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“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