First UC-CSU Shared Services Conference Thursday , July 11, 2013 UC Irvine Campus

1. First UC-CSU Shared Services Conference Thursday, July 11, 2013 UC Irvine Campus Shared Services: What It Is, What It Isn’t, And What It Can Be

2. Agenda • Brief Background on Chazey Partners • Definition of Shared Services.  What it is and indeed what it is not. • Why Shared Services? • Why Shared Services in the “Public Sector”? • Shared Services in Higher Education in the US • How Can One Cut Costs Without Impacting Frontline Services? • Does Shared Services Mean Privatization? • Critical Success Factors for Implementation of any Shared Services Delivery Solution. • The “nine key components” of a robust Internal Customer/Client Relationship Management CRM framework • Key Competencies of Shared Services Teams • Q&A

3. Who We Are • Chazey Partners is a specialist advisory/consulting business, that brings together a unique wealth of expertise in implementing and operating world class business support and Shared Services Organizations (SSOs) around the globe • We pride ourselves in having built, operated and turned around some of the world’s most highly commended and ground breaking Shared Service organizations • We have operationally and as consultants delivered numerous programmes globally, over the last 20 years, in both the Private and Public Sectors, in the US, Canada, Latin America, UK, Ireland, Continental Europe, India, Singapore, Australia and China, amongst others • We provide advice, guidance, support and implementation expertise, covering strategy setting, business case, programme management, implementation, process optimization, technology enablement, training and change management

4. Who We Have Worked With NUIG

5. What Exactly Is Shared Services?

6. Definition and Goal of Shared Services Shared Services …is the organization that provides non-core services to the “business”, employing a specialist team, geographically unconstrained, and focusing on the requirements of the internal customer. This involves a philosophy and approach totally unlike traditional “corporate”-driven centralization. The goal of Shared Services is to provide high quality, non-core, but mission critical, services (which can include both repetitive common processes and more specialized professional services)to the “business”at lower cost and more efficiently than thebusiness could otherwise provide for itself. Shared Services achieves cost savings and higher quality of service by leveragingcustomer relationship management, organizational re-alignment, economies of scale, technology, standardized end-to-end processes, and best practice.

7. Why Shared Services?

8. Why Shared Services? Centralized Decentralized Shared • Disparate processes • Multiple standards • Duplication • Different control environments • High cost and costs unclear • Not scaleable • Responsive to Business and Operational needs • Business/ Operations control decisions • Customized solutions to meet Business/ Operational requirements • Highly client focused • Commercially driven • Service Partnership Agreements • Clear unit costs • Flexible delivery • Clear drivers and activities • Common systems and support • Consistent standards and controls • Tight control environment • Economies of scale • Remote from business • Unresponsive and inflexible • No Business/ Operational control over costs • Viewed as central overhead • Prevalence of shadow operations The Best of Both Worlds!

9. Why is Shared Services different to Centralization?

10. The Potential Scope of Shared Services • Finance • Accounts Payable • Billing/Accounts Receivable • General Ledger • Consolidations • External Reporting • Planning and Budgeting • Treasury/Cash Management • Internal Audit • Tax • Foreign Exchange • Business Support Analysis • Financial Reporting • Project Accounting • Cost Accounting • Lockbox Services • Records Management • International Accounting • Supply Chain Management • Procurement • Transportation & Logistics • Strategic Sourcing • Warehousing • Inventory Management • Vendor Management • Human Resources • Payroll • Travel & Expense • Compensation Administration • Benefits Administration • Records Management • Training & Development • Relocation Services • Evaluation Planning/Review • Policies & Procedures • Labor Relations • Recruiting/New Hire On-boarding • Headcount Reporting • Succession Planning • Employee Recognition Systems • Information Services • Desktop Support • Application Maintenance • Telecommunications • Hardware & Software • Application Development • Data Center Operations • Standards • Technology Planning & Development • Acquisition Support • IT Security • Customer Service • Call Centers • Credit & Collections • Order Management • Returns Processing • Legal/Corporate Affairs/Administrative Services/Other • Travel Services • Real Estate • Facilities/Site Services • Fleet Management • Security • Communication Services • Environment, Health & Safety • Regulatory Compliance • Public Affairs/Media Relations • Litigation Support & Coordination • Insurance • Mailroom • Grants Management • Health Clinics/Day Care Centers • Corporate Brand Compliance • Engineering • Subsidiary Management • Emergency Management Source: Scott Madden & Associates

11. Why Shared Services In The “Public Sector”?

12. Why Shared Services in the Public Sector? • “Public Sector” here includes Government, Higher Education, Healthcare and Not For Profit • Why not? Has worked well in the Private Sector for 25+ years, and is also working in the Public Sector today. • Significant funding issues today … everywhere. Shared Services can deliver potential “triple benefit” of efficiency/effectiveness/control • The same basic challenges and significant opportunities around implementing Shared Services in the Private Sector are also there in the Public Sector….but need to be adapted and applied differently. • Some unique challenges in the Public Sector (and in Higher Education), namely managing “politics” and workforce, territorial and governance issues, different funding sources, and unique change management. • Harvard 2009 Summit: “Harnessing new found capacity with a shared service enterprise and extending it enterprise wide increases the capacity for high performance and subsequently increases public value. Managing for efficiency and effectiveness is now a win-win proposition for public sector leaders.”

