Are Your Shared Services KPIs for Good or Evil?

PHIL SEARLE
CEO & Founder
Global/Americas
Tel: (408) 402-3008
philsearle@chazeypartners.com
Phil has more than 20 years of experience in Finance,
Shared Services, Technology and Outsourcing. Prior to his
current role, he was Group VP and CFO of Cendant TDS
International, which encompassed all areas of Finance
across four continents, including Decision Support,
Financial Planning & Analysis, Controllership and
Financial plus certain HR Shared Services.
Phil was granted O1 visa status by the US government in
2008 which resulted in him gaining accelerated Green
Card status in 2009 through the “Extraordinary Ability”
classification. This classification is for
“ability…demonstrated by sustained national or
international acclaim” and was based on Phil’s unique
experience in Shared Services and Outsourcing. Phil also
was issued a C10 visa by the Canadian federal
government in 2010; this visa is only granted where there
is “significant benefit to Canada" [R205(a) CEC C10].
Phil is a Chartered Accountant and has a BA Honors
Degree in Economics from the University of Exeter. He is a
member of Financial Executives International (FEI).
ROBERT TOWLE
Regional Director
East Coast, US
Tel: (862) 812-7851
roberttowle@chazeypartners.com
Robert has over 20 years of experience in Finance, Shared
Services and Technology implementations. He has
managed multiple shared services transformation
projects and has held multiple roles managing shared
services operations in the U.S., U.K. and in multiple
locations in India. Prior to his recent assignments, he was
the Vice President of Finance for Pinkerton Consulting.
Prior to Pinkerton, Robert was the Vice President of
Global Operations Finance for Travelport Limited, with
responsibilities including the management of company’s
Indian Shared Service Center, global corporate travel and
North American payroll operations.
He is well suited to developing transformation activities,
but is comfortable focusing on daily operational issues,
managing staff at all levels and ensuring a high level of
customer service.
Robert holds an MBA with dual concentrations in Finance
and Information Technology from Auburn University.

Are Your KPIs being used for Good or Evil?
It is commonly accepted that leading Shared Services Organizations
measure performance in order to drive continuous improvement. In
this interactive session:
• We cover best practices in performance measurement and how
KPIs are one of the most important elements of the Client
Interaction Framework
• We share stories from the frontline that expose the good, bad and
ugly about KPIs
• “Good" examples that drive sustainable improvement
• “Evil” examples where the KPIs can actually damage the
relationship with the SSO’s clients
• Learn how to set the correct KPIs, achieve alignment between
functions, establish relevant targets & utilize KPIs to grow your SSO

Chazey Partners Profile
Critical Importance of the Client
KPI Best Practices
KPIs for Good or Evil?
Winning Strategies & Takeaways

Chazey Partners Profile

Chazey Partners is a practitioners-led global management
advisory business. We bring together a unique wealth of experience,
empowering our clients to strive for world class excellence through
Business Transformation, Shared Services &
Outsourcing and Technology Enablement
We have operationally delivered and consulted on numerous programs globally, over
the last 20 years, in the US, Canada, Latin America, UK, Ireland, Continental Europe,
India, Singapore, Australia, China, Middle East and Africa
Our end-to-end capability offers advice, guidance and implementation expertise,
covering strategy setting and business case production, program management,
implementation and process optimization
Who We Are · Overview

Who We Are · Services Portfolio
FINANCE & ACCOUNTING
●
HUMAN RESOURCES
●
INFORMATION
TECHNOLOGY
●
PROCUREMENT
●
TRAVEL & EXPENSES
●
CONTACT CENTRES
Expertise In Public Sector & Private Sector
INVENTORY & LOGISTICS
●
STAT & TAX COMPLIANCE
●
SUPPLY CHAIN
●
LEGAL SERVICES
●
FACILITIES MANAGEMENT
●
MARKETING BACKOFFICE
BUSINESS
TRANSFORMATION
−
SHARED SERVICES
& OUTSOURCING
−
TECHNOLOGY ENABLEMENT
−
BUSINESS CONTINUITY
−
CHANGE MANAGEMENT
−
LEAN SIX SIGMA
Functional Breadth of
Experience
Other Supporting
Services

