3 Themes That Define Shared Services: Business Intelligence; 'New Normal' in Outsourcing; and Onshore Talent
Find out where the big hits are coming from – North American conference highlights what's in store.
The SSON team came together in Orlando, last week, for the 17th Annual North American Shared Services & Outsourcing Week conference. It’s a great time for reunions (man y of us have been running into each other for over a decade, now) but also for making new friends. A full 57% of attendees this year had never attended before, and it was a great opportunity to find out what they're doing and what they want to achieve. We also had a tremendous response from the industry through our sponsors, and we'd like to take this opportunity to thank them for partnering with SSON, and helping to make this event the success it is.
As we build this event, year-on-year, we listen hard to our customers to make sure we are hitting their trouble spots. This year, data analytics, talent implications, multi-functional versus global business services, cloud & technology, and social media, were some of our core themes. While many of the presentations took place in the main plenary hall, sessions broke into five different tracks to allow delegates to align themselves with a function or process challenge most applicable to their situation. The event also provided a "by invitation only" track called Executive Exchange, hosted by KPMG’s veteran of North American shared services, Bob Cecil. This room is reserved for C-level practitioners, or those reporting to C-level, with a personal service budget of 2.5-20m dollars, and who are in charge on transformation. The Exchange thus provides a safe forum in which to air challenges faced at this level, and topics on the table included Risk & Resource management; Intelligent Business Enterprise; and Talent Management [I’ll be interviewing Bob to get a sneak peek of what was discussed].
New this year, was the introduction of two parallel Summits on Procurement and IT – both sessions we expect to see outgrow the one room allocated to them this year.
Interspersing the learning sessions, was the fun that we always build into an event of this kind. We welcomed back Doug Spence, our Chief Networking Officer, who took us through some "touchy-feeley" sessions on working with colleagues, and on recognizing your business "personality". To brand our personalities, we were given color-coded stickers for our delegate badges, and for the rest of the conference we were encouraged to check each other's badges, recognized their "color personality", and interact with them accordingly. The real take-away here: if you only focus on your own needs and habits you'll have limited success in influencing others. It’s only by understanding the "personality" and relevant communication preferences of the other party that we can succeed in negotiating with them [valuable communication lessons, for free at the event].
One of the most popular presentations was that of Paul DePodesta – made famous through the movie Moneyball, and the brains behind the analytics that led the Oakland A’s to victory. Today, he is VP of Player Development & Scouting for the New York Mets, andspeaks eloquently and enthusiastically about business intelligence. It's not hard to draw the dots between Paul’s evaluation of players’ scores, and your own in-house metrics relating to process. If you step back and let go of your traditional focus area for a moment, and just look at the data, brand-new options present themselves. [Paul obliged our delegates by signing baseballs for them during the coffee break – and was nearly mobbed in the process.]
It's not just fun and games, of course (you can read a "Daily Dish" summary here). The plenary session that kicked off Tuesday morning’s opening led with a debate on whether the term "shared services" was today a liability, limiting what the model can do. In fact, a number of leading organizations on site were rebranding themselves as "business services". Some were leaving behind the negative connotation associated with early disappointments; others were emphasizing "business partnerships," and yet another group was highlighting the link between support services and business objectives. This was, perhaps, the constant thread running through the five days of Shared Services & Outsourcing Week: support services coming out of their corner and forming analytics-based alliances with business units – sometimes even in the face of resistance from their partners.
Also notable this year was the extension of the shared services model into the small and medium-sized enterprise. BBA Aviation, for example, a $2 billion business, provides support to commercial and private aerospace customers around the world. The shared services structure has become a crucial element of the company’s growth-through-acquisition strategy. In fact, it’s also a perfect example of name rebranding. Through her "business support center" team, VP Karen Bryant-Gianiorio set up global process owners to drive standardization in P2P, O2C, and R2R across two global centers. She shared some key learnings with us: first, that being hired to lead a center and starting on day 1 of "go live" was not the best way to go about things (from personal experience); second, that the one month she had allowed for stabilization after each consecutive implementation wave was probably too aggressive (it would have taken three months to allow issues to bubble through); third, the importance of establishing proper desk level procedures, with every possible exception documented; and finally, the importance of strong project governance. Karen had brought along Mandy Richards, Director of Continuous Improvement, who was responsible for BBA’s governance, and who shared the governance structure with us.
