrategyUSG Shared Services StrategyACIT Meeting ACIT Meeting –– University of West Georgia University of West Georgia

November 8November 8thth 2007 2007

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Strategic Goal Six

The University System is fortunate to enjoy strong financial support from stateleaders. The USG must continue to earn that support by demonstratingaccountability for the use of its resources, by maximizing non-state revenues, andby increasing the efficiency of its business operations. The USG must work withstate leaders to develop an appropriate business model for current economictrends and conditions.

Our Focus: Strategic Goal Six

As a result of its strategic actions, the University System will increase its efficiencywhile increasing academic quality.

Objectives of this goal include increasing the efficiency of business functions,developing a leadership culture and engaging the workforce in processimprovement, and establishing accountability metrics for the System.

The Board of Regents adopted a new Strategic Plan in August, and is nowactively moving to take action on each of the six goals.

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Feedback received from the universities is that there were inaccuracies inthe data submitted. Select data and metrics will be further validated.

Key Survey Observations

Overall process costs are 3rd quartile as compared to those of similar peers

Higher costs due to staffing in transactional processes

Dispersal of transaction processing to each campus has led to:

– Higher enterprise-wide costs

– Inconsistent compliance with financial practices and policies

– Higher manual processes

Under-utilized technologies yielding a lower return on investment

Concluding in June 2007, Hackett completed a benchmarking study toanalyze resource efficiency across eight finance processes. Keyobservations from the survey included:

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Hackett Value Grid

High

Low High

1Q

1Q

Board of Regent’s Value Grid Indicates Opportunity toImprove Efficiency and Effectiveness

Overall Board of Regents

Effe

ctiv

enes

s

Efficiency

Board ofRegents

World-ClassWorld-Class

Cost per transaction

Board ofRegent

Integrated Technology &Common Architecture

Automated Transactions

Productivity, CycleTimes & Self-service

Cost and FTEs

Risk Mgmt

Value of Analysis andQuality of Output

Information Access &Distribution

Role of Finance

Key FN Drivers

Effe

ctiv

enes

sEf

ficie

ncy

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Hackett Study Recommendations

Action #1 - Evaluate approaches & develop a plan for shared servicesacross BOR for the following functions:

– Accounts Payable– Procurement– Human Resources– Payroll

Action #2 – Leverage more standardized tools and best practices withinPlanning and Performance management

Action #3 – Target areas with higher labor costs and redundancies

The results from the Hackett study included recommendations that theBOR focus on certain high priority actions:

As a result of the survey analysis and recommended actions, the GeorgiaBoard of Regents has started a Shared Services assessment of key financefunctions.

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Shared Services is often confused with the centralization of functions intoone physical location. In fact, Shared Services is much more:

DistributedModel

CentralizedModel Shared

ServicesModel

Scal

e &

Effic

ienc

y

Service/Responsiveness

Focus on both increased efficiencyand increased service levels

Customer-service oriented mindset Back-office functions run as a front-

office (“run like a business”) Ability to reengineer processes to:

Optimize degree of sharing to achievescale

Incorporate best practices Maintain end-to-end process integrity

and control Early adoption in the U.S. private

sector demonstrated potential forsavings in government also

Shared Services Objectives

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USG Reasons for Shared Services

Reduce risk of loss of key personnel Leverage investment in technology to maximize functionality Reduce audit risk from non-standard processes and reporting Provide responsive, high-quality services at lower system-wide cost Enable campuses to put more effort to teaching and research Keep tuition cost down by lowering administrative overhead

Several strategic objectives were identified based on the results of thesurvey including to:

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• 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 levelagreements

• Independent legal entity

• Single vendor master data base

• Central shared service center

• Moving to a low cost site

• Reduced finance staff andmanagement layers

• Investment in leading-edgeIT capabilities

• Automation of core processes

ExamplesComponents

• Establish a service culture• Organize around end-to-end processes• Implement best practice processes

Cost Savings

Only by addressing all three components ‘standardization, consolidation andre-engineering’, full benefits of implementing Shared Services can beachieved.

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As-Is

Administration

Transactions

Decisionsupport

SSC provides organizations with more time for decision support andcontinuous improvement in the SSC secures efficiency in transactions.

Local F&A

Reduction oftransactional

processes

Focus on decisionsupport

Administration

Transaction

Local F&A SSC

Decisionsupport

To-Be

Decisionsupport

Automation

Administration

Support the organization bystandardizing and centralizing

activities

Maximizing technologycapabilities to improve

efficiency

SSC

Benefits of Shared Services

“Creating A More Educated Georgia”

Board of Regents

Governing Board for USG Shared Services Center(Made up of customers: Institutional Reps, etc.)

Policies/Procedures

Shared Services Center:Executive Director

HR/Payroll Accounts PayablePurchasing Reporting

Help Desk

TechnologyProviderAssoc. Director (int. admin)

Shared services to 33 institutions and sites

DRAFT ConceptOnly!

Shared ServicesModel

Service Level Agreements w/metrics

1010

Critical SuccessFactors

Technology

Customers

Processes

People

Processes documented

Standardized,controlled & repeatableactivity

RechargingMethodology

Benchmarkingcapability –internal/external

Metrics: (1) controlbased & (2) efficiency &effectiveness

ERPImplemented

DocumentScanningSolution

Workflow

AutomatedPayments

Elimination ofside systems

Skilled leadership in place

Team shape & stability

Team members: culture, values & competencies

Team morale, reward & retention

Service Orientation in Place

Structured way of dealing with customers

Customer satisfaction levels understood

Searle’s diagram (Phil Searle - expert on SharedServices implementations)

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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 DevelopmentProgram

• Design Facilities• Design Service Management

Approach Details

• Develop Service ManagementProcesses

• Build Performance Support andTraining 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 four Phases, we are in theAssessment Phase:

• 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

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

Cur

rent

Pro

ject

Foc

us

ManagementCheckpoint=

10-14 Weeks

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USG / Accenture Project Team

The Shared Services Assessment phase will be conducted with a smallteam with cross-functional and cross-organizational representation. Thefollowing is the proposed organization structure.

ProgramSponsor(s)

SteeringCommittee

Bill Bowes (USG)Mark Howard (ACN)

Debbie Lasher (USG)Zeynep Angin (ACN)

ProcessStream Leads(AP, Procurement,

HR/Payroll)

Donna Bertran (USG) – APMike McClearn (USG) – Procurement

Bill Filtz (USG) - ProcurementRobert Elmore (USG) - HR/Payroll

Zeynep Angin (ACN) – AP/ProcurementDavid Horowitz (ACN) – HR/Payroll

Business CaseStream Leads

Vikki Williamson (USG)Michal Borkowski (ACN)

David Horowitz (ACN)

ChangeManagementStream Leads

John Millsaps (USG)Kristin Murphy (ACN)

Technology SME

Tom Maier (USG)Kris Biesinger (USG)

TBD (ACN)

William Bowes (USG)John Clemens (USG)Larry Wakefield (USG)James Brignati (USG)Tracey Cook-Robinson (USG)Dan Whitfield (USG)Adriance Galloway (USG)

Paul Glasser(USG)Peter Shields (USG)Ron Carruth (USG)Randy Hinds (USG)Jerry Turner (USG)Holley Schramski (USG)James Sutherland (USG)

Not a Workstream. Input on current underlying technology

ProjectManager(s)

“Creating A More Educated Georgia”

USG Shared Services StrategyUSG Shared Services StrategyACIT Meeting ACIT Meeting –– University of West Georgia University of West Georgia

November 8November 8thth 2007 2007