1. ITSM Specialization Sourcing
2012-2013
Prof. Frank Willems
Lecture 6: Shared Service and Directing Sourcing

2. Agenda
• Shared Services
• What is directing
• Processmodel for directing
• Roles within the directing organisation
• Learning Task 3
• Questions and answers
2

3. Shared Services
3

4. Definition and goal of a Shared Service
Center (SSC)
• We speak about an SSC as supporting processes
within an organization on an approximately similar
way, are delivered in a new, semi-autonomous unit
and on the basis of agreements it provides
services to other units
• The goal of an SSC is generally to improve the
service quality while also cutting costs
• SSC versus centralization is service-oriented
versus task orientation
4

5. Shared Services plotted on the Kraljic
model What is the extent to which the product / service adds value for the business
Large added value
Leverage Strategic
th
Shared Service
3 Generation sourcing
Centers
Routine Bottleneck
Less added value
Purchasing Risk
Is it a standard or a specialized product?
Standard Specialized
5

6. Measures in perspective
Saving potential
Measures at a functional level:
Concentration, integration, mergers,
Full outsourcing
Take-over or outsourcing
Shared Services Centre
Integration, mergers and concentration
Measures at a process level: Outsourcing of parts of the organization
Collaboration and
joint investments Optimization and standardization of processes
System optimazation
Measures at task level: Collaboration regarding purchasing, support, etc.
Stopping investments
Orcutting down on current Stopping projects
initiatives Cutting down on training and learning
Cutting down on engaging external consultants Capitalizing
Short term Medium term Long term effects
(0,5-1 year (1-2 years (2-5 years)
6

7. Concentration leads to economies
of scale
Costs
Economy
of Scale
Internal SSC
Efficiency-
effects
Insourcing/
External Supplier
Volume
7

8. Are the trends moving up and
down?
Yes, to take maximum concentration and complexity there will be need for new
solutions.
Costs
Startingpoint
Impact Scale Complexity Costs
reached will increase
Impact Scale
reached
Volume
8

9. Potential services for a SSC
Facility Management ICT Services
- mailroom - Application Support
- copying and printing service - Helpdesk
- archive - Management and Operations
- purchase control
- catering - Training
Real Estate Management
Customer Service
- Building Management
- sales service
- Security Management
- Telephone Service (call center)
Sales and marketing
Administration
- Ad coordination
- financial administration
- Direct mail
- pensions administration
- Sales
- Payroll
- Tele ordering
Personelmanagement (HRM)
- Order administration
- recruitment and selection
- Personnel administration
- Training

10. Variants of Shared Services
Shared Business Process
Management
primairy functions
Shared
back-offices
supportfunctions
Shared Support
Process
10

11. The components of Shared Services
What is the proper organization, which
staff and how are we ready for the
future?
Opstellen
van Business
Cases
The core of the service SSC 1 Governance
Managen
van
projecten
Inrichten
SSC 2 Regie Architectuur van
processen
Processes
SSC 3 SSC 4
How to manage the
environment, where the
process is cut and Customers
who is responsible for
what processes? Systems Organization
ICT funct ionalit eit Kant oor Bedrijfs Technische
informat ie informat ie Informat ie
ICT infrast ruct uur syst emen syst emen syst emen ICT Funct ie/processen
laag
User Support en
Funct ioneel
Applicat ie Management
Specifiek
Syst em
Management
Generiek
Fysiek Net werk
Management
How are technology, process and organization
ICT infrast ruct uur component en
knotted together?