Going from "small" to huge, FedEx, today a 43 billion-dollar company, relies on its back office business – FedEx Services – to provide the business intelligence it needs to compete. Christopher Wood, Vice President & Controller, explained that FedEx Services evolved under unusual circumstances as compared to traditional shared services. It was, in fact, a means of providing one face to the external client that caused FedEx to develop a fourth operating unit dedicated to support service. Today, the shared services company is 20,000 people strong. Chris shared some insights on FedEx’s BOBI project [Back Office Business Intelligence]. What started as an attempt to centralize a dispersed benefits program [and incidentally, saved the company tens of millions annually] today provides security, the ability to delegate, access to 10 different sources, and a virtual infrastructure which is changing the way FedEx does business. "If you build it they will come" is Chris’s motto. He shares his Backoffice Reporting Data Flow Diagram with us:
More and more organizations are considering some sort of "new normal" for outsourcing. It's definitely not about cost alone, for the more sophisticated among you, as you look for "innovation" from providers, partnership models, and leverage provider technology where you choose not to invest in your own. Hand in hand with this goes "smart" leveraging of talent, as opposed to "wage arbitration." Onshore talent is becoming more important, and the retained organization is now recognized as much more than a friendly conduit. Deborah Kops from Sourcing Change led a session on "Where The Rubber Meets the Road: The Challenges of Finding & Developing Shared Services and Outsourcing Talent Onshore." This reflected the dawning acknowledgement that sourcing is so much more than a process and technology business; even diehard members of the industry are starting to admit it’s all about people. But while traditional approaches to attracting and training talent often fall short, companies like Fifth Third Bank, Alcon, and MGM Resorts shared how they plan to win the new talent game.
One of the workshops I attended was led by Jim Diamond, VP of Shared Services at Houghton Mifflin Harcourt. A 30-year veteran of publishing and finance for this $2 billion company, Jim’s focus was on shared services’ role in optimizing cash. He spent a lot of time talking about cost efficiency versus cost savings, and the importance of getting the right measurements in place [volumetrics are useful for reporting upstream]. This session also provides an opportunity for participants to debate the challenges of DPO. Most agreed that they were finding it hard to slow down the rate at which cash ran out the door, whether due to supplier relationships, or otherwise. Also discussed was their interest in industry specific statistics [editor’s note: here is an interview with Everest Group about the significance of industry verticalization]. As a true veteran of this sector, Jim acknowledge that staff requirements were changing significantly and SSO leaders should be raising the bar through accrediting workers and providing additional training to improve the skill set [Ed’s note again: SSOPro is an online learning accreditation program, hosted by SSON]. A final note, Jim shared one way that his organization had cut down on waste: "the stupid things you do award" had been a great success in getting those things that waste employee time under the spotlight for elimination. In closing, Jim again highlighted cost efficiency versus cash generation; challenged those present to generate cash by leveraging their staff through making improvements; and reminded us that you can generate cash through changing process.
Other presentations I liked: Citi Shared Services’ Sheree Stomberg on tracking your services maturity according to infiltration percentages; Khem Balkaran, CIO, Minerals Technology on harnessing the power of big data and analytics to drive operational efficiency; Sloan Canaday, Vice President, Shared Services, Argo Group International Holdings, on managing change in a global transition (and pushing through with aggressive timelines); and a really fascinating presentation for anyone considering establishing a center in Europe (a third of the room, according to a show of hands) by Matt Cagwin, Vice President of Strategic Finance Initiatives, at Coca-Cola Enterprises.
I will be sharing more of what was discussed at the conference online over the next month, but I did want to just mention the vertical industry networking roundtable discussions that on Monday afternoon: 10 industries were identified [including banking and financial services; infrastructure; hospitality; public sector; manufacturing; media; etc.] and large tables were spaced out in a sunny hallway to allow debate on issues specifically impacting these sectors. I joined the banking and financial services table and caught a great discussion on how social media was being adopted, and mobile practices fostered, to support customer demands in this sector. What’s fascinating is the emergence of a "bring your own device" culture within more and more businesses. Only a year ago, a participant said, his company had adamantly denied iPhones; but now there was an employee-driven turnaround, and personal devices were being welcomed as a means of channeling communication. It’s the consumerization of technology supported by apps like "Good", that enable secure collaboration. This allows individuals to access their traditional communication methods. It’s also the first time I came across the term "SMAC" [social media, analytics, and cloud] though a Google search tells me it’s been bandied around for a few months now.
Either way, you may as well get some business cards branded with SMAC. I’m pretty sure you’ll be needing them in future.
Note: find out who won the SSON's Excellence Awards in Orlando here (and watch the video).
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