SSF's Journal - Aug'18 Edition

1. AUGUST 2018 Innovation in business involves making disruptive changes that creates value by introducing new products and services, operational processes or business models. Innovating to Excel Innovating to Excel A VERSATILE PARTNERSHIP BETWEEN INNOVATION AND PERFORMANCE A Journal of Shared Services Forum

3. Editor’s Note AUGUST 2018 The best known CEOs in the world are the ones who have created legends by dramatic transformations which leave us spellbound in awe. One has to simply imagine the impact on the business world created by people such as Steve Jobs, Jeff Bezos, Mark Zuckerberg, Bill Gates, Elon Musk, Jack Ma, Indra Nooyi, Richard Branson and so many others, thereby, changing the direction of their industry significantly. Such was the influence of their transformational journeys that they have all become subjects of case studies in several business schools all over the world. Having said, there are enough and more stories of transformations within the business world that may not make to the books of business history. There is no denying the impact that such efforts have had on their companies and surrounding communities. For one, the need for transformation has moved out of front-end and main stream business to enterprise and staff functions. Many not-so-large companies have aspirations to rationalize and standardize their enterprise processes across their organization in order to realize efficiency benefits. Also in this almost unmerciful world, real competitive advantage could well come from their staff and support functions. Business leaders are well aware that having universal processes, common technology and strong capability can lead to consistent, repeatable, scalable, quality services. Many large organizations have created shared services or ‘global in-house centers' for business process transformation, while few others have ‘outsourced’ their processes to players specializing in their respective industries. And then, there are several models in between. However, that is easier said than done. Even transformation of this magnitude can be very difficult to undertake. Many mid-size companies usually lose out largely due to lack of scale or wherewithal – and usually both. Nevertheless, by adoption of a well thought out strategy, and by following a scientifically created delivery model specifically geared to this aspect, global professionalism can be achieved which can be comprehensive, all-encompassing, all-inclusive, and holistic. In this edition of PE, we explore one such business transformation model which is both unique and innovative. It is a state-of-the-art processes management environment that encompasses the benefits of both in-house centers and outsourcing without compromising on flexibility or control. To further help the business process leaders, this edition also includes another process management model – a maturity matrix. This matrix is a very useful tool to assess the level of competence infused in the enterprise processes, on the road to professionalism and continuous value delivery. Businesses are becoming more complex by the day - and digitization is tightening the loop even further. Some of the cutting edge technologies of today are making the tasks invisible to humans. Whether it is trading on the nano second or using an encrypted decentralized distributed ledger-based cryptocurrencies for payments and other transactions. Direct human intervention is becoming rare. Humans are interfacing with these technologies only at the strategy, design and control level. The execution level is far too fast and complex for the relatively sluggish human. The one thing we do know, however, is that to be able to counter the risk of technology ‘goingrogue’, is technology itself. While we wait for the next big story on global transformation, progressive business leaders are taking front and center to chalk out their own success stories. We at SSF are committed to help make that happen, whether by bring out executable business models, or sharing stories of demonstrated successes, or organizing discussion forums, conclaves and knowledge summits. Our forthcoming flagship annual conclave, the 8th in its series, is specifically geared to cover all the elements mentioned above - and more. A Journal of Shared Services Forum A Journal of Shared Services Forum EDITORIAL BOARD Sanjay Gupta Rakesh Sinha Pallavi Jayaswal CORPORATE OFFICE Shared Services Forum D-75, Malviya Nagar, New Delhi - 110017, India Phone: +91-11-2667 4920 www.sharedservicesforum.in Published, Printed and Owned by Shared Services Forum All rights reserved. Reproduction in whole or in part without written permission from Shared Services Forum is prohibited. Write to us: contact@sharedservicesforum.in Services Forum. He has over 32 years of work Sanjay Gupta is the Chief Architect of Shared experience Management, Finance and Human Resources. Sanjay has pioneered & published several research papers on BPM & Shared Services and also co - authored the first ever comprehensive book on BPM –“BPM in Global India - The Inflection Point Advantage”. Sanjay is the Executive Editor of Shared Services Forum’s Journal, Process Edge and contributes immensely towards Services/ BPOs by knowledge capture, sharing and dissemination through articles, research and creating models for base lining and growth. Sanjay divides his time between SSF activities and consulting for large corporates. In addition, he provides English coaching to the underprivileged children, youth and young adults. in the fields Processes, of Business for Competitive GICs/ Shared www.sharedservicesforum.in

4. Table of Contents 3 COVER STORY Innovating to Excel CO-CREATING VALUE BY BUSINESS PROCESS TRANSFORMATION 15 Moving Towards Continuous Value Delivery Through Process Maturity AN INNOVATIVE MODEL DESIGNED BY PRACTITIONERS FOR PRACTITIONERS 22 Calling the Attention of Financial Gatekeepers THE GOOD AND BAD OF CRYPTOCURRENCIES 25 Cognitive Automation for Operational Risk Management AI BASED PROCESS SURVEILLANCE IN TRADE LIFECYCLE 30 SSF Excellence Awards, Recognition and Felicitations A CURTAIN RAISER 36 A Scientific Art & An Artistic Science SIMPLIFYING BPM – OR THE LIGHTER SIDE OF SERIOUS BUSINESS www.sharedservicesforum.in

5. COVER STORY Innovating to Excel CO-CREATING VALUE BY BUSINESS PROCESS TRANSFORMATION  ANAND MAHESHWARI Innovation in business involves making disruptive changes that creates value by introducing new products and services, operational processes or business models. “Here’s “Here’s to to the ones ones who who see them, them, but but the forward, forward, and to to think think that the crazy crazy ones, see things things differently the only only thing thing you and while while some some may that they they can can change ones, the differently; ; they’re you can’t can’t do may see see them change the the world, the misfits, misfits, the they’re not do is is ignore them as as the world, are the rebels, rebels, the not fond fond of of rules ignore them the crazy crazy ones, are the the ones ones who the troublemakers, troublemakers, the rules. . You You can can quote them because because they ones, we we see see genius, who do do. .” ” the round round pegs quote them, them, disagree they change change things genius, because because the pegs in in the disagree with things. . They They push the ones ones who the square square holes with them, them, glorify push the the human who are are crazy holes. . The glorify or or vilify human race crazy enough enough The vilify race — Steve Jobs Steve Jobs PROCESS EDGE | AUGUST 2018 | 3 www.sharedservicesforum.in

6. F Few decades ago, by evolving and adapting to a collaborative collaborative supply supply chain chain (like shop-made vs. bought-out or sub-contracting), the Manufacturing Industry transformed itself and created strategically differentiated business models. Pursuant to the Information Technology explosion that made the physical world virtual, such collaborative supply chain found its way in the enterprise and service functions and paved the way for consolidation of the same within or beyond the geographical boundaries of the developed nations - to begin with - where the wage component in the overall cost structure had reached untenable levels. I. I. Business Business Process Process Transformation Transformation is is a a Universal and and Continuing Continuing Need Need Over the last two or three decades, consolidation of business processes has been primarily associated with large companies, both global and domestic, more often with diversified businesses operating from multiple locations. India came to be the ‘globalhub’ for off-shoring for large organizations, whether as global in-house centers (GICs) like American Express or global BPO majors like IBM/ Accenture. In addition, many forward looking Indian MNCs and large corporates have set up their own in-house shared services (say, Hindustan Unilever/ HDFC Bank/ Tata Motors) or outsourced to Indian BPO majors like Intelenet. Transforming business processes in staff and support functions/ service operations have specifically yielded significant benefits such as cost arbitrage, skill arbitrage, change acceleration, and enhanced compliance and control environment. It has thereby freed up resources in terms of time, capital and energy for the core business requirements, with the view to help the company to compete and grow in this VUCA world. However, more often than not, such models have been seen to deliver results only when enabled by reasonable scale of operations within those functions. For these companies, the challenges can be classified into four four elements elements as under: ELEMENT ELEMENT 1 1: : Limited Process Focus Beyond Line Functions These companies predominantly focus and rightly invest on upgrading the core manufacturing and marketing functions/ processes (the line functions) to produce and sell their products and services. Hence, if these companies need to upgrade the business processes of their enterprise-wide support or staff functions or service operations, there is a clear need for special expertise Management (BPM) or Transformation (BPT) focus to metricize and deliver value through customer processes. on Business Process Universal customer centric centric ELEMENT ELEMENT 2 2: : Lack of Operational Alignment with Business Goals In respect of the enterprise functions (like F&A, HR, Supply Chain, IT etc.), business leaders of many such companies are faced with challenges regarding varying systems and processes across multiple locations, duplication of activities, inability to track and deliver on agreed timelines, and not fully leveraging the IT investments. These performance functions are, therefore, not aligned to deliver on business goals/ metrics of the company. Hence, there is strong need for leaders to create a BPT strategy that a) aligns aligns these these staff/ staff/ support business business goals goals enabling operational improvements, excellence and innovation of business processes, and b) consolidates and manages processes to avoid duplications and enables enables service service with metrics for support functions functions with with with control control. . ELEMENT ELEMENT 3 3: : Low Scale or Fragmented BPT Focus for Any One Enterprise Function FOR THE SEGMENT COMPANIES… THE CHALLENGES CAN BE CLASSIFIED INTO FOUR ELEMENTS In terms of business services, these companies have limited scale for enterprise functions like F&A, HR, SCM, IT or even Analytics for consolidation and management – say around 50 employees per function. Hence, there is a specific need for these companies to create an organization organization- -wide staff/ staff/ support support functions functions (and not a single function based strategy). Even though most of these companies have ERPs, they have since come to believe that the investment in the same is far from being optimized. Quite often, a strategic blueprint for process transformation does not ‘precede’ the decision to consolidate or outsource back office processes, leading to a fragmented approach to BPT. II. II. Typical Typical Transformation Transformation (BPT) Challenges Challenges in in Business Business Process Process (BPT) For many not-so-large companies (within India or overseas), there are typical challenges in the sphere of BPT, and this segment of companies have made limited progress or investment in this field, except perhaps investing in ERP and a few basic IT tools. wide strategy strategy for for all all the the The segment companies typically fall in the annual turnover range of INR 500-5000 Crores. In a global context, the reference range could well be between US$500 million and US$5 billion as annual revenues with an employee strength upwards of 500. PROCESS EDGE | AUGUST 2018 | 4 www.sharedservicesforum.in

7. Process Process Capability Capability as PCaaS, is transformation centricity to the model. This is a niche BPM capability in today’s business environment with advanced expertise. It may not be an economically viable proposition if invested directly by the company at a relatively lower scale of enterprise functions and processes. PCaaS is deployed at two levels: a) a) Design - the transformational front end, creating the blueprint and roadmap for transformation, and b) b) Operations Operations & & Delivery Delivery - the Aggregated Capabilities for back end i.e. enabling the operations and connecting with process design at SDU through an ‘on-demand’ capability framework to deliver service to customers. At the Design level of PCaaS, BPT expertise is required for strategic leadership to create the transformation road-map. This enables redesign of business processes through the BPM strategy that brings composite focus on the 6 elements of BPM: people, people, process, process, technology, technology, customer, control control, to realize value to the segment company. The strategic blueprint touching all the above 6 elements also helps ‘prioritize’ the BPM implementation in line with client specific requirements like automation opportunities, lean/ six sigma for process improvements,, customer experience management, review of current outsourcing or consolidated in- house operations, etc. Amongst other things, PCaaS at the Design Level could well include Process Maturity Assessment, Program Management, Change Management, Work Distribution Assessment, Opportunities, Process & Metrics Review, ERP Utilization, BPM Tools & Systems Enablement, Lean Six Sigma etc. The SDU is only an offshoot of the as a a Service Service ( (PCaaS PCaaS) ) ELEMENT ELEMENT 4 4: : Current Requirements for Expertise & Capabilities: the spring board that provides Operating Models Not Addressing A typical dilemma that such companies often face is about choosing the best fit model for their BPT journey. They remain more concerned about the perceived dilution of control over, and confidentiality of their business data under the outsourcing model. They have a distinct need for a captive consolidation of processes but they do not have the scale or wherewithal to create a compelling business case. Even if they progress with outsourcing model, the scale limitation equally hinders their ability to get a Tier 1 or even Tier 2 BPO firm as their service providers, as they may not provide them with the right level of attention for service delivery and transformation centric strategy and execution. Hence, the current operating models do not adequately address the requirements of these segment companies. As a result, they are often stranded at a sub-optimal level with pure play outsourcing or pure play in-house process consolidation. Hence, in most cases, they are almost totally deprived of the benefits of BPT - thus risking their competitive advantage in the market place. Design & & Execute Execute customer, business business and and III. III. The limitations as above have given rise to a new and transformative solution namely ‘Dedicated (D (D- -Cap) Cap) Mode Model. This model addresses all the above challenges and becomes integral integral to to the level level Business Business Process Process Transformation Transformation strategy D-Cap model, enabled by unique capabilities, can thereby service the businesses to gain advantage from both ‘economies of scale’ and ‘economies of knowledge.’ ‘ ‘ transformation capability framework and and a delivery model that is best fit for the segment companies during the various stages of maturity for BPT and to sustain continued transformation of processes as extension of the organization. Two Two Distinct Distinct Components Components The combination of a contemporary and cutting edge process capability with service delivery makes it a particularly relevant and value generating choice for such companies. There are two distinct components of the model or the solution: Process Capability as a Service (PCaaS) and Segregated Delivery Unit (SDU) – both provided by a professional D-Cap solutions partner. Need Need for for a a Comprehensive Comprehensive Solution Solution ‘DedicatedCaptive’ Captive’ the enterprise enterprise strategy. The RPA & Automation Design transformation road map for enterprise as a whole and the SDU is to be considered as a need ‘only to the extent’ level ‘Dedicated Captive’ (D-Cap) Model addresses all the above challenges and becomes integral to the enterprise level Business Process Transformation strategy. D-Cap is both a the ’ ’ there is a requirement for consolidation of processes before they can be transformed or brought together for effective management of operations. PCaaS at the Delivery level, is the deployment of ‘AggregatedCapabilities’ such as setting up of the Operating Unit, Process Operations and Process Improvements at the SDU, Quality & Process Innovation, Work Flow, DMS, RPA & Tech Tools Deployment, Compliance & Control Review, Knowledge Management, People & Leadership Development etc. This will ensure alignment of back- end with front-end processes improvement, and benefit of the business outcomes. Documentation, the for overall PROCESS EDGE | AUGUST 2018 | 5 www.sharedservicesforum.in

