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CUSTOMIZING THE SERVICE MODEL TO ALIGN WITH ORGANIZATION OBJECTIVES CNI’s Journey, Mistakes, and Lessons Learned Kenny Ong...
Contents: <ul><li>Before we start… </li></ul><ul><li>Identify Business Objectives </li></ul><ul><li>Align Service Model </...
Intro: CNI <ul><li>18 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Exp...
Intro: CNI <ul><li>CNI’s Shared Services background </li></ul><ul><li>CNI Malaysia </li></ul><ul><li>CNI Global </li></ul>...
A. Before we start…
<ul><li>“… in the past 18 months, we have heard that profit is more important than revenue, quality is more important that...
Before we start… <ul><li>In the old days of HR… </li></ul><ul><li>Average training hours per staff </li></ul><ul><li>% of ...
Before we start… <ul><li>Moral of the story… </li></ul><ul><li>Innovation: </li></ul><ul><ul><li>Business models </li></ul...
<ul><li>“ What is the moral of the story?” </li></ul>
B. Understanding the Business Objectives Strategy and Intent
Strategy: Value Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Leaders , Michael Tr...
<ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li...
Sample KPIs for Each Discipline <ul><li>Operational Excellence </li></ul><ul><li>Price </li></ul><ul><li>Selection </li></...
<ul><li>Operational Excellence </li></ul><ul><ul><ul><li>Move  know-how  from top performing units to others </li></ul></u...
Strategy: Value Disciplines <ul><li>Customer Intimacy </li></ul><ul><ul><ul><li>Capture knowledge about  customers </li></...
<ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce  time  to market </li></ul></ul></ul><ul><ul><ul><li>Commercia...
The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li...
Strategy: Value Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Leaders , Michael Tr...
Strategy: Value Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Leaders , Michael Tr...
Financial Shared Services <ul><li>Strategy and Intent of the Business? </li></ul><ul><li>FSS role in the strategy? </li></...
C. Aligning the Service Model
Aligning Service Model <ul><li>Role of FSS </li></ul><ul><li>Objectives of FSS </li></ul><ul><li>4-Wheels  </li></ul>
Alignment: 4-Wheels Service Model Principles Corporate  Objective FSS Role & Objectives Structure Resources Leadership Per...
FSS Role? Financial Shared Services SBUs, Divs, Depts Corporate Center Strategy Results Request Service Policies Service
FSS Objectives? Transactional Cost reduction, Efficiency, Agility, Fast Copy AP, General Ledger, B/S analysis, Accounting,...
Open & Hidden Objectives <ul><li>Eliminate redundancies </li></ul><ul><li>Remove no value-adding activities </li></ul><ul>...
Alignment: Framework <ul><li>Price Transparency </li></ul><ul><li>Business Management </li></ul><ul><li>Market Responsiven...
Alignment: Framework <ul><li>Org Structure </li></ul><ul><li>Job Design </li></ul><ul><li>Policies & procedures </li></ul>...
Alignment: Service Structure Corporate Center Financial Shared Services One Internal Customer Multiple Internal Customers ...
Alignment: Internal Structure FSS Transition Management Fulfillment & Service Delivery Business Development
Alignment: Internal Structure Migrate processes to standard platforms, scaled migration, joint-process ownership FSS Trans...
Alignment: Internal Structure SLAs, Audit Compliance, Business Controls, records Management, service request processing, d...
Alignment: Internal Structure identify processes to migrate, customer relationships, value migration, CS interviews, perfo...
Alignment: Framework <ul><li>Tools </li></ul><ul><li>ICT Systems </li></ul><ul><li>Digitization </li></ul><ul><li>Self Ser...
Strategy: Framework <ul><li>Customer focused </li></ul><ul><li>Attentive to market standards </li></ul><ul><li>Costs </li>...
Alignment: Framework <ul><li>Specialist Career Ladders </li></ul><ul><li>Staff -> Frontline </li></ul><ul><li>Team-based <...
