Werkt BPO voor kleinere organisaties?

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1 Werkt BPO voor kleinere organisaties? PON Seminar 10 april 2014 KPMG Joyce van Breugel

2 Intro Joyce van Breugel 20 years experience in finance management and consultancy functions Finance management functions Business Control, Shell Project Management SSC strategy and implementation, Shell Head SSC, Unilever Project Manager BPO, Unilever Financial Controller Continental Europe, Heinz Consultancy Finance Financial Management & Shared Services PwC Shared Services & Outsouricng KPMG 2

3 Agenda 1. Introduction BPO 2. Trends 3. Maturity in shared services & outsourcing 4. Bigger versus Smaller; Company view and Provider view 5. What does it take? 3

4 1. Introduction BPO Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions (or processes) to a third-party service provider. Originally, this was associated with manufacturing firms that outsourced large segments of its supply chain. BPO is typically categorized into back office outsourcing, which includes internal business functions such as human resources or finance and accounting, and front office outsourcing, which includes customer-related services such as contact center services. 4

5 2. Trends in BPO Different opportunities across Europe Benelux - Only one or two bigger contracts per year - New initiatives Smaller contracts - Contract renewal driving many discussions following closure of contracts of the 00s High traction in Nordics smaller BPO contracts in targeted industries or high profile companies Different view in Continental Europe versus UK Industry or Domain specific BPO solutions, beyond traditional back office processes Banking & insurance e.g. Clearing services Telecom New specialist solutions (e.g. Social Media support of KLM outsourced to TCS) BPO opportunities following maturity of SSC models or following ITO experience Differences per process domain Modest in F&A and HR More traction in Supply Chain 5

6 2. Trends in BPO & Shared Services Sourcing and Shared Service Goals are moving beyond just cost savings Leading sourcing and shared service organizations are advancing their capabilities, evolving to models engineered to be positive influencers of change Success in this new model depends on the ability to dynamically assemble a variety of capabilities regardless of where those capabilities reside into a seamless end-to-end process that s focused on a specific business outcome IT HR F&A Procurement Align operating model for efficiency and effectiveness Labor Arbitrage Product Innovation Create a platform for growth Capacity Management Quality Improvement Business Intelligence Business Agility Optimize the global operations footprint Process Efficiency Offshore Leverage Process Transformation New Market Entry Collaborate across teams and mine data to drive insight SERVICE DELIVERY FOCUS Drive the business through information and innovation Enable access to technology Protect the brand and foster a common customer experience 6

7 Business services maturity 3. Maturity: Characteristics at each level There are 5 stages to reaching full Global Business Services maturity. Level 5 is not a goal in itself - Those organizations that get there see significant value from their operations. Characteristics Level 5 GBS 5 5 Delivery of business services providing true end-to-end customer-centric services Customer-focused organization that provides value Value creation versus cost reduction 4 Level 4 Integrated services 4 Shared services cover transactional and some high-end processes Optimized balance of internal/external capabilities Integrated internal capabilities supporting service delivery Level 3 Multifunction shared services Level 2 Functional shared services Level 1 Decentralized support functions The journey development stages time Global process owners Multi-function shared services covering all transactional processes, with all business units and locations supported Non-integrated internal (shared services center) capabilities Outsourcing strategically used Single function shared services covers most transactional processes with tactical on/offshore outsourcing Most BUs and locations supported by shared services. Outsourcing tactically used Decentralized functions with little central control over business support services Outsourcing not used 7

8 3. Maturity: What is Global Business Services (GBS)? Global business services (GBS) is the next stage of maturity for organizations looking to drive increased value from their operating models, particularly when some shared services and outsourcing has been deployed. GBS delivers business support services to customer organizations by deploying common processes, tools, and leading practices, generating synergies across multiple function areas, (e.g. finance, HR and IT), by consolidating activities into one centralized function. Services are delivered on a global scale using centers of expertise, captive shared services and outsourcing to optimize scale and capabilities across all functions In the last 10 years, many multinationals have established a GBS organization GBS organizations generate synergies across multiple function areas, (e.g. finance, HR and IT),by consolidating activities into one centralized function with the aim of delivering significant cost, quality and customer satisfaction benefits A core idea underpinning GBS is to create a function that can be adapted to changing market and company conditions,(e.g. to enable smoother integration of acquired firms), and business objectives (e.g. to serve customers in new markets) Services are delivered on a global scale using specialist centers, captive shared services and outsourcing to optimize scale and capabilities across all functions. For example, a FMCG company built a GBS organization composed of 7,000 people, delivering 170 different services (employee and business services) The emphasis today is on driving greater GBS maturity via better integrated operations across functions and geographies, and better supporting wide-ranging business processes Management of GBS third parties and operations to ensure efficiency and effectiveness of the service delivery models This requires evaluating the eight key attributes of GBS (see illustration) Sourcing models Technology Key Attributes of GBS Centers of expertise Talent GBS C-suite ownership Service delivery management Scope Process ownership 8

9 4. Bigger versus Smaller Grote, internationaal opererende ondernemingen besteden steeds meer bedrijfsprocessen uit, zoals delen van hun financiële administratie of HR-processen. Is BPO ook interessant voor organisaties die niet tot de top 100 van de grootste bedrijven van de wereld behoren? Case Medical Mobility Products ~40 FTE ~50 FTE Case Hospitality Industry The finance function is located in 11 countries (high cost locations). The biggest footprint is in Western Europe and USA / Canada. The current set up is considered sub optimal. The CFO s agenda is to grow the company to a USD 1 bln. Company over the next few years and transform the finance function to support this ambition. Strategic objectives Transform finance function Harmonize processes and systems Consolidate activities and re-locate at a low(er) cost location Scalable and sustainable solution The finance function is spread over a limited number of European countries. The company has been considering shared services or outsourcing as a future model supporting the finance functionstrategy. Key strategic objective with sourcing solution: To increase added value of services provided to internal customers Standardization and harmonization of finance processes and reporting Centralization of transactional processes in a service centre Harmonization of ERP system and application 9