12. Name the change components
Response, context Target focus on
and vision of SSC's service domains
clear and design Ontwikkelen
Ontwikkelen
SSC 1
maatwerk
direction activities maatwerk
Beheer &
Beheer &
ICT -
Governance
draaien 2
SSC
draaien
governance
pakketten
pakketten
Regie Architectuur Beheer
Beheer Support/
Support/
Regie Architectuur SSC 4
SSC 3
infrastructuur Helpdesk
infrastructuur Helpdesk
Make Governance Professionalize
agreements demand
Opstellen
Opstellen
van Business
van Business
Cases
Cases
Governance
ICT - M anagen
M anagen
governance van
van
projecten
projecten
Regie Architectuur Inrichten
Inrichten
Regie Architectuur
van
van
processen
processen
Opstellen
van Business
Cases Transform
Managen demand management
SSC 1 Governance van
projecten
Inrichten
SSC 2 Regie Architectuur van
-
ICT -
processen Governance
governance
SSC 3 SSC 4
Regie
Regie Architectuur
Architectuur

13. An Change approach for Shared
Services
Intervention-oriented communication about plan and implementation
Support by Change help desk
Change analysis
+ Culture scan
Aligning structure and processes Characteristics of
products, pro-
Organizing control and and prepairing SSC implementation cesses & structure
Clients,
Change idea Culture change and competence development Governance &
suppliers
Characteristics Characteristics
Contracting and realizing SLA’s of interaction of employees
Learning to collaborate
….
Measuring Measuring
progress progress
Inter- Inter-
Reconsider- Reconsider-
ventions ventions
ing Ing
and (re) And (re)
planning
goals
planning
goals Change goals
Kick off
Plateau 1 Plateau 2 DD MM YYYY
Assessment by Change board
Consultation with Sounding board group
Client …
CIO
13

14. Example of a Target Efforts Network
for the SSC Change Programme
Mission
Develop a Shared Service Center that is a
knowledge-and information-engine around pension products,
Mission by sharing forces to deliver better innovation
and deliver at lower cost high quality
products and services to
Better quality
More innovative power Higher efficiency
Goals ICT services and
and sharing knowledge pension processes
products
20% Faster
75% Reuse 95% Reliable
Measurable pension processes
market 30% Cheaper
20% Less
60% Knowledge
service in
introduction implementation pension products
and systems duplication accordance
goals (FO & BO)
pension processes more accessible
SLA
products
Projects
and activities
14

15. Directing
15

16. What is directing
Directing is about linking demand and supply.
You must know what the customer (commissioner and the user)
wants, then translate it into a solution with the
necessary resources (sources) to
achieve and then arrange
that the services
is provided.
And to be able tot do that to you really need the right
competences. The director will lead
16

17. Use the three columns of the 9-grid
for setting up the directing area
Management Directing Service
Aligning Bepalen strategie Bepalen strategie Bepalen strategie
bedrijfsvoering informatie ICT service
voorziening en
Supplier organization
regie
Business
Directing
Organizing Ontwerpen en Ontwerpen en Ontwerpen en
plannen plannen informatie plannen ICT
bedrijfsvoering voorziening en service
regie
Ontwerpen en exploiteren Beheren en gebruiken Beheren en exploiteren
Implementing
bedrijfsvoering informatievoozieningen ICT services

18. Use the three rows of the 9-grid
model to design the chain
Management Directing Service
Aligning Bepalen strategie Bepalen strategie Bepalen strategie
bedrijfsvoering informatie ICT service
voorziening en
View and governance regie
Oganizing Ontwerpen en Ontwerpen en Ontwerpen en
plannen plannen informatie plannen ICT
bedrijfsvoering voorziening en service
Planning, organization and regie
projects
Ontwerpen en exploiteren Beheren en gebruiken Beheren en exploiteren
Implementing
bedrijfsvoering informatievoozieningen ICT services
Implementation and
operational service delivery

19. Then a complete framework for
managing sourcing is designed
Management Directing Service
Aligning Specify strategy Specify strategy Specify IT and FM
facilities and services
information supply
and control
Organizing Design and Design and Design, build and
implementation implementation implement IT and
facilities and FM services
information supply
and control
Implementing Use and Management and Management and
exploitation use facilities exploitation IT and
FM services
19

20. Then match the directing activities
with CMMi acquisition at the 9-grid
Management Directing Service
Aligning specify strategy and Governance
specify strategy specify IT and FM
management services
Strategy & and
facilities Collaboration
information supply
Service Portfolio
and control
management
Account Mgt.
Architecture Management
Organizing Design and Project Monit.
Design and Design, build and
implemantation & Control implement IT and FM Management
implementation
Performance mgt services
management
facilities and
and analysis
Account &
Monitoring
information supply
Demand mgt.
quality
and controlSupplier mgt.
Purchase & Contract &
tenders Supplier mgt.
Demand
Use and exploitationManagement
Implementing
management Management Change
and Management and
management
use facilities
exploitation IT and FM
services
Demand & failure
settlement
20