Alignment: Framework Principles Corporate  Objective FSS Role & Objectives Structure Resources Leadership Person
D. Internal Customer Indicators
Measurement & Satisfaction <ul><li>“ In business after business, 60% to 80% of lost customers reported on a survey just pr...
Corporate-level BSC Financial “ To satisfy our stakeholders, what Financial objectives must we accomplish?” Internal Proce...
Corporate Objectives FSS-level BSC FSS Strategy Customer Who do we define as our customer? How do we create value for our ...
ISLI <ul><li>ISLI = Internal Service Level Index. </li></ul>Services and Levels Expectations, Priorities, Improvement Plan...
<ul><li>Relationship = Expectations </li></ul>
ISLI Matrix Customer Intimacy Product Leadership Operational Excellence Transactional Value-added Best Practices Transform...
ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value ...
ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value ...
ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value ...
ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value ...
E. Notes, Problems, Issues
Notes, Problems, Issues <ul><li>FSS viewed as simply Cost Cutting </li></ul><ul><li>No change in C&B structure </li></ul><...
F. Starting Up
Starting Up <ul><li>Strategy and Intent of the Business? </li></ul><ul><li>FSS role in the strategy? </li></ul><ul><li>Obj...
Thank You. soft copy of slides:  www.totallyunrelatedrandomanddebatable.blogspot.com
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Customizing the Finance Shared Services Model to align with Organization Objectives - ABF Financial Shared Services Conference

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Customizing the Finance Shared Services Model to align with Organization Objectives - ABF Financial Shared Services Conference

  1. 1. CUSTOMIZING THE SERVICE MODEL TO ALIGN WITH ORGANIZATION OBJECTIVES CNI’s Journey, Mistakes, and Lessons Learned Kenny Ong CNI Holdings Berhad
  2. 2. Contents: <ul><li>Before we start… </li></ul><ul><li>Identify Business Objectives </li></ul><ul><li>Align Service Model </li></ul><ul><li>Internal Customer Indicators </li></ul><ul><li>Notes, Problems, Issues </li></ul><ul><li>Starting Up </li></ul>
  3. 3. Intro: CNI <ul><li>18 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Export/Trading, eCommerce </li></ul><ul><li>Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan </li></ul><ul><li>Staff force: ± 500 </li></ul><ul><li>Distributors: 250,000 </li></ul><ul><li>Products: Consumer Goods and Services </li></ul>
  4. 4. Intro: CNI <ul><li>CNI’s Shared Services background </li></ul><ul><li>CNI Malaysia </li></ul><ul><li>CNI Global </li></ul><ul><li>Key Elite </li></ul>
  5. 5. A. Before we start…
  6. 6. <ul><li>“… in the past 18 months, we have heard that profit is more important than revenue, quality is more important that profit, people are more important than profit, customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our performance is inconsistent&quot; </li></ul>CEO, Anonymous
  7. 7. Before we start… <ul><li>In the old days of HR… </li></ul><ul><li>Average training hours per staff </li></ul><ul><li>% of staff attending training </li></ul><ul><li># of training programs </li></ul><ul><li>% of training programs conducted </li></ul><ul><li>Training needs analysis conducted </li></ul><ul><li>Competency models developed </li></ul><ul><li>Training budget as % of payroll </li></ul>What’s wrong with this picture?
  8. 8. Before we start… <ul><li>Moral of the story… </li></ul><ul><li>Innovation: </li></ul><ul><ul><li>Business models </li></ul></ul><ul><ul><li>Products </li></ul></ul><ul><ul><li>Services </li></ul></ul><ul><li>Market Leadership </li></ul><ul><li>Competitive differentiation </li></ul>Get the picture?