8. PCaaS: A Transformation Centric Approach for Integrated Processes Covering Strategic Elements at Both the Front and Back end of the SDU are managed by the D-Cap partner. It is an extension of the clients’ own businesses or offices – and the employees are seen as exclusively identified for the client. This SDU is typically carved out as a distinct section in the operating facility, and often could be an independent legal entity, where the client has the right of access and can interact with the employees. The SDU under D-Cap, hence combines the best of in-house as well as outsourced models. The chart below depicts the specifics of this unique model. Segregated Segregated Delivery SDU is a segregated service delivery unit set up exclusively for operations segregated manner for the client company (by the D- Cap solution partner) identifying closely with its business, brand and culture. As shared earlier, the decision to consolidate is an offshoot of the Transformation Road Map of the PCaaS Design level and is done only only to to the the extent extent the need is assessed and justified as part of transformation. The operations Delivery Unit Unit (SDU) (SDU) consolidated in a Segregated Delivery Unit (SDU) under D-Cap transformation centricity in business processes. At the same time, it avoids under-utilization of specialist resources (like Transformation, Transition or Process Reengineering) and betters the leveraging of specific requirements (like bolt on tools, Robotics, systems optimization etc.) - thereby reducing the overall cost of operations and ensuring sustained benefits. The above combination of PCaaS Design at the front end as a spring board and a separate SDU as per client’s need, supported by PCaaS Delivery at the back end from a common pool of talent from the D- Cap partner, enables the client company to derive the much needed expertise for achieving end-to-end PROCESS EDGE | AUGUST 2018 | 6 www.sharedservicesforum.in

9. By adopting this innovative solution in totality, the client company is assured of segregated service delivery like a captive unit with redesigned and often automated processes in the front as well as back end, along with the expertise required to initiate, manage and sustain BPT on an ongoing basis. This model, therefore, continually transforms the processes optimally in tune with the business needs without any risk of losing or diluting the considerations of confidentiality, control and continuity. Ownership Ownership Structuring Structuring of of SDU Model Model: : The uniqueness of this model making it innovative extends further to the aspects of structuring the SDU in a manner to enable value generation and realization. a) a) Holding Holding: The model gives flexibility to the client to structure the ownership of the SDU as per their requirements and comforts. The options could be  100% ownership as a division of the client,  a separate legal entity having mix of ownership (say 26% to 74%) between the client company and the D-Cap partner, or  100% owned by (especially for overseas clients to eliminate or avoid transfer pricing issues, as part of ‘relatedparty’ transaction). ‘ ‘ simply be described as Client Owned Partner Operated (COPO) or Partner Owned Partner Operated (POPO). c) c) Resourcing Resourcing: : Similarly, the D-Cap model permits staffing of the SDU with a combination of resources with existing resources of the client company transferred to the SDU (particularly for an onsite consolidation), supported by resources from D-Cap partner and/or external staffing agencies. This way, the client company is enabled to deal with immediate absorption of leaders for operations and also have the flexibility to release resources in line with the anticipated productivity improvements or reengineering. SDU under under the the D D- -Cap Cap The D-Cap model fills a clear void of a specific process transformation model that provides the unique opportunity for the segment companies to transform/ redesign business processes and derive benefits from BPM, retaining independence and freedom through captive operations while ensuring interdependence and economies through a pool of capabilities that can sustain process improvements and operational innovation. IV. IV. Operationalizing Operationalizing the the D D- -Cap The D-Cap model underpins centricity’ to processes and operations, right from the word ‘go’, requiring integrated execution of PCaaS and the SDU to effectively operationalize it. PCaaS PCaaS – – the the spring spring board board: : Transformation starts with PCaaS through a ‘SEE’ ‘SEE’ framework Execute, Execute, Excel Excel. . Shape focuses on two aspects: Levers and Outcomes. Transformation Strategic Blue Cap Model Model ‘transformation the D-Cap partner framework – – Shape, Shape, The above ownership structuring Print & Road Map, prioritization transformation elements covering 3x3 matrix of technology, people are the Levers. Customer, business and control are the Outcomes. This model continually transforms the processes optimally in tune with the business needs without any risk of losing or at least diluting the considerations of confidentiality, controls and continuity. can of process, ’ ’ The Shape stage is the most holistic review for end- to-end transformation including review of current state of consolidation and/ or outsourcing. It is completed in a span of 4 to 8 weeks depending on the scale, size, functions of the client company and the number of locations. The primary action first focuses on client’s prioritization enhancements and solutions, process redesign at the front end, re-staffing and reskilling requirements of people and their development. The blue print review also examines actions towards consolidation and/ or outsourcing of processes including restructuring of the current state. The Shape study clearly captures the change management and program management requirements, based on business, brand, values and culture. Finally, the Execution Roadmap with a phased execution plan and the resultant business case is prepared to enable approval of the transformation journey. b) b) BOT BOT Option Option: The client has the option to retain a BOT (Build Operate & Transfer) clause under the model whereby the SDU is operated for a certain period of time (say 3 to 7 years) by the D-Cap partner, and thereafter transferred to the client. The SDU is initially created as a separate operating unit and is managed with professional expertise of the D-Cap partner for the day-to- day management as well as to implement specialist practices. The process of transferring ownership of the center remains relatively simple with the D-Cap partner exiting the contract as per terms for transfer either on natural termination, or earlier as required. The D-Cap model, by design, gives the option to the client to continue/ extend the arrangement with the D- Cap partner for the SDU or decide to transfer SDU to a third party to realize value through a spin off (instead of outsourcing upfront). for technology PROCESS EDGE | MARCH 2018 | 7 www.sharedservicesforum.in

10. consolidating the processes as they exist but also to assess and clean them up before transition, by appropriate usage of process and technological expertise, or streamline post consolidation. The client company and the D-Cap partner are part of the governance to drive the specific goals and deliverables of the SDU to client/ internal customers. The D-Cap partner provides infrastructure, people and leadership to document the processes and run the operations efficiently leveraging PCaaS (Operations to Delivery) through ‘Aggregation of Capabilities’ to implement BPM tools and systems, metrics, review frameworks etc. The resources for PCaaS are deployed on need basis by the D-Cap partner. Besides a new SDU set up, the D-Cap model can become operational even with SDU as the initiating point when an existing low scale in-house centre already set up is taken over or a current outsourced operation is brought in as an SDU by the D-Cap partner. Both these options become viable routes for initiating the D-Cap model in view of the immense benefits of PCaaS, the various advantages of operating SDU under this model, and end-to-end transformational focus including automation. The D-Cap partner is committed to achieve the agreed goals on Process Transformation by applying robotics and other technology tools, Black Belt (LEAN/ Six Sigma/ eSCM) projects, migration of upstream/ down-stream processes, and other business enablement services. The ‘Execute’ stage opens up with two streams – front end linked transformational solutions such as on-site automation, restructuring etc., and back end process transformation consolidation, spin off, process redesign post consolidation etc. Both are prioritized for speed of execution and value generation. The execution plan for each action is then detailed for each prioritized action. Program management that combines project management and change management is the key for a great plan to be a successful one. Post the execution, the Excel stage takes over to stabilize the executed actions, progress change management requirements to logical completion, deepen process excellence areas and a business case refresh to validate and ensure value delivery plan/requirements. The The SDU SDU offshoot offshoot: : The Execution roadmap for SDU follows a ‘Scope, Set-up, Operate and Excel’ (SSOE) methodology. The partner builds on the transformation road map to scope the process landscape, assess the potential for process and headcount consolidation, creates an implementation road map based on client priorities to set up the SDU, and works out the business case for the actions planned. At this stage, the SDU structuring options are also evaluated and finalized. Setting up and transitioning to the SDU with the identified processes is the next stage of Execution. Enabled by PCaaS, the emphasis is not on just solutions such as the necessary SEE – Strategic Advisory and End to End Program Management & Execution for Transformation SSOE - End to End Set Up, Operations & Transformation Partner or innovative can succeed without active and effective engagement of the people implementing the same. Thus, leadership of both the client company and the D-Cap partner must remain focused on the customer, business and value with clearly understood roles for each of them. Intrinsic methodology is the Business Partnership Approach to be practiced by both the client company, led by the CXO/ leader concerned and the D-Cap partner, as no transformation strategy or solution, howsoever unique to the aforementioned execution PROCESS EDGE | AUGUST 2018 | 8 www.sharedservicesforum.in

11. V. V. D-Cap is a unique transformation centric business model that Unique Unique and and Innovative Innovative c) c) Customer Customer Experience Experience: : The combination of PCaaS and SDU with transformation focus brings holistic customer centricity, enhancing the overall experience of internal and external customers. enables transformation of enterprise-wide processes d) d) Consolidation Consolidation: : The Segregation of Operations becomes more an ‘offshoot’ of a structured Transformation Roadmap, fragmented approach consolidation or outsourcing. When consolidation is considered, the SDU approach not only leads to benefits due to similar functions/processes brought under one umbrella that are currently distributed across multiple locations but also ensures ‘no loss of control’ and ‘hassle-free’ remote operations (India or overseas) as the operations are managed by a BPM practitioner of the D-Cap partner. SDU also realigns resources in terms of right level, right skill, right level and redeployment, with opportunity for process improvements post consolidation. Beyond Beyond Captive Captive to to Capability Capability: : The SDU which is initiated as captive in-house operations grows in maturity over a period of time. This provides a great spin-up effect to make the D-Cap move beyond a ‘DedicatedCaptive’ to become ‘DedicatedCapability’ model when the SDU demonstrates enterprise-wide partnership to co- create value. by leveraging process capabilities and eliminating to the synergizing the benefits of both in-house and outsourcing models, back-office while maintaining the required level of data confidentiality and control, that are particularly suited and practicable for mid to large corporations. At the same time the model is innovative to provide a segment specific focus to mid-to- large companies using its transformational centricity, combining front-end and back-end improvements, and Aggregation of Capabilities and Segregation of Operations leading to best of the two worlds - pure play captive and pure play BPO, e) e) along with a uniquely flexible ownership structure, and by becoming an extension of the organization - to move beyond dedicated 'captive' to dedicated 'capability' unit VI. VI. This innovative solution as the cornerstone of the overall Business Process Transformation Strategy leverages the two components - Process Capability as a Service (PCaaS) and Segregation of Operations (SDU), together delivering substantial strategic benefits as under: a) a) Value Value of of PCaaS PCaaS: The model brings dedicated BPM expertise transformational solution combines strategy, execution and process excellence through PCaaS. It is not limited to merely providing advisory transformation or acquisition of a totally new set of skills and capabilities for managing an in-house model. It also helps to avoid the limitations of outsourcing, where the attention to a low scale client is a challenge and enables becoming extension of the client organization for Business Services. b) b) On On Demand Demand: : The Aggregation of Capabilities for SDU and availing of services ‘on-demand’ by the client on ‘usagebasis’ (under PCaaS) from the D-Cap partner brings the power of BPM expertise to drive process efficiency and effectiveness, while avoiding under-utilization of high cost specialist expertise and resources focused on BPM, being part of SDU on a full time basis. The above strategic benefits translate into a business case as under: a) a) End End- -to to- -End End Process Process Improvements Improvements: : With a well- orchestrated business transformation effort combining accountabilities to design, execute, operate and deliver, the model supports customers of the segment companies with front- end benefits through end-to-end process assessment, reengineering, automation and treats outsourcing, not as the first step, but only as the most essential step transformation. b) b) RoI RoI: : Despite a smaller scale of operation under SDU, the model supports clients with a business case of ~25% IRR minimum, payback of 2-3 years and 5 to 10% YoY improvement opportunities. c) c) ‘Economies ‘Economies of of scale’ scale’ for investments and operations that enable the client to reduce investment substantially to get the financial benefits through SDU, use of PCaaS and ownership structuring. d) d) ‘Economies ‘Economies of of Knowledge’ Knowledge’ that brings valuable all round BPT expertise in all aspects of transformation at the right time, driving unbiased client focused value to be derived from holistic end-to-end focus, far outweighs the cost incurred through the D-Cap model. e) e) Value Value Creation Creation: : An opportunity to monetize the SDU through spin-off at the right time. Strategic Strategic Benefits Benefits and and Business Business Case Case redesign consolidation and or with an that end-to-end amazingly towards process capabilities for PROCESS EDGE | AUGUST 2018 | 9 www.sharedservicesforum.in

