the latest trends and technologies driving gbs maturity

The latest trends and technologies driving GBS maturity

1Q 2016 Pulse Survey Results

KPMG Global Insights Pulse

2©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

KPMG’s shared services and outsourcing advisory practiceKPMG has the ability to support member firms’ clients transform enterprise

services and help improve value, increase agility and create sustainable business performance.

Who we are

What we do

How we do

it

The Shared Services and Outsourcing Advisory practice brings a specialized team of more than 1,000 professionals within KPMG’s global network of independent member firms operating in 155 countries. We help clients design, build, and manage information technology (IT) and business processes across the enterprise.

We help clients align their business strategy, organization and execution to enable them to manage the entire IT and business process life cycle improving business performance, and laying the groundwork for genuine business transformation.

We apply focused research, automating tools, proprietary data, clear business acumen, and a forward-thinking mind-set to provide timely, objective, actionable advice and practical approaches for clients.



The surveys are a quarterly review of global business services (GBS) market trends and individual observations from the ‘front lines’.

Input sources: Topics evaluated: Primary functional focus:

— 1000+ KPMG sourcing advisors

— 12 leading global business, IT, and cloud service providers

— KPMG market research

— Drivers for GBS usage

— Demand and buying patterns

— Deal attributes

— Thematic topics for each Pulse Survey

— The role of the GBS executive

— GBS governance

— Update on process and cognitive automation

— Call center/customer care

— Finance and accounting

— Human resources

— Information technology

— Procurement

— Real estate and facilities management

— Vertical industry BPO

— Emerging BPO/KPO functions

Focus on performance, trends, and futures

— Launched in 2004 by EquaTerra*

— Part of a growing family of KPMG Pulse market research studies

* KPMG LLP (US) KPMG Holdings Limited (UK) and KPMG International acquired the business and subsidiaries of advisory firm EquaTerra, Inc. in February 2011.

The role of the GBS executive


The role of the GBS executive

David Brown, KPMG’s Global Lead, Shared Services and Outsourcing AdvisoryKPMG in the US

“ “

— Creating strong GBS leadership at the executive level as a peer to other CXO roles is critical to enabling the drive to higher levels of GBS maturity and delivering meaningful and measureable business value and outcomes beyond cost savings.

— Most GBS groups are still organized and managed by function or geography, though this will change over the next three years, moving towards end-to-end process ownership and global management models.

— Functional or geographic GBS leadership rarely (in <10% of organizations) rolls-up into a single global GBS executive, though awareness of the need for this role and planning for its implementation is growing.

— GBS executive leadership, in whatever form, faces many challenges to improving GBS capabilities, especially in enabling end-to-end process ownership and gaining executive level support for GBS operations and improvement efforts.

Bringing GBS services into one organization that operates under one accountable executive leader is crucial in maximizing efficiency and effectiveness and driving greater business value.


Advisors: GBS organization and management models —today and in three yearsToday

In three years

20%

19%

25%

16%

56%

65%

60%

56%

24%

16%

15%

27%

0% 20% 40% 60% 80% 100%

Organized and managed globally

By end-to-end process

By geographic region

By function

Uncommon Common Very common

71%

77%

22%

15%

26%

20%

63%

58%

3%

2%

15%

27%

0% 20% 40% 60% 80% 100%

Organized and managed globally

By end-to-end process

By geographic region

By function

Source: KPMG Global Insights Pulse 1Q16


Advisors: GBS organization and management models —today and in three years

12%

21%

40%

32%

28%

28%

11%

7%

6%

9%

4%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

3Q14

1Q16

No plans, not on the radarAwareness but no actionDeveloping plans to install role/under discussionPlans being executed, 3+ year timelinePlans being executed, 1-3 year timelineRole already established



Advisors: biggest challenges facing GBS executives

43%

49%

43%

35%

61%

52%

41%

43%

44%

45%

52%

42%

Expanding & integrating GBSoperations across processes &

functions

Enabling an integrated IT model,systems & applications to support GBS

Performing governance globally acrossall GBS processes

Executive level support to adopt and/orexpand GBS

Enabling end-to-end process ownership

Evolve GBS focus from cost savings tostrategic business value

1Q16 3Q14Source: KPMG Global Insights Pulse 1Q16

Governance best practices for GBS


Governance best practices for GBS

“Liz Evans, Managing Director, Shared Services and Outsourcing AdvisoryKPMG in the US

“ “

In an integrated environment, the need to have clearly defined roles and responsibilities and hand-offs in your governance environment are extremely significant for success.

— Good governance coupled with strong change and program management is critical to the success of an organization’s global business services efforts, especially as focus shifts to delivering meaningful and measureable business outcomes above and beyond cost savings.

— Governance is a perennial challenge to the success of shared services and outsourcing efforts, especially with integrated delivery models comprising global business services.

— The bar of what constitutes “best in class” GBS governance is constantly being raised so even as organizations’ skills improve they are still often not able to keep up with the demands placed upon them by more advanced and aggressive GBS efforts.

