Finansu Partneri

How do you stabilize an outsourcing deal?

FP — Sat, 10 Sep 2011 13:15:56 +0000

Patrick Cassity, Global Shared Services Leader for Owens Corning, discusses the decision to move from “build” to “buy” – and how to manage the jobs transitions that come with outsourcing…

AS:Welcome to the Shared Services Podcast. I’m Amber Scorah . Today’s guest is Patrick Cassity, Global Shared Services Leader for Owens Corning, a Market Leader Innovator of Glass Fiber Technology. He’s going to talk about what it took to move from a 16 year old captive to an outsourced operation, the reasons for change and looking forward, and the opportunities he sees ahead. So welcome to the show Mr. Cassity.

PC: Hello Amber.

AS: What have been the major challenges thus far at Owens Corning, in terms of your outsourcing journey, and how did you overcome them?

PC: Great Question. To give you a little bit of context for my answer, we had captive shared service centers at Owens Corning all the way back to 1993. When we made the decision to outsource in late 2009, it was a big culture change for the company. One of the more effective things we did was to put together a task force that met with our major stakeholders on a regular basis. In the beginning, this was done on at least a weekly basis and then as we went through our transition, each of us on the task force was assigned a major stakeholder. I had all of our processes that dealt directly with customers and I met with those folks on a regular basis to keep them up to date in terms of where we were and to make sure I had their feedback and concerns addressed on a regular basis.

G6 in Amsterdam

FP — Fri, 02 Sep 2011 13:15:13 +0000

SSON’s G6 tradition continues in Amsterdam at Shared Services & Outsourcing Week 2011.

In what has become one of the most widely anticipated sessions at Shared Services & Outsourcing Weeks around the world (!), the stage at Amsterdam’s Rai conference center (May 11, 2011) was set for the big-wigs (you voted them in) of the sourcing world to face the questions of our moderator, Deborah Kops. As we already saw in the US, earlier this year, there is now a convergence of opinion between advisors and providers, which we were not seeing just a few years back. When it comes to the ever-green (still?) debate between captive and outsourced, it’s widely acknowledged that it’s no longer an “either/or” but an “and”; and that today it is business solutions that are driving these kinds of decisions.

If anything, the G6 were perhaps too unanimous in their opinions – notably, that automation has been woefully undersold (Hackett warns of a sharp swing in the opposite direction over the next three years, to the scary tune of 1 million West European jobs) and that clients should be capitalizing a lot more on technology, now that wage inflation in low cost locations is making labor arbitrage less obvious.

Oh, and there’s a bit of a love-in between the advisors and the providers going on. Is it because, with an expanding provider market, these guys are only too aware they need a bit of help with brand promotion? And that clients need the brokerage services of a trusted advisor in choosing the right match? It’s eHarmony for sourcing.

Finance and accounting outsourcing to grow 15-20 percent

FP — Sat, 20 Aug 2011 13:15:17 +0000

Annual contract value (ACV) for this specialized category of outsourcing is expected to grow by 15 percent to 20 percent this year, to more than $4 billion, according to the Everest Group.

This growth comes on the heels of a 15 percent increase in 2010, suggesting the market is surging once again.

In 2008 and 2009, ACV growth was closer to 10 percent, reflecting the weaker overall economy.

Nearly 55 percent of the ACV growth in 2010 was contributed by contract renewals and expansion rather than purely a function of new contracts, according to Everest, rather than new business.

“Buyers continue to be cautious,” Everest stresses. “The big-bang approach has given way to a phased approach.”

The study notes that the trend towards end-to-end solutions such as Procure to Pay (P2P), Order to Cash (O2C) and Record to Report (R2R) continued to gain momentum as opposed to a traditional piecemeal solution.

Everest identifies six service providers in its “Leaders” category. They include what he calls established FAO leaders such as Accenture, IBM, and Genpact, as well as Capgemini, Infosys BPO, and Hewlett-Packard.

Last November, a study from EquaTerra found that 85 percent of all respondents said they will continue to outsource financial and accounting tasks at the same or higher levels, with 72 percent indicating they will probably or certainly outsource more.

In addition, 97 percent of F&A outsourcing buyers surveyed said they would recommend their service provider to a peer.

In the EquaTerra study, Procure to Pay was the most frequently outsourced process, outsourced by 85 percent of participants. At the time 16 percent of these organizations said they have plans to outsource more in this process. P2P was followed by Order to Cash (O2C) and Record to Report (R2R) which were both outsourced by 69 percent of respondents. Another 22 percent of these organizations are considering increasing their outsourcing levels for both O2C and R2R.

