AECOM: Winner of the Business Transformation Impact Award (Gold level), APACAdd bookmark
Missed Part 1 of the series? View IBM's award-winning transformation journey HERE.
SSON's Impact Awards are globally recognized, annual awards that honour and celebrate shared services achievements across several different categories, across four different regions in the world. Applications are evaluated by a judging panel made up of leading practitioners selected for their experience and are exemplary members of the services delivery community.
Today’s shared services operating models are the engine of enterprise transformation. Here we share an edited version of AECOM’s winning application for the Business Transformation Impact Award
AECOM is the world’s premier infrastructure consulting firm, delivering professional services throughout the project lifecycle – from planning, design and engineering to program and construction management. On projects span transportation, buildings, water, energy and the environment,; and our public- and private-sector clients trust us to solve their most complex challenges. Our teams are driven by a common purpose: to deliver a better world through our unrivaled technical expertise and innovation, a culture of equity, diversity and inclusion, and a commitment to environmental, social and governance priorities.
AECOM is a Fortune 500 firm and its Professional Services business had revenue of $13.2 billion in fiscal year 2020. The firm is ranked #1 in Transportation and General Building in Engineering News-Record’s 2020 “Top 500 Design Firms,” and was named one of Fortune magazine’s “World’s Most Admired Companies” for the sixth consecutive year.
AECOM’s Global Business Services (GBS) vision is to deliver fast, reliable, efficient and quality business support services, with a consistent commercial focus, to the global AECOM enterprise. Over the last five years, AECOM has embarked on a GBS Transformation, expanding its global footprint with the development of three greenfield centres in Manila, Bucharest, and India, as well as becoming a multifunctional delivery model providing services across more than 20 functions. Our strategy focuses on people and organization, transformation programs, service delivery, technology and innovation, and customer experience.
We service more than 54,000 people across the globe and have about 1,500 team members from five strategic locations.
BUSINESS OBJECTIVES OF THE TRANSFORMATION
In late 2017, AECOM embarked on a journey to develop a truly multifunctional GBS, delivering services in Finance, Procurement, HR, Marketing and Communications, Legal, IT, Remote Executive Assistance, Project Accounting and Support, as well as 20+ other functions. The transformation was designed to accelerate the maturity of AECOM’s GBS model to delivery SG&A efficiency and cost reduction, process standardization and an improved employee and client experience. It was enabled by:
- a new strategic footprint consisting of a Hub & Spoke location strategy via three greenfield ‘best cost’ captive centres in Manila, Bucharest and Bangalore (the first of which was delivered in just 5 months)
- a global governance model with GBS lifting into a standalone operating unit with strong framework
- Global Process Ownership driving transformation, standardization, efficiency and automation
- a service delivery model with a customer-centric approach using ServiceNow, IVR/VCC and global contact centres
- a new digital strategy to improve collaboration, client and employee experience, and process automation
As AECOM executes its strategic initiatives – including the sale of its Management Services business line in January 2020 and other divestments, substantial G&A restructuring, and the planned exit of certain countries – the future AECOM organization will be a lower-risk, higher-return business focused on its industry-leading professional services capabilities.
GBS has been identified as a key, strategic enabler to the broader business transformation, rationalization and simplification objectives. After years of business acquisitions and divestments, GBS is focused on realigning the operating model, standardizing processes, improving the use of technology, driving efficiency, and cost reductions across the organization.
AECOM is a Fortune 500 company that has grown through acquisition in the last 20 years. The business is segregated by region and business line, which led to support being provided locally – often from high cost locations using similar but disparate processes.
The challenge was to deliver standard efficient processes to a global organisation in a cost-effective way. Initially, the focus was cost reduction. This expanded in 2020 with transformation initiatives focused on standardization and automation. Our objectives included doing things “One best way”.