12. Benefits Galore The Industry Agnostic and Innovative D-Cap Solution Delivers on Both Financial and Strategic Fronts The innovative solution of Dedicated Captive Model, unique combination of PCaaS and SDU operations, seeks to address all the challenges and requirements for such segment companies. Care should be taken to choose the right D-Cap partner who can bring the right level of leadership expertise, hands-on program management and execution experience to adopt the model, with the appropriate structuring model for the sustainable success of the transformation strategy. The best value is achieved when the D-Cap partner becomes an extension of the client’s organization for business services transformation and operations. PE In In Summary Summary In the ever evolving world of business, the need for transforming the underlying processes on regular basis continues to grow and demands intervention backed by the right expertise, supported by an end- to-end accountability to strategize, design, execute, achieve, operate and excel. For many organizations, creating or developing such expert capabilities may not be a viable option on their own but foregoing the benefits of such potential transformation is not an option either. ABOUT THE AUTHOR ABOUT THE AUTHOR Anand Anand Maheshwari Maheshwari is is a a meritorious experience experience with with a a blend the the Founder Founder Director Director of of Quintes Consulting Consulting to to offer offer certain segment segment - - both both in in India responsibilities, responsibilities, business business and Domestic Domestic Business Business Services, services services. . In In his his current current role role with strategic strategic execution execution capabilities, on on coaching coaching and and mentoring mentoring of of other meritorious Chartered blend of of senior senior leadership Quintes Global, certain innovative innovative solutions India as as well well as and finance finance leadership Services, Financial Financial Services, Chartered Accountant Accountant with leadership and and entrepreneurial entrepreneurial roles, Global, a a new new start start up, solutions and and capabilities as globally globally. . His His experience leadership across across a a variety Services, Oil, Oil, Petrochemicals Petrochemicals and with over over 3 3 decades roles, within up, promoted promoted by capabilities in in the experience includes variety of of domains decades of of extensive within India India and by Ramakrishnan Ramakrishnan & & RvaluE the arena arena of of BPM BPM to to a a niche includes controllership/ controllership/ CFO domains of of Offshoring and Chemicals, Chemicals, IT IT and extensive work and UK UK. . He work He is is RvaluE niche CFO Offshoring & & and related related with the capabilities, stakeholder other leaders the RvaluE RvaluE Group, stakeholder collaboration leaders. . Group, Anand collaboration and Anand brings brings proven proven entrepreneurial entrepreneurial experience, and people people management management skills experience, skills and and focus focus PROCESS EDGE | AUGUST 2018 | 10 www.sharedservicesforum.in

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16. 8th ANNUAL GLOBAL SHARED SERVICES CONCLAVE – A Curtain Raiser NOVEMBER 2018 In the year 2018, SSF takes pleasure in announcing its 8th Annual Global Shared Services Conclave to be held in November 2018 . After the last seven successful Conclaves, this year, once again, SSF aims to bring the focus of the Industry to the relevant and futuristic strategies which will be the shape the things to come. The one-day Conclave event will focus on the next steps to be an enabler for organisations to become future relevant by being agile, developing a cognitive digital workforce, adopting intelligent automation, etc. to enhance consumer experience across their Enterprise functions. The agenda ofBPM & Shared Services Conclave 2018 has been categorized under three streams:  Interactive Panel Discussions & Case Presentations, and Knowledge Sharing Interactions,  Felicitating BPM Achievers, Excellence Awards & Recognitions, and  SSF Publication of ‘Report on BPM Practices for Creating Sustainable Differentiators’. The Awards/ Recognition/ Felicitation Categories for Industry Leaders and Organizations  Shared Services in India – Single Function/ Multiple Functions  Effective BPM adoption - Delivered Business Impact/ Achieved Business Excellence through: o Leveraging Process Innovation in any of the Service Functions o Technology Transformation or digitization in any of the Service Functions o Deploying Innovative People Practices o Moving up the Process Value Chain o Exemplary Customer Experience Management The above Awards will be for two separate sub-categories: Global In-House Centres & Corporations & Shared Services in India  Effective Business Process Transformation for a Client by BPO, presenting a Client Case Study demonstrating value delivery  Successful Launch of Shared Services Strategy  Felicitating Pioneering BPM Leaders/ Achievers Who are attending:  C-Suite Executives, Finance Controllers, Heads of HR/ IT/ Supply Chain and BFSI Leaders  Entrepreneurs of the Rural Sector; Business strategy Leaders/ Managers  Senior functional managers from multiple functions like, Quality/ Process Excellence, Finance & Accounting, Corporate Compliance, Supply Chain & Logistics, Information Systems, Human Resources  Managers/ Leaders from Shared Services /BPO – F&A, HR, Supply-chain, Operations Attendance is limited to Business Heads, C-Suite Executives, Directors, General Managers and their direct reports. SSF reserves the right to refuse attendance to any person not fitting the above roles or from a non-sponsoring vendor organization. FOR QUERIES ON PARTNERSHIPS OR PARTICIPATION, WRITE TO conclave@sharedservicesforum.in www.sharedservicesforum.in

17. Moving Towards Continuous Value Delivery Through Process Maturity AN INNOVATIVE MODEL DESIGNED BY PRACTITIONERS FOR PRACTITIONERS  TEAM SSF M Most organizations globally face pressures to gain and retain competitive advantage by identifying cost cutting opportunities, improving quality, reducing turnaround time and enhancing customer experience. Essentially every one of these is a process management or an improvement technique. The better we manage our processes, the better our chances of taking advantage of efficiencies – and improve effectiveness. On the other hand, many organizations do not have full understanding of how process steps affect quality of the output. The first There are a few process maturity models that are in vogue today. Having said, they draw upon the organizational model of Gartner then construct an approach based on real life experience of processes with key parameters that directly affect the output and outcome from such processes. Hence, one can say that a clear need exists for the Business Services industry to have an implementable model that can help to assess and classify the levels of maturity of the ‘processes’ per se at the mega or major process level, before deploying a model to assess and ‘ ‘ categorize their process ‘management’ maturity at the organizational level. Shared Services Forum as a community practitioners industry experts, decided to evolve a Process Maturity Model (PMM) that is based on industry practices. step realization processes can be and need to be optimized to yield even outcomes. If there is no objective judging the quality of processes, the products or services from those is usually the that …being a large industry encompassing multiple domains and a range of processes, the model focuses on six primary and most important parameters common to all services…. a 6 x 5 Matrix to assess the major or mega processes for the organization... processes may not solve the problems that they are supposed to. In an effort to ensure that processes are consistently managed, controlled, and reported across an enterprise, many organizations use a business process management (BPM) maturity model - a structure of capabilities with various levels of specified ‘maturities’ like the six phases of Gartner BPM model. Over the years, few more process management models have been developed to assist the organizations make such assessments. These BPM models are at the ‘organizationallevel’ and are not at the mega process or major process levels within an organization. The Gartner model assessment clearly indicates that many organizations are in the early stages or phases of BPM, thereby confirming the need for organizations to step up their focus on the critical success factors for holistic BPM maturity. With the advent of off shoring, global in-house (captive) centers and major BPOs have become essentially process management centers by design to drive performance and value. Accordingly, better of and basis for ’ ’ This PMM can be used as an evaluation tool to benchmark processes in the GICs or BPOs or India shared service centers, against a standard set of parameters to assign levels of process maturity. The intention of setting up such a model is to create a methodology which can be used to measure improvements as well as establish thresholds. An organization with mature processes effectively defines, manages, measures, and hence, has greater scope or opportunities to improve its processes. Processes are documented, roles and responsibilities are well understood, and work flows are easily updated when necessary. A disciplined process is consistently followed because understand its value, and infrastructure is readily created to support it. Process Process Maturity Maturity Model Model developed developed by The model developed at SSF is primarily designed keeping in mind the extent of detail required/ available in the Business Services industry. Business Services, being a large industry encompassing all participants by SSF SSF PROCESS EDGE | AUGUST 2018 | 15 www.sharedservicesforum.in

18. The The Parameters Parameters of of PMM There are six most important parameters for process maturity assessment and these have been reviewed and revised based on real life application and assessment. Given below are the descriptions for each of the parameters and the drilldown of the details for the various levels for each parameter to enable an objective assessment, and keep it meaningful and even convincing to the leaders of the organization. A. A. Process Process Documentation Documentation Process documentation is a complete written description of how to execute a given process. This includes any and all documents that go to support a process – process execution maps, policies, checklists, tutorials, forms and links to other applications and processes. The intention of creating such documentation is to:  have a common view of the steps in a process  reduce vulnerability to employee specific knowledge  improve processes  create a training plan Process documentation is segregated to include all necessary information on the inputs and the desired outputs as well, through a SIPOC and deployment charts to share how the process ‘flows’ across the organization through multiple departments as well as in multiple forms (manual/ scanned/ automated etc.). B. B. Process Process Control Control & & Risk Risk Management Process control is the starting point to assess potential process risks (what can go wrong) including exceptions, failures and outages handling. Risk management is the complementary process of identifying and evaluating a threat to the outcome of a process or to the enterprise as a whole as a result of an error in execution of a process. The risk involved could be as simple as cost of re-work or loss of actual or expected revenue. It could even be the more serious threats such as poor customer experience, loss of reputation or compliance failures. Usually companies deploy several methodologies like FMEA to capture the control issues, classified according to occurrence, detection and prevention to predict such incidents of losses and put in place processes to prevent, measure, report, evaluate and fix them. C. C. Process Process Metrics Metrics Process metrics are numeric measurements used to evaluate and benchmark business processes performance. Metrics tell the process owner how the process is operating. PMM multiple domains and a range of processes, the model focuses on six primary and most important parameters common to all services. This model uses a 6 x 5 Matrix to assess the major or mega processes for the organization and classify them into five levels – Levels 1 through 5). Eventually, the model will enable a function or an organization to ‘move up the value delivery’ to customers and stakeholders. It is essential to emphasize that the PMM of SSF can be well applied to all processes within enterprise functions (like F&A, HR, SCM, IT, CLM etc.,) in various sectors and industries, as this will reinforce the need to focus on processes by all companies across all major industries. The summary structure (Parameters & Levels) of the PMM is given below: Process Documentation Operational Governance & Leadership Process Control & Risk Management Level of Automation Process Metrics Process Robustness & Stability Management PROCESS EDGE | AUGUST 2018 | 16 www.sharedservicesforum.in

