Public Services Run Better With SAP

Adi BudimanIndustry Principal Public Services SEA

How Public Services Agencies can achieve better productivity and efficiency using common platform shared services framework

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Agenda

Observation Framework

Case Studies

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Shared Services penetration growths fast

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Why governments promote Common Platform Shared Services

Executives,CIO’s, Agency

Heads

Increase Public Trust & Public Value

Deliver consistent, responsive constituent services

Obtain best value from available resources

Achieve Economies of Scale

Improve services and service delivery while maximizing cost reductions and cost avoidance

Group similar activities and expertise for economies of scale

Aging populations mean lower tax bases, governments must prepare ahead

Resource Reallocation

“Back-office” / public administration improvements allow government to improve “front-office” services

SOA feeds shared services by emphasis of interoperability and re-use of components

Improve Productivity

Enable employees to be self reliant with less administrative and IT intervention

Standardize processes based on best practices, eliminate duplicative transactions and functions

Increase Quality of Services while Cutting Costs

Deliver responsive, high quality, consistent, end-to-end services to all users

Implement a scalable, sustainable, and flexible IT platform for growth at incremental cost

Sustain service levels and knowledge base despite retiring workforces

Depth of integration

Processes and IT

Labor Mix

Scope

Functional Geographical Organizational

Government Contract Outsourced

Harmonization Standardization Automation Self Services

Make (Shared, Non-Shared)

Buy (Business Process Outsourcing)

Shared Services Value Drivers

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Agenda

Observation

Framework Case Studies

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How Common Platform Shared Services Lower TCO & Creates Value?

Mono-functional Shared Services

Multifunctional Shared Services

Shared Services

Management

Valu

eNational shared services enables

Ministries and Agencies strategic direction of efficient organic growth and acquisitions

Drive Efficiency

Drive Effectiveness

National CompetitiveAdvantage

F&A HR IT Procure-ment

Facility

Evolve towards a lean Organization

Scale supporting process with future growth of agencies

Quick integration of cross-ministries/agencies

Best practice companies aim to cut SG&A costs by 10 to 20% with shared services

Shared services provides global transparency to improve cash flow

Improves quality and accountability with guaranteed service levels

Reduce cost of running shared services

Increase productivity and activity share of shared services

Reduce cost of doing business

Improve key financial KPIs with consolidation and harmonization

Multifunctional shared services provides an additional decrease in administration costs

Impact Shared Service Centers

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Shared Services Delivery FrameworkEfficient Service Delivery, Transparency, Service Quality and lower TCO

SAP Shared Services solutions help turn administrative functions into a service to agencies and communities, and free resources for value-add

Agency

Benefits• Lower overall TCO (Total Cost of Ownership)• Simpler and less expensive maintenance, changes and upgrades• Reduced IT complexity and acquisition, integration and development costs

Agency

Benefits• Consolidated information at government

level to facilitate fact-based, informed decision-making

• Common and shared performance indicators for quality assurance and business process improvement

Solution: Enterprise process visibility and access

Benefits• Enhanced service to citizens and

agencies via standardization of repeatable business processes

• Automation reduces risk of errors • Consolidated, one “source of truth” /

single data source enables faster, accurate service

Solution: Uniform, consistent, automated processes

Solution: Flexible, adaptive technology platform

Agency

Citizens /

Other Authorities /

Departments

/ Suppliers

STAFF

Financial Management

Human Resources

Procurement

Systems and Technology

SYSTEMS AND PROCESSES

Users

Technical / IT staff

Functional / Process staff

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Monitor and OptimizeShared Service Delivery

Improvement Recruitment Personnel Admin Payroll HCM Self Services Travel / Leave

Management

Purchase Order Processing

Financial settlement Public Sector tender Supplier Relationship

Management

Asset Management Real Estate Maintenance Management Self Service Mgmt

Infrastructure SOA Security Network

Approach Applied to Multiple Administrative Functions

AGENCIES‘ HEAD

Head of SSCCIO/Head of Solution LoB Shared Service Operation

Configure Administrative Processes for Shared Services

Monitor and Optimize Shared Services Delivery

Operate Administrative Processes as Shared Services

Shared Service Operation(Lvl 1, 2, . . )