Who We Have Worked With
OUR CLIENTS
WHERE HAVE WE COME FROM

Critical Importance of the Client

Client
• Service orientation in place
• Structured way of dealing with customers
• Customer satisfaction levels understood
• SPAs in place
• Reality versus perception
• Account management
Process
• Processes documented
• Standardized, controlled & repeatable activity
• Recharging methodology
• Benchmarking – internal/external
• Metrics: Control Based; (ii) Efficiency &
Effectiveness
Technology
• ERP implemented
• Document Scanning Solution
• Workflow
• Automated Payments
• Elimination of Side Systems
• Self services tools
• Automated Score Cards
People
• Skilled Leadership in place – do not compromise on
competencies
• Team shape & stability – process shaped/spans of
control/staff – perm v temps
• Team members – culture, values & behavioral competencies
assessed
• Team morale, reward & retention
• Working environment conducive to team working

Without CIF
• Lack clarity on who does what
• “Perception versus reality”
• Focus is on negative aspects of
service delivery
• One-way traffic without traction
• Strained client relationships
• Not proactive; takes effort to
maintain morale
• Takes emphasis away from
customer service
With CIF
• Outward looking and proactive
• Client-orientated
• Deliver to pre-defined standards of
service to meet agreed client needs
• Accountable and measured, using
metrics and KPIs
• Drive cost of service towards a
world-class standard
• Active management of client
relationships
Through a formal framework: The Client Interaction Framework (CIF) distinguishes a
leading practices Shared Services from a simple act of centralization and drives a spirit
of partnership between the SSO, its clients, and all key stakeholders

Account
Management
•SSO to client; via reporting,
interaction, escalation &
communication
Client Contact
Management
•Client to SSO; to manage
and resolve queries and
drive learning/improvement
Service Partnership
Agreements
•SPAs are 2-way agreements
clarifying both SSO services
and client inputs
Client
Feedback
•Client satisfaction
continuously monitored
both informally and formally
Continuous
Improvement
•Mechanisms to identify the
areas for improvement and
to develop solutions
Process Control
Database
•Documents end-to-end SSO
processes; highlights
activity of both SSO & client
Performance
Measurement
•Comprehensive KPIs,
measures and metrics
framework, SSO & client
Performance
Reporting
•Process performance will be
reviewed monthly by SSO
and client
Recharging
Methodology
•Define basis for charging for
SSO services to turn
consumers into clients

KPI Best Practices

KPIs Enable the Client Interaction Framework
Recharging
Methodology
Performance
Reporting
Performance
Measurement
Process Control
Database
Client
Feedback
Client Contact
Management
Service Partnership
Agreement
Account
Management
Bring reality check to
client conversations
Measure input volumes
and exceptions
Documentation of
negotiated service levels
Process
handover points
Reported regularly to all
stakeholders
Full framework of input,
output, and operational KPIs
Measure
client satisfaction
Chargebacks typically
linked to KPIs
Continuous
Improvement
Support culture of
continuous improvement

OutputProcess
Input
KPIs
Operational
& Individual KPIs
Output
KPIs
Measure effectiveness
and efficiency of SSO
“The engine room”
Achieving targets?
Working as a team?
Measures the success,
quality and effectiveness
of service delivery
Downstream part of
process
Aka “lagging” indicators
Types of KPIs
Measure client input to process
Timely, standardized and in the
prescribed format?
Upstream part of process
Aka “leading” or “reverse”
indicators
Input

•Socialize framework to develop buy-in
•Engage providers and clients
•Ensure aligned to best practices
•Clarify strategic goals of organization
•Establish governance and project teams
•Identify stakeholders
•Establish teams of providers and clients
•To identify service line contribution to goals
•To develop framework
•Assess current performance measurement framework
•Cover client satisfaction, quality, efficiency & control
•Eliminate existing KPIs that do not add value
•Address gaps and ensure have input, output, operational & individual KPIs
•Consider targets
•Leverage technology to automate and reduce manual entry
Recommendation
Future
State
Current
State
Service Line
Teams
Vision and
Governance
Establishing or Rebuilding

Targets that Are Practical, Relevant & Achievable
Identify
Goal
Define
KPI
Set
Target
Develop
Initiative
Criteria: Relevant – “move the needle”
Simple To Understand
Dynamic – move up and down, not always constant
Timely – not out of date
Easy to measure
Actionable – drive business decisions