19. E. E. Level Level of of Automation Automation Process metrics can be of several types – input, process, output, or outcome. Besides, the metrics dashboard, visible numerical values of process performance will help to drive the process maturity. Similarly, metrics on real time and historical basis will add how the process is performing over a period of time. Each of these measures the process perspectives. Several combinations can be made to these metrics to determine process efficiency, effectiveness and determines the relationship between input and output while effectiveness measures the quality of the outcome. Flexibility metrics, on the other hand, determine the ability of the process to handle exceptions and adaptability to changes. The outcome metrics can also be linked to business metrics and KPIs to assess how well the process is focused on business performance and not just on process operations. Of late this parameter has begun to take greater significance in assessing maturity level of processes since it provides a good opportunity to ensure the adherence to all the four parameters discussed above. This includes use of control systems, bolt on tools for operating processes with minimal human intervention, effective utilization of ERP etc., In fact, this is a key driver for process capability base-lining as well as productivity measurements. In cases of high levels of process automation, variability of process execution would be low, controls and risk management process would be strong, predetermined metrics would be easily available, and the process outputs are likely to be very stable. However, there are many other factors too which make this parameter important. It ensures a direct linkage to the other enterprise processes by using a common platform. Use of state–of- the-art applications can also better prepare the organization for the unknown vagaries of the future. from different flexibility. Efficiency D. D. Process Process Robustness Robustness & & Stability Stability Process robustness reduces, minimizes and eliminates the variability in output and outcome. Process stability refers to the ability of the process to consistently provide the same desired result each time it is executed. If the process is executed by the same operator repeatedly the results returned should be well within the acceptable desired range – this is called process repeatability. In case the exact same process is executed by other operators, the results retuned here too should be well within the acceptable desired range – this is called process reproducibility. The combination is referred to as R&R – Repeatability & Reproducibility for process maturity assessments. The acceptable range itself should be set as narrow or broad as required by the process owner. In a stable process, both the Lower Control Limit (LCL) as well as the Upper Control Limit (UCL) should be well known and on a narrow band. The chart below summarizes the description for all six parameters. F. F. Operational Operational Governance Governance & & Leadership Leadership This parameter measures the engagement levels of the leaders and the effectiveness of structured governance performance. It determines the extent control the leaders have on the processes, as opposed to the processes being completely ad hoc and arbitrary. This will extend to how the leaders across levels are managing the process through team meetings, reviews, visuals, assigning tasks including peaks/ troughs, inviting comments and suggestion for team engagement. It also measures process ownership and importance of shared responsibility amongst the teams. This can be used as an effective tool to improve efficiency and effectiveness metrics, as well as act as an innovation and experimentation lab for the future. of the process Parameters Operational Governance & Leadership Parameter Definition Managing the process through structured operations/ strategic governance - team meetings, reviews, visuals, assigning tasks and inviting comments/ suggestions F F E E Level of Automation Use of control systems, bolt-on tools for operating processes with minimal human intervention Process Robustness & Stability D D Robustness to reduce variability and Stability to increase consistency in output and outcome Measurable and visible numerical values of process performance available on real time and historical basis. Linkages with the Business Metrics C C Process Metrics Process Control & Risk Management B B Identify and address potential process risks including exceptions, failures and outages handling Process flows, SIPOC / COPIS, Responsibility Matrix, Desk Instructions defined and standardized; Step-by-step instructions to ideally execute the process A A Process Documentation PROCESS EDGE | AUGUST 2018 | 17 www.sharedservicesforum.in

20. Processes are qualitatively predictable, but generally there are no measurements to enforce or improve it. Use of technology and automation is limited to stand alone, usually desktop level applications. At maturity Level 4, tasks or sub-processes contribute to overall performance, and they are controlled using statistical and other quantitative techniques. Measures are established for quality and performance, and they are used as criteria for managing processes throughout its entire lifecycle. Process variations are identified and corrected, and performance is both controlled and predictable. Error correction methodologies are traced to source and teams authorized to fix fundamental issues even if they happen to be in areas outside the control of the processors. Needs of the customer drive the process with clear linkage between process outputs and business outcomes. Processes are implemented in an effort to support business decision making. Technology usage is core and applications are part of enterprise wide resource management systems. At this highest maturity level, processes are continually improved based on quantitative analysis of common causes of variation. The focus is on continually improving performance through both incremental and innovative improvements. Quantitative process improvement objectives are established, revised, and used to manage process improvement. Improvements are evaluated against organizational objectives, and an empowered workforce objectives are usually governed by customer experience management techniques. The organization rapidly responds to changes and opportunities, and it openly shares learning and knowledge. Deployment of robotics for repetitive tasks and that of artificial intelligence for cognitive tasks is common and encouraged. The The Detailed Detailed Structure Structure of of PMM PMM Using the combination of the six assessment parameters and the five levels, the model creates a matrix to establish process maturity. This model can be put to use on any process of business services industry or enterprise function. Each parameter can be assessed individually and therefore each can well be at different levels of maturity. The process can then be assessed as a whole to arrive at a common maturity level. Since every parameter is generically connected with every other, it is highly unlikely that the parameters would in themselves be at vastly different levels of maturity.. The The Levels Levels The Level is the final measure for each parameter as well as for each process. In a way, this becomes the output of the model at various stages: i) Each Major process ((Payroll, Accounting, Accounts Payable etc.,), ii) Each Mega Process or Function (Finance, HR, IT, SCM) and finally iii) organization as a whole for Multiple Functions - by aggregating the assessments. The level also clarifies or reinforces the cross section of assessment between parameters and the current state. This level represents the most basic or ad hoc processes. At this level success often depends upon the limited understanding or whims of the employees in the organization. The process flows and risks lies in peoples’ minds. The process does not even have proper documentation and depends upon the instincts of the individuals. Even the leaders may follow an instructional way of managing the process or have personal preferences to drive the process. At this level, services may just happen, but often exceed timelines and may involve huge re-work. Both repeatability as well as reproducibility are often a challenge. At this level services are planned, performed, measured, and controlled. Limited technology is used. However process and procedures may vary between units, departments or even teams. Requirements, processes, work products, and services are managed with specified delivery points in mind. Processes are reviewed and revised as needed, and they are reviewed and controlled to meet requirements, standards, and objectives. Generally, processes are not extended beyond a department or business unit, and there is often little or no executive support. The Level 2 itself is a big jump and it is important to refer to the specifics for this level to decide the right level and not go by gut-based comparative performance between the past and current. This level is set against benchmarks and not against past performance. At this level processes are deployed universally, though are fragmented. The focus at this level is ‘deployment’ i.e. process flow across functions/ departments. Interlinking of process is weak though processes are defined, understood, and documented. Standards and tasks stem from departmental output requirements and are performed consistently across the organization. Variations established guidelines. Level Level 4 4 – – Consistent Consistent Deployment Deployment Level Level 1 1 – – Person Person Dependent Dependent Level Level 5 5 – – Continuous Continuous Value Value Delivery Delivery Level Level 2 2 – – Process Process Oriented Oriented technological executes them. Such Level Level 3 3 – – Fragmented Fragmented Deployment Deployment are allowed per PROCESS EDGE | AUGUST 2018 | 18 www.sharedservicesforum.in

21. The The basic basic structure structure of of the the model model is is given given below below: : PROCESS EDGE | AUGUST 2018 | 19 www.sharedservicesforum.in

22. Deployment Deployment of of the The Process Maturity Model of SSF has been deployed in several overseas and Indian environments as well as GIC and India SSC situations. It has provided great results in these multiple scenarios and hence, has successfully passed the test of deployment. Sample Sample 1 1 illustrates PMM assessment for a services organization depicting the process maturity levels of its finance function - that has 7 major processes. the Model Model 3 Operational Governance & Leadership 3 3 3 Level of Automation 2.5 2.5 3 Process Robustness & Stability 2.5 3 3 Process Metrics 3 2 3.5 Process Control & Risk Management 2.5 3.5 1 Process Documentation 2 1 0 1 2 3 4 5 Sample 2 IT HR Finance Sample Sample assessment for the organization on the six parameters for the 3 mega processes in scope (as in Sample 2 – Finance, HR and IT). This view gives an overall summary of the observations guiding the assessment and also the priority wise actions to move up the value delivery. 3 3 illustrates the consolidated PMM Operational Governance &… 3.0 Level of Automation 2.7 Process Robustness & Stability 2.8 Process Metrics 2.7 Process Control & Risk Management 3.2 Sample 1 Process Documentation 1.3 Sample Sample assessment for the organization depicting three functions - Finance, HR and IT of which the Finance function is a consolidated view of Sample 1 2 2 illustrates the consolidated PMM 0.0 1.0 2.0 3.0 4.0 5.0 Sample 3 Consolidated Score PROCESS EDGE | AUGUST 2018 | 20 www.sharedservicesforum.in

23. Challenges Challenges & & Requirements Requirements As in all assessment tools, this model has to be watched out for a few specific requirements. Not all of them need be a challenge for all.... Benefits Benefits to to Corporates Organizations stand to benefit greatly by undertaking this journey of process maturity assessment. Some of the possible benefits are: 1. 1. Performance Performance measurement measurement – – outcome Very often companies go through a series of processes without having a clear sense on how the processes impact the real business of the company. The PMM assessment assurance is a methodology that helps the company trace a direct linkage between the process and the business of the company. This act by itself is first step to gauge the relative importance of the process in the functioning of the company. 2. 2. Process Process improvement improvement. . As processes go through the various levels of PMM, there is an automatic affinity to continuously improve performance to reach optimum levels of efficiency. 3. 3. Benchmarking Benchmarking. . Comparison is possible between different processes of the same or organization or between organizations by bringing them to a common level of understanding and assessment. 4. 4. Consistency Consistency. . This ensures that the desired results are achieved for each instance after the other with all exceptions built in, even after they have been repeated or reproduced. Consistency is not automatic. It needs robust processes controls to exist. PMM recognizes such processes and assures consistency. 5. 5. Customer Customer service service. Great performance need to mean great customer satisfaction. Whether or not customer satisfaction is a defined SLA of a process, PMM forces the focus on it. PMM places a high degree of importance on this ultimate acid-test of service. 6. 6. Risk Risk. . Assessing the extent of exposure and readiness with mitigation strategies could well be the key difference between a well thought out processes and a poorly designed one. 7. 7. Cost Cost. . Each process control comes at a cost. This parameter counter balances the relative benefits of tightening controls and other value added processes. 8. 8. Employee Employee engagement engagement. . Organizations cannot work in silos or in isolation. The workforce is an equal stakeholder in the success or otherwise of its processes. Employees with higher levels of engagements with visibility on how their efforts impact the ultimate business goals tend to do well for themselves and the company. PMM helps leaders keep a keen eye on how to do just that. 9. 9. Evaluate Evaluate capabilities capabilities of of suppliers quality of output is determined by the quality of input. PMM can be used as a measurement tool to assess and document quality of the input data – whether from an internal source or external. Corporates outcome impact impact. . Individual assessment. Though the model attempts to create a numerical level by assigning thresholds, assessment on the ground is subject to individual ideologies. Assessors need to be adept and trained to evaluate the condition of each parameter so as to not fall into the trap of “falling between the chairs” Interdepartmental or intercorporate benchmarking may not be possible or easy due to the inherent differences in the businesses and business processes. In case of multiple process variants, it might be difficult to establish a common process which is best for the organization as a whole. Rapid organic growth and acquisitions can result in multiple processes at any given moment of time. It may not be prudent to streamline processes as such times. Evaluation should be carried out for the entire organisation and all process, to make the best use of the model. The basic corporate leadership principles of strategic alignment, governance, and change management should be in place. Conclusion Conclusion SSF’s Process Maturity Model is designed to support the services industry and enterprise functions of all industries to better understand the individual elements that helps achieve a more rigorous, structured, and controlled process program. In addition it creates a focus on high-risk or large impending change. Additionally, organizations are likely to have visibility into improvement initiatives to avoid conflicts, define approaches, and to identify and recommend improvements. In the cut-throat world of business today, following a defined and structured model as the PMM could well be the competitive advantage for the company. PE common improvement suppliers. . Often the PROCESS EDGE | AUGUST 2018 | 21 www.sharedservicesforum.in