  9. 9. <ul><li>“ What is the moral of the story?” </li></ul>
  10. 10. B. Understanding the Business Objectives Strategy and Intent
  11. 11. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
  12. 12. <ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li></ul><ul><li>Meet volatile customer needs </li></ul><ul><li>Fast concept-to- counter </li></ul><ul><li>Never satisfied - obsolete own and competitors' products </li></ul><ul><li>Learning organization </li></ul>Strategy: Value Disciplines <ul><li>Operational Excellence </li></ul><ul><li>Competitive price </li></ul><ul><li>Error free, reliable </li></ul><ul><li>Fast (on demand) </li></ul><ul><li>Simple </li></ul><ul><li>Responsive </li></ul><ul><li>Consistent information for all </li></ul><ul><li>Transactional </li></ul><ul><li>'Once and Done' </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Management by Fact </li></ul><ul><li>Easy to do business with </li></ul><ul><li>Have it your way (customization) </li></ul><ul><li>Market segments of one </li></ul><ul><li>Proactive, flexible </li></ul><ul><li>Relationship and consultative selling </li></ul><ul><li>Cross selling </li></ul>
  13. 13. Sample KPIs for Each Discipline <ul><li>Operational Excellence </li></ul><ul><li>Price </li></ul><ul><li>Selection </li></ul><ul><li>Convenience </li></ul><ul><li>Zero Defects </li></ul><ul><li>Growth </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Customer Knowledge </li></ul><ul><li>Solutions Offered </li></ul><ul><li>Penetration </li></ul><ul><li>Customer Data </li></ul><ul><li>Customer-success focus </li></ul><ul><li>Product Leadership </li></ul><ul><li>Marketing </li></ul><ul><li>Functionality </li></ul><ul><li># of Successes </li></ul><ul><li># of Failures </li></ul><ul><li>Learn from key users </li></ul><ul><li>Interdisciplinary teams </li></ul><ul><li>Pipeline </li></ul>
  14. 14. <ul><li>Operational Excellence </li></ul><ul><ul><ul><li>Move know-how from top performing units to others </li></ul></ul></ul><ul><ul><ul><li>Benchmark against best in class </li></ul></ul></ul><ul><ul><ul><li>Ensure operations training for all employees </li></ul></ul></ul><ul><ul><ul><li>Use disciplines like TQM for continuous learning to reduce costs and improve quality </li></ul></ul></ul>Strategy: Value Disciplines
  15. 15. Strategy: Value Disciplines <ul><li>Customer Intimacy </li></ul><ul><ul><ul><li>Capture knowledge about customers </li></ul></ul></ul><ul><ul><ul><li>Understand customer needs </li></ul></ul></ul><ul><ul><ul><li>Empower front line employees </li></ul></ul></ul><ul><ul><ul><li>Ensure that everyone knows the customer </li></ul></ul></ul><ul><ul><ul><li>Make company knowledge available to customers </li></ul></ul></ul>
  16. 16. <ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce time to market </li></ul></ul></ul><ul><ul><ul><li>Commercialize new products fast </li></ul></ul></ul><ul><ul><ul><li>Ensure that ideas flow </li></ul></ul></ul><ul><ul><ul><li>Reuse what other parts of the company have already learned </li></ul></ul></ul><ul><ul><ul><li>Ensure there are multiple sources of funding </li></ul></ul></ul>Strategy: Value Disciplines
  17. 17. The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li></ul><ul><li>Make it easy to prepare </li></ul><ul><li>High Turnover </li></ul><ul><li>Tasks simple to learn & repeat </li></ul><ul><li>Make it quick </li></ul><ul><li>“ Fast Food” </li></ul><ul><li>Tests new products for Cooking Times </li></ul><ul><li>Make what customers want </li></ul><ul><li>Prowls market for new products </li></ul><ul><li>Monitored field tests </li></ul>*Adapted from: Businessweek , Februrary 5 th 2007
  18. 18. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
  19. 19. Strategy: Value Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
  20. 20. Financial Shared Services <ul><li>Strategy and Intent of the Business? </li></ul><ul><li>FSS role in the strategy? </li></ul><ul><li>FSS Strategy and Intent? </li></ul><ul><li>Objectives of FSS? </li></ul><ul><li>FSS Service Model? </li></ul>
  21. 21. C. Aligning the Service Model
  22. 22. Aligning Service Model <ul><li>Role of FSS </li></ul><ul><li>Objectives of FSS </li></ul><ul><li>4-Wheels </li></ul>
  23. 23. Alignment: 4-Wheels Service Model Principles Corporate Objective FSS Role & Objectives Structure Resources Leadership Person
  24. 24. FSS Role? Financial Shared Services SBUs, Divs, Depts Corporate Center Strategy Results Request Service Policies Service