Self-Service(Emp./Mgr./ApplicantSupplier/Customer)

Identify contact and purpose

Manager: Approve employee request

via MSS

Select service from employee self-

service (portal or kiosk)

Initiate request through call, dobe interactive forms

or email

Dashboard

Review context of request

Create Ticket

Monitor peaks in work load

Monitor SLA fulfillment

Respond to request

Self Service Portal

Contact Center

Government Shared Services covers process automation, collaboration between process constituents and supports the quest for excellence in service quality across key lines of business within the organization

Automation Enablers

Public Sector Finance Manage Risk &

Compliance Grants Management Performance Based

Budgeting Continous Performance

Improvement

HRFINANCE PROCUREMENT FACILITY MGMT IT

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Agenda

Observation

Framework

Case Studies

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SAP for Public Sector Enables Shared Services

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SAP® Supplier Relationship Management for Public Sector

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Computerworld Honors

Source: Computerworld http://www.cwhonors.org/viewCaseStudy2008.asp?NominationID=723

“From an organizational perspective, by instituting the COTS solution and the HR Shared Service Center, the Postal Service has realized the following benefits:

Annual savings of $50 million Sunset of over 30 legacy standalone systems – replaced by one

integrated system Establish the USPS as a leader in HR technology, self-service and

shared service center activities Provided a standardized IT platform for more than 50 processes that

will enable the USPS to further automate and re-design up to 200 additional business processes in up coming years

Created the foundation to add additional human resource functionality into HR systems

Established interoperability arrangements for USPS employee information as they move to/from other agencies”

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Erie County, New YorkComputerworld Honors

Source: Computerworld http://www.cwhonors.org/case_studies/ErieCountyNY.pdf

“…Erie County government designed and implemented a shared service technical

infrastructure. This large effort included…applications/ERP.

The ERP system has been replaced by a tier 1 system from SAP. Human resources, payroll,

benefits, procurement, accounting, grants, capital and budget were implemented in 2004.

An analysis of process savings performed 60 days post ERP implementation reveals $3 to

$4 million of reduced annual expense. The savings were realized in the areas of payroll,

human resource management, automation of the procurement process…”

In conclusion: TCO savings using Common Platform Shared Services

Human Resources ProcurementFinance

Our Customers have Achieved Significant Benefits

Tangible Benefits* % impact

Operating Cost

Reduced Maverick Indirect Spend Staff efficiency

3-5%

5-10%

Tangible Benefits* % impact

Operating Cost 25 – 40%

Payroll HR Cost per Employee Improved recruitment costs Improved process cost by Employee

Self Service

10-30%20-30%10-15%

14%

IT

Real-Estate

Tangible Benefits* % impact

Operating cost

Increase office space efficiency 20-30%

Tangible Benefits* % impact

Operating Cost

Reduced Integration cost Hardware & Operations Software Maintenance and

implementation

15-20%20-50%20-70%

Tangible Benefits* % impact

Operating cost

Accounts Payable Accounts Receivable Budgeting & forecasting Cash management Collections management Credit management Customer billing Fixed asset management General Ledger and Finance Closing Internal Auditing Regulatory and compliance Risk management Tax accounting and reporting Treasury Reduced DSO

- Working Capital Cost Increased DPO

- Working Capital Cost

20-50%20-50%50-80%50-70%50-65%25-35%40-70%20-35% 45-75%

50-70%40-60%

40-60%5-10%

35-55%5-25%

5-25%

Function* Saving to peers

Finance 49-61%

Human Resources 16-49%

Procurement 30-49%

IT 8-39%

Overall Cost Saving Potential

Terima Kasih!

Adi BudimanIndustry PrincipalPublic Services SEA

SAP Asia Pte Ltd30 Pasir Panjang Road #03-01Singapore

E Adi.Budiman@sap.comM +65- 9070 7890

Adi BudimanIndustry PrincipalPublic Services SEA

SAP Asia Pte Ltd30 Pasir Panjang Road #03-01Singapore

E Adi.Budiman@sap.comM +65- 9070 7890