24. Calling the Attention of Financial Gatekeepers THE GOOD AND BAD OF CRYPTOCURRENCIES  VAISHALI NAROOLA C Cryptocurrencies are thought of as encrypted decentralized digital equivalent of paper currency, i.e. it can be characterized as a set of entries in a database, which no one can change without fulfilling specific conditions. This is very similar to a banking ledger system. Cryptocurrencies attribute a price accounted to them but the intrinsic value is not universally seen. As a contrast, the value of a federal legal tender such as United States dollar is not something about which anyone needs to be convinced. It is the lynchpin of all international trade. transactions to international trade finance and even to non-traditional sectors, such as aid finance. Adoption of cryptocurrencies will rise if it is backed by a transparent asset, such as fiat currency. This would amount to the digitization of real world assets, which can aid and transform many forms of financial transactions conducted around the world. ‘ ‘ There business use cases that a company can leverage cryptocurrency blockchain technology, which technology cryptocurrency. A few are listed below: are several Cryptocurrencies have some legitimate uses. These uses could span from distributed trust to authentication certification to confirmation of transactions to international trade finance and even to non-traditional sectors, such as aid finance. using or is the behind ’ ’ Any Any process, process, wherein multiple parties have to authenticate a transaction. Any Any product, product, whose authenticity needs to be verified using a ‘multivariate’ approach (an approach to find patterns and relationships between several variables simultaneously)., such as for medicines. Any Any financial financial innovation, instruments, as long as the absolute native asset has some intrinsic value. For example, a company could issue cryptocurrency to allow it certain rights in company transactions or decisions. These could be backed by the company stock, which is eventually backed by equity in the company, which eventually translates into a fiat currency depending on the company’s market cap on a given day. innovation, which uses derivative Cryptocurrency Cryptocurrency Uses Regardless of the limited equivalency to a real currency, quite a few countries and companies are planning to release their cryptocurrency. Recently, partnership with Stronghold, which is the first digital currency backed by US dollars traded on the Stellar Blockchain Network. Cryptocurrencies have some legitimate uses. These uses could span from authentication certification to confirmation of Uses and and Use Use Cases Cases Any Any process process that consensus consensus threshold decision to put an issue to be brought up to a vote in a company’s annual stock holder meeting. that can threshold has can be has been be confirmed confirmed only been met, met, such as a only if if a a own version announced of its IBM A A smart smart contract contract is a digital protocol intended to digitally facilitate, verify, or enforce the contract implementation implementation. . A smart distributed trust to PROCESS EDGE | AUGUST 2018 | 22 www.sharedservicesforum.in

25. negotiation or performance and eventual disposition of a contract. Legal and notary services would see tremendous use for these smart contracts. For For creating creating a a system system of of trusted It is the process by which the time of creation and the time of modification of a document can be secured. Integrity of the timestamp is key for the system to not be compromised. The use cases are immense for the legal and financial industries, amongst others. ‘ ‘ the world of cryptocurrencies is very much evolving, companies who choose to roll out or in any 6) If trading is allowed, detail the policies by which a trade is considered legal and executable 7) Have an approach to manage volatility, which would include capital buffers, trade restrictions, liquidity guarantees, etc., since cryptocurrency transactions can tend to cause large fluctuations and variability trusted timestamping timestamping. And, since we live in a world where good and evil meet often, we would be amiss if we did not focus on the unintended cryptocurrency. As the world of cryptocurrencies is very much evolving, companies who choose to roll out or in any manner interact with this technology, need to be careful so as not to run afoul of any regulations and legalities… Cryptocurrency Cryptocurrency Protocols Protocols As use of ’ ’ The The Dark Dark side It is quite evident that the dark elements have found cryptocurrencies to be a convenient way to finance their activities. This comes as no surprise to the financial gatekeepers. The incentive to develop cryptocurrencies as an alternate way of financing and hence avoiding the international financial system can be easily understood. This point is well demonstrated by the roll out of Petro, Venezuela’s state backed cryptocurrency. It solicited help from another sanctioned nation, Russia to develop this currency via two state owned companies. Venezuela’s government institutions were mandated to start accepting Petro as legal tender. International acceptance has not been easy but that has not deterred Venezuela from preparing to launch a second cryptocurrency backed by the country’s gold reserves. An analogy might serve to understand this situation better. One country creates a new currency based on a set of Lego blocks that their citizenry has collected over the years. Lego blocks are not an internationally traded product or convertible into currency. side of of Cryptocurrency Cryptocurrency manner interact with this technology, need to be careful so as not to run afoul of any regulations and legalities imposed by the governing institutions under which these companies operate. The following list should only be viewed as a starting point and not a comprehensive list of measures that would complete the cryptocurrency protocols at any company. The company should: 1) Explain in layman’s terms the use case(s), for which the cryptocurrency is intended. This is by far the first and foremost thing that the company would be well advised to do 2) List all jurisdictions (domestic and foreign) from which it accepts customers and transactions 3) Understand the relevant regulations applicable in those jurisdictions, such as General Data Protection Regulation and other relevant regulations. Cryptocurrency could serve both as a breach of these regulations as well as a solution to comply with these regulations. The company should understand the end goals of such regulations and align their cryptocurrency and blockchain use cases so as to not risk noncompliance 4) Detail the linkage between the fiat currency and any derivate instrument created by way of cryptocurrency 5) Specify the methodology and rates at which exchanges occur, in case exchanges are permitted from one cryptocurrency to another service or instrument or an eventual fiat currency Image Courtesy jaysbrickblog.com PROCESS EDGE | AUGUST 2018 | 23 www.sharedservicesforum.in

26. The government of this country however, mandates its institutions to accept this Lego blocks based currency, for which the pricing and currency generation mechanism is random. Next it starts to use this currency to purchase sanctioned items, such as iron, or cement or weapons. Tools Tools for for Economic Economic Sanctions Sanctions Economic sanctions are a powerful foreign policy tool. However, in the age of cryptocurrencies, economic sanctions would have to work a little differently to still be as effective. A similar framework including education, deterrence, detection, and enforcement against financial crime, which applies to fiat currency would have to be applied when dealing with cryptocurrencies to apply economic sanctions. Cryptocurrencies eventually need to be converted into real goods. Economic sanctions can target those specific points of conversion. cryptocurrencies need to go past the country of origin to complete international transactions, their raison d'être. ‘ ‘ of course not a complete list but the intent is to generate conversation and fortify the white hats. Provide clear guidance for rating websites, such as ICOindex.com, which tracks initial coin offerings of cryptocurrencies, for when to label an ICO a scam Geographically fencing certain transactions based on suspicion, or at least having delay mechanisms in place so that such transactions can be investigated. Build and proactively apply signature patterns to identify rogue transactions, based on variables, such as originating country, country of support, transaction antecedents, underlying asset, identification of various levels of ownership, accompanying collateral, other logistical information, etc. Sanction or use other punitive measures against rogue entities or nations supporting the country originating bogus cryptocurrencies. Link suspicious transactions for their completion and confirmation to logistical details such as, shipping routes, distribution parties, counter parties, insurance providers, etc. Also, these To To Conclude Conclude As we know, fiat money is currency government declared to be legal tender, but it is not backed by a physical commodity. The value of Sanctioning entities may have the following tools at their disposal. This is The argument that a fiat global currency could also be used by criminals serves only as an admission that regulation is much needed in the crypto world to keep the world from becoming a lawless jungle. that a has ’ ’ fiat money is derived from the relationship between supply and demand rather than the value of the material from which the money is made. The argument that a fiat global currency could also be used by criminals serves only as an admission that regulation is much needed in the crypto world to keep the world from becoming a lawless jungle. Criminal laws and financial laws are interlinked such that a functioning society depends on these laws. Nonetheless, anti-crime enforcement bodies will continue to have to make strides in the areas of identification, anti-money laundering, suspicious activity reporting, commodity threading, transaction verification, counter party risk, dark web research, and others. PE Sanction supporting crypto exchanges and trading platforms on which the sanctioned nation’s cryptocurrency trades Link internationally recognized cryptocurrencies to the release of any aid benefit. Co-opt a legitimate investigative entity to become part of the consensus mechanism for these rogue cryptocurrencies and blockchain transactions, thereby not letting the transaction reach a consensus threshold, or at least having the ability to detect the transaction ABOUT THE AUTHOR ABOUT THE AUTHOR Vaishali Vaishali has Services, Services, Technology Technology and from from Due Due Diligence, Diligence, Merger She She works works with with cross Strategic Strategic Buyers Buyers execute She She has has led led business business transformation American American Express Express and and Apple She She holds holds an an MBA MBA in in International Graduate Graduate Certificate Certificate in in Technology certified certified Information Information Systems has over over sixteen sixteen years and Utilities/ Utilities/ Renewable Merger Integration, Integration, Digital cross functional functional teams execute on on deals deals. . years of of work work experience experience in in Strategy Renewable Energy Energy industries Digital Transformation, Transformation, and teams of of bankers bankers and and Operations Operations focusing She has has a a diverse and Complex Complex Program and lawyers lawyers to to assist assist Private Strategy and industries. . She focusing on diverse skill Program Management Management. . Private Equity Equity clients on Financial Financial skill set set ranging ranging clients and and transformation and Apple. . and value value creation creation projects projects for for Wells Wells Fargo, Fargo, Bank Bank of of America, America, International Affairs Technology Management Management from Systems Security Security Professional Affairs from from Thunderbird Thunderbird School from La La Trobe Professional (CISSP) (CISSP). . School of of Global Trobe University, University, Australia Global Management Management and Australia. . She and a a also a a She is is also PROCESS EDGE | AUGUST 2018 | 24 www.sharedservicesforum.in

27. Cognitive Automation for Operational Risk Management AI BASED PROCESS SURVEILLANCE IN TRADE LIFECYCLE  NEERAJ PARASHAR I In recent times, leading global banks have drawn attention towards trading patterns where an individual employee has the ability of putting the financial position of the banks or trading houses at risk. This is commonly referred to as Rogue Trading. Rogue trading has largely been possible due to limited awareness towards risk-based vulnerable organization practices, paving an easy way towards such outcomes. With likelihood of cybercrime and ransomware, there is a huge risk involved where any single act of such practice can convert the capitalization of any bank or financial institution to a significantly low level and impose existential threats in terms of direct financial exposure, loss of customer base or huge penalties. The risk of rogue trading can be effectively mitigated mitigated early on by warning signals flagged off by AI based cognitive RPA that helps to prevent occurrence of such scenarios from the system. The table below specifies the top financial losses which were caused directly by rogue trading between the period 1992 and 2011. The case of Nick Leeson requires special mention which led to Baring Bank’s eventual insolvency. He brought down the 233 year old Barings Bank to a third of its capitalization. Its losses on unauthorized investments in index futures contracts were sufficient to bankrupt the bank in 1995. Through a combination of poor judgement on his part, increasingly large initial profits, lack of oversight by the management, a naïve regulatory environment, and an unforeseen outside event - the Kobe earthquake, Leeson incurred a US$1.3 billion loss that bankrupted the centuries old financial institution. Risk Risk of of Rogue In the world of data protection with mandatory compliance of GDPR like regulations, organizations vulnerable to unauthorized access from inside, than external data breaches. ’ ’ frequency frequency. . The operational dangers inherent in the world of securities and derivatives trading have risen dramatically in last 20 years with operations becoming digital. This new threat is a result of the advent of high-frequency, ‘blackbox’ trading strategies, which are fully automated but not fully optimized, for the low latency exchange markets. In the exceed limits, and finding prices moving against them, extend positions. The build-up of risk and losses would force the individuals to cover up and misrepresent activities. Such hidden brought to light, have toppled banks, and led to resignations scenarios and ‘ ‘ He brought down the 233 year old Barings Bank to a third of its capitalization. Incurring losses of US$1.3 billion from unauthorized investments in index futures contracts were sufficient to bankrupt this centuries old financial institution in 1995. Rogue Trading Trading accountability are more Rogue Rogue trading stake stake and and prone trading is is one prone to to high one such high risk, such scenario scenario which risk, high high tension which is is high tension and and high high high past, traders would their unauthorized positions, when PROCESS EDGE | AUGUST 2018 | 25 www.sharedservicesforum.in

