14-15 September 2016

Lisbon, Portugal

#DeloitteSharedServices

Deloitte Shared Services, GBS & BPO Conference

Breakout 1: Shared services / Global Business Services centre transition and migration planning

Mark Craddock, Deloitte

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Contents

The transition curve…mind the ditch! 5

Why transitions go wrong 7

How to get transitions right 8

Questions

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- Invest in transition – don’t cut corners!

- That which I help create, I won’t reject

- PLAN, PLAN and then do some more PLANNING!

Thoughts for the day

If you remember nothing else from this session!

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The transition curve… mind the ditch

5

Typical Transition Curve

… mind the ditch!

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4

5

3

HONEYMOON STEADY-STATE

Time

Sati

sfa

cti

on

(Valu

e)

Illustrative

TIPPING POINT

3. TIPPING POINT

1. HONEYMOON

The relationship or new design model has just been negotiated, expectations are high. In BPO situtations, Businesses have a tendency to let the vendor “run the show” and lead transition.

5. RECOVERY

With a properly laid foundation,

transition programs remain

healthy, resulting in risks that

are properly controlled.

A program will begin to

generate positive momentum

and transition becomes an

enabler of the overall success

of the SSC.

4. DITCH

A poorly executed transition

can spiral downward and erode

confidence in the SSC solution.

Shadow organisations emerge

as staff are “retained” to

support the programme post

go-live. Costs increase rapidly

and the transition can grind to

a halt

2. NATURAL DECLINE

The transition is a massive

change event and a decline in

satisfaction is natural as people

come to understand the effort,

complexity, and lasting effects

of the change. Delivery

pressures mount as new teams

struggle to ramp up.

3. TIPPING POINT

The weight of complexity is fully apparent and

governance, planning, core vision, and value

proposition are all tested. Any downward

momentum must be reversed through the rapid

resolution of issues, achievement of milestones,

proactive management & clear communications

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Why transitions go wrong

Common Causes

Senior leadership want the ‘vision’ quickly, but see transition as ‘commoditised’ and either under-invest or demand unrealistic timescales

BPO Sales Teams are over optimistic; playing up the end state and playing down the risks

There is insufficient up-front stakeholder engagement – transition requires significant change management; in great programmes, transition is really 50% all about change management

In-house operations teams typically have insufficient experience in managing large transition programmes, even after many years of SSC set-up

Insufficient attention is given to the retained organisation and how it will operate post-transition

When faced with issues, decision-making and accountabilities are unclear and slow

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How to get transition right

8

Spend time up-front in preparation and planning

Get the right team and the right project structure

Align the governance approach and decision rights at the start

Engage Stakeholders early and invest in Change Management

Tailor knowledge transfer to the process being transferred

Plan for things to go wrong – contingency!

Remember what you are trying to achieve – get the metrics right!

7 key pillars to successful transition

Although managing these pillars closely won’t guarantee perfection, they will significantly increase the chances of your programme being successful

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Preparation and Planning

Joint Transition Planning is the most critical planning stage and often most overlooked

Stage 1Detailed Planning

Stage 2Joint Transition Planning

• Workshops with appointed regional representatives

• Review with country leadership (e.g. HRD/CFO)

• Formal sign-off of plans, governance and decision rights

Stage 3Wave Refresh

Output : Validated plans, alignment on governance and decision rights

• Calculate number of waves• Determine sequencing, taking into

account legal, cultural, technological and process constraints

• Develop High and detail plans

Team : Core Transition Team/ BPO

Output : High-level plan (HLP), detailed plan, KT approach, governance and decision rights

• Typical run a month ahead of a country formally entering into transition

• Refresh of assumptions

Team: Wave Team + country reps

Output : Updated plan, detailed workshadowing plan

Good preparation can take 2-3 months

4 weeks 4-8 weeks, depending on size

Team : Core + country reps

Plans can be 1000+ lines in detail

Done in Excel as a minimum – MS Project is ideal to track dependencies

Powerpoint should be the communication tool, not the planning tool

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Transition Team and Structure

The ideal structure is a blend of 3 teams: Market, Centre and Project

The model reflects industry good practice

The model leverages the use of Single Points Of Contact (SPOC) for Markets, HR and IT.

The Market SPOC is responsible for providing market context and coordinating transition activities with the market.

Process SMEs provide up-front analysis and design at the start of the programme, but switch to oversight for later wave deployments into market

Wave leads need to possess both process understanding and reasonable project management skills

The model encourages strong stakeholder interaction and building of market-centre relationships from the start

Transition Programme Lead

Programme Director

TMO

Market TeamsWave LeadWave Lead

Support

Sending

Programme Process SMEsComms & ChangeGlobal ITFinance SPOC

Centre IT SPOC Centre HR SPOC

Receiving

Wave Team

Named Contacts

Full-time

Programme Transformation Team

Change Management

Support

Centre BAU Process Lead

For multiple programmes or BPO

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Governance and Decision Rights

