Shared Services Open Forum

1
Shared Services Open Forum

• April 9, 2008
• Sponsored by Administrative Senate

2
Agenda

• Introducing Mark Hopton
• What is Shared Services?
• What does Shared Services mean for Ohio
  University?
• Mark Howard - Accenture
• Current Efforts and Timeline
• QA

3
Introducing Mark Hopton

• Wickliffe, OH native
• Married
• Three children
• Community involvement
• American Greetings SSC background

4
What is Shared Services?

• Business Process Re-engineering journey
• Shared Services is the destination

5
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
6
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
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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

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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

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Ideal processes for Shared Services have low
strategic impact and significant economies of
scale

• Payroll Processing
• Compensation
• Records

• Hire to Retire
• Benefits Administration
• Training Education

• Travel Expense
• Self Service

Human Resources

• General Ledger
• Accounts Payable
• TE Processing

• Accounts Receivable
• Planning Budgeting
• Purchasing

• Cash Management
• Internal Audit

Finance

• Standards
• Technology/ Development
• Desktop Support

• Applications Development
• Data Center Operations
• Application Maintenance

• Telecommunications
• Hardware Software Acquisition

Information Services
Logistics/ Materials Management

• Strategic Sourcing
• Asset Management

• Warehousing
• Inventory Management

• Transportation

• Call Centers

• Non-Emergency Service Calls
• Credit Collections

• Order Management

Customer Service
Legal Affairs
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Shared Services is often confused with the
centralization of functions into one physical
location. In fact, Shared Services is much more
Shared Services Objective

• 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

Scale Efficiency
Service/Responsiveness
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Split of Savings
Only by addressing all three components
standardization, consolidation and
re-engineering, full benefits of implementing
Shared Services can be achieved
Examples
Components
Standardization

• Investment in leading-edge IT capabilities
• Implement global SAP standard
• Automation of core processes

• Standardize processes and policies
• Minimize number of different systems

25
Consolidation/ Centralization

• Single vendor master data base
• Central shared service center
• Moving to a low cost site
• Reduced finance staff and management layers

• Reduce physical locations
• Typically move to a low cost location
• Streamline organization
• Outsourcing/ Co-Sourcing

50

• Process oriented organization
• Service culture through service level agreements
• Independent legal entity

Re-engineering

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

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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
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Benefits of Shared Services
SSC provides countries with more time for
decision support continuous improvement in the
SSC secures efficiency in transactions
Economies-of-scale by standardization and
centralization
Efficiency and continuous improvement through
automation
To-Be
As-Is
Focus on decision support
Decision support
Decision support
Local FA
Administration
Reduction of transactional processes
Administration
Automation
Transaction
SSC
Local FA
SSC
13
Intangible Benefits
Shared Services provides a variety of highly
valuable intangible benefits that are not
quantified in the business case
Strategic
Efficiency / Speed
Quality

• 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

• 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)

• 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

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Typically Shared Services Projects have 4 Phases
Typical Shared Services Road Map
3-5 Months
6-12 Months
2-16 months
10-14 Weeks
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

• 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

Current Project Focus
Pilot
Group 2
Group 3
Program-, migration- and change management
(ongoing)
Management Checkpoint

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.
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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

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• Questions?

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Thank You!

• Mark Hopton
• Director of Shared Services
• 9 Factory Street
• 597-3269
• hopton_at_ohio.edu