toning up your shared services operation for elite performance

Toning up your shared services operation

for elite performance

….formalised service performance modelling to fit with your organisation

Ian McAllister March 2012

For today…….

The Nationwide Building Society

Finance Business Services

Interactive session: your views

Our model: the ‘HOW and the ‘WHAT’

Interactive session: how are you managing service performance

Key challenges and next steps

Risk management (if we have time)

Context

Service Performance modelling

In summary

Context: The Nationwide Building Society in numbers

165 years.…….experience - as a mutual

£190 billion....assets held - the world’s largest building society, UK’s largest mutual

£320 million…last reported profit (2011)

15 million..…..members – borrowers and savers

16,000……..….employees – in approximately 700 locations

180+…….………similar organisations – acquired or merged

1st………………..retail internet banking - introduction in the UK

8...………….……range of retail financial products – savings, mortgages, loans, investments etc..

♯2…………...…UK savings and mortgage provider

♯1…………...…for customer satisfaction (Financial Research Survey: February 2012)

http://www.thederbyshire.co.uk/Homepage.aspx

Context: forming Finance Business Services (FBS)

• Nationwide transactional activities (mainly P2P and R2R) branded as ‘shared services’ but in reality are centralised accounting (and in another location)

• This shared services proposition:-

• a provider of Business Intelligence and other analytics to senior decision-makers

• focus is on delivering high quality, often complex outputs through a combination of efficient transactional activities and insight.

• Shared services as a business

• This story: how…..

• we intend to deliver on our proposition

• an embedded Service Performance Model (of any design) is equally effective for a range of shared services solutions

Business Customers

Service Performance [Model] Management

Finance Business Services

Group Financial

Planning and Analysis

Group Cost Management

Capital Management

Operational Cost

Management

[Product] Income and

Margin Management

Channel Performance Management

Board and Regulatory Business Partnering

Fin

anci

al P

erfo

rman

ce

Shar

ed S

ervi

ces

Context: Operating model for ‘Financial Performance’

Our Critical Success factors

Our Key Performance

Indicators (w-i-p)

Achieving the vision:

STRATEGY for 2012-3

Developing capability Creating opportunities Being accountable Recognising excellence

Continuously Improving Raising standards Best Operating Practice Embracing change

Raising Service levels Delivering on time, in full Developing partnerships Expanding range of services

Clear strategy Optimising automation Engage and support Re-engineer

Our Vision

Our Mission

To be a high performance shared services business

Delivering excellence to each customer first time, every time

•Viewpoint score •Absenteeism •Attrition rate •# PRIDE awards •Average PA score •% development plans in place

•SLA success rate - various •# Exceptions •Cost of rework

•LV7 downtime •P1 & P2 faults raised •SLA performance •Projects completed on time •% self-service application

Embed a structured and formalised way of working – Service Performance Model implementation Review our product and service offering – Service Performance Model implementation Review, optimise processes for delivery – FMT27 outcomes Review, modify organisational structure to support delivery – FBS aligned to process Focus on developing capability – people and systems

•Customer satisfaction •Process improvements •SLA performance •OTIF delivery

Finance Business Services: being organised as a ‘Business’

People Process Technology Service

Your views: what a Service Performance model looks like

Interactive session: at your tables……………..two questions: 1.What should ‘good look like’ for managing Service Performance

2.What do you think the benefits are of having a ‘model’

Applied

to….

The HOW and the WHAT

Service Performance model: Execution through process excellence

Our execution: 7 priorities, 5 workstreams

1. Support a business mindset………....vision, mission, critical success factors

2. Establish where we currently are….baselines

3. Monitor how we are performing…..scorecards

4. Set out our service promise………....service level agreements

5. Sustain a learning culture…………....exceptions management

6. Deliver performance………...............formal continuous improvement

7. Assist in managing priorities……..….self-managed teams

Something to………


• A bit of interactive ‘fun’………………….not scientific

• On the handout provided, we would like you to indicate where your shared services business is up to with regard to modelling ‘Service Performance’

• As we share the contents of this particular model, we would like you to score that progress as follows:

Score 0………………….not started, not applicable, not interested!! 1………………….thought about it, at the ideas stage, may implement 2………………….have a plan for implementation 3………………….currently implementing 4………………….fully implemented, still evolving 5………………….totally embedded

• We’ll total at the end

• Maximum score is…………110

• Would like to collect in at the end of the session, replies can be anonymous

Service Performance model: Your experiences

Scorecards in your packs………..

Performance Measurement – process checklist

1. Baselines

Current transaction unit costs Expense ratios, budget performance Productivity measures Cost of exceptions

✔

2. Process metrics

Best practice in Shared Services Identify key processes for measurement Establish measures – link into SLA Agree internally and with customers Publication

✔

3. Internal Benchmarks

Establish contacts Agree benchmarks Measure and report Share and identify influences

✔

4. External Benchmarks

Establish contacts – Hackett, SSF Agree benchmarks Measure and report Share and identify influences

✔

5. Balanced Scorecard Best practice in Shared Services Design local scorecard Agree targets and implement

✔

6. Performance modelling Enable Performance Measurement processes Increased automation in production

✔


Establish where we currently are….

Measure process performance…….

Point of comparison if you can access them………………..

Powerful point of comparison if you can get them………………….

Report to stakeholders...................

Make it easy to execute……………….

