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…….

Context
 The Nationwide Building Society
 Finance Business Services

Service Performance modelling
 Interactive session: your views
 Our model: the ‘HOW and the ‘WHAT’
 Interactive session: how are you managing service performance

In summary
 Key challenges and next steps
 Risk management (if we have time)

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)

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

Context: Operating model for ‘Financial Performance’
Business Customers
Financial Performance

Board and Regulatory Business Partnering

Group [Product]
Operational Channel
Financial Group Cost Capital Income and
Cost Performance
Planning and Management Management Margin
Management Management
Analysis Management

Service Performance [Model] Management
Shared Services

Finance Business Services

Finance Business Services: being organised as a ‘Business’

Our Vision To be a high performance shared services business

Our Mission Delivering excellence to each customer first time, every time

People Process Technology Service

Developing capability Continuously Improving Clear strategy Raising Service levels
Our Critical Creating opportunities Raising standards Optimising automation Delivering on time, in full
Success factors Being accountable Best Operating Practice Engage and support Developing partnerships
Recognising excellence Embracing change Re-engineer Expanding range of services

•Viewpoint score •SLA success rate - various •LV7 downtime •Customer satisfaction
Our Key •Absenteeism •# Exceptions •P1 & P2 faults raised •Process improvements
Performance •Attrition rate •Cost of rework •SLA performance •SLA performance
Indicators (w-i-p) •# PRIDE awards •Projects completed on time •OTIF delivery
•Average PA score •% self-service application
•% development plans in place

Embed a structured and formalised way of working – Service Performance Model implementation
Review our product and service offering – Service Performance Model implementation
Achieving the
vision: Review, optimise processes for delivery – FMT27 outcomes
STRATEGY for Review, modify organisational structure to support delivery – FBS aligned to process
2012-3
Focus on developing capability – people and systems

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’

Service Performance model: Execution through process excellence

The HOW and the WHAT

Applied

to….

Our execution: 7 priorities, 5 workstreams

Something to………

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


• 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
So what…
 Current transaction unit costs
 Expense ratios, budget performance
Establish where we currently are…. 1. Baselines
 Productivity measures ✔
 Cost of exceptions
 Best practice in Shared Services
 Identify key processes for measurement
Measure process performance……. 2. Process metrics  Establish measures – link into SLA ✔
 Agree internally and with customers
 Publication
 Establish contacts
Point of comparison if you can  Agree benchmarks ✔
access them……………….. 3. Internal Benchmarks
 Measure and report
 Share and identify influences
 Establish contacts – Hackett, SSF
Powerful point of comparison if you  Agree benchmarks
can get them…………………. 4. External Benchmarks
 Measure and report ✔
 Share and identify influences
 Best practice in Shared Services
Report to stakeholders................... 5. Balanced Scorecard  Design local scorecard ✔
 Agree targets and implement

Make it easy to execute……………….  Enable Performance Measurement processes
6. Performance modelling ✔
 Increased automation in production


Capability Development – process checklist
So what…
 Evaluate current FBS status and structure
Organisational  Define end-state
1. 
Establish the optimum
delivery structure……………..
capability analysis

Gap analysis
Fill through skills development
✔
 Job specification and competency profiles
 Development and retention programme
 Succession planning ✔
People performance  Reward and recognition process
2.  Improved use of existing tools e.g. Reviews/360
management systems
Develop our people……….....  Resources for training and development
 Leverage the Capability Framework
 Leadership competency
 Viewpoint
Get the team’s perspective 3. Employee surveys  Action planning ✔
and act……………………………..  Accountability, progress monitoring and delivery
 Communication/stakeholder management
Systems optimisation  Training and awareness approach
Leverage technology………… 4.
strategy  Protocols for development and initiatives ✔
 Process for prioritisation of business as usual

 A visible, well defined process
Formalised continuous  Shared with customers and branded
Delivery, effectiveness, 5.
improvement  Incentivised ✔
efficiency, differentiation……..  Tracked benefits


Customer Relationship Management – process checklist
So what…
 Agree Design
 Establish FBS service measures
Set out our service promise…… 1. Service Level Agreements 