  25. 25. FSS Objectives? Transactional Cost reduction, Efficiency, Agility, Fast Copy AP, General Ledger, B/S analysis, Accounting, Fixed Assets, AR, Facilities Value-added Budgeting, Reporting, Financial Analysis, Forecasting, Tax, Legal, Treasury Consistency, Analysis, Value creation, customization Systems, Standardize, Benchmarking, ERP, Streamlining, Automation, Governance Best Practices Process improvement, service innovation, secondary KPIs, internal customers Transformation Market Leadership, Competitive Differentiation, Business model, M&A, CSI Direct Business Impact, primary KPIs, external customers
  26. 26. Open & Hidden Objectives <ul><li>Eliminate redundancies </li></ul><ul><li>Remove no value-adding activities </li></ul><ul><li>Cost Savings </li></ul><ul><li>Focus on Core </li></ul><ul><li>Economies of Scale </li></ul><ul><li>Compete with external vendors </li></ul><ul><li>Specialized skill sets </li></ul><ul><li>Move from staff to line </li></ul><ul><li>Salary Band </li></ul><ul><li>Career Path </li></ul><ul><li>Manage external vendors </li></ul><ul><li>B.U.s appreciate services </li></ul><ul><li>Additional revenue w/o interfering core </li></ul><ul><li>Divestment/IPO </li></ul><ul><li>MSC tax break </li></ul><ul><li>Make accountable to SBU vs. HQ </li></ul><ul><li>Undertake large infra projects </li></ul>
  27. 27. Alignment: Framework <ul><li>Price Transparency </li></ul><ul><li>Business Management </li></ul><ul><li>Market Responsiveness </li></ul><ul><li>Best Practice </li></ul><ul><li>Process Standardization </li></ul><ul><li>Service Culture </li></ul>Principles
  28. 28. Alignment: Framework <ul><li>Org Structure </li></ul><ul><li>Job Design </li></ul><ul><li>Policies & procedures </li></ul><ul><li>Governance </li></ul><ul><li>Management Systems </li></ul><ul><li>BSC and KPIs </li></ul><ul><li>Benchmarking </li></ul><ul><li>A.B.C. </li></ul>Structure
  29. 29. Alignment: Service Structure Corporate Center Financial Shared Services One Internal Customer Multiple Internal Customers External & Internal Customers In-sourcing Co-sourcing Joint-Venture BPO
  30. 30. Alignment: Internal Structure FSS Transition Management Fulfillment & Service Delivery Business Development
  31. 31. Alignment: Internal Structure Migrate processes to standard platforms, scaled migration, joint-process ownership FSS Transition Management
  32. 32. Alignment: Internal Structure SLAs, Audit Compliance, Business Controls, records Management, service request processing, digitization FSS Fulfillment & Service Delivery
  33. 33. Alignment: Internal Structure identify processes to migrate, customer relationships, value migration, CS interviews, performance evaluations FSS Business Development
  34. 34. Alignment: Framework <ul><li>Tools </li></ul><ul><li>ICT Systems </li></ul><ul><li>Digitization </li></ul><ul><li>Self Service </li></ul><ul><li>Workflow </li></ul><ul><li>Physical facilities </li></ul><ul><li>In-source? </li></ul><ul><li>Co-source? </li></ul><ul><li>JV? </li></ul><ul><li>BPO? </li></ul>Resources
  35. 35. Strategy: Framework <ul><li>Customer focused </li></ul><ul><li>Attentive to market standards </li></ul><ul><li>Costs </li></ul><ul><li>Service </li></ul><ul><li>Best practices </li></ul><ul><li>Accountable for SLAs, ISLIs </li></ul><ul><li>Build relationships with BUs </li></ul><ul><li>Bottom line management </li></ul><ul><li>Tradeoff between Cost vs. Value </li></ul>Leadership
  36. 36. Alignment: Framework <ul><li>Specialist Career Ladders </li></ul><ul><li>Staff -> Frontline </li></ul><ul><li>Team-based </li></ul><ul><li>Duplication </li></ul><ul><li>Standard or Creative? </li></ul><ul><li>SS vs. Staff mindset </li></ul><ul><li>Sourcing </li></ul><ul><li>C&B, Retention </li></ul><ul><li>In-source? </li></ul><ul><li>Co-source? </li></ul><ul><li>JV? </li></ul><ul><li>BPO? </li></ul>Person
  37. 37. Alignment: Framework Principles Corporate Objective FSS Role & Objectives Structure Resources Leadership Person
  38. 38. D. Internal Customer Indicators
  39. 39. Measurement & Satisfaction <ul><li>“ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied .” </li></ul>HBR March/April 1996
  40. 40. Corporate-level BSC Financial “ To satisfy our stakeholders, what Financial objectives must we accomplish?” Internal Process “ To satisfy our customers, in which internal business processes must we excel?&quot; Customer “ Who are our target customers? What is our value proposition?” Learning & Growth “ What capabilities and tools do our employees require to help them execute our strategy?
