Transcript Document 7642934

STREAMLINING SHARED
SERVICES
FOR OPTIMAL
PERFORMANCE
Ms Thami Sithole
Group Shared Services Executive
2nd ANNUAL PROVINCIAL PUBLIC SECTOR HUMAN RESOURCES
MANAGEMENT CONVENTION 2007
Theme
Transforming Human Resources
Management in the Public Sector:
From transactional management to
strategic boardroom partnerships.
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FOCUS AREAS
 Shared services as an efficiency leveraging
approach
Efficiency leveraging (economies and savings)
Service delivery
 Business process streamlining and optimisation for
operational efficiency
faster, better, focused
 Efficiency building blocks and value drivers for
measuring performance
Culture and mindset
 Transition and stabilisation: change management
 Building and enabling for enduring success
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What does our universe look like?
IFRS
DWAF & Stakeholders
CIDB
ISO Audits/SABS
FICA
Auditor
General
Financial Market
Local /Foreign
King II
Communities in
Area of Supply
COSA
NEMA
Local Govt and
Provinces
Rand Water
Rating
Agencies
PFMA
G30
PAIA
SAAWU
& other industry
bodies
External
Audit
FSC
PAJA
Organised Labour
Sect.78
SARB/NT
Service
Providers
Contractors
WA & WSA
Board Breakaway Session – 14th March 2007
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Strategic Issues facing RW
IFRS
Restructuring of Institutional
Arrangements & Sector
Collaboration
NEMA
Raw Water Quality
& Pricing
CIDB
ASGISA
FICA
NEPAD
Demarcation of Water
Services Authorities
King II
Establishment of Catchment
Management Agencies
G30
COSA
Rand Water
Sect.78
Culture,
Competencies
and Staffing
Cross Border
Initiatives
Creation of a National Water
Resources Agency
Subsidiary and
Secondary Activities
Regional Electricity
Distributors
FSC
PAIA
PAJA
Black Economic
Empowerment Initiatives
Skills Shortage
Chemical &
Energy Costs
Corporate Social
Responsibility
WA & WSA
Remuneration at State
Owned Enterprises
PFMA
Board Breakaway Session – 14th March 2007
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PROBLEM STATEMENT
 Support services are fragmented across the
business with each site responsible for and
providing its own support service
 Overlapping responsibilities and low spans of
control
 It is inherently difficult to co-ordinate, to differentiate
between policy and guidelines with execution
responsibilities
 Support service cannot take full accountability for
their functions
 Imbalance in the levels of support enjoyed by each
site
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PROBLEM STATEMENT
 Site managers are operating as “silos” being
responsible for the entire spectrum of business
operations and support leading to lack of focus
and/or undue pressure
 Duplication of processes
 High cost of doing business
 Repeated services with no standards set
 No value add to the services provided
 Under leveraged technology – ERP platform and
scattered IT infrastructure
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DELIVERING ON MISSION
Strategy - 2004
Creating an Operating Model for Optimal
Efficiency and Cost Effectiveness:
Consolidate, streamline, align and focus
commonly shared services and business
processes to realise operating efficiencies and
deliver cost effectiveness
Package these shared services and processes
within an organisational structure that is
designed to promote efficiency, generate value,
realise cost savings, and deliver improved
service for the internal customers.
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WHAT IS SHARED SERVICES?
