business services concept and operating model dimensions

Business services

concept and

operating model

dimensions

GBS Roadmap: Driving Value and

Performance

Joakim Abeleen

28 April 2015

1© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm

has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

What is Global Business Services (GBS)?

An integrated platform to deliver enterprise business services

Drives efficiency and business outcomes

Evolves with the market and company needs

Key Capabilities:

■ Multi-functional business processes

■ Multi-channel service delivery –

outsourced, shared services and

centers of excellence

■ Process ownership and management

■ Common information technology

■ Enterprise-wide governance



GBS is a journey: Five levels of GBS maturity

BUSINESS

SERVICES

MATURITY

• ** Typical Savings with Progressive Maturity

• Companies performing at Levels 4 and 5 typically achieve 3-5% higher ROE

Level 01

FRAGMENTED

Decentralized service

delivery model

Duplicative functions,

processes, and technology

Little central control and

governance over business

support services

Supply driven delivery model

Level 02

SUB-SCALED

Consolidated delivery model

Leverage economies of scale

for highly transactional services

Shared services or outsourcing

typically on a single-function,

regional basis

Supply driven delivery model

Level 03

SCALED

Multi-functional service

delivery model that

operates in siloes

Variation around the

inclusion and level of

processes, technology, and

governance standardization

Transition to demand driven

delivery model

Level 04

INTEGRATED

Enterprise wide multi-

functional transactional and

specialist business service

model

Coordinated processes,

technology, governance,

and multi-channel delivery

for scale and adaptability

Demand driven delivery

model

Level 05

STRATEGIC

Multi-functional, multi-

channel business service

delivery synced end to end

Provides transactional,

expert, and analytic

services

Managed through

integrated, outcome-

oriented governance

Demand driven delivery

model

** Level 1 to 2

15%

** Level 2 to 3

7%

**Level 3 to 4

7%

**Level 4 to 5

3%

**At Level 5

3% Yr-on-Yr

3© 2015 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services.

No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

GBS is enabled and optimized by multiple dimensions

CHANGE AND PROGRAM MANAGEMENTA focused, holistic approach for getting the people and the enterprise ready, willing, and able to fully adopt and sustain changes through targeted strategies promoting understanding, buy-in

and ownership. Change management helps to achieve greater realization of expected benefits, reduce resistance, and mitigate risks that might undermine the value of the initiative

OPERATIONAL EXCELLENCEOn-going focus on problem solving, improvement, and GBS transformation outputs toward delivering high quality, seamless, and consistent business solutions

COMMERCIAL PERSPECTIVE

Customer relationship model defining the way GBS

operates “like a business”, and engages with

customers

DELIVERY AND SOURCING STRATEGY

The defined strategic intent of the GBS

organization, its purpose and relationship to the

overall enterprise

SERVICE PORTFOLIO

Definition of the breadth, depth, geographic

reach of services provided by GBS

TALENT MANAGEMENT

Flexible, integrated enterprise talent management

model designed to attract, retain and engage

resources

ENABLING TECHNOLOGY

Common technology platform across ERP, applications, and

tools to enable standardized services

TAX AND RISK OPTIMIZATION

Monitor and manage change and regulations,

including fiscal, legal, and tax

DATA AND ANALYTICS

Enhanced value through the capture, collection,

analysis and visualization predictive and

prescriptive analytics

PROCESS EXCELLENCE

Deployment of end-to-end service s with

focus on quality, continuous improvement and

innovation

ENTERPRISE SERVICE GOVERNANCE

An integrated way of working to engage with

stakeholders and manage overall service

delivery



How to define growth

strategies?

M&A

New markets

New products

New businesses

Growth Understand how to

better engage with

customers.

Brand

Loyalty

Customer Acquisition

Product/Svc Strategy

Customer

EngagementHow to make global

operations decisions?

The most effective

operating model?

Operating Strategy

Global Business Svcs.

Shared Services

Global

Operations

Where are

opportunities aligned to

your business?

How to manage

risk/return

BRIC

MEA

Emerging

MarketsHow to manage

uncertainty around

legislative change?

Where to focus?

Government Regulation

Tax Issues

Legislative Where are the

opportunities to reduce

cost without

impairment to the

business?

Balance Growth goals

with cost reduction

Cost

Reduction

Focus on opportunities

in new technology while

leveraging legacy

investments.

Digital Mobile Social

IT Consumerization

Internet of Things Cloud

Technology

Disruption How to focus on the

right data to convert to

knowledge?

Big Data

Analytics

Knowledge to Insight

Data

OverloadHow to retain, empower

and manage this critical

corporate asset?

