The path of transformation towards operational excellence begins with developing the right strategy and selecting the approach to centralization or outsourcing (SSC, GBS and CoE models). We advise clients in designing their target operating models, support implementation, migration and stabilization processes, and assist in monitoring productivity, optimization and transformation of the client’s business. We also deliver managed services.
What are the SSC and GBS models?
The SSC (shared services centre) model consists of spinning off processes or functions within the organization. The areas most often spun off include finance, accounting, payroll, HR, IT, supply chain, procurement, and customer service.
With the growing popularity of this model, the set of services continues to grow. Organizations more and more often decide to spin off more strategic areas, such as data analytics, process automation, marketing (digital, omnichannel), legal and compliance, and, in the case of healthcare companies, hubs managing clinical trials.
A shared services centre is a boundless source of potential for growth of the organization. Along with expansion of the set of services and achievement of maturity, such a centre can start down the path toward transformation to GBS (global business services) or CoE (centre of excellence/expertise).
Global business services is a model whose task is to create added value for the business. This means a change in thinking about the shared services centre from a service provider to the role of co-partner for the organization. The centre begins to play the role of an internal consultant for the organization, concerned with its innovation and making a lasting contribution to the growth of the entire organization.
In practice this means:
- Taking the initiative in improvement projects
- Creating substantive backing for the whole organization in selected areas
- Active engagement in business transformation
- Setting trends e.g. in digitization and automation.
Originally, SSC and GBS were mainly created by big multinationals exploiting effects of scale. But the success of these operating models has led to increased interest in implementing them also in smaller organizations.
Firms’ challenges in maintaining market competitiveness
Dynamically evolving business environment, constantly striving for a competitive advantage on the market amid growing pressure to cut costs
Desire to raise the quality of processes and exploit the effect of scale for greater efficiency in exploitation of resources
Transformation toward standardization and optimization requiring engagement of staff at every organizational level, comprehensive knowledge on migration and centralization of processes, and an understanding of the leading market practices in this area
Benefits for the organization from implementation and growth of SSC and GBS models
- Cost reductions (salary arbitrage, elimination of duplicated positions, economies of scale)
- Greater efficiency of processes and utilization of resources
- End-to-end standardization of supported processes
- Standardization of controls and procedures, consolidation of the risk management process
- Transparency and better ability to manage processes
- Centralization of knowledge and data
- Consolidation of technologies used in the organization
KPMG advisory on SSC, GBS and CoE organizational models
Strategy: Support in defining vision and strategy and tailoring the SSC model to the organization’s business goals
In SSC strategy, we provide services on such issues as:
- Development of the conception, including analysis of variants and models for centralization or outsourcing
- Preparation of a location study
- Developing the feasibility study and business case for the SSC
- Preparing the general guidelines for the operating model (key parameters: functional processes, people, service delivery model, technology, data, analytics, management)
- Creation of framework plan for implementation of the SSC.
Target model: Support in designing centralization solutions based on the defined strategy and adopted guidelines
We support clients in developing detailed requirements and defining solutions enabling implementation of the target operating model, including:
- Preparing detailed analyses of the current status in terms of key parameters
- Designing the target operating model
- Dividing responsibilities between the organization and the SSC
- Designing the organizational structure
- Drafting the master service agreement (MSA) and service level agreement (SLA)
- Designing the intended flow of processes and procedures
- Developing control mechanisms and key performance indicators
- Drawing up the infrastructure conception (technical and office)
- Creating a detailed plan for implementation of the SSC.
Implementation and stabilization: Support in preparation and ensuring operational readiness, conducting migration and stabilization of the organization for execution of services in line with the adopted operating model
In implementation and stabilization, we support clients in introducing changes and new methods of executing tasks in the organization, including:
- Drafting a detailed plan for migration of processes
- Creating the operational documentation for the SSC
- Coordination of knowledge transfer and the transition process
- Supervision over preparation of infrastructure and office space
- Implementation of service agreements (MSA/SLA)
- Preparing an assessment of the readiness to shift responsibility for execution of processes
- Stabilization support after launch of the SSC
- Developing conclusions from the implementation and completion of the transition process (lessons learned).
Support in optimization and striving for operational improvement at the SSC
Our support in this respect includes:
- Preparing a maturity assessment of the SSC
- Quick scan of inefficiencies in processes, developing recommendations for improvements
- Benchmarking of processes executed at the SSC
- Standardization and optimization of processes
- Preparing for automation and robotization of business processes.
Support in transformation of SSC to the role of GBS or CoE
We assist clients in transforming SSCs to GBS or CoE. One of the aims of the transformation is to shift the purpose of the SSC’s operations from a cost-cutting unit to an organization creating added value by expanding the range of the services it provides.
Our support in transformation of SSC to GBS or CoE primarily includes:
- End-to-end design of processes
- Implementation of the process owners’ functions
- Implementation of a policy of continuous improvement in the organization
- Reorganization of the target operating model
- Support in planning and managing the transformation
- Assistance in implementing service agreements (MSA/SLA) with regard to the value created by the organization.
Contemporary, productive and optimally functioning operating models in organizations in the sector of modern business services are increasingly becoming a strategic aim for building the firm’s competitive advantage. To ensure operating continuity and deliver the highest quality services to their clients, management teams constantly strive to attract talent, expand competencies, and build an effective organization. And new challenges—in HR, projects, processes and strategies—constantly arise, demanding to be addressed and resolved as soon as possible.
In our operating support service, we offer a dedicated team of specialists with a broad spectrum of skills and experiences working at international shared services centres. Our experts are ready to act immediately, at any location, within flexible timeframes.
The SSOA (Shared Services and Outsourcing Advisory) team has carried out over 150 SSC, GBS and CoE projects in the last 10 years for international organizations operating in numerous industries. We have supported clients at every stage of the project, from drawing up the vision and assistance in taking the decision to build an SSC or outsourcing, through projects for transformation to GBS, introduction of a culture of continuous improvement, digitization projects, and automation of processes.
Our deep knowledge of the market, refined and proved methodologies, and wealth of project experience enable effective implementation of SSC, GBS and CoE models or selection of the optimal provider of outsourcing services. As a consulting partner, we offer a full range of services, pursuing our clients’ strategy and vision and how to realistically implement them.
Being part of the global KPMG network ensures us a truly international perspective in leading practices and trends in the SSC, GBS and CoE area.
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