“is as a strategic instrument to promote
innovation, growth and service quality
and to respond faster to the market”
“is an efficiency leveraging approach”
(service and cost effectiveness)
“only marketing and innovation
produces profits”
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WHY THIS OPERATING MODEL
 Strategic responsibility over nature and quality of
support services
 Focus on economies of scale and scope
 Cost effectiveness and efficiency
 Process streamlining and optimisation
 Creation of service excellence and culture
 Ability to leverage vendor's existing skills, methods,
technology, and infrastructure
 Ability to leverage skills across the organisation and
share the successes
 Platform to build common values
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WHY THIS OPERATING MODEL
 Consolidation of transactional and administrative
work, includes professional and advisory services
 Platform for standardised compliance
 Objective is to:
 Balance the service scope
 Reduce costs through economies of scale
 Standardise and optimise processes
 Improve service standards and quality across RW
 Enhance stakeholder service experience
 Enables for agility and services delivery
 Speed of delivery
 Response to market & customer demands
 Response to environment
 Eliminate “fruitless and wasteful” expenditure
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MULTIFUNCTIONAL SS
GROUP SHARED SERVICES EXEC
BUSINESS PROCESS
OPTIMISATION
AND TECHNOLOGY
LEVERAGING
FINANCE AND HR
FACILITIES
SUPPLY CHAIN
ENTERPRISE
RISK SERVISES
LEGAL
COMMUNICATIONS
IT &
KNOWLEDGE MNGT
Relationship Mgt, People Development and Continuous Improvement
PORTFOLIO SUPPORT
(Reporting, Customer & Service Mgt, Communications)
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Group Shared
Services Portfolio
Portfolio Support Mgr
Service
Orientated
Architecture
Personal Assistant
Communications
and Marketing
Risk Advisory
Services
Brand Management
Stakeholder Engagement
Exhibitions and Event Mgnt
Employee Communication
Information Management
Media & Public Relations
Corporate Collateral and
Merchandise
Graphic Services
SHEQ
Risk Control
Risk Financing
Business Continuity Mgt
Security Services
Quality Control Mgt
Additional Areas into
GSSP
(Commercial)
Procurement
Supply Chain Management
Supplier Development
BBBEE
Travel Services
Office Supplies
Human Resources
Management
HR Information and
Administration Mgt
Staffing & Recruitment Mgt
Training & Education
Administration
Compensation Mgt
Employee Relations
Employee Self Service
Performance Mgt
Employee Wellbeing
Employment Equity
Areas to be taken out of
GSSP
(Strategic Human Capital)
Org Design and Architecture
Change Management
Talent Management
HR Planning
Employee Relations
Risk Compliance
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Information
Technology and
Knowledge
Management
ERP-SAP Support
ICT Asset Management
Infrastructure and Networks
IT Business Continuity Mgt
Business Applications Mgt
Information and Document Mgt
Business Process Mgt
Collaboration Solutions
ICT Equipment
Mobile Solutions
Software and Application Mgnt
Library & Mail Services
Logistics and
Facilities
Warehousing and
Inventory Mgt
Facilities Mgt
Accommodation
Buildings
Canteens
Conferencing
Office location
Fleet Mgt & Maintenance
Environmental Services
Mgt (including servitudes
and grounds mgt)
Legal Services
Contracting
Litigation
Servitudes & Expropriations
Encroachments & Property Mgt
Legal Advise
Legal Compliance
Legislative changes input/
impact analysis
GOVERNANCE FRAMEWORK
Governance Framework
Minister of WA & F
Rand Water
BOARD
Human
Resources
Committee
Audit &
Risk
Committee
CBF/PCP
Transformation
Forums
EE Committee
Wellness Committee
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Finance &
Treasury
Committee
Farm
Committee
Portfolio Integrating Committee
Portfolio
MANCO’s
OPCO
PRC
Procurement
Risk Forum
Capital
Investment
Committee
OPERATING PRINCIPLES
Customer centric organisation
Seamless value chain driven organisation
Best fit technology enablement
Zero tolerance for poor performance
All investment decisions are business case
driven
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Provide one stop service and do it right the
first time
Finance
Create company wealth
Increase efficiency
Reduce direct costs
Manpower cost
Cost of Non-Service Delivery
Cost of Service delivery
Processes
Employees
Learning and
Growth
Internal Processes
Customer
Create Stakeholder
value
Product Attributes
Group Image
Brand
Quality of
Supply
Reliability of
Supply
Accesability to
Supply
Information
Accuracy
Relationships
Processing
Quality
Service Attributes
Information
Quality
Citizenship
Cost of
Supply
Create
synergies
Service
Complaints
Service
Requests
Service
Information
Customer
responsiveness
Operationally Excellent Service Value Chains
Business
enabling
policies &
procedures
Manage
availability &
credibility of
HR Services
Cost effective
HR processes
and practices
Performance
Man
Enabling Environment
Performance Culture
Enhance
Service
Leadership
Competencies
Competencies
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Manage
change &
diversity
Develop
people &
learning
org
Administrative
efficiency
Development of
competencies &
employee
productivity
Technology Enablement
Key Talent
Recruitment,
deploy &
retention
Quality of
Worklife
Improve
SHER Record
Quality of
Worklife
IOD TRacking
Sytem
HRIS
Document
Management
System
EFFICIENCY LEVERAGING
Skills – streamline structure
Technology – enterprise wide platform
Processes – end2end align and
streamline
Services – consolidate
Scale – strategic sourcing (buy better)
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SAP R/3 Modules
TECHNOLOGY LEVERAGING
Logistics
SD
FI
Sales &
Distribution
Financial
Accounting
MM
CO
Materials
Mgmt.