Learning &

Development

Acquisition & Retention

Talent Development

Talent &

Human Capital

Issues facing executives today

http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/seven-steps-better-customer-experience-management.pdf

http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/hr-transformations-survey/Pages/Default.aspx



The shift from cost focus to value focus

Although reducing indirect cost still remains the primary reason companies re-evaluate their service delivery models, there has

been increasing focus on value creation and innovation in recent years.

I need to drive down

operating costs

I want end-to-end

process optimization

I want real-time data-

driven insights

I want seamless

integration of acquisitions

I want access to

good quality data

I want cost effective,

flexible services

I want to tackle

emerging markets

I want a seamless

brand experience

I want to drive

product innovation

I want business

agility

Strategic

priorities



Beyond cost savings

Unlock the Power of

Data & Analytics

■ Increase sophistication and

centralize DA (remove duplicate

systems, add tracking where

needed, one ERP system,

process requests faster, ability to

track process breakdown utilizing

analytics, identify missing process

controls)

■ Common platforms and common

processes and capabilities

Mitigate Overall Business Risk &

Ensure Compliance

■ Proactive vs reactive response to

regulatory demands

■ Global repository of regulatory

requirements (tracking, reporting,

and process driven common

response to regulatory mandates)

Achieve Excellence & Consistency

in Customer Experience

■ Ensure consistent experience to

the customer (uniform and

consistent methods and platforms

to respond to customer requests)

■ Utilize VOC and validate using

internal DA information

■ Implement user satisfaction

Indexes

Build Internal Repository of High

Quality Talent

■ Build professionals within GBS

that can be sourced out to the

other business functions and

train/provide services – source of

internal high quality talent

■ Establish a clearer career path for

GBS professionals

■ Leverage skills & build training

Increase Effectiveness

& Ability to Scale

■ Need to be able to provide

effective services, effective

outcomes. i.e., Integrate project

management to deploy lean six

sigma and continuous

improvement and effectiveness of

delivery goes up due to

centralized leadership of the

different functions

Establish a Consistent Brand

Experience

■ Improve competitive position

■ Support consistency of global

brand experience

Enhance Sophistication &

Collaboration

■ Mind shift in terms of

professionalism. GBS

organizations have much higher

level of expectation in terms of it

being a provider of choice, and a

lever for cost competitiveness

■ Share skills and knowledge

across the organization

■ End to end process

standardization for non

standardized products/services

and business units

■ Process owners identification and

accountability

■ Process controls and continues

process improvement

■ Process automation

Drive Process Excellence



Maturity survey analysis: The Nordics view

Europe includes Nordics (30 Plus companies surveyed)

Europe Nordic

79% over

10k

employees

35% one

ERP

91% Process

OwnersMultiplier

Effect of

Technology

& Talent

75% over

10k

employees

43% one

ERP

93% Process

OwnersMultiplier

Effect of

Technology

& Talent




Remit of GBS owners

Delivery model and Coverage

0% 15% 30% 45% 60%

Operational

Strategic in function

Strategic cross function

Global

European wide

Nordic wide

Country wide

0% 25% 50% 75% 100%

Finance

HR

IS/IT

Procurement & Sourcing

Customer Services

Real Estate

Predominantly run out of nearshore center/s

Predominantly run out of offshore center/s

Predominantly run out of Scandinavia

Run from various sites around the world

■ 50% of organizations started since 2010

■ 44% greater than 250 FTEs in shared services

■ 60% outsource finance and IT

Delivery Model

Functional Coverage




Analytics

0% 10% 20% 30% 40% 50%

GBS is not involved in data and analytics services

GBS is currently planning and building a data and analytics reporting service

GBS delivers basic data and analytics reporting (standard packages) and providesperiodic and ad-hoc analysis for customers

GBS delivers advanced data and analytics reporting and diagnostic analysis, andidentifies future operational reporting proactively based on the frequency and

importance of business needs

Analytics

Process Focus

0% 10% 20% 30% 40%

Business processes are managed solely within functionaldelivery teams, discrete to a function

Fragmented process ownership, but with informal peer-to-peer networking

Process owners exist and manage global process forselect processes, applied in functional silos

Functionally oriented process owners exist to managemost global processes

Global process ownership incorporating both the GBS andnon-GBS portion of an end to end process



Maturity survey analysis dimensions

Delivery and Sourcing

StrategyLittle or no alignment between GBS and corporate missions,

strategy and planning.

Bi-directional formulation of strategy & planning between GBS,

functional, BU and corporate management

GBS operates on multiple IT systems for each GBS customer.GBS operates on a single instance ERP across enterprise with

standard enabling technologies. Enabling Technology

GBS delivery groups are aligned singularly to functional leadership.

Functions are responsible for all aspects of process development,

performance management and

talent management.