28. whose trading is highly computerized, the US regulators decided to explore whether algorithms that cause disruption in markets should be treated as if they were rogue traders. of senior executives with otherwise stellar records. In the future, banks, or worse — clearing houses — could be brought down by high-frequency trading software building massive positions in unforeseen and difficult to predict ways. ‘ ‘ Regulators are eager to develop methods assigning responsibility when trading technology goes awry. Overall, the computerization financial markets improved transparency …hidden positions, when brought to light, have toppled banks, and led to resignations of senior executives with otherwise stellar records. for The black box rogue trading scandal of the future will have much in common with the rogue trader scandals of the past. ’ ’ of has and efficiency, and reduced investors’ costs. To avoid politically motivated bans on new trading technologies, leaders in the financial markets industry must define when high-frequency or algorithmic trading crosses the line into being disruptive to markets, and who is responsible when it happens. Finding the answers to these concerns is now perhaps the most critical element in ensuring the safety of financial systems in the future. With a two-pronged approach of system audit and monitoring transactional data, AI-based cognitive RPA solutions via predictive model and proactive actions not only provide early warnings but also execute them automatically. The key benefits for the organization by installing such solutions are:  Stakeholder Value  Corporate Governance  Risk and Compliance  Early Warning Signals  Prevention of Financial loss  System Robustness Digital Digital Capability Capability for for Risk Risk Management Management As per current circumstances, Blockchain, IoT and RPA are taking over human input based governance. There is very little room left in the process or system not monitored closely in an integrated architecture. To have such a robust capability, organizations need to have a clear view of not only their enterprise architecture i.e. SOA (Service Oriented Architecture) but also customer facing BPM platforms. There is a distinct possibility that agile enterprise changes may leave some risk controls vulnerabilities. In light of such situations, AI-based capability is not only vital but imperative to have. Business integration services are putting a ‘method in the madness’ by framing agreements for their partners and vendors. However, a huge area in operational environment is left unattended. In the digital world, old methods/ practices are not going to be replicated. With disruptive technologies and dynamic business environment, structured thinking based on concepts and lots of imagination is required to seek the necessary capability to meet internal and external threats and attacks. The actions of those individuals dubbed as ‘rogue traders’ have fascinated and, to an extent, invoked a degree of awe and admiration from those not directly affected by their machinations. These individuals circumvented controls, exceeded limits, and carried on by misrepresenting their holdings and risk. Unfortunately, in the high-stakes, high-risk, high- tension world in which traders find themselves, the drive for success can overcome ethics. These individuals cover losses and deceive their colleagues, often in clever and ingenious ways. After the blow-up, it usually turns out that rogue traders have exploited multiple weaknesses in their firms’ procedures and systems. Keep in mind as well, that in most cases, investigations reveal that a number of managers were aware of the profits (which later, of course, turn out to be fictitious), and therefore the risks that were being taken. Key Key Questions Questions for for Risk Risk Management Management In the digital ecosystem, there are many automated activities, which require regular reviews and governance to reduce risk exposure. Some of the important questions to be asked are listed below: Are banks running ‘stresstests’ on their high frequency trading programs? Could errors in price feeds from the many sources of market data trigger a flood of trades before the aberration is detected? Could detailed knowledge of a large bank’s algo trading rules be exploited by an external trader who sets off the market conditions that lead the algo to ‘misbehave’ or ‘gorogue’? Are regulatory cross-market ‘circuitbreakers’ and trading halts required, or can natural price discovery be retained in today’s low-latency markets? open for future Concerns around the role of these algorithms skyrocketed after the so-called ‘flashcrash’ of 6th May 2010 that caused the Dow Jones Industrial Average to plunge nearly 1,000 points in less than a half hour, with nearly a trillion dollars in stock market value evaporating — and then (mysteriously) reappearing. When it was later discovered that 68 per cent of the questionable trades that ended up being cancelled involved Exchange-Traded Funds (ETFs), PROCESS EDGE | AUGUST 2018 | 26 www.sharedservicesforum.in

29. AI AI- -Based Based Surveillance Surveillance Mechanism Broadly the surveillance mechanism can be developed around two broad major dimensions: 1. Core Process Based Scenario Governance; and 2. Data Driven Discrepancies Both these dimensions are elaborated below: Core Process Based Scenario Governance (or System Audit Framework & Business Intelligence). Here, user stories and remedial actions need to be configured on the AI platforms as scenarios to put a robust and scalable governance mechanism in place. The process and customer journey scenarios can be broadly classified into two categories: 1) trading related scenarios where transaction level governance is required, and 2) enterprise security and hygiene, which requires significant specific security standards and framework based approach for sustained and consistent operational excellence. Mechanism Case Case Scenario Scenario Recently, a leading BPO company conducted a risk assessment exercise of many of its clients to identify vulnerable scenarios at client locations. Based on the learning captured, an AI-based solution was designed to mitigate all such scenarios in the future. While assessing the Trade to Settlement process on a client, the BPO company observed that there are huge discrepancies in the system with respect to people, processes and technology. Based on preliminary suggestions, the client noted the hugely vulnerable circumstances of their processes The client decided to leverage the assessment to not only determine the loopholes but at the same time, take immediate preventive and corrective actions. AI AI Based Based Deep Deep Learning Learning Framework Framework Based on various scenarios, a pattern discovery analysis has been designed through multivariate and big data analytics that will identify the drivers (independent factors) of instances and frame a predictive model for early warning signals and establish robustness of the system. The key areas where the below methodology helped are:  Access Control Issues  Technology Implementation in mapping business rules to accounting books  Reconciliation Issues respect to open exceptions  No ownership accountability against trades  Discrepancy in Static and Reference Data such Trade Life Cycle Risk Recognition Aspects: Major Scenarios with and failed The two categories as above have their own specific elements but it is very essential to note that these two categories are interdependent, making the scenario complex, demanding digital capability to track and monitor risks from rogue trading. In the next table, details of the major factors are mentioned, in terms of developing scenarios and incorporating controls in front, middle and back office. PROCESS EDGE | AUGUST 2018 | 27 www.sharedservicesforum.in

30. Front Office Middle Office Back Office  Access of booking/capturing trades and settlement to same person.  Confirmations are managed manually or can be influenced.  Trade allocations to incorrect client/prop accounts.  Confirmed trades are not pre- matched within stipulated timelines/matched incorrectly.  Manual confirmation of trades.  Manual pre-matching of trades.  Manual release of trade instructions in the market .  Manual reporting, tracking and monitoring of post trade events.  Reconciliation rules not preset in systems.   Exceptions during settlement are incorrectly booked/settled.  Failed trades are not reported on time/reported incorrectly.  Failed trades are allocated to incorrect age/nominal buckets  Accounting entries booked to incorrect journals Purpose of Trading based on pattern recognition. Dealer Profile validation. Manual entry of counter party. One time vendor transactions, not in ICP master. Trading Scanner     Existence of non-live portfolios.  No-access control of S&R data.  No call back to confirm static and reference data.  No monitoring of trade patterns for inter-company trades  All Static Data is not aligned/ implemented to accounting events.  All source applications are not aligned to FIs.  All daily exceptions are not automatically flagged on time.  All resolved exceptions are do not have audit trail.  Reconciliation and fail reports are not automated. Technology Scanner  No daily recon by system of all transactions booked by FO and closure of open issues.  No ownerships of accountability issues  No job swapping and risk audits pertain to operational practices and processes.  All daily exceptions are not escalated or channelled to respective business owners.  Root cause analysis not done on daily exceptions.  All transactions are not tracked in book keeping system/ledgers  Incorrect flow in the Inter- system reconciliation.  Incorrect posting of journals leads to incorrect balances in the sub-account leading to contra bookings in the suspense and the wash accounts. Finance Scanner  Access control issue of call accounts & Bank Accounts.  No clarity on creating, editing and deleting call accounts. Access Control Scanner   Manual adjustment of accounts and database  Back office personnel having access to trade booking / amendment systems. Traders/Sales Desks having access to book keeping and settlement systems.  No Audit trail of client requests.  No tracking of client grievances.  No system of clearing client accounts on periodic basis.  No formal preset channel for client communication  Client sensitive information sent to incorrect parties.  Absence of formal communication for confirmation and settlement for all trades.  No reverse recon for each client data via automatic mechanism. Client Scanner  Movement of people from middle office and back office.  No Tracking of financial impact in their dealings.  No audit trail of employee access levels and internal account details.  No planned rotation of people  Existence of non-live employees in the system.  Absence of external audit practices or strong internal audit. Compliance Scanner Early Warning Signals Scanner  No Dash boarding system  Management of swift cost and offline trade separately.    No Dash boarding system around critical parameters like Ratios , Performance and Pattern. No Dash boarding system Recon between order book and trade book across applications Business Intelligence Scanner  Movement of people from middle office and back office.  No Tracking of financial impact in their dealings.  Absence of trading pattern recognition software  No strong follow up and closure  Absence of analytics engine around defined business rules.  No strong follow up and closure  Separation of official duties.  Conflict of interest.  No analytics of data available in system  No strong follow up and closure PROCESS EDGE | AUGUST 2018 | 28 www.sharedservicesforum.in

31.  Ensuring integrity, which is the key to a good trading system. This means all trade accounting data consistent, and can be verified easily through reconciliation parties (e.g., client trade confirmations, clearing, etc.) In summary, firms must maintain a robust control environment, allow for audits, limit access to key functions to specified users, and be able to reconcile with other internal and external data. Way Way Forward Forward for for Digital Digital Readiness The AI based surveillance mechanism and framework leverages capabilities of the organization and offers a robust and scalable framework where data driven and culture building practices provide a holistic environment that leads to a secure framework and mitigates operational risk, especially led by rogue trading and other off trading practices. Putting a structured framework works as a significantly effective deterrent against ongoing cyber and internal attacks and compromising positions for the organizations. Since this is a dynamic and never ending process, it is essential that organizations should align dedicated teams on research and analysis of other possible scenarios and enrich surveillance index organically and inorganically. There is also a need to view actions taken by RPA- led engine and review the performance in pre and post implementation conditions. Assessment of risk requires innovative ways of measuring risk - be it interviews, suggestion system, floor governance and secondary data inputs which is from the qualitative point of view and not covered in the present way of working. Big data based analysis covering both unstructured and structured data offers intelligent monitoring of transactions and defined process which provide an opportunity to install early warning signals, lead indicators, caveats, advisories to seek vulnerable tendencies. Benchmarking and digital performance management standards too need to be developed in this space, which may also prove useful in leveraging digital capability for business performance. PE Data Data Driven Driven Discrepancies Discrepancies (or These are descriptive, diagnostic, predictive and prescriptive analytics via actionable insights, KPI reports and models/patterns. (or Data Data Driven Driven Actionable Actionable Insights) Insights): : are accurate and Off-Track Trading Strategies – Surveillance Mechanism with external Readiness all the digital Core Core Preventive Preventive Measures The major rogue trading cases discussed above were all avoidable through basic, general management governance and review. There are a few immutable principles in the control of trading operations, but management must enforce them rigorously and continuously with no exceptions. The four core principles for avoiding rogue trading disasters are as follows:  Separating front/middle/back office activities and processes. Segregation of duties ensures traders cannot interfere with the processing and reporting of their transactions  Limiting access to trading, risk control and settlement systems to separate functional areas completely and preventing any individual from having access to more than one area  Using independent, outside pricing sources for mark-to-market valuing of positions. It’s easy to value a bank’s position in IBM shares, but many traded instruments do not have an easily obtainable market price. Allowing internal staff to enter price estimates for profit and loss calculations opens the firm to deception Measures ABOUT THE AUTHOR ABOUT THE AUTHOR Neeraj Neeraj Parashar Parashar is is Practice Tech Tech Mahindra, Mahindra, and Transformation Transformation (where (Information (Information Systems Systems and Sigma Sigma MBB, MBB, Lean Lean Master, Software Software Engineering) Engineering) of of Carnegie in in consulting consulting (operational, (operational, architecture based based organization organization excellence domains domains of of telecom, telecom, banking, in in RSA, RSA, Singapore, Singapore, India, customers customers not not only only in in seeking strategic strategic capabilities capabilities. . Practice Head and has has also also worked (where he he has and Marketing) Marketing) from Master, PMP, PMP, CIO Carnegie University architecture and excellence projects banking, financial financial services India, UK, UK, EU seeking financial Head of of BFS, worked as has written written digital BFS, Global Global Risk as Global Global DPO digital performance performance management from IMS, IMS, Indore, Indore, M M. .Phil CIO Said Said- -Garter Garter Certified Certified Professional University of of Pittsburgh, Pittsburgh, USA and advisory) advisory) and projects i i. .e e. . focusing focusing IT IT and services and and insurance insurance. . He EU and and US US. . The The solutions solutions developed financial impacts impacts but but also Risk & & Compliance, Compliance, Digital DPO for for TechM TechM. . He management standards), Phil in in Economics, Economics, Certified Professional and USA. . With With over and managing managing delivery and business business outcomes He has has managed developed by also in in effectively effectively deploying Digital and He is is pursuing pursuing PhD standards), and Certified DPO, and an an alumnus alumnus (Diploma over 18 18 years years of of experience delivery of of Digital Digital and outcomes especially especially in in the managed client client engagements by Neeraj Neeraj have have benefited deploying digital digital business and Design Design Lab PhD in in Digital and MBA Lab for Digital MBA DPO, Six (Diploma in in experience and RPA for Six RPA the engagements benefited business PROCESS EDGE | AUGUST 2018 | 29 www.sharedservicesforum.in