Controlling
AM
PP
Accounting
R/3
Production
Planning
QM
Quality
Management
Human
Resources
PM
Client / Server
ABAP/4
Plant
Maintenance
HR
Human
Resources
Cross
Application
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Fixed Assets
Mgmt.
PS
Project
System
WF
IS
Workflow
Industry
Solutions
PROCESS ALIGNMENT
PEOPLE
Supporting
tools for
processes
and people
TECHNOLOGY
People are
key in
implementing
new
processes
PROCESS
Process innovation
& redesign linked
to corporate
strategy
The three critical aspects to a process improvement project
are people, process and technology
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Plan Enterprise
Definition: Models that
represent the business on
value chain level
Model type: Value added
chain diagram (VACD)
Generate Demand
Develop Products and Services
Manage
Promotions
Situation
Analysis
Forecast
Demand
Optimise Raw
Water Sources
Enter into
Supply
Agreement
Business
Development
Manage
Pricing
Abstract Water
Manage
Customer
Relationships
Develop Value
Proposition
Distribute
Water
Purify Water
Manage
Partnerships
Visioning
Fulfill Demand
Infrastructure
and Logistics
Network
Management
Strategic
Options
Manage
Suppliers
Manage
Customer
Interface
Fulfill Contract
Obligations
After Sale
Support
Manage
Customer
Satisfaction
Billing and
Collections
Manage Enterprise
Manage HR
Manage
Finance
Manage IT
Manage
Procurement
Manage
Projects
Manage Legal
Manage
Marketing
Manage Risk
Manage
Corporate
Governance
Manage Water
Quality
Manage
Communication
Overall
Strategy
VALUE CHAIN LEVEL (VCL)
L1
Level 2 Manage Information Technology
Definition: Models that
represent the business on
process level
Model type: Value added chain
diagram (VACD)
Develop IT
Strategy
Manage BPM
Centre Of
Excellence
Implement IT
Example Only
PROCESS LEVEL (PL)
L2
SUB PROCESS LEVEL (SPL)
L3
Level 3 Manage BPM Centre Of Excellence
Document Business Processes
Definition: Models that
represent the business on sub
process level
Model type: Value added
chain diagram (VACD)
Note: Multiple layers are used
to model complex processes
Confirm Role
Players
Gather Existing
Information
Conduct
Workshop
Review
Processes
Obtain Final
Sign-Off
Manage COE Functions
Receive BPM
Request
ACTIVITY LEVEL (AL)
Develop
Modelling
Method Filter
Restore
Database
Add new user
Develop
Customised
Report/Utility
Merge
Database
Publish
Models on
Web
Generate
Existing Report
Consolidate
Objects
Change
Control
Maintain User
Licence Key
List
Maintain
Access Rights
for Users
Maintain
Template
Backup
Database
Create Local
Database
Close BPM
Request
L4
Definition: Models that
represent the business
on the activity level
Model type: Event
driven process chain
eEpc and for each
activity the assigned
Function Allocation
Diagram (FAD) is
modelled.