GBS serves as an independent operating unit on par with other

Functions/BUs providing output based services to Functions/BUs

based on policy and requirementsEnterprise Governance

Decentralized service delivery model with single function Multi-functional, multi-channel service delivery modelServices Portfolio

GBS provides transaction processing and staff mix and skills reflect

this narrow focus

Broad talent management practices ensure GBS people and

leaders are recognized for their insight, innovation and customer-

orientation. Talent Management

No formal analysis of service supply-demand.

Formal supply-demand of services is used to optimize

consumption and evaluate service sourcing. Formal analytics in

place. Commercial Orientation

Business processes are managed solely within their delivery teams,

which are discrete to a function and/or geography.

Global process ownership incorporating both the GBS and non-

GBS portion of an end to end process. Process Excellence

Information is created and distributed through a combination of static

reporting and limited ad-hoc requests; analysis is performed on as-

needed basis.

Dynamic reporting, with predictive modeling provide users with

prescriptive analysis of real time data from internal and external

sourcesData & Analytics

Absence of organizational flexibility and senior management

ownership

High degree of management buy-in and formal processes for

driving GBS acceptance in the organizationChange Management

Assurance reporting requirements are not included in service

provider contracts, and no coordination occurs with providers on

assurance related matters

Assurance reporting with impact to the organization's financial

reporting, operational, and compliance objectives with due

diligence occurring for new and existing providersRisk and Tax Optimization

Lo

w

Hig

h

1 3 5



1 3 5

3.92.7

3.62.4

3.0

4.23.1

2.9

3.72.8

3.2 4.0

3.72.6

3.82.9

3.8

Data & Analytics

Lo

w

Enabling Technology

Lo

w

Enterprise

Governance

Lo

w

Talent Management

Lo

w

Process Excellence

Lo

w

Change Management

Lo

w

Services Portfolio

Lo

w

Delivery and Sourcing Strategy

Lo

w

Risk and Tax Optimization

Lo

w

Commercial Orientation

Lo

w

Hig

hH

igh

Hig

hH

igh

Hig

hH

igh

Hig

hH

igh

Hig

hH

igh

2.9

3.6

3.9

Aspirational

LEGEND

Current

Best in class

average

Global average




Roundtable discussions: The 10 Dimensions of GBS

CHANGE AND PROGRAM MANAGEMENT

CASE FOR CHANGE • SPONSORSHIP • RESISTANCE AND BUY IN • COMPETING PRIORITIES • READINESS

ENTERPRISE SERVICE GOVERNANCE

Overall GBS Governance

Cross Channel Service

Agreements

Change Management

Service Delivery Channel

Governance

Outsourcing Portfolio

Management

Performance Management

Collaboration Forums

Issue Management

Financial Management

COMMERCIAL PERSPECTIVE

GBS Brand

Benchmarking

Pricing and

Competitiveness

Customer Relationship

Management

Service Level Transparency

Demand to Deliver

DELIVERY AND SOURCING STRATEGY

Value Drivers

Transformation Agenda

Role of GBS in Business

Strategy

Investment Strategy

Executive Commitment

Alternative Delivery

Mechanisms

SERVICE PORTFOLIO

BU and Geographic Scope

Service Type

Operational Scale

(Historical Trend)

Functional Scale

TALENT MANAGEMENT

Culture

Collaboration

Career Development

Skills Mix

Learning and Development

Global Workforce Planning

Employer of Choice Strategy

Staff Retention

TAX AND RISK OPTIMIZATION

Financial Reporting

Integrity & Compliance

(e.g. SOX)

Data Security and IP Risk

Business

Continuity/Disaster

Recovery Framework

Regulatory Compliance

Cross Channel Integration –

Risk & Compliance

Management

Income Tax Considerations

(e.g. US, state, foreign)

DATA AND ANALYTICS

GBS Involvement and

Capability

Reporting

Information Production

Data and Analytics

Deployment

PROCESS EXCELLENCE

Process Owner

Responsibilities

Service Management

Integration

Process Accountability

Process Standardization

Organizational Structure

Global Process Management

Documentation & Enterprise

Content Management

ENABLING TECHNOLOGY

Technology Platform

IT Innovation

Automation

IT/Business Process

Integration

Thank you

© 2015 KPMG International Cooperative ("KPMG

International"), a Swiss entity. Member firms of the

KPMG network of independent firms are affiliated with

KPMG International. KPMG International provides no

client services. No member firm has any authority to

obligate or bind KPMG International or any other

member firm vis-à-vis third parties, nor does KPMG

International have any such authority to obligate or

bind any member firm. All rights reserved.

The KPMG name, logo and “cutting through

complexity” are registered trademarks or trademarks

of KPMG International.

business services concept and operating model dimensions

Business

member firms

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transactional services

level of processes

client services

business support services

business services concept

multichannel delivery