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Drawing on data published recently by Deloitte and HfS/Hackett...
How Shared Services optimization demands a new approach to process management.
In three slides:
Download Shared Services - Rethinking Process Management - 26 May 2011
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With backing from FatBoy Slim, it wasn't going to take much for me to enjoy the Shared Services and Outsourcing Revolution video shown at SSOW in Amsterdam and just released online by SSON.
We could quibble with the calculation of $1.3bn cash flow benefits. We could point out some inconsistencies in the logic of the storyline. But basically it's five minutes of excitement - and broadly right. It's very plausible that 89% of executives worldwide now see shared services as strategic to their business.
Next year, it will be Nitin Sawnhey backing a more reflective video on how the cosmological underpinning for sustainable success in shared services and outsourcing is process management. With a bluesy number from John Mayer on the heartache of losing control (of one's processes)... Meantime, play me that Fat Boy Slim again. Process and good music - Mmmmm.
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Hat tip to IBM for its 2010 Global CFO Study.
What did 1,900 global CFOs report as the primary driver for their investment in Finance Transformation programs? It wasn't ROI.
What was really interesting in the presentation, hosted by APQC, on IBM's findings was that CFOs are pursuing strategic goals in Finance Transformation, way beyond simple cost reduction and better cash management.
Carl Nordman, IBM Research Director on the Study, commented:
"The case for change is much more about strategic goals: greater transparency, enhanced risk and controls, globalization and the mitigation of structural complexity. ROI was secondary. The benefits were seen as longer-term, building the capability to recognize opportunities and to execute on their plans."
Which makes perfect sense. And it's a breath of fresh air because the received wisdom tends to focus almost exclusively on the ROI of cost reduction.
Two other findings stood out:
'Time to value' is shortening dramatically. Finance Transformation programs used to take 10-15 years. Now they take more like 5-7 years. It was a lesson learned by CFOs: "You can pull multiple levers at the same time".
One of the biggest gaps between aspiration and reality related to continuous improvement. More than 80% of CFOs said that embedding continuous improvement was a high priority. But only 50% thought that their Finance functions were doing it effectively.
This accelerated pace, together with the complexity of multi-track change programs and the need to enable engagment in continuous improvement, reinforce the argument that the methods and tools for managing process that got us this far aren't fit for the future.
Going forward, an enterprise platform for process management of this sort will be essential. They are the key to delivering the mitigation of structural complexity that CFOs want. Otherwise, as Phil Gilbert has noted, we risk creating enterprises so ridiculously complex that they are unmanageable, or hopelessly inefficient.
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Why exactly does process management matter in shared services and outsourcing? And what does good process management look like? How do you recognise it? Explain to me - in six minutes.
That was the challenge that we took on at a speed-dating session at SSOW in Amsterdam last week. We pitched to six groups of shared services and outsourcing professionals, the bell going promptly every six minutes for the change-round.
This video shows how we did it. Great fun! And in one of the groups, a member of the audience announced at the end that he was from Nestlé - and used Nimbus Control. Couldn't have scripted it better.
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Great pleasure to be able to release today a video interview with Tim Palmer.
A leader in Global Business Services and HR Transformation at PA Consulting, Tim is an industry veteran and thought leader. His clients include some of the world’s largest companies. And, in this and much else, he's a visionary: since I first met Tim six years ago, he's been passionate about process management as the bedrock for sustainable success in business transformation.
He's also a really nice bloke - and spontaneous. I took along the camcorder on the off chance. Tim said 'why not?' and we switched it on. And in case you're wondering why he's so well dressed late on a Friday afternoon: his daughter had given him the tie for his birthday and insisted that Daddy wore it.
Make a pot of tea, sit down and enjoy...
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For me the most remarkable comment in three days of discussions at this year's SSOW event in Amsterdam came from George Connell, telling the story of Shell's success in its global shared services strategy.
It was almost an aside - but it perfectly captures the significance of the global business services revolution that is underway.
It was this: an internal announcement from the Shell CFO that a future CFO will be expected to have spent a significant part of his or her career in one of the SSCs.
Which is remarkable, I think, because it demonstrates how shared services has morphed from tactical back-office cost-reduction to become a strategic issue, a way of driving transformational change across the business. If you haven't worked in shared services, you're not equipped to be the CFO. It's an amazing advance.
This wider perspective came through too in the many comments from speakers and panellists on the vital importance of change management. [We had a Six Minute Demo on the Nimbus booth on exactly this theme - more to follow].
My two favorite comments though came from two of the visitors to the Nimbus booth who listened to the Six Minute Demo pitch.
One of them said afterwards: 'So process was MS-DOS and now you've invented Windows..'. I resisted the temptation to hug him - but that visitor went away with second pack of Nimbus-branded M&Ms.
The most brilliant response though was from a visitor who stood thoughtfully and then said:'So Nimbus is the Apple of process management...'. Which obviously merited the full works: the Nimbus pen and pencil as well as the candies.
Great event - congratulations to SSON.
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You are going to be blown away by an article I had published on the SSON website yesterday: How To Succeed in Business Services.
I was invited to write it in advance of the Shared Services & Outsourcing Week 2011 event in Amsterdam next week.
And I know you'll be knocked out by its glittering prose because I had just returned from a one day copy-writing course. Embarrassing! Most of what I write was demolished as being boring, pretentious and laden with jargon. So I came away with a new mission - to lighten up, and write as though I was talking to my Mum at the kitchen table.
Well, wherever I can, anyway. I hope it's not disrespectful to let this slip - but my Mum doesn't have much of an appetite these days for 1,000 word thought leadership pieces. Even on Business Services...
Look forward to seeing many of you next week. Come visit us at the Nimbus stand!
Download via Nimbus website: How To Succeed in Business Services
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