Receive BPM
Request
Receive change
control request
Review request
Inform user
Close change
request
Changes
Required
Sign-off changes
Update ARIS
model
Close BPM
Request
OR
SYS
ARIS
Update ARIS
model
Process Analyst
Update
documentation
(PSD)
SYS
ARIS
SYS
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Changes not
required
ARIS
Models ready for
publication
Publish
Models on
Web
CONSOLIDATE SERVICES
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ECONOMIES OF SCALE
 The secret to lower costs, improved profits and a more
competitive operation lies in the supply chain. Strategic
Sourcing is a procurement process that continuously improves
and re-evaluates the purchasing activities of the company. It is
one component of supply chain management.
 The steps in a strategic sourcing process are:
 Assessment of a company's current spend (what is bought where?)
 Assessment of the supply market (who offers what)?
 Development of a sourcing strategy (where to buy what, while
minimizing risk and costs)
 Identification of suitable suppliers
 Negotiation with suppliers (products, prices)
 Implementation of new supply structure
 Track results and restart assessment (continuous cycle)
 Outsourcing and Managed Solutions is a method that can be
employed as part of the overall sourcing strategy for services..
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STRATEGIC SOURCING
Here are five ways strategic sourcing is different:
 1. Total Cost, Not Just Purchase Price: From storage to
repairs to disposal costs, there is more to a product or service
than its sticker price.
 2. Consolidating Purchasing Power
 3. Tighter Supplier Relationships: By narrowing the number of
suppliers used in the business, "partnering" in alliances and
entering into mutually beneficial contracts, suppliers can work
together with a strategic sourcing business to achieve
standardization and improvements in cost, quality and time.
 4. Realigned Business Processes, Work And Information
Flow: Strategic sourcing redesigns work and information flow to
eliminate redundancies and non-value-added work. Strategic
sourcing can also help reduce the frequency of purchasing
orders and inventory costs.
 5. Improved Teamwork And Purchasing Skills: Creating
cross-functional teams that can include suppliers, a business
can overcome organizational barriers and inspire collaboration.
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SHARED CULTURE
Service-Profit Chain: Leveraging
Corporate Performance Through Linking
and Satisfying Your Employees and
Customers
The service-profit chain is a powerful
phenomenon that stresses the importance
of people – both employees and
customers – and how linking them can
leverage corporate performance.
The service-profit chain is an equation
that establishes the relationship between
corporate policies, employee satisfaction,
value creation, customer loyalty, and
profitability
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SHARED CULTURE
It is estimated that two-thirds of
customers who defect do so because of
poor service. In order for customer service
to drive profits, every link in your serviceprofit chain – employee capability, job
satisfaction, productivity, employee
loyalty and customer satisfaction – must
be strong
To achieve success, you must make
superior service second nature of your
organization.
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COLLABORATION MECHANISM
• Service level agreements
• Knowledge, resource
sharing
• Competitive pricing
• Pooling of key
competencies
• Knowledge sharing
Centre of
excellenc
e
• Customer
responsiveness
Decentralised
services
• Economies of
scale
• Standards and
architecture
control
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Centralised
Control
Shared
Service
• Revenue generation
potential
Charge
out units
Joint
Ventures
Potential
Outsourcin
g
combine a number of these options for different services.
• Shared risk
• Leverages partner
resources
• Contractual
relationship
• Predictable costs
• Reduces capital
outlays
PERFORMANCE SCORECARD
Base line
Cost efficiency
service delivery costs are the lowest
cost per service provided is the lowest
service transaction costs are the lowest
Service efficiency
service levels are the best by customer
experience
Faults are eliminated/repeat jobs
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PERFORMANCE SCORECARD
Process efficiency
Turnaround times are the shortest
comply with local and international
financial practices and standards
accurate and meaningful management
information on a real time basis
Doing it better every time
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PERFORMANCE SCORECARD
strongest customer share of mind
product range and attributes is optimal
customers are billed in the shortest
period with zero errors
lowest debtors days
lowest cost of revenue collection
lowest total cost of ownership
lowest total logistical costs
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PERFORMANCE SCORECARD
best price, quality and service from
service providers
people enjoy the best working
conditions
contribution per employee is the highest
spend the highest Rand per employee
to develop competencies
Maximum self-service is undertaken by
employees
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Thank You
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