1. Packaging the Value Proposition of the SSC Satish Paul
CIMA Loughborough Shared Services Forum
17th October 2012

2. Agenda Moving from traditional to global Introducing KPMG Research
How do we measure value

3. What is a value proposition?
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
“The benefits that a product or service provides to customers, especially by being different to or better than a competitor's products or services”
Source: Financial Times Lexicon
“The benefits that a product or service provides to customers, especially by being different to or better than a competitor's products or services”
Source: Financial Times Lexicon
“We in Shared Services have to ask ourselves every day what value proposition we are delivering…because if we don't continue to give value, we cease to exist.”
Source: Rick Stephens, President, Shared Services Group, The Boeing Company
“The Value Proposition – Key to Business Success” speech

4. Considering Shared Services - Traditional View
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
The biggest driver of Shared Services is cost reduction and service efficiency, in addition there are some strategic benefits associated with Shared Services.
Costs
Quality
Strategic
Critical mass to develop and sustain skills
Higher productivity,
Lower cost location,
Reduced working capital,
Reduced expenses,
Reduced systems infrastructure costs.
Improved service supporting the business (e.g. higher quality of information for decision making),
Increased controls, SARBOX
Reduced error rates - quality at source.
Enable new business models,
Support growth,
Achieve process and systems standardization,
Accelerate merger & acquisitions.

5. A KPMG research effort Development in Global Business Services (GBS)
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
Process
Ongoing series of interviews with GBS executives from Fortune 500 companies
…representing a wide range of industries (including life sciences, high-tech, CPG, financial services) . . .
…in mature GBS organizations:
In a leveraged model for 5 years or longer
Involved in shared services (for current and past employers) for 7 years or longer
Value Capture and Performance Sustainability
The Journey Development Stages Time
Level 1 – Sub-optimized
Level 2 – Rationalized
Level 3 – Optimized
Level 4 – Strategic
Level 5 – Integrated
Leaders
1/3 of KPMG Survey Participants
2/3 of Survey Participants
Average Performers
Some of this change is about recalibrating traditional shared service objectives, but collectively its about fundamentally challenging and redefining GBS’s role in innovation and strategy execution

6. Global Business Service (GBS) models are evolving to… …deliver a much broader value proposition
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
Linkage Across Broad, Multifunctional Scope
Integrated Resource View of Human Capital
End-to-End Process Ownership
Function
Talent
Process
Strong Alignment and Governance between GBS, Customers & Stakeholders
Integrated Process & Technology Platform 1 10 2
Business
Solution 9 3
Fully Integrated Global Business Services
Business
Intelligence 8 4
Sourcing
Data & Analytics Combined with Transaction Services
Seamless Delivery Across Hybrid Portfolio 7 5 6
Global
Commercial
Supply Chain
Globally Networked Delivery Centers
Financial Transparency Across Enterprise
Seamless Connectivity with Trading Partners

7. Construction management Infrastructure design
Breaking through Functional Boundaries Corporate Site Development
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
From a set of disparate activities and departments ...
Site identification
Construction
management
Hiring
Training
Leasing Negotiations
Relocations
IT infrastructure
Site start-up
Facility design
Staffing plan
Equipment sourcing
Provisioning
Site identification
Construction management
Infrastructure design
Staffing plan
Relocations
Provisioning
Equipment sourcing
IT systems
Site start-up
Training
Hiring
Real Estate
Legal HR
Procurement IT
Facilities Management
... To an integrated process to open a new facility

8. Breaking Into New Functional Areas . . .
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
Engineering
Communication
Travel Management
Import / Export
Customer Service / Contact Center HR
Finance IT
Procurement
Facilities Management
Master Data
Distribution / Logistics
Marketing
Sustainability
Radiating from the Core
Outsourcing COE
Quality Management
Analytics
Legal
Consulting
Business Process
Management
Corporate Affairs
Environmental Health & Safety

9. Breaking Through Functional Boundaries
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
Level 1
Sub-Optimal
Level 2
Rationalized
Level 3
Optimized
Level 4
Strategic
Level 5
Integrated
End-to-End Process Orientation
Processes managed exclusively within functional silos
Limited use of KPI’s
Processes managed exclusively within functional silos by corporate
KPIs oriented around compliance metrics
Limited process integration across functional silos
Processes managed by broader set of service levels consistent with customer requirements and price points
Full integration across silos at the enterprise level for key or critical processes
Processes managed end-to-end across silos, leveraging functional capabilities as needed and managed by a single global process owner
Metrics shift to value contribution rather than operational efficiency

10. The Challenge of Finding Value in Data – Business Perspective
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
Use the high volume of data to capture its value and compete more effectively
Collect, manage, and analyze data effectively for better business decisions and provide a critical competitive advantage
“Companies that invest heavily in advanced analytical capabilities outperform the S&P 500 on average by 64%.”*
* An interview with Thomas H. Davenport and Jeanne Harris, “Analytics and the Bottom Line: How Organizations Build Success,” Harvard Business Review, September 23, 2010.

11. Current State Assessment Integrated Information & Analytic Capabilities
Moving from traditional to Global
Introducing KPMG Research
How do we measure value
Two Dimensions of Company Maturity
Outcomes
&
Analytic Capability
Integrated with Mature Analytics Capabilities
Siloed but with Advanced Analytics Capabilities
Somewhat Integrated/Building Analytics Capabilities
Starting to Integrate/ Beginning Analytics Capabilities
Siloed with limited Analytic Capabilities
Enablement
Siloed
Integrated Information & Organization

12. How do we measure value?
Moving from traditional to Global
Introducing KPMG research
How do we measure value
Traditionally, performance has been evaluated through benchmarking
However, a Value assurance exercise offers provides a route to effectively align service expectations, perceptions and realities to optimise value.
KPMG uses the “6P” framework to assess value:

13. KPMG 6P Framework Moving from traditional to Global
Introducing KPMG research
How do we measure value

14. Any Questions?

15. For further information please contact: Satish Paul
Financial Management Advisory
+44 (0)
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16. The Journey: typical stages of development in Global Business Services maturity
Value Capture and Performance Sustainability
The Journey Development Stages Time
Level 5 – Integrated
Globally integrated services portfolio with aggressive use of alternative and mixed delivery models
Top Third of Respondents
Key Differentiators
Multifunctional
Global
End-to-End
Accelerators
Governance
Commercial Orientation
Talent Management
Level 4 – Strategic
Optimized balance of internal and external delivery capabilities, global sourcing with multifunction focus
Level 3 – Optimized
Traditional outsourcing relationships with global delivery; non-integrated internal shared services capabilities
Level 2 – Rationalized
Single function shared services with tactical onshore or offshore provider relationships
Level 1 – Sub-optimized
Decentralized and duplicative functions ; little central control over business support services