21. Processmodel for directing
21

22. Process chains for the directing
organisation
• There are three primary process chains in the
directing organisation:
– Innovation Management, develop new services
– Change management, implementation of changes to existing
services (doing projects, etc.)
– Service management, performance and direction on the
existing services
• The processes are derived from the CMMi-ACQ
model. By process chain KPIs (Key Performance
Indicators) set.
22

23. The chain shows three dominant
lines
Management Directing Service
Aligning specify strategy and Governance
specify strategy specify IT and FM
management facilities and services
Strategy & Collaboration
information supply and
control
Innovation
Account Mgt.
Architecture Management
Organizing Design and Project Monit. &
Design and Design, build and
implemantation Control
implementation implement IT and
management
Performan
facilities and FM services
ce mgt an
Managing changes
information supply
and control
Supplier mgt.
Purchase &
tenders
Demand
Implementing Use and exploitation
Management
management Management and Management and
Service continuity exploitation IT and
use facilities
FM services
Demand & failure
settlement
23

24. Explanation process model for
demand/supply
• Directing organization is focussed on matching
present and future customer IT service needs and
demands with (contracted) services from supplier(s).
• The total organization should be seen as a logistic
process (coordination between supply and demand).
Each activity in this logistic process must be indicated
either as a coordination of daily business or as a
change in services rendered or as an innovation in
services being supplied
• The activity is then attended to by the appropriate
person/office in the logistic process and brought to a
good result
24

25. The process model more detailed
Customer/ Directing Supply
S
t Demand
Stra -
r Proposal for renewal
tegical
a meeting
t Architecture mgt
e
g Service portfolio mgt Strategy & coorporation
i Governance
Request for Procurement & tender
c Proposal for renewal
New product
supplier
or service
Innovation
Proposal for renewal
Proposal for improvement
T Monitoring KPI’s
a Project monitoring reports Tactical
meeting
c
Request for Monitoring KPI’s
t change of
Proposal for impovement
i Product or
c service
Change process supplier
Structural
Proposal for improvement
problems
O
Results customer satisfactionsurvey
Measurement & analysis Reports
Opera -
tional
p meeting
e
r complaints complaints Monitoring
within SLA outside SLA KPI’s Improvement
a
complaints services
t / solve
i
o
Service & incidents
Incident management Management of complaints incidents
n
a
l
Delivery of services

26. Bounderies of soucing and
IT supply
Customer/ Directing Supply
S
Demand
t
Stra -
r Proposal for renewal
tegical
a meeting
t Architecture mgt
e
g Service portfolio mgt Strategy & coorporation
i Governance
Request for Procurement & tender
c Proposal for renewal
New product
supplier
or service
Innovation
Proposal for renewal
Proposal for improvement
T Monitoring KPI’s
a Project monitoring reports Tactical
meeting
c Monitoring KPI’s
Request for
t change of
Proposal for impovement
i Product or
supplier
c service
Change process
Structural
Proposal for improvement
problems
O
Results customer satisfactionsurvey
Measurement & analysis Reports
Opera -
tional
p meeting
e
r complaints complaints Monitoring
within SLA outside SLA KPI’s Improvement
a
services
t complaints
/ solve
i
o
Service & incidents
Incident management Management of complaints incidents
n
a
l
Delivery of services

27. The Innovation process (1/2)
Initiation Global Analysis Detail Analysis
Input Input Input
Input
Governance Output Output
Strategy & Procurement and
Service portfolio tenderprocess
Functional Design colaboration
management Architecture Contract
management
Output
Business case with
P.I.D
go go go
1a Develop 1b Develop 1c Analyse 2a Estimate 2b Develop 2c Get 3 Agree terms and
customer Product and validate planning and projectplan commitment for contract with supply
Start
requirements requirements requirements forecast the project
No go No go No go
Inventarisation of customer requirements Prepare Project Contracting
Demandmanager
Contractmanager
Demandmanager
Suplly mgt
Projectmanager
27

