balancing local & global with a hybrid approach to shared services
Post on 24-Jan-2015
542 Views
Preview:
DESCRIPTION
TRANSCRIPT
Balancing Local & Global With a Hybrid Approach to Shared Services
IQPC SSO Week - May 10th, 2011Michele Gray, Sr. Director, Global Consulting,ADP
©2011 Global HR studio, Inc. Proprietary and Confidential
A little bit about Michele
28 years in HR - Industry and ConsultingADP Global Consulting for 11 yearsInvolved in setting up Avaya (Convergys) Hybrid Model EMEA90% of time spent on advising multi-national companies on how ADP’s outsourcing services can support their HR & Payroll SSC models at design & pre-contract stage■
HR■
HR + Payroll■
Payroll Only
2©2011 Global HR studio, Inc. Proprietary and Confidential
And now a bit about you?
Do you:■
A) Have an HR SSC and already outsource Payroll■
B) Have HR SSC + in-house Payroll■
C) Planning to move to model A■
D) Planning to move to model B■
E) Other
3©2011 Global HR studio, Inc. Proprietary and Confidential
Growing Demand for Global HR and Payroll
Multinational companies’ HR Depts. strategic stakes:
■
Aligning with the organization’s business objectives and adopting common HR policies;
■
Focusing on core business and end-users satisfaction and free local operations from administrative tasks;
■
Reducing day-to-day operating costs related to the management and maintenance of various platforms and vendors;
■
Increasing reporting capabilities through process standardization;
■
Reducing risks related to compliance obligations with local legislation and international finance standards (Sarbanes-Oxley).
©2011 Global HR studio, Inc. Proprietary and Confidential 4
©2011 Global HR studio, Inc. Proprietary and Confidential 5
Business Drivers for SSC and Outsourcing Combined Approach
Company
ComplianceCorporate Governance Sarbanes OxleyPayroll complexity and rate of changeStandardization, efficient processesService Level Agreement, KPIsRisk management
Growth
Technology
GlobalizationMergers and acquisitionEmerging businessShared Service CentersCost effectiveness & value to businessIncrease flexibility and scalability
Decrease interfaces maintenance/ payroll platformsIncrease use of ESS/MSSDecrease risks on system availability, systems upgradesDevelop controls (disaster recovery plans, data protection)Increase flexibility
What’s driving you most?
What is your primary driver for shared services
a. Reduced Costb. Compliance Assurancec. Improved Data Visibility d. Spend Controle. Functional Controlf. Leveraging suppliers technologyg. Other
6©2011 Global HR studio, Inc. Proprietary and Confidential
©2011 Global HR studio, Inc. Proprietary and Confidential 7
Benefits Executives are wanting from Outsourcing (Source: NelsonHall 2010)
Mid-market / National
1) Cost reduction and control
2) Become strategic partner / Stop doing
transactional work
3) Compliance / Risk management
4) Improved technology
5) Lack of resources
6) Reduced risk
7) Better payroll data and service
8) Process improvement
9) Dissatisfied current provider
10) Bad experience with internal payroll
Large / Multi-national
1) Cost reduction and control
2) Global / multi-country service using single vendor and platform
3) Improved payroll data and service
4) Process improvement
5) Improved technology
6) Become strategic partner
7) Compliance / Risk management
8) Bad experience with internal payroll
9) Lack of resources
Why Could a Hybrid Model be attractive?
Cost
Control
Compliance
Service Improvement
8©2011 Global HR studio, Inc. Proprietary and Confidential
©2011 Global HR studio, Inc. Proprietary and Confidential 9
Client Example: Cost Driven
1 - SituationInitial scope Europe only Big supplier to Automotive sector –
hit by recession6,259 employees in 10 European Countries –14 payroll engines “Payroll”
included Time Management & HR (OM/PA)Current TCO €342 PEPY
2 - ObjectivesIdentify $300 -
$500 of ongoing savings part of global cost savings initiativeMove fixed cost to variable
3 - Challenges & ResultsOpen in-house team with lots of base dataExtrapolated for smaller countries -
but key base data available Projected 18% saving( $547K) on As-Is Reduced fixed costs from 93% of TCO down to 38%Projected 23% ($705K) if leverage SSC in lower cost country Regional To Be TCO €264-€282
Increased future TCO to €336 & reduced savings to $150K Corporately used saving from one region to offset investment in other regions
• Expanded scope to Americas & China• Increased HR functionality
©2010 Global HR studio, Inc. Proprietary and Confidential 10
Electronics Co. Consider SSC in Low cost Country
Electronics Co ‐
MS with SSC Comparison Current Vs Future Costs
Europe CurrentFuture
In CountryFuture
SSC in Low Cost
Total Headcount/employees 6,259 6,259 6,259
Total FTE's involved in Payroll processes 17.92 7.84 7.84
Total Transactions per annum 120,876 120,876 120,876
Europe CurrentFuture
In CountryFuture
SSC in Low Cost
Payroll Staff Compensation & Social costs €
1,065,163 €
490,930 €
381,975
Outsourced Services €
159,967 €
1,092,625 €
1,092,625
Payroll IT Costs [Payroll Systems Related costs plus IT Staff Expense] €
333,123 €
64,000 €
64,000
Time Costs €
250,046 €
91,366 €
91,366
Additional Company Payroll Costs ( SOX) €
308,000 € 0 € 0
Postage Costs €
24,266 €
24,266 €
24,266
Total Cost of Ownership €
2,140,564 €
1,763,187 €
1,654,231
Euro Saving €
377,377 €
486,333
% 18% 23%
USD Saving ( at 1:1.45) $ 547,197 $705,183
TCO Metrics CurrentFuture
In CountryFuture
SSC in Low Cost
Payroll:FTE Ratio 349 799 799
Cost per Employee €
342 €
282 €
264
Cost per transaction €
17.71 €
14.59 €
13.69
Organize and Synchronize an SSC with the Deployment of an International HR Project
©2011 Global HR studio, Inc. Proprietary and Confidential 11
Carefully Defined Roles for the SSC & Supplier
©2011 Global HR studio, Inc. Proprietary and Confidential 12
Ensure Process Workflow is clear and agreed
©2011 Global HR studio, Inc. Proprietary and Confidential 13
©2011 Global HR studio, Inc. Proprietary and Confidential 14
Defining Future Positions within the SSC and at the Local Level
Don’t forget to…
Be clear on your business drivers – why are you doing this?Start measuring now so that you can estimate benefits and measure achievement laterSeek Stakeholder buy in – resistance costs, time, money and careers!!Take time to understand what is available from the supplier marketNetwork with others and dig out the truthPlan after Go-Live …SSC is for life not just a projectCome back and tell us how you get on
15©2011 Global HR studio, Inc. Proprietary and Confidential
top related