— The biggest challenge to GBS governance efforts is a fundamental lack of governance maturity and capabilitiesat a level required to support existing GBS efforts.

— The top governance success factor to ensure expected value is delivered from GBS efforts is measuring business outcomes against original business case expected value.

— Clearly defined roles and responsibilities for the new governance & operating organization and end-to-end global process ownership are the top two critical considerations for GBS governance.


Biggest GBS governance challenges

19%

32%

39%

41%

41%

50%

61%

0% 50% 100%

Inability to execute operationallyagainst GBS operating model

Lack of technicalautomation/integration in support

of GBS

Lack of enterprise-wide supportfor a new GBS operating model

Stakeholder misalignmentregarding business scope and

expectations

Lack of strategic alignmentbetween business strategy and

GBS strategy

Lack of clear ownership for GBSstrategy and execution

Lack of governance maturity andcapability to manage GBS scale

and scope

Advi

sors

Serv

ice

prov

ider

s

15%

10%

50%

55%

55%

35%

70%

0% 50% 100%



Top enabling technologies for GBS governance

5%

14%

18%

21%

23%

30%

35%

39%

42%

51%

0% 50% 100%

Asset management tools

Mobility applications

Vendor managementtools/applications

Risk compliance andmanagement tools

Contractmanagement/procurement tools

Integrated custom developedtools

Sophisticated data analytics andreporting tools/dashboards

Microsoft products

Performance monitoring tools

Workflow tools for alerts,approvals, etc.

Advi

sors

Serv

ice

prov

ider

s

5%

26%

21%

37%

26%

37%

47%

21%

47%

32%

0% 50% 100%Source: KPMG Global Insights Pulse 1Q16


Top governance success factors to ensure GBS value


18%

29%

35%

36%

48%

51%

71%

0% 50% 100%

Effective customer surveying andimplementation of appropriate action

plans

Ability to effectively extract andanalyze GBS information in support

of the business

Monitoring achievement of costreduction and efficiency objectives

Focus on continuous improvementfor key business/technical processes

Clearly defined process integrationbetween the GBS org. & bus.

units/suppliers

Effective monitoring of keyperformance indicators and service

levels

Measuring business outcomesagainst original business case

expected value

Advi

sors

Serv

ice

prov

ider

s

12%

41%

29%

29%

53%

35%

94%

0% 50% 100%


Top considerations for successful GBS governance organization

25%

27%

33%

45%

53%

54%

57%

0% 50% 100%

GBS governance organizationalignment with regional operating

structure

Effective structure and focus ofjoint governance boards

Well-articulated scope and focusof the governance organization

Talent, experience, and skills ofGBS governance organization

Well-defined integration betweenthe governance org. & the

retained org.

End-to-end global businessprocess ownership

Clearly defined roles &responsibilities for the new

governance & operating org.

Advi

sors

Serv

ice

prov

ider

s

17%

11%

50%

33%

67%

44%

78%



Top relationship management components for GBS governance

18%

23%

30%

36%

38%

38%

43%

48%

0% 50% 100%

Clearly identified personnel match-ups and working relationships

Well-defined and communicatedchargeback and cost allocation

methods

Internal and external service levelagreements

Clearly defined decision rightsamongst key stakeholders

Dedicated relationship managersbetween the bus. units & the

governance org.

Well-defined service catalogshared with the business

Appropriate stakeholderrepresentation on jointmanagement boards

Service agreements in placebetween the GBS org. & the bus.

units

Advi

sors

Serv

ice

prov

ider

s

22%

28%

33%

28%

78%

6%

50%

44%


Process and cognitive automation


The evolution of process automation

Basic process automation

Enhanced process

automation

Cognitiveautomation

Rules engine

Screen scraping

Work flow

Machinelearning

Large-scale processing

Adaptivealteration

Artificial intelligence

Big data analytics

Naturallanguage processing

Processing of unstructured data

and base knowledge

RULES

LEARNING

REASONING

01

02

03

— Artificial intelligence— Natural language recognition and

processing— Self-optimization/self-learning— Digestion of super data sets— Predictive analytics/hypothesis generation— Evidence-based learning

— Built-in knowledge repository— Learning capabilities— Ability to work with unstructured data— Pattern recognition— Reading source data manuals

— Macro-based applets— Screen scraping data collection— Workflow— Visio®-type building blocks— Process mapping— Business process management


Levels of client automation activity by maturity levelAdvisors

Service Providers

72%

41%

19%

27%

40%

43%

3%

19%

19%

1%

4%

26%

0% 20% 40% 60% 80% 100%

Cognitive automation

Enhanced process automation


15% 40%

29%

14%

30%

33%

24%

15%

43%

67%

0% 20% 40% 60% 80% 100%

Cognitive automation

Enhanced process automation


No activity Self-education and planning Experimenting and running pilots Live implementationsSource: KPMG Global Insights Pulse 1Q16