We recommend the use of RAPID to speed up decision-making for key activities

Pre

-Tra

nsi

tio

n

Define Transition Methodology

Du

rin

g Tr

ansi

tio

n

Update revised processes in Knowledge Management repository

Monitor revised process

Clo

sure

Collate transition deliverables and assess against agreed criteria

Review revised process against agreed criteria and make ‘Go/No go’ decision

Agree transition toll-gates and assessment criteria

High level activities

Ph

ase

Transition Toll-gate Management

Determine impact of revised process on BAU activities

Perform Input DecideRecommend Agree

Programme Director TMO Stream Leads Steering Co.Wave Lead

Programme Director TMO Stream Leads Steering Co.Wave Lead

Stream LeadsWave Lead

Programme Director TMO Stream Leads Steering Co.Wave Lead

Programme Director TMO Stream Leads Steering Co.Wave Lead

TMO Stream LeadsWave Lead

Programme Director TMO Stream Leads Steering Co.Wave Lead

High level activities

PerformRecommend Agree Input Decide

High level activities

PerformRecommend Agree

Planning and Scope

Management

Risk and Issue

Management

People and Change

Management

Financial Management

Communication Management

Transition Tollgate

Management

RAPID was developed by Bain for decision-making and has proven extremely effective in large, complex transitions with multiple stakeholders

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Stakeholder Engagement

Poor Change Management is often the root cause of perceived BAU service issues

Under-investment in Change Management leads to negative perceptions and often gives rise to shadow retained organisations, eroding the original business case

Areas to address:

Communication

− Regular and often through a variety of channels (newsletter, workshops, individual face-to-face)

− Communication, however, is not the sole responsibility of the comms team – it’s for all the transition team

Project Role

− Actively engage the local business as members of the project team and governance teams throughout the lifecycle

− There may be resistance due to time commitments, but the investment is invaluable and moves the business from passive receivers to active participants

Retained Organisation Reskilling

− Ensure that the role of the retained organisation is clearly defined and distinct from the SSC.

− Avoid ‘checker’ roles; take time to upskill and retrain the retained organisation – moving from people management to value-add

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Tailored Knowledge Transfer

Overall transition times and apportionment vary significantly by the type of transition –it is not one size fits all and needs to be identified clearly early in the planning stages

Type (s) of Transition

Transactional Processing Transformation KPO (Judgmental,Supervisory)

Project or outcome based

Nature of Transition

Large volume, repeated tasksTransition size: 50-100 FTEs per process. e g. AP

Large scale process or technology changee.g. chart of account roll out

Skilled hires, difficult to train, ad hoc e.g. commentary, business reporting and validation

Skilled hires with outcome/deliverables based project

Duration 22-32 weeks 24-34 weeks 28-42 weeks 17-26 weeks

Hiring and Preparation

6-8 weeks (phased hiring) 6-8 weeks (phased hiring) 12-16 weeks 12-16 weeks

Visa and Onboarding

4-6 weeks (10-20% resource only)

4-6 weeks (20% resource only)

4-6 weeks n/a

Onshore training 4-6 weeks 6-8 weeks (UAT/Parallel run/Go live)

8-12 weeks 4-8 weeks

Offshore Training 4-6 weeks (20% train 80% of the team along with

onshore trainer)

4-6 weeks (new process training)

1-2 weeks 1-2 weeks

Parallel Run/ Hypercare

4-6 weeks 4-6 weeks (UAT/processteething resolution)

4-8 weeks n/a

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Planning for when it goes wrong

Advance contingency planning is critical

Works Council discussions can be unpredictable, particularly in countries such as France. Be aware of the ‘gotcha’ locations, confirm previous experience, push down in the sequence and allow significant contingency (several months!)

Typical Risks (extract)

Employee Consultation

Early Exit

Attrition Issues

Training Issues

Some existing employees may choose to leave for new jobs before the formal exit, particular those with limited service. Have a retention programmeand plan a back-fill approach, potentially using SSC/BPO staff

It is not uncommon for new staff to leave during transition or shortly after. Over-recruit (up to 10%), particularly in the early waves. Excess staff can be deployed to later waves and can overcome efficiency gaps in the early months

For complex process in particular, it can often happen that new staff don’t reach sufficient levels in time – never be time-driven in these cases. Test early and often in KT. Add contingency in terms of exit dates. Record all training sessions.

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Getting the metrics right

Measurements need to focus on the desired outcomes throughout the transition, not on the completion of deliverables

Mobilize/ Plan

Analyze w/shops

Regional Design

KT Prep Train UATIntensive

Care

TRANSITION EXECUTION

PARALLELRUN

PLANNINGENTRY

GO LIVE BAU

BAU

TRAININGENTRY

Gates Reviews are outcome focused and address detailed readiness criteria in three areas: People, Process, Technology & Infrastructure

Market/BU and SSC BAU Representatives participate in the reviews

Transition cannot proceed to next phase unless gate criteria have been met

Supporting evidence and documentation is reviewed with the Business at the Gate Reviews

Outcome-focused gate review

People component

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Preparation and planning

Right team and right project structure

Governance approach and decision rights

Stakeholder Engagement; invest in Change Management

Tailor knowledge transfer

Plan for things to go wrong

Outcome-focused metrics

Recap

Transition is not rocket science, but requires a good attention to detail and advanced preparation. Remember the 7 pillars

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Questions?

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