Innovatively Managing the Business Process to Create Excellence

1June 25 and 26

Hyatt Regency, Santa Clara, Calif.

Innovatively Managing the Business Process to Create Excellence

2

TCS Public

A 60,000 Feet View of a Business Process…

Supplier Process Consumer

Data Data

DataData

Infrastructure

Process

People

Applications

People

Infrastructure

Process

People

Applications

People

Infrastructure

Process

People

Applications

PeopleSession Focus

3

TCS Public

…Helps Identify Opportunities to Drive Optimization…

Analyze

Digitize

Technology Interfaces

Optimize

Data

Human Application

Interface

Application - Application Interface

Application Performance

Process Value StreamMapping

Error Analysis &Prediction

Prioritization & Simplicity Analysis

BusinessData

Operations Metrics

4June 25 and 26


Industry Expert Talk

Copyright © 2013 Information Services Group, Inc. All Rights Reserved. No part of this document may be reproduced in any form or by any electronic or mechanical means,

including information storage and retrieval devices or systems, without prior written permission from Information Services Group, Inc.

Innovation & Excellence in Operations

Peter LauerPartner – Head Business Advisory Services North America (BPO)peter.lauer2isg-one.com June 25, 2013

The Journey to Date

© 2013 Information Services Group, Inc. All Rights Reserved 6

Inform Services

Provider Research: Tailored research about provider capabilities and industry trends.

Mark-to-Market: Leveraging ISG’s 14,000 contract database to gauge market-current contract pricing and terms & conditions

Assess Services

Benchmarking: Comparing client IT delivery costs to peer costs and provider pricing, and recommending improvement opportunities

Process Analysis: Detailed workflow review of IT processes and practices, comparing to industry best practices

Design Services

Sourcing Strategies: Determining the best mix of sourcing for IT services . . . retained, shared services, and outsourcing based on financial, organizational, and risk considerations.

Target Operating Model: Designing the elements of the optimal end state for IT service delivery, and laying out the roadmap to reach the targeted end state.

Execute Services

Transaction Support: Developing RFPs, managing response process, supporting provider due diligence and selection.

Renegotiation: Evaluating the pricing and SLAs of renewing contracts.

Transition: Applying ISG’s Transition Framework for successful migration to a new service provider

Operate Services

Governance Advisory: Standing up the organization and processes for effective oversight of providers, and training client staff to implement and sustain processes.

Governance Managed Services: Providing resources and tools to support client’s “commodity” governance processes.

IT Consumption Management: Providing insights for optimal cost, compliance, and risk management of IT assets

PMO Services: Support of project portfolio management with tools , best practices, and project tracking technologies.

*Representative list of ISG services; those most used by ITO clients

800+ professionals

20+ years in business

21 countries

1,000+ clients

75% of Fortune 100

5,000+ engagements

Power of One . . .

About ISG

ISG Brings Deep Experience and Specific Services to Support Clients with their IT and Business Process Strategies


Lots of Issues on the “C” suite Heat Map. Many of these issues have lots of players opining from north to south, east and west.

Issues that are on the Desk of “C” Suite

Innovation

Big DataCollaboration

CLOUD

IT Consumerization GreenLabor

Arbitrage

RISKTalent

Management

IT with processes?

Security

Business UnitAlignment

Business EnablerVs.

Business InhibitorCOST

Self-Funding Models

Sustainability

& AnalyticsRegulators

Automation

Supplier Concentration


WSJ Marketplace in 2012

► “Innovation” used 33,528 times in quarterly & annual reports last year

► 255 books published in the last 90 days (2012) with the word Innovation in the title

► 43% of surveyed execs state they have a Chief Innovation Officer or similar role

► 28% of business schools use the word in their mission statement

► So. . . What does it mean? ISG had a look at what it means!

“You Call That Innovation?” – Word in danger of becoming a business jargon cliché (if it’s not already).


Business drivers, investment, organizational alignment and disciplined execution must all exist for innovation to occur.