28. The Innovation process (2/2)
The innovation process
Development Preparation & test Implementation
Mana
geme
nt
Input Input
Input Developed
products Testresults
Contract &
Functioneel Design Decision making
about testgroup Output
& test environment
Acceptation
products
4a Select 4b Develop 4c Implement the 5a Prepare 5b 5c Check selected 6a Prepare 6b Ensure interface-
product- the design product design verification Testing products productintegration ompatibility and deliver
component the product
Develop technical solutions Verification Productintegration
Demandmanager
Projectmanager Demandmanager
Contractmanager
Suplly mgt
Supply mgt Contractmanager
28

29. The Change process
The change process
Analysation Development Implementation
Initiation
Manag
ement
go go
4 Track and 5 Prepare 6 Ensure interface-
1 control 2 Evaluate alternative 3 Develop
manage product- comptability and produce
requirements solutions projectplan integration
Start changes solution
Alternative analysation and choice of
Req. management solution No go Projectplanning No go Configuration mgt Product integration
Demandmanagement Demandmanagement
Demandmanager Supply
Contractmanagement Contractmanagement
29

30. The Incident process
The incident management process
ICT Management stage
1st line support 2nd line support
No
Start Incident Administration Classification Solution or Deeper Design and Distribution and
entry escalation investigation specifications of administration of
incident the solution activities and solution
Yes
Supply Front Office Supply Back Office
Incident solved
7 Assign
Incident nd
2 line support
6 Analysest 8 Solve
4 Take 9 Manage
Incident 1 line Incident 1st line
Care progress
support support
self
Measure
exceeding
Nee 3 Inform Supply mgt
5 Escalation
coördinator
ja
Intake 1 Registration existing 10 Decline 11 Decline
2 Relationship
Frontoffice Classification incident call user
call
call ja
30

31. Roles within the directing
organisation
31

32. The areas of responsibility plotted
on the 9-grid mgt framework
Management Directing Service
Aligning Specify strategy Specify strategy facilities SpecifyIT and FM
and information supply services
Governance and
and control
architecture
Project mgt and
Account and
collaboration
Portfolio mgt
Organizing Design and Design and
mgt
Design, build and
implementation implementation facilities implement IT and FM
and information supply services
Information Sourcing
and control
management management
Sourcing Contract mgt
Services and performance
monitoring
Implementing Use and exploitation Management and use Management and
facilities exploitation IT and FM
Functional services
Application
mgt
32

33. Directing roles in Governance and
Architecture area
• The Director (CIO) will carry the ultimate
responsibility for overall information and ICT chain
and is sparring partner for the management of ICT-
related issues
• The information architect designs and implements
organisation-wide information architecture
(applications, hardware, networking, datacom)
• The business architect designs the business
processes and frameworks and enter the correct
application of the process frameworks. Together with
the ICT architect, a risk analysis in case of changes in
processes or applications will be made
33

34. The information management area
• The Information Manager advises on solutions in the
field of ICT for business to better support in achieving
their objectives. It is a long term vision and planning
and should develop a framework for planning and
assessment of renewal and modification of
information systems.
34

35. Account and Portfolio mgt areas
• The ICT consultant advises organisation-wide,
sought and unsolicited, on solutions in the field of ICT
business in order to better support their goals using
ICT solutions
• The Information Analyst focuses on analyzing and
advising on how the information flows within the
customer organisation can be supported by the
current system landscape
35

36. Project mgt and collaboration mgt
• The Project manager executes projects in the field of
ICT (from the initiation tot the transfer to the existing
organization)
36

37. Contract mgt and performance
monitoring
• The Contract Coordinator focuses on the creation
and implementation of the supplier strategy,
mapping product / vendor combinations and building
and maintaining existing relationships
• The Purchaser focuses on the procurement of
services, and if products and people at the right
price, performance levels, and compliance are
buyed with contractual agreements is that can be
monitored
• The Demand Manager focuses on developing and
maintaining relationships with external ICT suppliers
and on the steering / leading the team in - and
outside staff responsible for the daily operation
(including Service Desk and Field Services)
37