Discover more award-winning journeys at the SSON Impact Awards: The Winners Series
In two years GBS successfully delivered:
- savings and consolidation of SG&A through the placement of roles to best cost locations
- a global support model servicing Workday, HR, finance and other related functions through a tiered ServiceNow platform and global contact centre running 24/7 covering 4 languages
- process transparency and a document management system as well as key fundamental service delivery frameworks and methodologies to drive sustainability and growth
- a finance transformation design, roadmap and business case outlining the future operating model, service placement strategy and automation roadmap to drive efficiency through 2021
- a BPO service contract renegotiation delivering 10% YoY savings (for our small contingent outsource services)
- the establishment of a new Operating Unit in 2020 allowed for a consolidated business unit P&L and increased transparency to the business on support service costs and levers
- Governance Review Board and Global Process Ownership model to drive key objectives and accelerate transformational initiatives
- hard savings in labour arbitrage with the development of three best-cost locations delivering a savings ratio of 1:4
- tiered approach to service delivery and a self-service philosophy to improve platforms and reduce cost of support at each tier. This resulted in fewer SME’s required at the more senior level
- process standardization / automation transformation in finance led to savings
- the new finance global contact centre delivered a global ServiceNow driven platform, employee centre and contact centre with a net nil business case while improving the employee experience and removing functional silos irrespective of functional ownership
The GBS Transformation leveraged program management under 5 strategic pillars (and a governance review board):
- Organisations and Location Strategy
A business RFA (Business Case) was developed for each service centre. This included establishing legal entities and governance structures required to build and operate the centres.
This included several deliberate transformation programs and projects designed to drive the individual towers to transformation and transition activities to the GBS delivery model.
- Service Delivery
This key pillar covered several the governance components essential to GBS Transformation:
- Transition Methodology
- MSA, Service Catalogues, Engagement etc.
- Business Continuity
- Document Management Systems
- Recharge Models
- Customer Experience
This pillar was responsible for refining the support model, contact centres, case management, and the newly established employee centre and tiered support model.
Responsible for driving a new COE for RPA as well as enhancing and improving the utilization of the key tools used to provide support to AECOM and its customers.
The transformation has been a two-year project broken into several key millstones and achievements:
- Program Kick-off October 2017
- Project Approval December 2017
- Governance Review Board Established Jan 2018
- Global Taxonomy - Mar 2018
- Development of our first Strategic Centre – May 2018
- Document Management System - Jun 2018
- Workday / Global Contact Centre / ServiceNow – Oct 2018
- Development of our second centre Bucharest – Mar 2019
- MSA and Chargeback Model - Sep 2019
- Service Delivery Model and Strategic Plan – Sep 2019
- First ~500 FTE’s in the new Centres Sep 2019
- Performance Reporting and governance Jan 2020
- Finance Transformation Roadmap – May 2020
- Approval for third centre in India – Jun 2020
- Go-Live for new Employee Centre Aug 2020
RESOURCING, TECHNOLOGY, CHANGE MANAGEMENT & IMPROVEMENT METHODOLOGY
This program was delivered using primarily internal program teams supported by steering committees, expert and specialized functions such as IT and HR, new hires and SMEs and some partner support where we needed acceleration, risk mitigation, expertise or influence.
We partnered with CapGemini (who provided BPO for some transactional finance out of India) for the new HR contact centre in Manila, Highmetric for the ServiceNow Implementation, Deloitte for the Business Continuity Planning, and KPMG for the Finance Transformation in 2020.
For the most part, this transformation consisted of a new operating model existing infrastructure, ERPs and applications. We did, however, work with HR in delivering Workday, ServiceNow, VCC and IVR as well as a new Oracle instance for our GBS organisations and several other smaller applications across each tower or function as we adapted and transformed our model.
Change management was key in delivering transformation. We used Kotter’s Change Management approach which engaged and enabled the whole organisation. Engaging senior leadership and linking our transformation initiatives to business objectives have been key to success. We focused heavily on building GBS knowledge using site visits and industry intermediaries who helped us connect with organisations who have gone through a similar journey.
Lean Six Sigma is embedded within our GBS organisations. We have developed inductions and general training programs to support the wide roll-out and development of this methodology. Given large-scale strategic transformation initiatives, we deliberately focused on large-scale change over incremental change identified through our Lean Six Sigma programs.
Over the last two years we have experienced several areas of resistance:
- Business resistance to the new operating model
Businesses were used to a highly customized concierge service underpinned by individual subject matter experts opposed to strong consistent processes. In addition, the business was used to having support in the same office while the new operating model leveraged strategic locations.
This was overcome by ensuring strong change management programs which included operations, consultation during design, a robust transition, onboarding, KT and hyper care period with robust governance that allowed the operations to be in the driver’s seat.
We also chose a captive sourcing model deliberately to drive ownership and connectivity as well as relationships.
We moved a lot of operational period through our centres and focused at all levels of the organisation aligning our business development with the objectives and key success factors of each level of the organisation.