  41. 41. Corporate Objectives FSS-level BSC FSS Strategy Customer Who do we define as our customer? How do we create value for our customer? How do we enable ourselves to grow and change, meeting ongoing customer needs Employee Learning and Growth Internal Process To satisfy customers while meeting budgetary constraints, at what business processes must we excel? Financial How do we add value for customers while controlling costs?
  42. 42. ISLI <ul><li>ISLI = Internal Service Level Index. </li></ul>Services and Levels Expectations, Priorities, Improvement Plans Service Costs
  43. 43. <ul><li>Relationship = Expectations </li></ul>
  44. 44. ISLI Matrix Customer Intimacy Product Leadership Operational Excellence Transactional Value-added Best Practices Transformation Standard
  45. 45. ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value Process improvement, service innovation, secondary KPIs, internal customers Transformation Direct Business Impact, primary KPIs, external customers Time Cost Quantity Quality
  46. 46. ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value creation, customization Process improvement, service innovation, secondary KPIs, internal customers Transformation Direct Business Impact, primary KPIs, external customers Time Cost Quantity Quality Innovation Service
  47. 47. ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value Process improvement, service innovation, secondary KPIs, internal customers Transformation Direct Business Impact, primary KPIs, external customers Time Cost Quantity Quality Innovation Service KPI
  48. 48. ISLI Transactional Cost reduction, Efficiency, Agility, Fast Copy Value-added Best Practices Consistency, Analysis, Value Process improvement, service innovation, secondary KPIs, internal customers Transformation Direct Business Impact, primary KPIs, external customers Time Cost Quantity Quality Innovation Service KPI Impact
  49. 49. E. Notes, Problems, Issues
  50. 50. Notes, Problems, Issues <ul><li>FSS viewed as simply Cost Cutting </li></ul><ul><li>No change in C&B structure </li></ul><ul><li>“ Shadow” services at BUs </li></ul><ul><li>Incongruent with Company Strategy </li></ul><ul><li>HO allocation </li></ul><ul><li>Just consolidate, no Redesign </li></ul><ul><li>Complicated, Legal-jargon SLAs </li></ul><ul><li>FSS leadership turnover </li></ul><ul><li>FSS staff < competent than BU staff </li></ul><ul><li>Who should bear external party costs? </li></ul><ul><li>Infra ownership </li></ul><ul><li>SLA yes, but ISLI no </li></ul><ul><li>Staff unwilling to go to FSS </li></ul><ul><li>FSS taking orders from Big Boss vs. BUs </li></ul>
  51. 51. F. Starting Up
  52. 52. Starting Up <ul><li>Strategy and Intent of the Business? </li></ul><ul><li>FSS role in the strategy? </li></ul><ul><li>Objectives of FSS? </li></ul><ul><li>FSS Service Model? </li></ul>
  53. 53. Thank You. soft copy of slides: www.totallyunrelatedrandomanddebatable.blogspot.com

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