KPI Best Practices
1. Include all types: input, operational, and output KPIs
2. Link KPIs to strategic goals and cascade from strategy/goals to strategic
KPIs to operational/output KPIs then to individuals KPIs
3. Negotiate and agree with the client and departments
4. Include targets for current and future operations and comparisons to
external benchmarks
5. Establish a process to refresh KPIs as targets are achieved or become less
relevant
6. Include key exception indicators to go after exceptions/defects in
processes and drive continuous improvement
7. Enable with technology to minimize/eliminate manual data collection
8. Cover the key targets of customer service level, quality of service, cost
and efficiency.
9. Use to drive continuous improvement and all elements of CIF

KPIs for Good or Evil?

•Introduction of input
KPIs
•SSO concerned
about client reaction
Input KPIs
•Positive reaction
•Clients embracing
concept
Client
Reaction •Client actively asking
for information
•“How can I make this
better?”
Evolution
•Finding efficiencies
•More partner-led
initiatives
Growth
Good: Engage Client, Drive Improvement

•Manufacturing Co.
•Credit controller and
SSO Head fired due
to poor collection of
accounts receivable
Act First
•End-to-end process
review
•Focus on root cause
analytics
Investigate
•Weakness in cash
collection was
upstream of SSO
•No relevant input
KPIs
Discover
•People fired
unnecessarily
•Need effective KPIs
to manage
Lessons
Learned
Evil: Fired Employees Unnecessarily

• Corporate demanded
explanations &
remediation plans if
targets not achieved
Aggressive
• SSO groups resented
corporate function
• Seen as paper exercise
Pushback
• Took “extra care” that
reports showed
targets @100%
• Reports less
meaningful
Impact
• Impact ≠ intent
• People will see to
avoid pain
• About getting better,
not about punishment
Lessons
Learned
Evil: Metrics as Punishment

• Krakow-based SSO for
German manufacturer
• Suppliers not being paid
Critical Issue
• Invoices approved in
plant due to lack of PO
compliance
• Lack of process
governance &
consequence
Discover • Very slow approval
process
• Culture of blaming SSO
when fault was
elsewhere
Impact
• Strong performance
measurement
• Governance &
sponsorship
• Consequences
Identified
need for
Evil: Lack of Accountability

•Travel & expenses
used to enhance
personal lifestyles at
expense of company
Loss to
Company
•Published T&E
statistics
•# non-compliance
•$ non-compliance
Transparency
•Compliance now
seen as not just a
corporate role
•Massive cultural re-
orientation & savings
Impact
•Right metrics will
drive the right
behaviors
Lessons
Learned
Good: Drive Correct Behaviors

Winning Strategies & Takeaways

•Create vision and develop clear roadmap
•Don’t expect immediate buy-in on KPI framework
•Negotiated and agreed with client
Achieve Buy-In
•If you go too fast, you’ll lose everyone
•Build understanding through working with teams
•Build skills in analysis, management and continuous improvement
Watch Speed
•KPIs done properly improve client engagement
•Dig deep to understand issues
•Frank, open and honest conversations with the client
Overcome
Resistance
•Push/Pull Dynamic (client expectations vs. affordability)
•Plan/Do/Check/Act approach
•Choices are data-based
Set targets
•If achieve 100% every period, change target or drop KPI
•Continually evaluate to ensure meaningful, aligned & relevant
•Consider introducing KEIs (Key Exception Indicators)
Continue to Evolve
Winning Strategies

1. KPIs enable and support a
proactive, structured
approach to client
relationships
2. KPIs can be used for good
or evil – don’t be evil
3. Picking the right metrics is
just as important as
deciding to use metrics –
wrong choices will drive
wrong behaviors
Leverage our Experience
for Your Success

Got CIF?
Go to www.chazeypartners.com/cif and complete the
Client Interaction Framework (CIF) Self-Assessment
Obtain your free report and access to resources
Remember that without client engagement, there is no
Shared Services

Contact us
www.chazeypartners.com
enquiries@chazeypartners.com

Are Your Shared Services KPIs for Good or Evil?

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