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Shared Services Strategies and Best Practices

Shared Services Strategies and Best Practices. Brad Holzer Solution Consultant. Program Agenda . <Insert Picture Here>. Shared Services Overview and Case Studies How Oracle Supports Shared Services Finance Procurement HR Future Trends in Shared Services Final Thoughts.

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Shared Services Strategies and Best Practices

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  1. Shared Services Strategies and Best Practices Brad Holzer Solution Consultant

  2. Program Agenda <Insert Picture Here> • Shared Services Overview and Case Studies • How Oracle Supports Shared Services • Finance • Procurement • HR • Future Trends in Shared Services • Final Thoughts

  3. We are emerging from the worst economic crisis since the Great Depression. • High levels of uncertainty and risk remain • Executives are shifting focus to growth • But companies remain, as always, cost conscious

  4. 20 – 50% Cost savings by adopting shared services Source: 18 Benefits of Shared Services, Shared Services Value, May 2011

  5. Shared Services Defined The standardization and consolidation of business functions or processes Finance 93% Sales& Marketing Human Resources 60% Supply Chain/ Procurement IT 48% Source: Deloitte 2011 Global Shared Services Survey Results, March 2011

  6. Shared Services Defined The standardization and consolidation of business functions or processes Finance 93% Sales& Marketing Human Resources 26% 60% Supply Chain/ Procurement IT 47% 48% Source: Deloitte 2011 Global Shared Services Survey Results, March 2011

  7. Top Five Reasons Shared Services Make Sense in Tough Economic Times 1Cut Operating Costs 2Get Better Insight Faster 3Keep Business Units Focused on Profit-Making Activities 4Support Strategic Initiatives 5Speed Time-to-Value

  8. Organization Delivery Models Peer to Peer Hierarchical Dedicated Unit Region SSC Dept. A Dept. B Dept. C Dept. D City City City Dept. A Leverages existing people and assets Removes the investment burden off small agencies Promotes transparency, accountability and efficiency Dept. B Dept. C User agencies Shared service provider Dept. D

  9. Start Small and Drive Standardization Step-by-StepImplementing Shared Services is a Journey, Not a One-Time Effort Shared Service Center Common Processes One Database One Location Consolidate within Region CommonPolicies One System Define Processes Rationalize Systems Consolidate within Country Multiple Systems Multiple Locations Multiple Processes

  10. CaseStudy Case Study #1: Oracle’s Transformation: The 1 Billion Dollar Story

  11. CaseStudy Case Study #1: Oracle’s Transformation: The 1 2 Billion Dollar Story

  12. CaseStudy Oracle’s Shared Service Centers (SSC) 197 Countries, 22 Languages • Customer Contracts • Credit & Collections • Exp Reporting • Procurement • Comp Admin 113 Countries • Controllers • Revenue Recognition 113 Countries 11 Countries • Controllers • Revenue Recognition • Procurement • Comp Admin • Exp Reporting 197 Countries 50 Countries • Controllers • Order Entry • AR / Cash Apps • Exp Reporting • Purchasing • Fixed Assets • Project Acct • Credit & Collections • Customer Data • AP • Comp Admin • Customer Contracts • Credit & Collections

  13. CaseStudy Oracle’s Transformation Make Everything Self-Service TACTICS Level of Self-Service Across Functions at Oracle • Automate All Low Value, High Volume Interactions With: • Employees • Customers • Suppliers • Model: Amazon’s Customer Experience * *Number of end-user processes and workflows that have been self-service enabled

  14. CaseStudy Benefits of Oracle Global SSC

  15. CaseStudy Oracle’s Savings Achieved through consolidation, automation (including self service), simplification, global processes, shared services and the use of standard product

  16. Outcome: M&A Performance Improvements Non-GAAP Operating Margin Figures based on Non-GAAP results. GAAP to Non-GAAP reconciliations are available at www.oracle.com/investor. Figures for acquired companies are non-GAAP results for 12 month period preceding acquisition.

  17. CaseStudy Keys to Success • Executive level support • Organize globally • Consolidate and simplify – as much as possible • Automate and globalize business processes • Implement self service – everywhere • Don’t underestimate the hardest part-MANAGING CHANGE!

  18. How Oracle Supports Shared Services

  19. Oracle Applications Strategy for Shared Services 1 2 Simplify Standardize Centralize Automate 3 4 Complex Simple Many Ways One Way Many Locations Few Locations Manual Automated

  20. Simplify the User Experience: Results Productivity Improvements • Web 2.0 “Facebook-like” user experience • Fewer steps and screens • Consistent user interface • Collaboration and sharing • Increased productivity

  21. Standardize on 100% Open, Standards-Based Applications

  22. Centralize Common Business Functions Unified HR Data Centralized Procurement Functions Tax Engine Accounting Engine Bank Model Payment Engine Software designed for Shared Services

  23. Data logically partitioned and secured by organizational units (BUs) One user can access multiple Business Units Processes can be run across organizations at the same time Centralize Access Russia UK Japan

  24. Automate Business Flows Pre-built, complete workflows • Reduce errors • Lower labor costs • Improve service quality • Reduce risk, instill controls • Enforce corporate policies Using industry best practice Adaptable business processes that survive upgrades

  25. Common Shared Service Processes 93% Finance 60% HR 48% IT 47% Procurement 26% Sales/Mktg Support 23% Real Estate/Facilities Source: 2011 Global Shared Services Survey Results, Deloitte March 2011