Biggest challenges to process automation

38%

48%

10%

19%

24%

33%

0% 50% 100%

Disparate underlying IT systems;lack of integration

Inconsistent and non-standardbussiness processes make it

impractical

Immaturity of RPA technologies

Client inability to build compellingand realistic business case

Lack of client appetite, budgetand skills to make required

process standardization

Determining where to start anddeploy RPA technologies

Advi

sors

Serv

ice

prov

ider

s

25%

29%

32%

39%

40%

41%

0% 50% 100%



Potential job losses by delivery model - next three yearsAdvisors

Service providers

26%

16%

17%

5%

42%

32%

44%

42%

21%

21%

22%

26%

5%

26%

17%

26%

5%

5%

0%

0%

0% 20% 40% 60% 80% 100%

Retained organization

Shared services

ITO operations

BPO operations

0-10% 11-20% 20-30% 30-50% 50%+

52%

23%

26%

23%

32%

40%

37%

36%

11%

26%

25%

27%

4%

9%

11%

11%

1%

2%

2%

2%

0% 20% 40% 60% 80% 100%


Shared services

ITO operations

BPO operations



Potential job losses by delivery model - next five yearsAdvisors

Service providers

20%

5%

6%

10%

20%

17%

15%

45%

20%

28%

40%

20%

35%

39%

20%

5%

20%

11%

25%

0% 20% 40% 60% 80% 100%


Shared services

ITO operations

BPO operations

0-10% 11-20% 20-30% 30-50% 50%+

25%

17%

16%

13%

42%

26%

28%

28%

25%

32%

31%

33%

7%

20%

15%

19%

2%

5%

9%

7%

0% 20% 40% 60% 80% 100%


Shared services

ITO operations

BPO operations



Likelihood process maturation will drive use of less outsourcing

16%

16%

12%

10%

25%

26%

26%

25%

44%

47%

40%

50%

9%

11%

15%

5%

6%

7%

10%

0% 20% 40% 60% 80% 100%

ITO - Advisors

ITO - SPs

BPO - Advisors

BPO - SPs

1 - Not at all likely 2 3 - Moderately likely 4 5 - Highly likely



Leveraging trends and technologies to drive GBS maturityThere are a variety of levers organizations have at their disposal to drive GBS maturity and deliver meaningful business benefits above and beyond cost savings

Move towards global, CXO level leadership on GBS

Drive end-to-end process ownership tied to global GBS governance efforts and leverage key technologies such as D&A and automation

Prioritize investments related to GBS governance (people, processes, technologies, authority) to get ahead of the curve rather than playing catch up

Clearly define GBS roles and responsibilities against retained organization and business units and ensure GBS governance value is measured in terms of business outcomes

Drive process automation maturity by defining a roadmap and prioritizing investments in efforts and technologies that bring the greatest business value; you cannot “skunk works” yourself to greatness

Recognize and account for the potential business value different types of automation can bring and the associated costs and complexities to implement

Recognize that white collar job loss due to increased automation is inevitable and take proactive steps to address ramifications

About global insights pulse survey


KPMG’s shared services and outsourcing advisory practiceKPMG has the ability to support member firms’ clients transform enterprise

services and help improve value, increase agility and create sustainable business performance.

Who we are

What we do

How we do

it

The Shared Services and Outsourcing Advisory practice brings a specialized team of more than 1,000 professionals within KPMG’s global network of independent member firms operating in 155 countries. We help clients design, build, and manage information technology (IT) and business processes across the enterprise.

We help clients align their business strategy, organization and execution to enable them to manage the entire IT and business process life cycle improving business performance, and laying the groundwork for genuine business transformation.

We apply focused research, automating tools, proprietary data, clear business acumen, and a forward-thinking mind-set to provide timely, objective, actionable advice and practical approaches for clients.



The surveys are a quarterly review of global business services (GBS) market trends and individual observations from the ‘front lines’.

Input sources: Topics evaluated: Primary functional focus:

— 1000+ KPMG sourcing advisors

— 12 leading global business, IT, and cloud service providers

— KPMG market research

— Drivers for GBS usage

— Demand and buying patterns

— Deal attributes

— Thematic topics for each Pulse Survey

— The role of the GBS executive

— GBS governance

— Update on process and cognitive automation

— Call center/customer care

— Finance and accounting

— Human resources

— Information technology

— Procurement

— Real estate and facilities management

— Vertical industry BPO

— Emerging BPO/KPO functions

Focus on performance, trends, and futures

— Launched in 2004 by EquaTerra*

— Part of a growing family of KPMG Pulse market research studies

* KPMG LLP (US) KPMG Holdings Limited (UK) and KPMG International acquired the business and subsidiaries of advisory firm EquaTerra, Inc. in February 2011.

David J. BrownGlobal Lead, Shared Services and Outsourcing AdvisoryKPMG LLP (US)

E: [email protected]

Thank youFor more information visit: http://bit.ly/1RK8emU

mailto:[email protected]

http://bit.ly/1RK8emU

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© 2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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