38. Sourcing management area
• The Service Level Coordinator is responsible for
monitoring and managing the delivery of agreed ICT
products and services by external parties as defined
in Service Level Agreements on quality, availability
and cost.
• The Project & Change Coordinator, will direct on all
new and ongoing projects and (big) changes
regarding the ICT systems (internal and external
capacity, content, planning, budget, priority)
38

39. Sourcing Services area
• The keyuser provides the functional management of
one or more applications tailored to the specific
business processes.
The key point of the users are from a group of users
to use a specific application and the application of this
application within a sector or management.
• The process specialists support the key user for the
translation of the process of sector specific
management or automated applications. They are
experts in the field of process and work within the
framework of the business architect suggests.
39

40. The Functional application mgt area
• The Functional Application Manager provides the
functional management of one or more applications
tailored to the specific business and focuses on
analyzing and advising on how the information flows
within the organisation can be supported by ICT
applications. He/She will also support in testing and
implementation of changes.
• The Technical Application Manager is responsible
for the availability and performance of the ICT
systems
40

41. The roles plotted on directing model
Customer/ Directing Supply
S
Demand
t
r Proposal for renewal Director(CIO) Stra -
tegical
a meeting
t Architecture mgt
e
g Service portfolio mgt Strategy & coorporation
i
Request for Governance Procurement & tender
Proposal for renewal
c New product
or service
Informationmanager supplier
Business Innovation
architect Proposal for renewal
Proposal for improvement
T Project and change ICT consultant
Information Monitoring KPI’s
a
coordinator reports Tactical
c architect
Request for Project monitoring
& control
Monitoring KPI’s
meeting
t change of
Proposal for impovement
i Product or
Projectmanager supplier
c service
Change process
Contract
Structural
Proposal for improvement
Demand manager problems
Information
manager
analist Opera -
Results customer satisfactionsurvey
O
p
Measurement & analysis Reports
tional
meeting
e
r complaints complaints Monitoring
Improvement
a
Functional application
complaints
within SLA outside SLA KPI’s
services
t
mgt
Service & incidents
Purchaser / solve
i
o
Incident management Management of complaints
incidents
n
a Application
Superuser
l
Delivery of services mgr

42. Roles and ideal change colors
Based on change management apporach of Prof. De Caluwé
Customer/ CIO Supply
S
Demand
t
r Proposal for renewal Director(CIO) Stra -
tegical
a meeting
t Architecture mgt
e
g Service portfolio mgt Strategy & coorporation
i
Request for Governance Procurement & tender
Proposal for renewal
c New product
or service
Informationmanager supplier
Business Innovation
architect Proposal for renewal
Proposal for improvement
T Information Project and change Monitoring KPI’s ICT consultant
a
architect coordinator reports Tactical
meeting
c
Request for Monitoring KPI’s
t change of
Proposal for impovement
i Product or
service
Projectmanager supplier
c
Change process
Contract
Information
Proposal for improvement Demand manager
Structural
problems
analist manager
Results customer satisfactionsurvey Opera -
O Reports
p
Measurement & analysis tional
meeting
e
r complaints complaints Monitoring
a Functional application within SLA outside SLA KPI’s Improvement
services
complaints
t
mgt
Service & incidents Purchaser / solve
i
o
Incident management Management of complaints
incidents
n
a Application mgr
Superuser
l
Delivery of services

43. Some principles for directing
competences
• 1st generation sourcing and directing asks for CMMI level 2
• 2nd generation asks for CMMI level 3
• 3th generarion asks for new competences in managing
colaboration and CMMI level 4
• 4th generation asks for personal leaderschip and at least
CMMI level 4
e e
2 generation sourcing 4 generation sourcing
Crowd
sourcing
Leverage Strategic
Business Proces
Outsourcing
Business
e development
3 generation sourcing
Backoffice
outsourcing
Shared Service
Routine Centers Bottleneck
DataCenter
Facilities outsourcing
outsourcing
Outsourcing
e workplace mgt Workinnovation
e
1 generation sourcing 2 generation sourcing
Operations
outsourcing
• Directing competences are professional projectmanagement,
managing change management, account management and
supplier management all at the desired CMMI level
43