Key finding – the Need for a Climate for Innovation

Assessing

TechnicalInnovation

ProcessInnovation

BusinessInnovation

Need to Innovat

e

Ability to Innovate

Managing the Innovation

Model

► Involves Risk / Requires Investment Win/win implies that lose/lose is possible Requires active risk management Need for a unified operating model

► Requires Change and Discipline Change management is key Target measurable and verifiable metrics

that bring business value New learning “how do we do this”

► Occurs Over Time Provide incentive for long-term mutual

benefit rather than the “quick hit” Improvements in the maturity of the

organization & relationship results in an improved ability to innovate


Pace of Learning < Pace of Change2

In today’s market, the pace of change exceeds our pace of learning. The divide is noticeable and increasing at an alarming rate

BusinessAlignment

We may endup here

Today’sBusiness Practices

We arehere

GrowingMisalignment

Tech

nolo

gy a

nd P

roce

ss C

apab

ility

Cli

ent

req

uir

eme

nts

Time

learningx


Varying models of operational delivery

Successful models requires careful consideration of the critical areas noted below to understand the impact to achieving the desired business objectives . Innovative models tend to be over to the right with gain and value sharing between organizations

Source? Optimization? Incremental? Transformation? Other?

The Strategy may include numerous solution considerations that are aligned to meet the objectives.

The new wave• Importance of

Software, Platforms,

• Labor Automation,• Scalability• Improved

efficiencies• Outcome based

Processing• Business evolution• Unified operating

model


Operating Model Levers

There are a number of considerations that relate to key factors when transitioning or operating a particular model.

Automation

Efficiency

Low Risk profile

Transparent single operating model

HighLow

Effectiveness

Variable pricing

Outcome Based

Governance

Continued improvement

Client Supplier partnership

Service level for operating model

Gain Share

Automation

Efficiency

Low Risk Profile


HighLow

Effectiveness

Variable pricing

Outcome Based

Governance




Gain Share

Automation

Efficiency

Low Risk Profile


HighLow

Effectiveness

Variable pricing

Outcome Based

Governance




Gain Share

1990- early 2000 Current Innovative Model


Gen 2 Characteristics

Gen 1 Characteristics

What is the big deal?

Think of the market progression from the left hand side of the chart to the right traditional models more focused on cost cutting though labor arbitrage to Gen 2 which is focused more on Labor Automation and Innovation

► 15%-30% cost take out

► Model is scalable to the extent that you can scale labor

► Custom/complex, legacy :“Your mess for less”

► Access to Low Cost Labor necessary to provide continuous value

► Revenue/Profit correlated to People

► 60%-80% cost take out

► Model is scalable and is largely independent of labor growth

► Transformative – New way of doing business, access to “Rocket Scientists” who can codify manual processes

► Revenue/Profit NOT correlated to People

► Outcome based approach

Generation 2Labor Automation

Innovation

Generation 1Traditional Model


Revenue Cycle

Accounting & Reporting

Corporate Services& Mgmt.

DisbursementsT& E Reimbursement

CreditOrder Management

Billing / Invoicing

Accounts Payable

Fixed Assets

Cash Apps / Accounts ReceivableCollections

Cost Accounting

General AccountingProject Accounting

External Reporting

Strategic Planning Support

Outlook/Interim Forecast

Bus. Performance Anals. & Rpting

New Business/Pricing Analysis

Treasury ManagementAudit and Risk Mgmt.

Tax Actng, Filing & Rprting

Budgeting

M&A Management

Cost Analysis

Tax Planning & Regulatory

FinancialPlanning & Analysis

Decision Support

Payroll*

* Payroll may report to CFO or HR

High

Ent

erpr

ise

Val

ue A

dded

Basic HighComplexity of Interaction

We are becoming more innovative an the bottom of the scale but need to grow more upstream

Process Level Perspective: F&A Services

Strong retained candidate Possible Sourcing/SSC candidate Strong Automation/sourcing candidate

Suitability For Sourcing

Functions

FUNCTIONAL AUTOMATION

Processes Undergoing Automation and Innovation

Inno

vatio

n is

requ

ired

to m

ove

furth

er u

p th

e va

lue ch

ain


The maturity model shows the back office service (F&A, HR, IT etc) in varying states of development.

ISG Maturity Model for Target Operating Models

Non-existent

No strategic operating model or global processes in place

Basic

Reduce costs distributed services• Consolidate

• Economies of scale

• Staff Aug related

• Everyone for themselves

• Enterprise Process maturity LOW

Marketplace

Reduce costs and improve service quality• Focus on reducing

costs

• Full governance in place

• Chargeback process

• Based on metrics and measurement

• Harmonization of processes/policy

• Global processes created for the enterprise

Unified Operating Model

Back Office service seen as a single operating model• Collaborative

partnerships

• Mix of out tasking, sourcing, shared Services

• Business units see operations as a single entity

• Continuous improvement is life

• Service integration maturity

• Global processes adopted by business Units

Advanced

Cost reduction while creates new and improved services. • Analytics led analysis

and design for new and improved processes

• Focus on Automation

• Best of Breed service in each function

• Service Integration

• Gain share

• Value sharing

• All parties collaborate to generate new efficiencies and automation

• Harmonization of systems

• Enterprise and SSC partner to improve enterprise processes

World Class

Developed strong efficiency, has a high level of automation and focuses on creating working capital• Very strong

