Chazey Partners was invited to present a session titled “Raped Benefits of Alternative Shared Services Models” at the 2016 Washington-ASMC National Capital Region in Washington D.C. on March 10, 2016. Phil Searle, Founder and CEO of Chazey Partners, educated attendees on the trends and benefits of Shared Services in the public and private sectors. The presentation also examined multiple case studies and some alternative models of implementation used before concluding with a list of “Tips and Tricks” for a successful Shared Services implementation.

1. DELIVERING THE PROMISE …
© Chazey Partners 2016
Rapid Benefits with Alternative
Shared Service Models
March 10, 2016

2. Agenda
Chazey Profile
Why Shared Services
Case Studies
Tactics & Insights
Why Shared Services in the Public Sector
Trends in Shared Services

3. Who We Are: Founded 2006 • Global offices headquartered in California • Over 50 full-time and 70 specialist resources
What We Do: Strategic advice • Project management • Technical & domain expertise • Business continuity
Where We Focus: Transformation of the back office • Human resources • Finance • IT • Procurement • Facilities
The Chazey Difference: Continuity of staff • Practitioners first • Knowledge transfer • Engage client in transformation
Chazey Partners:
Serving multiple
industries, globally,
both private & public
sector
Chazey Partners Profile

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

5. Agenda
Chazey Profile
Why Shared Services
Case Studies
Tactics & Insights
Why Shared Services in the Public Sector
Trends in Shared Services

6. Achieve the Triple Benefits of Shared Services
Higher Quality
Lower Costs
Improved Control

7. • Treats its internal clients as if they were an external client. Treats them with the same level of
respect and service that external clients expect
Elevator
Speech
• Provides non-core services to the “business”, employing a specialist team, geographically
unconstrained, and focusing on the requirements of the internal client. This involves a philosophy
and approach totally unlike traditional “corporate-driven” centralization.
Definition
• Has the goal of providing high quality, non-core, but mission critical services (which can include
both repetitive common processes and more specialized professional services) to the business at
lower cost and more efficiently than the business could otherwise provide for itself.
Goal
• Achieves cost savings and higher quality of service by leveraging organizational re-alignment,
economies of scale, technology, client interaction framework, standardized end-to-end
processes, and best practices.
How-To
What Exactly is Shared Services?

8. Centralization/De-Centralization Cycle
 Remote from
business
 Unresponsive
and inflexible
 No Business/
Operational
control over
costs
 Viewed as
central
overhead
 Prevalence of
shadow
operations
Centralized
Challenges
 Disparate
processes
 Multiple
standards
 Duplication of
effort
 Different
control
environments
 High cost and
costs unclear
across the
business
 Not scalable
Decentralized
Challenges
 Responsive to
Business and
Operational
needs
 Business/
Operations
control
decisions
 Customized
solutions to
meet
Business/
Operational
requirements
Benefits Shared
 Highly client
focused
 Commercially
driven
 Service
Partnership
Agreements
 Clear unit costs
 Flexible
delivery
 Clear
understanding
of drivers and
activities
 Common
systems and
support
 Consistent
standards and
controls
 Tight control
environment
 Economies of
scale
Benefits

9. Agenda
Chazey Profile
Why Shared Services
Case Studies
Tactics & Insights
Why Shared Services in the Public Sector
Trends in Shared Services

10. General Trends in Shared Services
• Started in mid-1980s - driven by private sector multinationals
• Successfully implemented Shared Services initiatives achieve “20%-45% cost reductions
from the current state” (The Shared Services Roundtable, March 2015)
• More prevalent today in midsized companies and businesses
• Significant focus and growth in the Public Sector globally, after initially being slower to
adopt

11. General Trends in Shared Services
SSON’s Global Report 2016: State of Shared Services & Outsourcing Industry
“What is your current service delivery model?”
• 100% of Hackett’s top quartile
benchmarked enterprises leverage Shared
Services (Hackett 2013)
• New adopters are moving directly to
multifunctional/Global Business Services
model as part of their implementation
strategy (Deloitte, 2015 Global Shared
Services Survey, February 2015)

12. “I believe our current Shared Services
strategy will deliver a dramatic and
recognized value to the organization –
beyond cost savings.”
General Trends in Shared Services
SSON’s Global Report 2016: State of Shared Services & Outsourcing Industry
“Moving up the value chain”
Don’t Know - 5.03%
Strongly Disagree – 2.84%
Disagree – 5.03%
Neither Agree Nor Disagree – 11.60%
Agree – 45.95%
Strongly Agree – 29.54%
Over 75%
agree

13. General Trends in Shared Services
SSON’s Global Report 2016: State of Shared Services & Outsourcing Industry
“How does business (your customer) define value?” “How do you demonstrate/report value to your customers?”