  26. Finance Shared Services

  27. Centralized Finance FunctionsSoftware Designed for Shared Services Global Tax Engine Centralized Parties(e.g., Customers, Suppliers) Centralized Accounting Dr Cr 500 200 Centralized Payments & Funds Capture Single Bank Account Model Centralized Intercompany

  28. 0101 1010 0101 Imaging Integration for Paper-Intensive Processes Capture Image Extract & Index Store Access Approve

  29. Efficient Self-Service Reduces the Burden on Finance • Financial Reports • Asset Transfers • Expense Reports • Customer Invoice • Make better, faster decisions with easy access to reports • Reduce burden on IT staff; end users can create their own reports • Improve customer satisfaction • Reduce burden on credit and collections departments • Reduce DSO and improve cash flow • Streamline asset transfers • Ensure up-to-date asset information • Improve budgeting with accurate asset ownership • Increase employee satisfaction • Expedite expense report processing • Lower processing costs

  30. Enterprise-Wide Visibility • 255 pre-built analytics (GL, AR, AP, Cash Flow, Profitability, Expenses) • Embedded calculations, metrics, and KPIs • Single, consistent view across functions and data sources • Better decisions, actions, and control at all levels

  31. What Finance Shared Services Customers Achieved • Outsourced finance, HR, and purchasing to one Shared Service Center, saving US$13.5 million per year • Return on investment expected in 3.2 years • Achieved 15% year-over-year cost reduction and delivered US$254 million in cumulative savings over three years • Consolidated 13 GLs to 1 • Achieved 376% ROI through efficiency gains • Reduced closing time from 15 days to 6 • Saved >US$131 M per year with shared services • Increased consistency of supplier invoice payments, paying 94% within the 10 day government target

  32. Procurement Shared Services

  33. Flexible Procurement Models Decentralized Centralized Sourcing, Local Execution Request Source Buy Pay Request Source Buy Pay BU 1 BU 1 SSC BU 2 BU 2 BU 3 Complete Shared Services Transfer Procurement to Local Business Unit Request Source Buy Pay Request Source Buy Pay BU 1 BU 1 Intra-co. Invoicing Intra-co. Invoicing SSC SSC BU 2 BU 2

  34. Policy-Driven Self-Service • Employee Requisitions • Supplier Collaboration • Contractor Time Card Entry • Streamline employee ordering • Enforce purchasing policy • Slash procurement costs • Ensure accurate supplier data (e.g., addresses, contacts, products) • Create closed-loop purchase order collaboration • Reduce inventory & receiving costs • Simplify contractor time entry • Validate time against POs • Automatically create invoices from approved timecards Utilize Fewer Resources and Accelerate Processing

  35. Complete Procure-to-Pay Automation Identify & QualifyVendors Create & ApproveRequisition Receive ElectronicInvoice EvaluateBids CreatePurchase Order Pay Supplier(EFT) Send ElectronicPO to Supplier AnalyzePerformance Award to Vendor Finalize Pricingand Contract Receive Goods or Services; Inspect AdjustContracts Source and Contract Strategy Purchasing Execution

  36. Enterprise-Wide VisibilityPre-Built Dashboards to Analyze Spend, Employee Expenses & Supplier Performance • Metrics for: • Spend analysis • Procurement efficiency • Employee expenses • Maximize savings by viewing spending patterns • Get insight into supplier performance • Improve contract usage and compliance

  37. HR Shared Services

  38. Centralized Human Resource FunctionsSoftware Designed for Shared Services HR Center of Excellence (Business Expertise) HR Shared Services (Transactional Services) Employee Services Employee Services Record Keeping Training Compensation Benefits Payroll Recruiting Career Development

  39. HR Shared Services / HR Service Delivery ConceptCentralized Service Delivery Management Portal Single Sign-On, Unified, Personalized 95% Tier 0 Employee & ManagerSelf Service Transaction-based self-service Help Desk & WFC* Tier 1 Goal: Limit Case Management to 5% of Inquires CaseMgmt Tier 2 5% * Workforce Communications & Social Collaboration

  40. What HR Shared Services Customers Achieved • Saved US$909,000 in first year payroll costs, including consultancy fees and contract costs • Reduced unit costs per pay slip by more than 25% • Reduced critical payroll processing time from 18 hrs to 4 • Accelerated the payroll process by 50% • Increased employee satisfaction with 24/7 access to HR and payroll information via a reliable online system • Consolidated 128 separate payroll databases into one • Halved the HR staff-to-employee ratio, saving 300 full time posts across the business

  41. Other Shared Service Customers

  42. Future Trends in Shared Services

  43. "In 2004, 24% of executives worldwide thought Shared Services was 'strategic' for their business. In 2011, 89% think it is...It’s no longer a question of whether you should adopt shared services or outsourcing models. Now it’s simply about HOW WELL and HOW FAR you can leverage them. “ Source: The Shared Services and Outsourcing Revolution is Here, Shared Services and Outsourcing Network, 2011

  44. Most Shared Service Centers Expand ScopeTrend Towards Multi-Functional Shared Service Centers % Increase 82% 76% 66% 61% # of Transactional Processes % of Business Units Served # of Geographies & Regions Served Source: “2011 Global Shared Services Survey Results”, Deloitte, March 2011

  45. 30% of 2014 spending on enterprise applications will be via the cloud Source: The "Next" 25 Years in IT? Clouds, Mobility, Big Data, Social Business and Intelligent Industries, IDC, March 2011

  46. Why is the Cloud Important for Shared Services? Because the Cloud Makes Shared Services more affordable. It’s about . . . • Renting NOT Buying • Sharing NOT Owning • Accessing NOT Installing

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