outsourcing health check and readiness assessment: a proactive approach to achieve full potential...

Health Check & Readiness Assessment: A Proactive Approach to Achieve Full Potential and Uncover New Value

Hemant Puthli, Partner & SVP, Neo Group Soumitra Rathod, Head of Globalization, Time Inc. June 30, 2015

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TODAY’S PARTICIPANTS 3

Soumitra Rathod, Head of Globalization at Time Inc., has over two decades of experience with the global delivery model. His early career was with captive centers, tier-1 and mid-tier services providers, in a career spanning 6 countries across 3 continents. More recently, Mr. Rathod has helped corporations such as the McGraw-Hill Companies, New York Life and Time Inc. define and execute their globalization initiatives.

Hemant Puthli, Neo Group Partner & SVP, brings around 30 years of experience in Management Consulting and IT Services. Hemant leads key engagements globally and works with clients to assist them in the development of outsourcing strategies and governance models. Hemant’s key areas of eminence include sustainable business and technology strategies


Ø What is a Health Check and why is it important

Ø Using an objective framework to assess performance and readiness

Ø Leveraging findings to build clear action steps for improvement and growth

AGENDA 4


•  Meaning, scope and purpose –  Health check – determine what’s working well, what’s not working –  Readiness Assessment – preparedness to handle growth in scope

and scale

•  Client need –  Independent and objective 3rd party evaluation of how well their

sourcing program is doing, how well their captive (Global In-house Center – GIC) is doing, how well their vendor contracts are doing

–  Most locations are remote and clients are not fully aware of the nuances of supply-side market realities in remote geos

–  Clients don’t know where to look for comparative data, even if they are able to carry out their own assessment

INTRODUCTION 5


QUICK POLL #1 6

Do you use Health Checks to assess the performance of your global delivery operations?

-  No -  Yes, on an ad hoc basis -  Yes, at regular intervals -  Other (use the chat or question feature to elaborate)


QUICK POLL #1 – RESULTS

QUICKPOLL

Do you use Health Checks to assess the performance of your global delivery operations? Poll Results:

Yes, on an ad hoc basis 50%

Yes, at regular intervals 13%

Other (use the chat or question feature to elaborate) 0%

No 37%


QUICK POLL #2 8

What typically triggers an Outsourcing Health Check within your organization? (select all that apply)

-  Dissatisfaction with supplier/GIC, need unbiased assessment

-  In preparation for upcoming contract renewal -  Occurs at regular intervals by company policy -  In response to significant growth (organic or

acquisition) -  Other (use the chat or question feature to elaborate)


QUICKPOLL #2

QUICKPOLL

What typically triggers an Outsourcing Health Check within your organization? (select all that apply) Poll Results:

In preparation for upcoming contract renewal 67%

Occurs at regular intervals by company policy 16%

In response to significant growth (organic or acquisition) 33%

Other (use the chat or question feature to elaborate) 0%

Dissatisfaction with supplier/GIC, need unbiased assessment 67%


NEO FRAMEWORK COMPONENTS 10

• Execu've Sponsorship • Goals & Expecta'ons • Por8olio Strategy • Delivery Model

• Solu'on Design • Knowledge Transfer & Transi'on Management

• Facili'es • Infrastructure • Capacity

• HR Lifecycle: Hiring, Staffing

• Roles / Responsibili'es • Communica'ons & Change Management

• Physical & Data Security • Contractual Delivery Compliance

• Quality & Cer'fica'ons • Risk Management


•  2 Perspectives –  Strategic: Capability & Capacity –  Operational: Efficiency & Risk

•  3 Dimensions –  Process (Business Services) –  People (Support Services: HR) –  Technology (Support Services: Facilities & Infrastructure)

•  5 Lifecycle Stages –  Initiate –  Initialize –  Transition –  Operate –  Retire

NEO HEALTH CHECK APPROACH 11


PERSPECTIVES ON DIMENSIONS 12

Dimension

To-‐Be

As-‐Is

Readiness Assessment (future)

Health-‐check (current)


QUESTIONS: AS-IS & TO-BE 13

Is there a strategy in place to address scalability as envisaged? •  Is there a clear plan to achieve end-‐state/ targeted outcomes? •  Is the plan complete and consistent?