14. General Trends in Shared Services
SSON’s Global Report 2016: State of Shared Services & Outsourcing Industry
Automation solutions
implemented:
• Technology
options continue
to grow
(spend on technology
is not the problem)

15. Agenda
Chazey Profile
Why Shared Services
Case Studies
Tactics & Insights
Why Shared Services in the Public Sector
Trends in Shared Services

16. Why Shared Services in the Public Sector?
ChallengesChallenges Benefits Shared Benefits
Funding
Decreases
Technology
Demand
Growth in
Services
Workforce
Demographics
Cost of Services
to Public
Unified Shared
Services
Management
FEELING THE “SQUEEZE”

17. Why Shared Services in Public Sector?
Cost savings from the “back office” can
be used to fund core and front line
services.
Recent Creation of the Unified Shared
Services Management Office creating
more incentive and visibility to build
Shared Services.
Why not? Has worked in the Private
Sector for 25+ years, and is also working
in the Public Sector today. The same
basic challenges and significant
opportunities exist around implementing
but need to be adapted and applied
differently.
Outsourcing opportunities continue to
expand and improve.
Significant funding issues today …
everywhere. Shared Services can deliver
potential “triple benefit” of
efficiency/effectiveness/control.

18. Why Shared Services in Public Sector?
Must determine what needs to be
physically close to the internal
“customer” or “client” vs what can be
done remotely.
Part of the solution to the new
socio-economic challenges
Impact of an aging population
Increased international competition
More difficult economic
environment
Remember that the scope across the
“back office” is very significant.
Although public sector adoption of
shared services has grown, the results
achieved do not yet approach those in
the private sector.
Consider who your “client” is – internal
and external. Also need to think about
“citizens” as key stakeholders.

19. Unique Challenges Facing Shared Services in Public Sector
Unique
Challenges
to Public
Sector
“Politics”
Across System
State and
Federal Workforce:
Locations,
Departments,
Leadership
Shifts
Governance
Issues
“Traditional
Silos”
Funding Sources
Increased Costs
Transparency
creates critics
“Failures”
jumped on
“Culture”
Tenure
Change
Management

20. Agenda
Chazey Profile
Why Shared Services
Case Studies
Tactics & Insights
Why Shared Services in the Public Sector
Trends in Shared Services

21. • Scope
• Sharing HR, procurement, finance & payroll
• Potential savings of £400m to £600m per year in administration costs
• Based on moving all departments to upper quartile efficiency levels
• Currently no departments are operating in upper quartile
• History
• Part of 2004 Initiative from Office of Government Commerce
• Full review in 2008 reported annual savings exceeding £20 billion
• 2011 review found that past efforts mainly focused on technology and end-to-end process
ownership with reductions in hand-offs
• National Audit Office (NAO) identified some challenges as well as successes
• Next Generation Shared Services Strategic Plan
• Create Crown Oversight Function to work with departments to drive performance
• Eight Shared Service Centers reduced to five
• Two independent of any single customer (assigned to Arvato & Steria)
• Three standalone in terms of operations and subject to performance monitoring
• Single ERP platform, without which Government will struggle to reach targets

22. • Scope
• Provides services across Ministry of Defense
• Functions include HR, finance, information & vetting
• One of the largest Shared Services Centers in Europe
• History
• Created in July 2011
• Four year contract worth £36m awarded to Serco with option to extend for further
year
• Based on zero management fee, all Serco’s earnings are performance-based
• Savings of £71m expected over life of contract
• Current Status
• Contract to end in April 2016 (not exercising option to extend)
• Serco: “contract has exceeded expectations”, “Decision of MOD to end contract”
• MOD: “contract reached natural end”
• To date has achieved £64m; full anticipated savings expected over final year
• Ministry has decided to initially bring DBS back within department
• Considering options

