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Conference Review

15 Secrets to Shared Services Success - The Top 45 Take Aways

 

Introduction:

It is generally agreed that ‘successful’ shared services organisations are doing certain things right. This two day event wanted to nail and share the key things that SSOs are doing that really making a difference. From applying Lean Sigma, to Charging Smart, this conference dug deep into the heart of what SSOs are doing and how improvements are being seen.

This write-up has been crafted to serve as a reminder of the key learnings that transpired during these two days.

Organisation Optimisation:

 

Secret No. 1 Secure a Global Strategy

Some people might say that if you have a global strategy for your SSO you’re destined for success. With the C Level management behind you and everyone pointing in the same direction, surely things will be done better and quicker? Leo Ammerlaan opened up our conference with a fascinating story overflowing with insights and tips. Philips decided on setting up a captive SSO in 2003 in Poland. In Leo’s view Poland has developed dramatically over the last 5 years, and making a decision on location now may well force different questions to be asked and different answers transpiring.

Philips aim was threefold – to create a world class transaction processing centre; to increase value of the business by expanding the SSO scope to value-add finance; and to then be able to provide the services externally. Great gains were made with the first two steps, and it was decided in 2007 to partner with a third party to accelerate the last step.

It took Philips a mere six months to secure a partnership with Infosys BPO. Would this efficiency be possible without the horse power generated by the support of a global strategy?

3 Key Take Aways:
1) Philips followed this impressive path without the aid of consultants
2) Shared services is 10% fact and 90% perception, therefore measure everything so you can deal with 90% perception and have everyone talking the same, and accurate, story.
3) Make sure you move up the value chain, that is where the real value is. In Infosys’ case they created a Centre of Excellence for VAT to build up expertise in one centre for its customers, and to minimise exposure for the business.

Secret No. 2 Secure Sponsorship

Have you noticed that successful shared services leaders are, on the whole, ‘Promotional Types’? Once a shared services director recognises they are selling a dream, and shared services is an enabler for that dream to happen, a shift occurs, and attention moves to securing buy-in. All of a sudden what you have before you is a sales process.

Carlo Nuvoletta has been in shared services for many years, and the theme which consistently transpired for him was the importance put on securing senior level buy-in. With every communication made comes the opportunity to sell the benefits of what you are doing, says Carlo. For example, because shared services will reduce costs, margins open up, and sales have more room to negotiate lower rates and beat competition, and marketing have more budget.

3 Key Take Aways:
1) Educate the Chairman and the CEO on the change in the business, the benefits, and the possible pain, and ensure they are ready to meet resistance with a ‘party line’ which is congruent with yours.
2) With shared services comes the division of responsibility between centralised and field duties. Having these divisions communicated clearly and then ‘signed off’ is a must.
3) Sell, sell, sell. Know who your sponsor is and make sure you have their attention. If they blatantly back you, a lot of the ‘white noise’ from the business will go away.

Secret No. 3 Combat Resistance

If shared services implementation isn’t enough to keep you occupied, how about adding on an SAP roll out to 110 countries too? It’s not uncommon in our world to have shared services and an ERP implementation happening at the same time. With two giants to contend with, having people let you ‘get on with the job’ can save you time and energy. As a rule, if your peers have confidence in you and your task, grumbling, questioning and push back may well melt away. So how do you secure confidence across the business? Simon Cramond from the British Council illustrated what had worked for him.

3 Key Take Aways:
1) Letting the peer group ‘vote in’ shared services will give you permission to get more done.
2) Often in shared services there are services which are fixed, and others which are a ‘nice to have’. By offering a Bronze, Silver or Gold service, you are enabling the customer to determine their package and yield a greater sense of ownership and control over what the SSO provides them with.
3) Recognising that high risk activity, when it works, often results in high reward, which helps attract high acceptability and levels of confidence.

Secret No. 4 Having the Optimum Mix

Increasingly, this market is seeing SSOs chop up functions, and processes within functions, and throw these modules into a matrix organisation made up of local, Centre of Excellent, Regional SSO, offshored SSO and outsourced support. Segments of a process or a function require different treatment depending on their business criticality, their transactional richness, and their reliance or dependence on local knowledge. In this session Richard Lorenzi from Orange Business Services spoke frankly about lessons learnt to ensure the Captive/BPO organisation is set up and managed to ensure optimum results.

3 Key Take Aways:
1) Have a clear matrix of functions to help you determine what is in scope for outsourcing and what is not. What criteria determines if a function is ready for outsourcing? Richard suggests mature, rule based processes are prime for outsourcing.
2) When looking at outsourcing, put significant effort into the RFP as this will help you determine what you want, and will have an impact on the nature of the contract.
3) Get outside help when it comes to agreeing and negotiating the contract. Legal teams representing BPOs are expert at navigating their way around a BPO contract, you may not be, so seek a third party to ensure this contract absolutely reflects your requirements.