Is there a comprehensive governance model in place that enables the necessary oversight

Is the current opera'ng base efficient and robust? Is it a good enough founda'on to build on for the future?

•  Is it efficient at current scale? Will it con'nue to be efficient at scale? •  Are opera'onal risks contained within acceptable limits? Will risks

increase dispropor'onately as the opera'ons scales up?

Strategy & Governance

Organiza'on & Opera'ons


LIFECYCLE STAGES OVER DIMENSIONS 14

Exit Manage Career Train On-‐board Recruit

Sunset Deploy Commission Procure Select

Discon'nue Deliver Services

Manage Transi'on

Design Solu'on

Iden'fy Opportunity

Peop

le

Process

Techno

logy

Ini'ate Ini'alize Transi'on Operate Re're


•  Leverage Neo templates, tools, questionnaires

•  Interviews & data collection, walk the floors

•  Benchmark data from Neo KnowledgeBase and Research team

•  Compare with peers: gap analysis, risk analysis –  As-is –  To-Be

•  Classify findings as:

–  Preserve –  Enhance –  Change

•  Develop recommendations and socialize with key executives

NEO APPROACH – METHODOLOGY 15


Interviews and data collection: what we look for •  Short description of role and areas of responsibility •  Overview of transitioning process and/or steady-state operations

(as applicable), with a focus on: –  Roles & Responsibilities RACI –  Policy & Procedures/ Process Maps (or related documentation) –  SLAs/ KPIs/ Metrics –  Customer Satisfaction (CSAT) –  Quality Systems/ Continuous Improvement – as relevant

•  What went/is going well •  What didn’t work/isn’t working •  Satisfaction level with internal support services •  What needs to change/improve

KEY FOCUS AREAS 16


ASSESSMENT OUTPUT SAMPLE SNAPSHOT 17

1

2

3

4

5Performance Management

Financial Management

Relationship ManagementResource Management

Contract Management

Best-in-class Score

Comparison Organization ScoreClient Score

Best-in-class Score

Comparison Organization

Score

Client Score

Performance Management 4.10 2.94 2.39

Financial Management 4.00 2.81 2.91

Relationship Management 3.80 3.32 2.57

Resource Management 3.80 2.76 2.54

Contract Management 3.90 3.08 3.46

1

2

4

3

5

Client Operational Governance Score 2.74


HEALTH CHECK ANALYTICS – SAMPLE 18

High Priority Core Challenges

Quick Hit Lowest Priority

Difficulty to Attain

Critical to valu

e creation

Gap Analysis: Cri.cal Value Enhancers

Low High

High

Bring pricing to industry standards

Change IT helpdesk service delivery model

Build performance based incentives

Onboard one more project manager

Comparison with industry standards

0 1 2 3 4 5

Factor: Introducing best practices

± ±Your Score

Industry Comparison Top 25% Average Bottom 25%

0 1 2 3 4 5

Factor: Staffing efficiency (support ratio)

± ±Your Score


0 1 2 3 4 5

Factor: Overall Outsourcing Effectiveness

± ±Your Score



•  The value and validity of a Health Check is dependent on the objectivity and depth and breadth of industry experience of the reviewing party.

•  Health Checks provide an organization with a reality check about what to preserve, enhance or change.

•  The findings of a Health Check form a blueprint for next steps to achieve strategic objectives.

KEY TAKE-AWAY’S 19


THANK YOU 20

NEO GROUP GLOBAL HEADQUARTERS 6200 Stoneridge Mall Road, 3rd Floor Pleasanton, CA 94588, USA ASIA-PACIFIC HEADQUARTERS No.13, B-2, 1st floor, C Block Embassy Heights, Magrath Road Bangalore-560 025, India AMSTERDAM, NETHERLANDS ATLANTA, USA AUSTIN, USA BOGOTA, COLOMBIA LONDON, UK NEW YORK, USA SAO PAOLO, BRAZIL SILICON VALLEY, USA SYDNEY, AUSTRALIA

HEMANT PUTHLI Senior Vice President [email protected] www.NeoGroup.com www.SupplyWisdom.com [email protected]