13. Shared Services In Higher Education in the US

14. Shared Services In Higher Education in the US • The recession/slowdown impacted both Public and Private Universities, but the impact has to an extent been different for the Public Universities. The recession/slowdown and the accompanying revenue decline at the state level has left less money to fund education • The private institutions, except for grants provided by the federal government for research, are to some extent less dependent on government funding. However, many private institutions saw their endowment values decrease as a direct result of the recession, and the private institutions also responded by increasing student fees. • Increasing student fees alone has not been sufficient to close the budget at many Universities and Colleges, and these institutions are looking to shared services to help them close the budget gap, increase efficiencies and provide better service. • Efficiency/effectiveness of “back office” operations is now really a pre-requisite, and not a “nice to have”, for any organization/enterprise, in Private or Public sectors.

15. Shared Services In Higher Education in the US • Shared services already underway pre recession at many Universities, e.g. Yale University, Harvard College, University of Michigan, University of Illinois & Cornell. • UC Berkeley administration division began in 2008 to move to a shared services model for HR, and successfully opened its center on July 1, 2010. In 2012the University approved a project to implement shared services for finance, research, information technology and human resources. • As part of its Synergy Initiative, CSU’s Procure to Pay (P2P) Shared Services Initiative seeks to leverage the success of implementing CSU’s Common Financial System and improve the efficiency and effectiveness of processes to purchase and pay for goods and services.

16. Shared Services In Higher Education in the US • The University of California has begun implementation of a University System Wide Shared Services center called UCPath for HR and Payroll. • The Yale Finance shared service center was formed in January 2010, to take repeatable common work out of departments. The center was formed through the consolidation of three pre-existing service units. The center provides Financial Management and transaction processing for procurement, accounting, accounts payable and client accounts. • Lawrence Berkeley National Laboratory has had an HR Service Center since 2011, and is looking to expand scope of services provided. • Accenture predicts that the next wave of implementation in higher education will see a broadening of the functional areas that are in scope for shared services.

17. How Can One Cut Costs Without Impacting Frontline Services?

18. How Can One Cut Costs Without Impacting Frontline Services? • Cost savings from the “back office” can be used to fund core and front line services. • When thinking about the possibilities for shared services in the public sector remember that the scope across the “back office” is very significant. This is just the same as in the private sector. • In terms of the public sector (and it is just the same in the private sector) one needs to determine what needs to be physically close to the internal “customer” or “client” vs what can be done remotely. Then one should ask the question that if something can be performed remotely will some level of service be lost? • Need to think about who your “customer/client” is – internal and external. Also need to think about residentsand tax payers as key stakeholders.

19. Does Shared Service Mean “Privatization” And If Not, Why Not?

20. Does Shared Service Mean “Privatization” And If Not, Why Not? • Straight up – NO • Outsourcing has been an option as a potential part of the solution mix, most notably in the Private Sector. • And while the private sector has used third party Business Process Outsourcing (BPO) to some extent, in-sourcing has been the most popular model chosen in the Public Sector.

21. Critical Success Factors for any Shared Services Delivery Model

22. Critical Success Factors Critical Success Factors • Processes documented • Standardized, controlled & repeatable activity • Recharging methodology • Benchmarking capability – internal/external • Metrics: (i) Control Based (ii) Efficiency & Effectiveness • Service orientation in place • Structured way of dealing with internal customers • Customer satisfaction levels understood • SPAs in place • Reality versus perception • Account management Customers Technology Processes • ERP implemented • Document Scanning Solution • Workflow • Automated Payments • Elimination of Side Systems • Self services tools • Automated Score Cards People • Skilled Leadership in place – do not compromise on competencies • Team shape & stability – process shaped/spans of control/staff – perm v temps • Team members – culture, values & behavioral competencies assessed • Team morale, reward & retention • Working environment conducive to team working

23. The Nine Key Components of a Robust Internal CRM Framework

24. Nine Key Components of an Internal CRM Framework • Customer/Client Relationship Management • Customer/Client Contact Management • Service Partnership Agreements (SPA) • Client Feedback • Continuous Improvement • Process Control Database • Performance Measurement • Performance Reporting • Service Pricing

25. Nine Key Components of a CRM Framework

26. Nine Key Components of a CRM Framework

27. Operating with no “CRM” Framework • Challenging experience • Lack of clarity on who does what • Dealing in “perception versus reality” • Focus is on negative aspects of service delivery • one way traffic • blame culture • Strained customer relationships • Focus on “fire fighting” and maintaining morale takes the emphasis away from customer service Customer Relationship Management distinguishes a Shared Services organization from a simple act of centralization and drives a spirit of partnership between the SSC, its customers, and all key stakeholders.

28. Key Competencies of Shared Services Teams

29. All SSO staff Strong focus on providing the highest level of client service to both internal and external customers Committed to the organization Establish and maintain relationships across the organization Confident, self motivated and enthusiastic Highly proactive and seeks continuous improvement in self and others Goal and results orientated Highly organized, with attention to detail Knowledgeable in services/processes supported Excellent communication and interpersonal skills Team player Takes ownership and is willing to be held accountable SSO Team and Process Leadership Experience in customer service provision Experience in managing multiple stakeholders/relationships Produce results Build a diverse, high performance team People development Key Competencies of Shared Services Teams 29