Establish customer reverse measures
Set targets and Implement
✔
 Define who the customer is
Get the customer view on a 2. Voice of the customer  Customer review meetings
systematic basis……………………..
 Customer survey and managing feedback
✔
 Agree what is to be delivered
 Product development – customer led ✔
So what do we do………………….. 3. Products Definition  Product development – FBS innovation
 Measure delivery and quality - insight
 Agree when and how we deliver
How should we deliver….......... 4. Service Definition  Measure delivery and quality ✔
 Capability development
 Design process
5. Exceptions Management
 Communicate out ✔
A sustainable learning culture….  Prototype
 Monitor , measure and action planning
 SLA requirements
Engagement at all levels…………. 6. Communications strategy  Relationship governance ✔
 Exceptions processes
 Exceptions modelling
Make CRM easy to execute…….. 7. CRM modelling  Collecting and reporting SLA performance data ✔


So what… Workload Management – process checklist
 Create schedule of regular activities
Identify standard and ad hoc  Review ad hoc requests
activity, establish baselines, focus  Map out peaks and troughs ✔
1. Activity Analysis  Assess flexibility of resource
effort on CI……………………………….
 Identify insight, focus on consistency
 Feed in to Capability Development process
 work is effectively prioritised - urgency of the
request, the importance to the customer
 ensure fluctuations in the FBS workload are managed
Develop a sense of team working within the planned staffing levels
and shared ownership, pro-active Hotspots
 plan the allocation of work to individuals and teams ✔
managment of issues on a 2. (Communication in a timely manner.
systematic basis…………………….. cells)  consider the skills, competencies and preferences of
individuals and teams
 ensure the developmental needs of individuals and
teams are catered for

Understanding cost of service,  Use activity analysis
impact of re-working, basis for Activity Based  Create activity cost analysis ✔
3.  Feed in the unit cost calculation
transaction unit costs Management
 Examine cost sensitivity and impact of exceptions
 Research best practice
Charging
Influence behaviours………… 4.
mechanism
 Prototype FBS model ✔
 Discuss potential impact with stakeholders

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…..)

Your Service Performance model: where are you up to?
Performance measurement Score Customer Relationship Management Score

1. Baselines 1. Service Level Agreements

2. Process metrics 2. Voice of the customer

3. Internal Benchmarks 3. Products Definition
Total 4. External Benchmarks 4. Service Definition

5. Balanced Scorecard 5. Exceptions Management

6. Performance modelling 6. Communications strategy
Maximum 30………. 7. CRM modelling
Maximum 35………….
Capability Development Score
out of….
1. Organisational capability analysis Workload Management Score

110 2. People performance management systems 1. Activity analysis

3. Employee surveys 2. Hotspots (Communication cells)

4. Systems optimisation strategy 3. Activity Based Management

5. Formalised continuous improvement 4. Charging mechanism

Maximum 25…….. Maximum 20………..
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

Additional slide: Risk Management

Risk assessment: mitigating risk supported by the model
Strategic Potential risks of going off-
Managing that risk……
themes track……..

• Lack of clarity of objectives, expectations • Specification, competencies for all roles
People

Engage and • Absence of shared services leadership • Skills development strategies
enable the team • Rewards systems are inadequate • Succession, retention, reward programme
• Failure to act on employee feedback • Satisfaction surveys and positive actions

Committed to • Processes and controls not understood • Documentation, standardisation, streamline
Process

process • Audit failure, reputation damaged • Formalised issues resolution, CI
excellence and • Ineffective change management • Change control process and governance
‘product’ quality • Lack of response, follow up on exceptions • Quality control, risk management focus

Embracing • Inappropriate technology selection • High levels of automation, % self service
Techno

technology to • Incomplete implementation, lack of training • Fit for purpose systems, few side applications
support service • Under-utilisation of the functionality • Project management expertise
delivery • Missing out on leveraging automation • Defined relationship with IS organisation

Developing • Lack of customer engagement • Well executed communications strategy
partnerships, • Non-compliance to agreed processes • Defined and agreed services and products
focus on • Service and ‘product’ failures • Key performance indicators – duly managed
Service

customers • Not leveraging the benefits from the SPM • Customer Satisfaction Surveys – gain insight

• Lack of organisational credibility • Baselining, bench-marking, scorecards
Being ‘organised’ • Low levels of ‘business-like behaviour’ • Leadership, objectives, CSF’s
as a ‘business’ • Inability to influence business customers • Charging mechanisms
• Ineffective communication • Communicated vision, strategy, mission

Toning up your shared services operation for elite performance

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