- GBS internal staff adapting to a new delivery model
This was a new model for GBS and the organisation. It changed the ownership structure and created uncertainty for all levels of GBS as well as several functions impacted by the change. It was important to be clear with our vision and timing / stages as well as ensure the management layer had opportunities to drive the changes themselves.
Most of the program teams were made up of impacted employees. This created significant development opportunities and allowed the organisation to assist employees to move to the new way of working. We hired new leaders to help balance the old with the new as we evolved into the new model. Engagement was important and we developed targeted programs to ensure our teams remained fulfilled during the heightened change period.
As part of the overall engagement program, GBS was able to maintain a consistent level of engagement during the transformation. We did our best to communicate often and transparently and learned a lot during this process.
- The evolving simplification and standardization of processes driving attention away from core business
AECOM has been through significant change over the past years and had a level of scepticism with regards to large scale transformation programs. We needed to differentiate ourselves to ensure we had key messaging that aligned our objectives with our business. Often transformation can be a distraction for core businesses. It was imperative we made the change relevant for each level and business line.
- Self-Service and a global approach to support
Our organisation was used to a localized concierge service. With the introduction of tools like Workday and ServiceNow, along with a remote strategic support centre model, we were asking the organisation to operate under a new delivery model. This piece we underestimated.
We did, however, respond with agility and with ownership. End-to-end global process ownership allowed us to take responsibility of issues and change failures centrally irrespective of the owner. By far, self-service has been the largest and hardest change.
BENEFITS AND IMPROVEMENTS
Initial tracking was based heavily on FTE transitions.. During Covid-19, the robust delivery model allowed us to continue to deliver between 30-50 new transitions each month using a full remote transition approach.
Financial targets were based on assumptions of labour arbitrage and cost to achieve. To date, targets have been met at a ratio often exceeding 1:4 (in core locations), delivering target savings. Cost to achieve targets required a nil impact in the financial year which has been achieved YoY.
GBS is a key contributor to company level strategic initiatives with regards to SG&A reduction targets, margin improvement targets, Cash and DSO targets, as well as improvements in other support services – client bids, marketing material through our Marketing and Communications delivery teams, improvement in utilization, and improved employee reporting through the introduction and support of our global Workday HR systems.
Internally, the GBS brand has gained strong support and the model experiences high demand due to the alignment to our strategic objectives. The support models that improve customer experience have been well received.
Consolidating our services across many end-to-end functions has created process transparency, which has driven opportunities for efficiency and cost reductions within function support and in the downstream processes within Operations. The GBS framework and methodologies have allowed us to understand our processes better – creating demand for transformational capability. This has matured the value of the function beyond labour arbitrage or back office support traditionally owned by Shared Services. AECOM GBS is seen as a vehicle for transformational change
Resistance to the new operating model were experienced from both an operational and GBS level, for example shifts in ownership, uncertainty and speed of transformation. This required significant stakeholder and leadership support as well as strong alignment to business objectives. A clear vision and strategy assisted our internal teams.
In the initial phase, we hired bottom-up quickly and took time to put the right management structure and governance in place. This created complexity for the GBS organisation due to blurred ownership and responsivity. It also led to varied stakeholder input and at times misalignment. This was corrected by developing strong governance and structure.
- Show the savings opportunities and link to business strategy. This was key and built momentum and support early.
- Act and think globally. Often, discrete business cases are hard to prove. By thinking globally, the scale and opportunities get the right leadership attention and buy-in. We were therefore able to expand and invest at a much faster and larger rate.
- Structured project management and teams. For complex programs it was critical to build expertise and consistent frameworks, as well as develop a common language to help drive consistency and transparency. Plus, track and report often and ensure key stakeholders are in the room.
What makes your transformation success stand out?
The extensive internal team as well as the AECOM executive leadership support was key. AECOM GBS was given the freedom and confidence to build two new centres, develop a framework and transition methodology, and build a service delivery model equal to any external BPO.
This was achieved within a year and the team was able to double in size (1,000), add 19 more functions, and build a third centre by the second year. This team, its resilience, and the strong level of support received by executive leadership is unique and proved to be the catalyst for our success.
Most of this was done internally except for the HR support centre, where we partnered with our long-standing Capgemini partner; and the recent finance transformation program, where we partnered with KPMG.
Column 3 of the SSON Impact Awards: The Winners Series now available! Click here.