Secret No. 5 Build a Strong Business Case

How many times have you heard a ‘Vision’ and it’s not a vision at all, it’s a solution. Shared services is the solution selected to help companies get to a certain Purchase to Pay dream, which will tone up the process, enable optimisation of working capital, increase profit margins and drive up shareholder value. Michael Hyltoft from DSG International opened up his session by talking about the importance of having everyone focus on the outcome. With this in mind, he states there is unification of message and communication, and unification of intention. Michael talked about how a business case was critical, but that importantly it should be used as a sales tool, to help sell the benefits to stakeholders.

3 Key Take Aways:
1) Communicate clearly and then document clearly so everyone really is on the same page
2) Measure so that you can illustrate improvements and defend your actions
3) Ask your stakeholders, ‘What’s important to you in terms of features within the business case?’ and focus on that.

Enforcing Process Compliancy:

 

Secret No. 6 Practice Lean

Many of us are familiar with the term Six Sigma, but the pioneers of this practice have shifted from this application to a less technical version called Lean Sigma. General Electric used to have the policy where everyone recruited underwent a Six Sigma training. Was this necessary? Perhaps. Was it costly? Probably. Could you apply something a little less ‘heavy weight’ as six sigma and still achieve the same outcomes? GE realised that the answer was Yes, and have now been practicing Lean as a slightly less intrusive business practice. Miguel Caulliez Global Functional PO Leader at GE was explicit in how Lean Sigma focused on one thing: reducing cycle times. If project times can be reduced, and cycles cut, the result is very attractive cost savings. If a project delays by one month, $60 million savings can be lost…

3 Key Take Aways:
1) Six Sigma could be seen as a sledge hammer to crack a nut – Lean Sigma focus on reducing cycles, and is more easily applied to business.
2) Invite people in from outside the process to look at what you’re doing and challenge your logic. Sometimes the best ideas come from those with no experience.
3) Focusing on one thing can be very powerful. The only thing measured at GE, according to Miguel, is time.

Secret No. 7 Focus on First Time Match

Increasingly there is a drive across P2P organisations for a high first time match in invoice processing. What was deemed as acceptable in the 1990s is now considered inefficient and expensive. HM Prison Service have turned around their straight through processing by increasing their first time match rate from 26% to 76% in 9 months. The secret? HMPS is applying Six Sigma to identify and scope out problems, and determine the most effective solutions.

3 Key Take Aways:
1) Great gains have been made at HMPS through the collection and analysis of data, and not on gut feel or ‘I think’.
2) If you look after the inputs, the outputs will look after themselves – P2P is a great example where you’ll see an elegant AP process if users have been compliant upstream.
3) The focus for HMPS is FTE productivity and everything that can be done to drive this up.

Maximising Automation & Systems

 

Secret No. 8 Aim for Quick Wins

One tip that SSOs with slow returns might look for is how to implement projects that deliver quicker wins in order to keep your Sponsor’s attention and support, and illustrate to the business that you’re making a difference. At Acco Brands it was recognised that one area where quick wins are feasible is purchase to pay. But in order to see great gains, says Anne Cutting, you must first start with knowing your baseline. This can prove to be a fairly substantial exercise in itself.

3 Key Take Aways:
1) Look to phase the realisation of benefits to keep stakeholders interested
2) Centralising AP in itself can offer a speedy return just through economies of scale, so this would support the argument to centralise AP before moving to a single system
3) Invest time and resource into project planning – identifying and measuring the problem, understanding the solution, building requirements which are congruent with the SSO’s goals, and following an intelligent RFP process, which serves your key needs will benefit you short and long term.

Secret No. 9 Run A Multifunctional SSO

Once your finance function has stabilised how many companies do you think start applying ‘best practices’ to other transactions in other parts of the business? Very few, but it seems to be a slowly emerging trend that F&A shared services are beginning to reach out their process excellence techniques to other parts of finance, HR and Procurement. In this presentation Raimund Koppel, European Procurement Director of Avid Technology talked about introducing shared services within a mid sized organisation, where drivers were process standardisation, SAP optimisation and improved visibility, rather than cost. It could be said that, without the massive scale, mid size companies have to think more creatively about how to save costs, and extending the functional scope of shared services may just serve this.

3 Key Take Aways:
1) P2P is an end to end process, so bringing as much into the SSO as possible makes real sense from a control perspective.
2) Non stock purchases lend themselves well to ‘in scope’.
3) If Procurement and Payables are both within one organisation, decisions regarding automation application can be made much quicker.

Secret No. 10 Automate Clean Processes as Standard

The scale of HP lends itself to some remarkable savings. Both Avid Technology and HP run off SAP. HP has over 2 million invoices and has been operating a shared services model for over a decade. Avid has just started out with shared services, and have to go further to find savings for their 70,000 invoices. With a combination of 1 million electronic invoices, self billing and paper invoices scanned and keyed, HP is looking for one thing – a ‘perfect flow’ invoice which has a complete and accurate data set. The attention placed on this over the past few years has meant an average cost per invoice (fully loaded and all invoices) is now under $10. Is this figure only achievable with scale? And if you have the scale, is this figure a given? Astrid Plessow of HP talked about the key things which made this possible. One was recognising the importance of a touchless process and understanding that this was impossible without a PO.