So what…

Capability Development – process checklist

1. Organisational capability analysis

Evaluate current FBS status and structure Define end-state Gap analysis Fill through skills development

✔

2. People performance management systems

Job specification and competency profiles Development and retention programme Succession planning Reward and recognition process Improved use of existing tools e.g. Reviews/360 Resources for training and development Leverage the Capability Framework Leadership competency

✔

3. Employee surveys Viewpoint Action planning Accountability, progress monitoring and delivery

✔

4. Systems optimisation strategy

Communication/stakeholder management Training and awareness approach Protocols for development and initiatives Process for prioritisation of business as usual

✔

5. Formalised continuous improvement

A visible, well defined process Shared with customers and branded Incentivised Tracked benefits

✔


Establish the optimum delivery structure……………..

Develop our people……….....

Get the team’s perspective and act……………………………..

Leverage technology…………

Delivery, effectiveness, efficiency, differentiation……..

So what…

Customer Relationship Management – process checklist

1. Service Level Agreements

Agree Design Establish FBS service measures Establish customer reverse measures Set targets and Implement

✔

2. Voice of the customer Define who the customer is Customer review meetings Customer survey and managing feedback

✔

3. Products Definition

Agree what is to be delivered Product development – customer led Product development – FBS innovation Measure delivery and quality - insight

✔

4. Service Definition Agree when and how we deliver Measure delivery and quality Capability development

✔

5. Exceptions Management

Design process Communicate out Prototype Monitor , measure and action planning

✔

6. Communications strategy SLA requirements Relationship governance Exceptions processes

✔

7. CRM modelling Exceptions modelling Collecting and reporting SLA performance data

✔


Set out our service promise……

Get the customer view on a systematic basis……………………..

So what do we do…………………..

How should we deliver…..........

A sustainable learning culture….

Engagement at all levels………….

Make CRM easy to execute……..

So what…

Workload Management – process checklist

1. Activity Analysis

Create schedule of regular activities Review ad hoc requests Map out peaks and troughs Assess flexibility of resource Identify insight, focus on consistency Feed in to Capability Development process

✔

2. Hotspots (Communication cells)

work is effectively prioritised - urgency of the request, the importance to the customer

ensure fluctuations in the FBS workload are managed within the planned staffing levels

plan the allocation of work to individuals and teams in a timely manner.

consider the skills, competencies and preferences of individuals and teams

ensure the developmental needs of individuals and teams are catered for

✔

3. Activity Based Management

Use activity analysis Create activity cost analysis Feed in the unit cost calculation Examine cost sensitivity and impact of exceptions

✔

4. Charging mechanism

Research best practice Prototype FBS model Discuss potential impact with stakeholders

✔


Identify standard and ad hoc activity, establish baselines, focus effort on CI……………………………….

Develop a sense of team working and shared ownership, pro-active managment of issues on a systematic basis…………………….. Understanding cost of service, impact of re-working, basis for transaction unit costs

Influence behaviours…………

So what…

Challenges and next steps

• Challenges…..

• Winning hearts and minds – culture, ‘bit theoretical?’

• Choosing the ‘right model’ – priorities, delivery, resources, ‘fit’

• Implementation – timing, change management

• Sustainability - measurement systems, evolution, embed

• Next steps…..

JDI for superior shared services delivery (in my humble opinion…..)

Questions?

Scoring template

Performance measurement Score

1. Baselines

2. Process metrics

3. Internal Benchmarks

4. External Benchmarks

5. Balanced Scorecard

6. Performance modelling

Maximum 30……….

Your Service Performance model: where are you up to?

Customer Relationship Management Score

1. Service Level Agreements

2. Voice of the customer

3. Products Definition

4. Service Definition

5. Exceptions Management

6. Communications strategy

7. CRM modelling

Maximum 35………….

Capability Development Score

1. Organisational capability analysis

2. People performance management systems

3. Employee surveys

4. Systems optimisation strategy

5. Formalised continuous improvement

Maximum 25……..

Workload Management Score

1. Activity analysis

2. Hotspots (Communication cells)

3. Activity Based Management

4. Charging mechanism

Maximum 20………..

Total

Score 0 - not started 1 - at the ideas stage, may implement 2 - have a plan for implementation

3 - currently implementing 4 - fully implemented, still evolving 5 - totally embedded

110

out of….

Additional slide: Risk Management

Being ‘organised’ as a ‘business’

Engage and enable the team

Embracing technology to

support service delivery

• Lack of organisational credibility • Low levels of ‘business-like behaviour’ • Inability to influence business customers • Ineffective communication

• Inappropriate technology selection • Incomplete implementation, lack of training • Under-utilisation of the functionality • Missing out on leveraging automation

• Lack of clarity of objectives, expectations • Absence of shared services leadership • Rewards systems are inadequate • Failure to act on employee feedback

• Baselining, bench-marking, scorecards • Leadership, objectives, CSF’s • Charging mechanisms • Communicated vision, strategy, mission

• Specification, competencies for all roles • Skills development strategies • Succession, retention, reward programme • Satisfaction surveys and positive actions

• High levels of automation, % self service • Fit for purpose systems, few side applications • Project management expertise • Defined relationship with IS organisation

Strategic themes

Potential risks of going off-track……..

Managing that risk……

Committed to process

excellence and ‘product’ quality

• Processes and controls not understood • Audit failure, reputation damaged • Ineffective change management • Lack of response, follow up on exceptions

• Documentation, standardisation, streamline • Formalised issues resolution, CI • Change control process and governance • Quality control, risk management focus

Developing partnerships,

focus on customers

• Lack of customer engagement • Non-compliance to agreed processes • Service and ‘product’ failures • Not leveraging the benefits from the SPM

• Well executed communications strategy • Defined and agreed services and products • Key performance indicators – duly managed • Customer Satisfaction Surveys – gain insight

Peop

le P

rocess

Techn

o

Service

Risk assessment: mitigating risk supported by the model

toning up your shared services operation for elite performance

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