44. At the end…
• Setting up a directing organisation (the new ICT
organisation) is a radical change….use the change
colours
• Filling in the roles is changing competences and
changing people
• A clear process model will help to implement the
directing activities
• Always use the three models to find a language of
communication during the Change Operation; 9 grid,
Kraljic and CMMI
44

45. Sourcing definition
The dynamic planning and organizing of
the supporting processes, people,
resources and capabilities,
needed to obtain
the business
goals
45

46. Which sourcing models should be
known?
46

47. Decision tree for the sourcing
solutions
Capacity required
High/average Impact on Low
Strategisch?
business
Yes Risks to be
managed?
No
No
Mature service?
No
Cost reduction
Stabiel?
important?
Yes
Yes
Yes
Cooperation
advantageous?
No
No
Under control?
Yes
Start Improve first and Improve together Outsource
Zelf
purchase capacity Uitbesteden
cooperation outsource if necessary
from external source(s)
3rd generation and strategic or 2nd generation and strategic or 2nd/3rdgeneration and bottleneck 1st/2nd generation and
leverage Kraljic segment bottleneck Kraljic segment or routine Kraljic segment routine Kraljic segment
4

48. The sourcing solutions plotted on
the Kraljic model
What is the extent to which the product / service adds value for
nd th
Large added value
2 generation sourcing 4 generation sourcing
Crowd
sourcing
Leverage Strategic
Business Proces
Outsourcing
Business
development
Backoffice
outsourcing nd
Shared Service
3 generation sourcing
Centers
DataCenter
Facilities outsourcing
outsourcing Routine Bottleneck
Less added value
Outsourcing
workplace mgt Workinnovation
the business
st Operations nd
1 generation sourcing
outsourcing 2 generation sourcing
Purchasing Risk
Is it a standard or a specialized product?
Standard Specialized
48

49. Five ways of thinking about change
Something changes when you . . .
Bring the interests of the most important players together by means of
Yellow print a process of negotiation enabling consensus or a win-win solution
Formulate clear goals and results, then design rationally a systematic
approach and then implement the approach according to plan
Blue print
Motivate and stimulate people to perform best they can, contracting
Red print and rewarding desired behavior with the help of HRM-systems
Create settings for learning by using Organisation Development
interventions, allowing people to become more aware and more
Green print
competent on their job
Understand what underlying patterns drive and block an
White print organization’s evolution, focusing interventions to create space for
people’s energy
‒ Change is in the eye of the beholder
‒ Each viewpoint has its ++ en --, ideals and pitfalls
49

50. The five colors at a glance
Yellow-print Blue-print Red-print Green-print White-print
Something bring common think first and then act stimulate people in create settings for create space for
changes interests together according to a plan the right way collective learning spontaneous
when you evolution
in a/an power game rational process exchange exercise learning process dynamic process
and create a feasible solution, a the best solution, a a motivating solution, a solution that people a solution that
win-win situation brave new world the best ´fit´ develop themselves releases energy
The result forming coalitions, project management assessment & reward, training and coaching, open space meetings
is... changing strategic analysis social gatherings open systems self-steering teams
topstructures planning
someone who uses
by a/an... facilitator who uses expert in the field HRM expert facilitator who his being as
his own power base supports people instrument
patterns and
aimed at... positions and context knowledge and results procedures and the setting and meanings
working climate communication
Result is… partly unknown and described and outlined but not envisaged but not unpredictable
shifting guaranteed guaranteed guaranteed
Safeguarded decision documents benchmarking and iso HRM systems a learning self-management
by… and power balances systems organisation
The pit-falls dreaming and lose- ignoring external and ignoring power and excluding no-one and superficial under-
lie in… lose irrational aspects smothering brilliance lack of action standing and laissez
faire
50

51. 12-2-2013