3 Key Take Aways:
1) E invoicing helps you to standardise your processes and helps suppliers provide the right information.
2) If you want to move to electronic, small things make a real difference, like not stating your billing address on your PO, and ensuring that your terms start from Receipt Date.
3) Supplier enrolment is key – selling the benefits helps traction and one key benefit is that Suppliers sending invoices electronically are more likely to be paid quicker.

Secret No. 11 Master Your Automation Options

Automating ready processes means more control, more visibility, less cost, and less process variation. No one would argue this isn’t part of the dream, and part of what shared services is about. But is there an better route? Should you do scanning and OCR first and then move to electronic? HP, Acco Brands, British Council and Avid Technology took questions from Conference Chair Susie West to defend their views on various solutions.

3 Key Take Aways:
1) OCR accurate-capture rates per invoice can vary from 20% to 85%. Working with your provider, and other OCR users to understand what are the critical success factors will mean you’ll realise your business case.
2) OCR is not necessarily a short term solution. The aim is to move to touchless, so your processes have to be clean first, but OCR complements e-invoicing as part of the ‘solution mix’.
3) If OCR is not serving you, think about scanning and keying in a low cost location for invoices which you can’t move to electronic.

Excelling in Customer Satisfaction

 

Secret No. 12 Think Like Your Customer

SSOs are businesses. Businesses run off the principals of High Quality Service, Competitive/Value Based Pricing, and Timely Delivery. So surely the service offered by an SSO has to embody a ‘Can Do’ mentality, where Customer is King and your staff are solution focused? Casandra Daubney, formerly from Abbey, brought inspiring energy to her session, highlighting the shift that has to happen in an organisation to move from a centralised accounting function to a genuine shared service model. When Casandra joined Abbey, the teams there were very task oriented, and not focusing on deliverables. Previous colleagues were now customers, which caused a sense of awkwardness. SSO staff were taken off site for 12 weeks for customer satisfaction training, and targets were changed to be customer based. The shift in energy has resulted in happier customers, better service, and a significant increase in the confidence of the SSO team with 96% feeling like they have a clear direction.

3 Key Take Aways:
1) Finance people measure other things, and are not used to measuring themselves, so anticipate resistance.
2) Service Level Agreements should work both ways to ensure that the service delivered is required and optimum.
3) Have your customer define the perfect service by asking them ‘Why are we not 10/10? ‘What does a 10/10 Service look like? If we did that, would we be 10/10? If Not, why not?’.

Secret No. 13 Charge Smart

The litmus test for seeing if an SSO is truly commercial is taking the service and model and offering it externally without changing a thing. Would you make or lose money? How satisfied would your customers be? So who better to come and talk about charging than a BPO? Aiveen Hyland, COO from SWS BPO, illustrated the different models available and the strengths and weaknesses associated with each one. The common theme amongst each model was the importance of covering costs generated in starting up shared services, running the every day operation, and growing the SSO.

3 Key Take Aways:
1) If you want to change behaviour, ie move transactions to electronic, then charge appropriately and reward customers who support, for example, electronic invoicing.
2) Within shared services, document everything and document the scope of work for each customer so you know what your costs, and therefore fees, will be.
3) SWS talked about the importance of having 20 key metrics, and having a customer picking the 5 most important metrics which the service they receive would be scored on.

Mastering Talent Development:

 

Secret No. 14 Focus on Talent

If you have the right people in the organisation in the right roles, exceptional things will happen. So surely recruitment, training, development, and leadership are everything? In this session Julie Ayres Smith from Kelloggs gave some excellent tips on how to attract and motivate high performers.

3 Key Take Aways:
1) Start off by defining what a ‘High Performer’ looks like and build a plan to identify, recruit and retain this quality of person.
2) Clarify that career development is 100% the responsibility of the individual and it is up to them to define what development looks like for them.
3) You will not find talent whilst recruiting in the climate of panic, so attention to resource planning is absolutely key.

Secret No. 15 Be Commercial

If you attended this event, you would have heard the final presentation by Dan Foley and left with goose bumps. This closing session illustrated the essence of how a shared services operation should think. And it should think like a business. ‘If the SSO was your business, would you fly business or first class?’. Probably not… ‘If you focus on cost saving only, are you a service centre?’. No. Is your SSO ready to hit the outside market today? If not why not, and what needs to be done to climb that curve?

3 Key Take Aways:
1) Appreciate the difference between World Class and Best-In-Breed. World Class means there are unlimited resources to support continuous improvement and Best-In-Breed is achieving the maximum based on scarce resource.
2) What gets measured gets done. Only measure and do the things that are going to help you achieve your vision.
3) Keep your vision short so people remember it, can communicate it, and will be excited by it. Put it somewhere obvious – ie not on the intranet (that’s not communication), but in meeting rooms and as screen savers to keep the team’s attention on the outcome.

 

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