32. SSF Excellence Awards, Recognition and Felicitations “COMPANIES OF EXCELLENCE GO THE EXTRA MILE TO ACHIEVE WHAT'S DISTINCT AND VALUABLE.”  A CURTAIN RAISER Champions do not become champions when they win the event, but in the hours, weeks, months and years they spend preparing for it. The victorious performance itself is merely the demonstration of their championship character. The time is now ripe for Excellence Awards & Recognition to those who have delivered Business Imperatives using the power of Process Discipline. With this intent, Shared Services Forum, in collaboration with its Knowledge Partner RvaluE , has instituted Shared Services Excellence Awards, Recognition & Felicitations. These Awards have been established to honor, recognize and promote Process Management and Transformative Strategies by Shared Services demonstrating winning practices. These awards are designed to recognize contributions by Companies & Individuals that are broadly comparable. These are poised to become the benchmark for Indian organizations to adopt Shared Services & BPM Strategy. AWARDS, RECOGNITION & FELICITATIONS The Shared Services Excellence Awards are designed to recognize contributions by Companies and Individuals/ Professionals that are broadly comparable. With this objective,the year 2018 will have the following categories for: EXCELLENCE AWARDS  Shared Services in India/ Overseas: Servicing for any of the Service Functions (private or public sector), such as Finance & Accounting (F&A), Human Resource (HR), Supply Chain Management, Operations, Customer Life Cycle Management, Information Technology Services  Effective Business Process Transformation – Delivered Business Impact/ Achieved Business Excellence by any of the following:  Leveraging Process Discipline Leading to Process Excellence/ Innovation in any of the Service Functions  Technology Transformation or Digitization in any of the Service Functions  Deploying Innovative People Practices (such as Organizational Talent Management Initiatives, including Innovative Employee Learning and Development Initiatives) resulting into a Business Impact  Moving up the Process Value Chain  Exemplary Customer Experience Management The above Awards will be for two separate sub-categories:  Global In-House Centers  Corporations and Shared Services in India  Realizing Business Value by centralized function spin-off/ Unlocking the Value of Business Process Management through a successful spin-off  Effective Business Process Transformation for a Client by IT Services/ ITeS Provider, presenting a Client Case Study demonstrating value delivery RECOGNITION Successful Launch of Business Process Consolidation/ Shared Services Strategy by Companies/ Institutions in India through Captive or Outsourced Shared Services FELICITATIONS Felicitating Leaders/ Achievers to recognize and honor stellar contributions by Distinguished Individuals who are key leaders to build the Global Shared Services & Business Process Transformation space at the Industry as well as at the Company level –T. Alan Armstrong PROCESS EDGE | AUGUST 2018 | 30 www.sharedservicesforum.in

33. Shared Services Forum (SSF) with RvaluE Consulting as knowledge partner has conceptualized and has been holding the annual BPM & Shared Services Conclave for six consecutive years now. The key objectives of this event are to capture, recognize and disseminate awareness/ impact of Business Process Management (BPM) by Global Indian Organizations through Shared Services, both captive and hybrid, thereby fully leveraging the best practices from global shared services and off- shoring operations. The 2018 Conclave aims to bring specific focus of the industry towards the role of the digital disruption on business process practices to counter the changing world and achieve enhanced business outcomes, thus fully leveraging the best practices from global shared services and off-shoring operations. Past Conclave Events (2011-2017) – A Snapshot The journey of SSF began in 2011 with the purpose of sharing the knowledge which was resident with a few leaders of the shared services and outsourcing industry. This journey so far has been extremely successful with its focus progressively widening from Business Process Consolidation (BPC) to a more holistic Business Process Management (BPM). Shared Services Forum has progressively become the Forum of Interactive Excellence in India for Shared Services and Business Processes. The participants at the SSF platforms/ events/ publications, take back not only a myriad of experiences with respect to strategic execution of shared services strategy, but also connections and awards that bring in ‘Culture’ and ‘Value’ to the Industry. WINNERS OF THE 2017 BPM & SHARED SERVICES EXCELLENCE AWARDS PROCESS EDGE | AUGUST 2018 | 31 www.sharedservicesforum.in

34. Awards & Recognition for Excellence in Shared Services (2011-2017) The Annual Conclave serves as the platform for recognizing and awarding Organizational Achievements and Professional Excellence, thus setting benchmarks, for Indian organizations to adopt BPM & Shared Services Strategy. These awards and recognitions have been conferred on the following organizations for their exemplary achievements: Conclave Year Organizations Awarded/ Recognized nuFuture Digital India and Hindustan Unilever Limited Bharti Airtel Ltd, Atlas Documentary Facilitators Company (ADFC) Pvt Ltd (An Associate of HDFC), ICICI Prudential Life Insurance Company Ltd, Dr Reddy's Laboratories Ltd Tata Motors Ltd, Adani Enterprises Ltd, ICICI Bank Ltd, ONGC Reliance Industries, Vodafone Shared Services Ltd, Dabur India Ltd, Brandix Mercury Asia (Sri Lanka), ZEE Media Corporation Ltd, VE Commercial Vehicles Ltd, AHL Business Solutions Limited Cipla Ltd, Hindustan Unilever Ltd, Tata Motors Ltd, Infosys BPO Ltd, Piramal Enterprises, United Spirits Ltd, and SRF Ltd Mahindra Integrated Business Services Pvt Ltd (Mahindra & Mahindra), TATA Motors Ltd, Essel Business Excellence Services Limited (Essel Group), Dr Reddy’s Laboratories Ltd, ANZ Begaluru Hub, and Kuoni Travel Group Olam Information Services Pvt Limited, Essel Business Excellence Services Limited (Essel Group), syngenta Services Pvt Limited, Principal Global Services Limited, Vodafone Shared Services India, Unilver Industries Pvt Limited, Hindustan Coca-Cola Beverages Pvt Limited, Intelenet Global Services, and Raymond Lifestyle Business 2011 2012 2013 2014 2015 2016 2017 Winning Moments Captured… TATA MOTORS DR REDDY’S LABORATORIES SYNGENTA SERVICES PRINCIPAL GLOBAL SERVICES LIMITED ANZ Bengaluru Hub OLAM INFORMATION SERVICES HINDUSTAN COCA COLA BEVERAGES UNILEVER INDUSTRIES RAYMOND – LIFESTYLE BUSINESS was given Recognition for Effective Shared Services Implementation In India ESSEL BUSINESS EXCELLENCE SERVICES MAHINDRA INTEGRATED BUSINESS SERVICES PROCESS EDGE | AUGUST 2018 | 32 www.sharedservicesforum.in

35. THE HALL OF FAME – SSF Felicitations of Pioneering Leaders in Global India Year 2014 marked a tradition of felicitating BPM Industry Leaders with Pioneering Leader Awards to honor their stellar contributions in the BPM space at the Industry level as well as at the Organizational level. PRIYAN FERNANDO 2017 ‘PIONEERING BUSINESS LEADER’ FOR GLOBAL SHARED SERVICES RAKESH KUMAR GUPTA BVR MOHAN REDDY 2016 2015 ‘PIONEERING BUSINESS LEADER’ IN GLOBAL INDIA ‘PIONEERING BUSINESS LEADER’ IN GLOBAL INDIA RAMAN ROY AKHIL GUPTA 2014 2014 ‘PIONEERING ENTREPRENEURIAL LEADER’ IN GLOBAL INDIA ‘PIONEERING BUSINESS LEADER’ IN GLOBAL INDIA PROCESS EDGE | AUGUST 2018 | 33 www.sharedservicesforum.in

36. THE HALL OF FAME – SSF Felicitations of BPM Achievers in Global India In 2015, SSF initiated the ‘BPM Achiever in Global India’ Awards to felicitate achievers in the Shared Services space for CREATIVITY & LEADING ENTERPRISE-WIDE SHARED SERVICES & BPM MISSION, DELIVERING VALUE AND BUSINESS TRANSFORMATIONAL IMPACT SHYAMA BIJAPURKAR PRADEEP KAPUR 2017 2016 ‘BPM ACHIEVER’ IN GLOBAL INDIA ‘BPM ACHIEVER’ IN GLOBAL INDIA PANKAJAM SRIDEVI RAHUL SINGH 2016 ‘BPM ACHIEVER’ IN GLOBAL INDIA 2016 ‘PIONEERING BPM ACHIEVER’ IN GLOBAL INDIA K RAMESH 2015 ‘PIONEERING BPM ACHIEVER’ IN GLOBAL INDIA PROCESS EDGE | AUGUST 2018 | 34 www.sharedservicesforum.in

37. ABOUT THE ORGANISERS Shared Services Forum (SSF) SSF is a pioneering, interactive platform of Industry Veterans and Business Process Experts & Practitioners with a vision to create and disseminate knowledge for excellence in Business Process Management (BPM). We ideate and synthesize ‘best in context’ practices for successful adoption of business process in the corporate world. SSF began its journey in 2011 for the purpose of sharing of knowledge which was resident with a few leaders of the shared services and outsourcing industry. Over the years, it has built a strong network of thought leaders, experts, and change agents across all functions and several domains. In short, SSF’s mission is :  To spread awareness of Value-Delivering Transformational Strategies for effective adoption of BPM  To establish Winning Practices that result from exchange of knowledge  To acknowledge, award and showcase Organizational Achievements & Professional Excellence  To build a strong network of thought leaders, experts, practitioners and change agents 10 Pioneering Leaders & BPM Achievers Felicitated SSF has progressively become the Forum of Interactive Excellence in India for Shared Services and Business Processes. The participants at the SSF platforms – interaction events, publications, seminars, workshops, etc., take back not only a myriad of experiences with respect to strategic execution of shared services strategy, but also connections and awards that bring in ‘Culture’ and ‘Value’ to the Industry. The On-Going Journey of SSF…. 35 Organizations Awarded/ Recognized 170+ Speakers Shared their Expertise/ Experience 55+ Case Studies Presented 10 Release of SSF Publications 3 Research & Survey Reports 6 Frameworks for Building Capabilities Knowledge Partner SSF leverages the immense global and India industry experience of RvaluE in multiple domains, across many functions and in all forms of operating models. RvaluE signifies ‘Realizing Business Value’ and is a team of BPM Pioneers & Team of experienced Practitioners, Consultants, Facilitators and Coaches. RvaluE offers niche End-to-end business transformation services and solutions covering Redesign of Business Processes & Offshoring, Developing Talent & Capabilities of Individuals/ Organization, Industry Expertise for BPM strategy adoption & execution, technology and enhancements, and Innovative Solutions for Operations across Indian / Overseas Organizations, Shared Service Centres and the BPM Ecosystem. For any query related to Awards, Conclave 2018 or SSF, write to awards@sharedservicesforum.in PROCESS EDGE | AUGUST 2018 | 35 www.sharedservicesforum.in

38. A Scientific Art & An Artistic Science SIMPLIFYING BPM – THE LIGHTER SIDE OF SERIOUS BUSINESS  KRISH VENKAT A A line is a dot that went for a walk. Managing Managing processes processes This is where Process Management comes into picture. There is a ‘process’ in everything that is occurring around us, if only we learn how to ‘see’ it. From as mundane as getting ready and leaving for – Paul Klee The dot taking a predictable walk results in a straight line, which is what most readers would visualize spontaneously while reading the above................................. ‘ ‘ work every morning to readying a flight with 500+ people for take-off, there is involved, whether we are aware of it or not. But somehow, think of consciously and intensely only when it comes to anything related business. There is a ‘process’ in everything that is occurring around us, if only we learn how to ‘see’ it. From as mundane as getting ready and leaving for work every morning to readying a flight with 500+ people for take-off, there is a process involved, whether we are aware of it or not. A random walk – a walk deviating from the routine – might lead to new, creative, that could possibly change the around us. a process something something something people processes world ’ ’ to Hence ‘Business Process Management’ (BPM) seems to have acquired a unique significance. Henry Ford, Steve Jobs, Bill gates and numerous others have had the requirements of replicating their inventions and scaling their businesses up to the sky and even beyond. The way they have conquered the world, even Alexander of Macedon would envy. To achieve this, the tens of thousands of their army had to bring out outputs in the same way they had envisioned. Hence, Business Process Management assumes utmost significance. “No institution can possibly survive if it needs geniuses or supermen to manage it. The business must be organized in such a way as to be able to get along under a leadership composed of average human beings.” Peter Drucker. But, successful organizations would want to sustain their ability to add value and thus, their competitive advantage. They have to create new products and also retain the best of brains. Thus, Business Process Management must look beyond mere awareness of the processes or the robotic repetition from the manuals. BPM has to ensure sustained excellence, thereby naturally assuming the nature of an art. Continuous Line Art Continuous Line Art Courtesy: darkroastedblend.com A straight line or a drawing of a specific shape and size is formed if it is drawn in a particular way, through a ‘process’. Especially, if there is a need to replicate it many times over, there is a need for a standard process that needs to be understood, designed, agreed, tested and implemented. PROCESS EDGE | AUGUST 2018 | 36 www.sharedservicesforum.in