Sourcing at Siemens

FP — Mon, 25 Jul 2011 13:15:58 +0000

Siemens’ Global Shared Services CEO, Michel E. de Zeeuw, on the amazing potential of tomorrow’s sourcing world: Supply Chain Management & Analytics, Warranty and Spare Parts Management, M&A Analytics, Legal Services, and Marketing Intelligence…

“I believe that with the new technologies emerging, such as platforms, SaaS, and the increased possibilities for mobile working, we will see a significant development of virtual capabilities in addition to existing large centers of scale.” Interview with Michel E. de Zeeuw, Chief Executive Officer, Global Shared Services, Siemens AG Barbara Hodge: Michel, how did you settle the single-function/multi-function question at Siemens shared services? What were the main drivers for your decision? Michel E. de Zeeuw: It has become very clear to us that despite the specifics of each function, there are many aspects in managing a SSO that are similar and that can be leveraged at cross-functional but also global level. This includes, for example, attrition management, knowledge retention, soft skills training, performance management, quality monitoring and management, benchmarking methodology, supplier demand management, governance for shared services, customer relationship management, financial management, transaction-based pricing, ticketing tools, work flow, KPI reporting, and many others. All these aspects are better leveraged when shared as much as possible and in some cases become possible only with some minimum critical mass. In addition, for those who think it is important to build a Shared Services brand for their organization, going cross-functional is a more effective way to achieve this.

Barbara Hodge: What are the respective advantages of single-function and multi-function? Michel E. de Zeeuw: I believe the main advantage of a single-function SSO is simpler governance. Cross-functional centers require setting up another set of cross-functional governance, which may not be relevant for some companies. It is very relevant for Siemens, however, as our regional and country based CEOs are very keen on partnering with Global Shared Services as one provider to support their growth.

The main disadvantage of a single function SSO is its lack of scale, at least potentially. Again this may not always be true, for example in financial services where customer service activities have huge scale just on their own. Again, the main challenge of a cross-functional model is its customer relationship management framework and governance model. It is a challenge in terms of structure, but also in terms of finding the right skills to manage cross-functional service interaction with internal customers. It is, however, a key function, which largely determines the success of the whole SSO. Barbara Hodge: What are the key benefits of your model? Michel E. de Zeeuw: The main benefit in my view is that it provides the opportunity to manage Shared Services as a business. We have enough scale as an organization to invest in all key business processes, including People and Customers, and not just Operational excellence. Even in Operational Excellence there is a lot more one can do with additional scale, for example investing in shared services backbone technology. Barbara Hodge: You were named “Outsourcing Superstar” by FAO Magazine in 2008. What do you base your strategic outsourcing decisions on? Michel E. de Zeeuw: There are different sourcing approaches: single strategic sourcing; competitive sourcing, involving a few key players; best-in-class sourcing, per service; and opportunistic outsourcing, to name some key ones. My first approach in terms of sourcing is to understand what my company needs and what it can, and is ready to, do. I will determine what my company needs based on its scale, the expertise available, its shared services maturity level, and its global footprint. Based on this assessment, it is possible to determine what is the best approach in terms of insourcing or outsourcing on the one hand, and in terms of sourcing approach on the other. Barbara Hodge: Would you share with us your thoughts on the outsourcing opportunities provided by the global markets today? Michel E. de Zeeuw: I think the market is evolving fast and we are seeing some significant changes in terms of technology, service portfolio, and location opportunities. “Access to talent” is probably something of a red herring, or a “wrong” trend, and I would also suggest that no major breakthrough is happening in terms of automation in the transactional area. I think the Business Process industry is now mature enough that we should see it address these problems and work on standard training schemes, and data standards, for example. It is fine if cloud computing is just a more efficient way of performing inefficient processes, but I would rather get rid of the transactions altogether. I believe that working on data standards for all key data that SSOs and BPOs work on would be a first step to achieving a real breakthrough.

Can you comment on the increasing sophistication/specialization of the BPO provider market? What are some new trends from the provider side that you believe will impact outsourcing activity looking forward?

Michel E. de Zeeuw: There are many more very interesting outsourcing opportunities today, and there will be even more tomorrow. Key BPO providers have extended their portfolios to areas that go far beyond traditional transaction processing, such as Accounts Payable. Some of them have gained good expertise in Supply Chain Management and Analytics, for example, which can address a lot more potential within corporations. Warranty Management, Spare Parts Management, M&A Analytics, Legal Services, and Marketing Intelligence, are also examples of new services that can be onboarded with significant potential for higher business outcomes and additional cost savings. I believe that with the new technologies emerging, such as platforms, SaaS, and the increased possibilities for mobile working, we will see a significant development of virtual capabilities in addition to existing large centers of scale. This will increase our access to experts and other talent.