partnership with multiple supplier/BU teams to create value

• Gain and value sharing

• Focus on generating working capital

• Investing in creating innovation

• Strong level of re-investment in the organization

• Innovative by nature

• Enterprise and SSC partner to create innovation throughout organization

Level5

Level4

Level2

Level0

Level1

Level3

As we move up the levels of maturity we see the development on a unified operating mode, harmonization of processes/systems and innovation.


Pace of Learning < Pace of Change2

In today’s market, the pace of change exceeds our pace of learning. The divide is noticeable and increasing at an alarming rate

BusinessAlignment

Where we may end up

Today’sBusiness Practices

GrowingMisalignment

Tech

nolo

gy a

nd P

roce

ss C

apab

ility

Cli

ent

req

uir

eme

nts

Time

learning

xx

We need to drive to here

New pace of learning


The cycle we to see

Review

Analyze

HarmonizeInnovate

Evolve

Innovation is a continuous cycle not just a straight line journey

Continuous review of the operations “what is working what is not”

Analyze the current operation

Harmonize policies, processes and systems

Innovate. Focus on developing efficiencies, automation and to create

working capital

Continue to evolve the service over time


“Labor arbitrage or just cost savings is not the goal any more!!”

“Back office operations need to be seen as a single entity delivering services to the enterprise”

“This means all parties need to collaborate and drive change developing greater efficiencies, automation and creating working capital to re-invest in the organization”

“This is the goal of innovation ”

Final thoughts!

www.isg-one.com


About ISG


ISG BPO at a Glance

What is occurring in the market and where is the market headed?

How are we performing, how do we compare, and what are the opportunities for improvements?

What is the best way for us to improve and take advantage of opportunities?

How do we implement the

changes to realize value?

How do we sustain the value over

time?

Client Experience Data Bases and Information Sources

Advisory throughout Sourcing Lifecycle

14,000 sourcing contracts for T&Cs and pricing

12,000 benchmark projects, each with 500 to 3,000 data elements

Momentum ™ vertical sourcing research report

Sourcing Prevalence™ research

Provider Dynamic RFI™ used to survey over 100 providers about scale and scope of capabilities

AccessISG™ subscription and custom research

Annual service provider and client conferences


Areas of BPO Expertise Finance and Accounting

Procurement

Human Resources

Call Centers

Legal Services

Print Services

Facilities Management

Document Management

Insurance-specific processes (policy admin, claims)

Specialized Services Mark-to-Market (M2M) review of

contract renegotiation pricing

AccessISG research subscription

Service provider portal

Momentum ™ research reports

Benchmarking

Asset monetization feasibility

City Risk Assessment

Major project health checks

Shared services design

Staff aug to managed services

Vendor management

Consumption and demand management

ISG Business Process Outsourcing Experience

ISG brings clients over 24 years of sourcing experience across multiple industries and around the globe. We have assisted clients with more than 1,200 BPO engagements, including more than 450 completed transactions. We bring to clients the tools, templates, methodologies, data, and best practices for BPO transactions that are successful and deliver the value that is possible

23June 25 and 26


Customer Case Study: Conceptualizing and Deploying EDGE: an Innovative Optimization Framework

Kathleen DobbelsVice President and GBS Quality Leader, Nielsen

EDGE: AN INNOVATIVE OPTIMIZATION

FRAMEWORKAJITH THOMAS (TCS) & KATHLEEN DOBBELS (NIELSEN)

JUNE 25, 2013

25June 25 and 26


Customer PoV: Optimizing the Business Process: Leveraging Operations Digitization

Adrian RoblesMD-Accounting, SCI Funeral Services

Leveraging Technology to Transform Our F&A Organization

Presented by: Adrian RoblesJune 25, 2013

Agenda

•Overview of SCI’s Business•Overview of SCI’s Transactional

Accounting Department•Our Transformation Journey

▫Accounts Payable▫Contract to Cash▫Payroll Services▫Trust Operations

•Tools & Technology Wish List

28

SummaryQ&A

Thank You

June 25 and 26Hyatt Regency, Santa Clara, Calif.

Thank YouThank You

Innovatively Managing the Business Process to Create Excellence

Technology

Transcript of Innovatively Managing the Business Process to Create Excellence