39. BPM BPM & & Technology Technology BPM is not just about technology. It goes way beyond technology. In fact, technology is just one part of BPM. Unless there is excellence in the business process, there is not going to be any excellence merely by using the most expensive or the most modern technology. At the same time, business and technology have become so woven together. As part of BPM, it is very rare that you talk about one excluding the other. Hence, BPM is more or less like an AR Rahman composition. It is about music. It is also about technology. You cannot exclude one from the other. But a novice using the same technology would not produce the same music that AR Rahman produces. Peter Drucker called management a liberal art and he in fact brought lessons from sociology, psychology, philosophy, culture and why, even religion into his teachings on management. BPM thus embraces art throughout. The art dimension would dominate, if an individual or a team is involved in BPM with passion, reasonable freedom, creativity and empowerment. Looking Looking Beyond Beyond the the Function Function Most professionals, especially in finance and accounting, may not be process oriented. Some of them would have understood the function well, while missing the process. BPM increases the visibility factor. A person who has a process orientation is able to see the “whole”, identifying bottlenecks and visualizing risks and enabling proactive action. Understanding the relationships and the end-to-end flow is science while improvising and adding excellence is more of an art. BPM is thus not a routine, predictable, boring job. BPM is not merely documenting what is. It is doing all things required to reach where you desire to be. In short, you design excellence. –Warren Buffett ...... ......automation automation applied will will magnify magnify the applied to to an the inefficiency inefficiency. .” ” an inefficient inefficient operation operation – Bill Gates ‘ ‘ from what “Risk “Risk comes not not knowing knowing what you’re you’re doing doing. .” ” comes from “No “No great ever ever sees sees things they they really really are he he did, did, he cease cease to to be artist artist. .” ” – Oscar Wilde great artist things as are. . If If he would be an artist as ’ ’ would an BPM is thus not a routine, predictable, boring job. BPM is not merely documenting what is. It is doing all things required to reach where you desire to be. In short, you design excellence. The The End The ease of use for the consumer - internal or external - is directly proportional to the vigorous efforts during the process design. Be it a smart phone or an app, the harder you work during the programming or the designing, the easier it would be for the end user. Thus, in BPM, while creating the process, there is a need for deliberating all relevant factors and even proactively visualizing the challenges. This will ensure that it simplifies life for the end user. Singing Singing for for t the he ‘Emperor’ ‘Emperor’ In most organizations, the employees are shown the process. They are merely expected to understand it and just keep repeating it. Once, Akbar heard the divine song of a fakir and found that it was far more melodious than that of Tansen, his most favorite court singer. He asked Tansen “Both of you have the same heavenly voice, but his song is far more superior to yours. What could be the reason?” Tansen replied “While I sing to please you, he sings for himself and his divine Master. That’s the big difference.” End User User “Design “Design is is not Design Design is is how not just how it it works just what what it it looks works. .” ” looks like like and and feels feels like like. . –Steve Jobs To a crafty batsman, the cover drive is akin to an artist’s brush stroke. But for those who study it and use it to coach others, it could be more of a science. Art is more internalized. Even for the batsman himself, when he is made aware of a flaw in his game, the science takes over in precisely measuring, for example, the extra unnecessary leg movement or the bat lift. Once he rectifies his flaw by practice, he gets back to the ‘artist’ mode and even improvises on what he just learnt. He He shifts shifts ‘doing’ ‘doing’ to to ‘being’ ‘being’. . repeated from from PROCESS EDGE | AUGUST 2018 | 37 www.sharedservicesforum.in

40. BPM, in many organizations, is very similar. The initiatives are taken to please some ‘emperor’ or the other and are executed in a highly predictable manner, dominated by a narrow vision. More often, it is too focused on the “emperor” that people even fail to point out that the emperor is not well dressed. This propensity to remain silent has sometimes even caused huge losses, including lives. The Columbia disaster of NASA is only one such example. The Board that investigated the disaster reported: "Cultural traits and detrimental to safety were allowed to develop," and cited "reliance on past success as a substitute for sound engineering practices" and "organizational barriers that prevented effective communication of critical safety information" among the problems found. (Courtesy: Space.com) organizational practices The highest level of Business Process Management would thus be Business Process Leadership, which is doing the right things rather than doing things right. From all of the above, we would find that BPM encompasses Strategy, Operations, Systems, HR and what not? And art permeates into all of these. “The “The leader leader is is the surveys surveys the jungle! jungle!.... .... Busy often often respond respond.... ....‘Shut progress progress!” !” the one entire situation, situation, and Busy, , efficient efficient producers ‘Shut one who who climbs climbs the the tallest tallest tree, and yells, yells, ‘Wrong producers and and managers up! up! We’re We’re tree, the entire ‘Wrong managers making making “There “There is is nothing that that which which should nothing so should not so useless useless as not be be done done at at all as doing doing efficiently efficiently all. .” ” – Peter Drucker – Stephen Covey Conclusion Conclusion For BPM to become inclusive, creative, disruptive and profitable: I. Create an open environment. II. Build business partnerships amongst the internal leaders. III. Open the communication channels. Stop conducting ‘meetings’ and start having conversations. IV. Listen to the people concerned. This is the most powerful motivational tool ever. V. Empower them. VI. Ensure that all business leaders are inclusive in their approach. VII. Identify the negotiable and the non-negotiable parts of the BPM. Make all understand these. “Art “Art is is not not a a thing, thing, it it is is a a way,” Leadership Leadership Dimensions BPM definitely needs inclusiveness, creativity creativity. . The courage to challenge existing ways of working must be appreciated as a value. Of course, a clear framework and a disciplined disciplined approach with concrete focus on business objectives. In music, each raag has a rule. If one chooses that raag, the specific rules have to be followed. But that does not mean the lack of creativity since, within each raag, great composers have managed to create thousands of songs using just those seven or less notes. There must be scope for new ideas and radical changes. This does not mean re-inventing the wheel, but often re-invigorating the zeal. It sometimes means a Zero–base approach to ensure that we are in the right ‘jungle’. Also, the Organization should look towards increasing the ownership down till the last employee to enable shared vision of the enterprise. Dimensions of of BPM BPM inclusiveness, openness openness and and approach is a must, way,” – Elbert Hubbard art. . PE Art Art is is a a way, way, a a process process. . And And process process is is an an art ABOUT THE AUTHOR ABOUT THE AUTHOR Krish Krish is is a a psychologist psychologist with Chartered Chartered Accountant Accountant with Organisational Organisational Psychologist, Speaker Speaker. . 25 25+ + years years of of corporate corporate experience leading leading Indian Indian & & Multi Multi- -National Theatre) Theatre) methodology methodology for of of businesses, businesses, teams teams & & individuals with a a special special focus with an an MBA MBA in in HR focus on HR and and a a Masters on creative creative leadership Masters in in Psychology leadership and Psychology, , and entrepreneurship entrepreneurship. . He He is is a a Psychologist, Chartered Chartered Accountant, Accountant, Strategist, Strategist, CEO CEO Coach, Coach, Author Author & & Keynote Keynote experience in in Strategy, National Corporations, Corporations, and for learning learning interventions interventions.. .. He individuals. . Strategy, Finance, and has He is is Passionate Finance, HR has designed designed the Passionate about HR and and Learning Learning & & Development the SMartT SMartT (Sports, about enabling enabling peak Development, , with (Sports, Music, Music, Art peak performance performance with Art & & PROCESS EDGE | AUGUST 2018 | 38 www.sharedservicesforum.in

41. GLOBAL CIO SUMMIT 2018 – A Curtain Raiser To be announced soon… In the year 2018, SSF is delighted to announce its first-ever Global CIO Summit 2018 The Global CIO Summit 2018 is SSF’s premier gathering of IT leaders. It’s an opportunity for IT chiefs and professionals to interact, exchange notes and gain insights from global technology and business leaders/ veterans/ experts. The participants at SSF’s Global CIO Summit 2018 will be able to explore the latest IT and business trends that will shape the business in the near future. The agenda of the Global CIO Summit 2018 has been categorized under three streams:  Panel Discussions & Case Presentations, and Knowledge Sharing Interactions;  Felicitation of a Leader in the Technology Space;  SSF Publication on the latest IT and Business Trends The key focus areas of the One-Day summit are:  Business transformation and technology management  IT-Business issues and solutions  Changing technology landscape  Staffing and security  Artificial intelligence and machine learning  Cyber Security and data safety  New technologies for competitive edge Who are attending: SSF’s Global CIO Summit 2018 is a highly-focused C-Level Summit for the technology leaders and business strategy heads of some of the major corporates and shared services organizations with participation of:  C-Suite Executives, Business Heads, Technology Heads, Heads of HR/ IT/ Supply Chain and BFSI Leaders  CIOs  CTOs  IT Directors and Senior IT Executives  IT Managers and Senior Business Executives  Entrepreneurs of the Rural Sector; Business strategy Leaders/ Managers  Senior functional managers from multiple functions like, Quality/ Process Excellence, Finance & Accounting, Corporate Compliance, Supply Chain & Logistics, Information Systems, Human Resources  Managers/ Leaders from Shared Services /BPO – F&A, HR, Supply-chain, IT, Operations Attendance is limited to CIOs, CTOs, Business and Technology Heads, C-Suite Executives, IT Directors, General Managers of IT and their direct reports. SSF reserves the right to refuse attendance to any person not fitting the above roles or from a non-sponsoring vendor organization. FOR QUERIES ON PARTNERSHIPS OR PARTICIPATION, WRITE TO summit@sharedservicesforum.in www.sharedservicesforum.in

42. RvaluE Group is Celebrating 12 Years of Excellence 12 12 RECOGNIZED AS 20 MOST VALUABLE BUSINESS CONSULTANT COMPANIES!! Years of Years of Excellence Excellence RvaluE signifies ‘Realizing Business Value’ THROUGH OUR PROVEN SETTM FRAMEWORK BPM Pioneers & Team of experienced Practitioners, Consultants, Facilitators and Coaches, we at RvaluE, offer niche comprehensive services and solutions covering Redesign of Business Processes & Offshoring, Developing Talent and Capabilities of Individuals/ Organization, Industry Expertise for BPM strategy adoption, execution, transformation, technology Innovative Solutions for Operations across Indian / Overseas Organizations, Shared Service Centres and the BPM Ecosystem and enhancements and OUR SERVICE SPECTRUM Converting Support Functions to Line Functions (F&A, HR, IT, SCM, Ops.,…) DOMAINS Sustain Global Standards of Service Excellence Realize Full Potential of BP Services Become Strategic Consultants to Corporates What is the What is the Industry Industry saying saying about us… about us… Consultants Review, Jan 2016 CFO India Magazine Recognized as 20 Most Valuable Business Consultant Companies 25 Most Promising Business Consultants in India, Consultants Review, Dec 2014 MAIL TODAT, December 2017 Phone: +91-11-2667 4814, +91-11-26674920 I Mobile: +91-9958840404 Email ID: contact@rvalueconsulting.com www.rvaluebs.com I www.rvaluels.in I www.sharedservicesforum.in 42

44. Disclaimer © 2018 Shared Services Forum No part of this publication may be reproduced, stored in, or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of the copyright owners. Shared Services Forum has made every effort to ensure the accuracy of information presented in this document. Neither the organization nor its office bearers, analysts, or employees can be held responsible for any financial consequences arising from the use of information provided herein. In case of any views, perspectives, discrepancies or errors, please write to: contact@sharedservicesforum.in www.sharedservicesforum.in