23. • Passed legislation to give Internal Services Agency (ISA) power to
operate as a business
• Autonomy of operations
• Divergence from “normal”
• Transactional and Administrative services into a single model
• Payroll & Benefits, AP, IT Services, & IT Operations
• Benefits Achieved
• $8.8m in annual savings, net of investment
• Government-wide strategies
• Economies of scale with more consistent service delivery
• Opportunities for staff development and improved retention

24. • The US Department of Heath and Human Services (DHHS) Shared Services
“Program Support Center” (PSC) provides support services to all
components of the U.S. Department of Health and Human Services (HHS)
and other Federal Government agencies worldwide. PSC has a broad range
of over 40 services and products.
• To clarify customer confusion around “true costs” or “full costs” in an
allocated environment, the PSC operates with funding received at the
beginning of the year, with the commitment to ensure costs are agreed
upon.
• They work throughout the year with their customers to
ensure cost discipline – and agree upon any additional
funding needs via Service Level Agreements (SLAs) or
Inter Agency Agreements (IAAs).

25. • Good initial work in the Business Case and Design
• However, due to time schedule, the Build cycle was compressed
• Resulted in sub-optimal services delivery and customer issues
• Fixed by having a review of services, leadership change and a
comprehensive playbook of areas to modify
• Now initial areas have been corrected and center is growing services
again

26. • Initial Shared Services work in Finance, Information Technology and
Human Resource started by the governing board and an external firm
• Minimal “buy-in” with the functional staff at each university
• Lack of “ownership” on the financial targets, objectives and
timeline as a result
• Supplemental exercise initiated to validate findings
• Benefit in validating, and in some cases modifying findings
• Larger benefit in that each functional area worked closely on the
engagement
• Buy-in was achieved for a much larger number of areas
• Foundation laid for future Shared Services activities

27. 44%
Return
Unlocking Efficiencies and Demonstrating ROI

28. • Problem: City facing $50-70M Budget Deficit
• Opportunities: Centralization; reduce liabilities; improve efficiency; eliminate
redundancy
• Plan: Implement Shared Services
• Process:
– Step 1: People – Redefine Roles and Responsibilities
• Anyone spending over 51% of time moved to Central HR
– Step 2: Process Standardization
• Focus on quality of service and transparency
– Step 3: Technology Adds Capability
• Reduce reliance on expensive and unnecessary add-on solutions
• Results
– HR Staff to Employee ratio improved from 1:38 to 1:119
– Improved quality of service
– More efficient, better placed staff
– Self-service functionality
– Improved understanding of customer issues
– Enhanced use of SAP Capital Management Module: $650k of annual savings
Case Study – City of Houston Human Resources

29. Agenda
Chazey Profile
Why Shared Services
Case Studies
Tactics & Insights
Why Shared Services in the Public Sector
Trends in Shared Services

30. • Having a Business Case is key: improved decision making & accountability mechanism
• Consider functions, processes, sub-processes, locations, operating units and entities
• It is really important to distinguish between “solutions” vs “quick fixes”
• Multifunctional now often the chosen way to proceed
• Consider how far up the value chain you want to go
• Senior level executive sponsorship is key - executives must understand and support
the roll-out
• Do not underestimate the change management required
• Consider a multi-faceted communication and advisory approach
• Generate a culture of service and continuous improvement
Tactics & Insights (1 of 2)

31. • Remember always that the project does not end with “go-live”
• Assign your best resources and people to the project
• Assign end-to-end process owners
• Separate transformation from ongoing activities
• Offer end-to-end services by provisioning as many non-core services as possible
under one organizational umbrella
• Realignment can help remove silos and foster a strong shared service culture and
team spirit
• Enable succession planning, job rotation, new opportunities as well as targeted and
consistent training programs
• Do things differently – that’s the whole point!
Tactics & Insights (2 of 2)

32. 1. Shared Services can be complex,
but it is not rocket science
2. Start with a Roadmap and
supporting business case
3. You are not alone, others
have gone before
Top Three Takeaways