10 4. Smaller companies: Why consider BPO as feasible solution? Should we strategically want to do these activities in house? Is a BPO provider capable of delivering value beyond our (SSC-)optimised model? Are we able to build our own captive global shared services organization? Do we have the resources? Do we have the scale to create a sustainable position? Would a BPO partner provide easier access to innovation, process solutions and quality? Experience Telecom ~20 FTE Een BPO partner biedt een aantal voordelen waarbij kosten reductie en kwaliteit verbetering wat mij betreft de belangrijkste zijn. Stukje kosten reductie kun je zelf wel invullen maar bij kwaliteitsverbetering zou ik ook zeker de gedrevenheid en trots van de mensen willen benoemen die (in ons geval in Hydrabad bij BPO Provider) voor ons als klant aan het werk zijn. Deze arbeidsethos kom je in veel gevallen niet meer tegen in de VS of west Europa. Ook de verbondenheid met de opdrachtgever is heel aansprekend. Dat ons team in Hydrabad een beetje gepikeerd was dat ze nog geen spiegeltjes en kraaltjes (lees petjes en horloges) van ons hadden vond ik tekenend. Ik zie in onze kantoren niemand met bedrijfslogo s en spullen rondlopen. 10

11 4. Smaller opportunities: Provider View and Considerations Scope and size of the contract: Geographical fragmentation of activities in scope for outsourcing Brand value of the potential customer in addition to vertical strategy of providers Development potential: Does the customer provide opportunity for development within same function or other functions to grow the relationship to a strategic partnership BPO-provider presence in European Markets BPO-providers show differences in their srategic focus and approach to smaller sized opportunities 11

12 5. What does it take? - Example project approach June / September October / December January / February March < BPO Contracting & 1 2 Partner selection 3 Strategy Negotiation 4 Transition & Start Services Explore the strategic options & introduction to service providers Select capable and reliable service providers ( Best Fit ) Prepare for Contracting Prepare for first migration Stakeholder analysis Define scope & Cost baseline Validate RFP Scope & Cost baseline RFP (Design, Assessment & Evaluation) BAFO - Best and Final Offer Refine Operational Model Design process definitions & Work instructions Sign Off Process Definitions RFI light (Design, Assessment & Evaluation) Site Visits (incl. Assessment & Evaluation) Define retained organization BPO RFP Pitch (local / on site) Design Pricing model Finalize Business Case Design SLA & KPI s Implement SLA & Pricing model Business Case (RFI saving potential) HR & IT impact Business Case (Saving Potential) Site visits/ Reference Calls / Visits Design Contract schedule Negotiations Work Shadowing Train the trainer Define Strategic Direction Risk Assessment Validate Strategic Direction Define Migration Strategy Sign Agreement Prepare Migration Wind down employees BPO Selection for RFP Communication Plan BPO Selection Workers Council Strategy Due Diligence Cut over Processes & Start Services Project Management & Communication Project kick-off BPO Strategy Defined Validated Business Case Signed Contract Migrated organization 12

13 5. Waar moet je op letten om BPO tot een succes te maken? Een outsourcingsinitiatief past binnen een strategische beweging van een organisatie van transformatie Er moet commitment van de hogere legerleiding zijn Betrokkenheid van C-level functionarissen gedurende het proces Procesvolwassenheid en weten wat je uitbesteed reduceert risico op teleurstellingen Het is heel belangrijk dat het proces welk je wilt outsourcen heel volwassen is (je moet dus optimaal geautomatiseerd, gestandaardiseerd, uniform, volledig etc. etc.) We hebben onze BPO provider gebruikt om standaardisatie en optimalisatie van onze processen te versnellen Besteedt voldoende tijd aan het selecteren van de juiste partner Het gevoel met de uiteindelijke partner moet heel goed zijn => cijfermatig kan iedereen meestal alles maar dit is een commitment voor langer en dan gaan ook emoties meespelen. Je moet er dus niet inzitten als klant vs leverancier maar veel meer als twee echtelieden Bereidheid om te investeren in de ondersteuning van het BPO proces Je moet hele goede externe ondersteuning hebben bij alle facetten van dit proces 13

14 5. Waar moet je op letten om BPO tot een succes te maken? Goede aandacht voor je contract en daarin opnemen van de zaken die belangrijk voor je zijn Voldoende investeren in het opzetten van een governance organisatie gericht op samenwerking De aanvliegroute welke uiteindelijk resulteerde in een contract waarbij de afstap aan FTE bij de BPO Provider en de reductie in kosten over de komende jaren was vastgelegd vormde voor mij wel de basis voor het stukje innovatie. Dit heeft naar mijn mening gezorgd voor borging van de innovatie aan de BPOzijde. Het opzetten van de governance structuur om innovatie initiatieven te beoordelen en te implementeren zijn dan key. Het resulteerde bij ons in Q tot 44 initiatieven (op lean six sigma) waarvan wij er uiteindelijk 29 hebben goedgekeurd. Toegevoegde waarde: Als je mij dan vraagt naar de toegevoegde waarde zie ik 1) kosten reductie 2) kwaliteit en positieve uitstraling (dat is in eerste instantie natuurlijk niet zo) naar de eigen (SSC) organisatie. 3) Vreemde ogen dwingen principe. Doordat we op een minuscule wijze door ons eigen proces heen moesten heeft dit ook bij onze interne organisatie een extra stuk aan finesse aangebracht en behouden. 14

15 Thank you Presentation by Joyce van Breugel +31 (0)