Shared Services Proposal (Final) REDACTED

ISiS Partnership Shared Services Proposal

Variant Bid Volume 2

Section C2

28th November 2006

Shared Services Proposal

IBM Response to ISiS ITN Volume 2 – Section C2

IBM Confidential


Key messages The ISiS Programme is responding to the Cabinet Office report on

Transformational Government which calls for government to move to shared services and release efficiencies by standardisation, simplification and sharing.

The projects which we are proposing contribute towards this journey to shared services. This project represents the final step to achieving a professional, multi-functional, customer-centric shared services entity.

IBM’s extensive experience of implementing shared services in the public and private sectors will help you achieve “integrated support services and transactional services which meet the precise needs of the front line services and represent industry best practice.”

Shared services will help support your aspirations for the JV to grow.

Highlights of our approach We will use our tried and tested shared services method to:

Define the shared service centre service delivery and channel strategies to ensure smooth and seamless customer interactions;

Redesign the ISiS organisation structure in line with the service delivery strategy, providing a dedicated point of contact for internal and external customers;

Review the business case for enabling technologies which will increase process automation and free staff for value adding activities;

Review the SLAs and KPIs to support full accountability and encourage a culture of continuous improvement; and

Deliver a shared service centre knowledge base, providing on line support and detailed business procedure documentation to ISiS staff and its internal customers.

Staff transition from the old to new organisation structures will be managed in accordance with the partners’ requirements

How you will benefit Increased efficiency and professionalism of back office processes for SCC

and TDBC and a chance for ISiS staff to broaden their skill base

Position the ISiS shared service centre as a provider of ‘best in class’ shared services, providing a platform to becoming a regional shared service centre

Creation of new jobs in Taunton and sales for the JV as other local authorities and public sector bodies join the shared service centre


IBM Confidential


Shared Services and SAP at a glance . . .

Delivering “best practice” processes and world class systems capable of continuous

improvement

Why is this important to Taunton Deane and Somerset?

Key, Up front messages

There is little justification for the Councils having different processes and systems in those areas where the transactional and support services provided are essentially the same. There are benefits to be had by standardising processes and sharing support services.

The drive towards best practice and reducing the cost of transaction processing means re-designing processes, increasing automation and adopting new ways of working. There are “world class systems” that can support this journey. We propose to implement SAP.

We propose to introduce widely recognised “world class” systems that will support both Taunton Deane Borough Council and Somerset County Council in the move to these new ways of working as well as the wider ambitions of ISiS.

By improving transactional services, employees will have more time to focus on value adding/ advisory activities.

Context: The Councils are both “good” in “use of resources”. The systems used by both Councils have contributed to their achievements so far. Both councils aspire to be “excellent” in the “use of resources.” However, budget constraints, central government directions and rising customer expectations create a need for modernising, improving and reducing the costs of transactional and support services.

What’s our compelling idea?

What outcomes are we striving for?

What we do to make this happen?

1

2

3

4

TheBig Idea

A performance culture

“Best Practice”transaction processes

• Deliver improved processes on an “end to end” basis. This work will be based upon work done in both Local Government and in other sectors

• Benchmark the processes against “best practice”using our experience of other public and private sector implementations

• Test redesigned processes with users to ensure that they are suitable for the shared services

• Ensure that the principle of standardisation is adopted where there is no business case for adopting non-standardised processes

• Implement the appropriate modules from SAP R/3 based on work done in Local Government and other sectors to ensure the approach to transaction processing is fully automated

• Extend the SAP “footprint” to replace as many legacy systems as possible. This will increase automation and reduce integration costs

• Adopt SAP as standard and only use other systems or bespoke developments where there is a business case for doing so

• Use the combined research and development capability of both IBM and SAP to ensure continuous improvement of the SAP system and system integration

• Develop a Service Level Agreement for the provision of shared services and deliver to this level of performance

• Use the information available from an integrated SAP system to create better performance management information for both Councils

• Ensure that the business cases for improving the systems and process are fed into the change management programme and continuous improvement becomes a norm

• Develop and extend the support servicesoffered to other organisations and thereby continue to reduce the overheads of the shared service centre

• Deliver the training materials and training management required to migrate people to the new ways of working

• Support not only those migrating to the new ways of working, but also support those remaining in the “legacy”organisation with the change

• Develop an organisation structure for transaction processing that supports the new ways of working

• Recruit people for the new roles in the shared services centre – this may mean re-training staff or recruiting new staff.

A system tailored to support new processes

People adopting the new ways of

working


Delivering “best practice” processes and world class systems capable of continuous

improvement

Why is this important to Taunton Deane and Somerset?

Key, Up front messages

There is little justification for the Councils having different processes and systems in those areas where the transactional and support services provided are essentially the same. There are benefits to be had by standardising processes and sharing support services.

The drive towards best practice and reducing the cost of transaction processing means re-designing processes, increasing automation and adopting new ways of working. There are “world class systems” that can support this journey. We propose to implement SAP.

We propose to introduce widely recognised “world class” systems that will support both Taunton Deane Borough Council and Somerset County Council in the move to these new ways of working as well as the wider ambitions of ISiS.

By improving transactional services, employees will have more time to focus on value adding/ advisory activities.

Context: The Councils are both “good” in “use of resources”. The systems used by both Councils have contributed to their achievements so far. Both councils aspire to be “excellent” in the “use of resources.” However, budget constraints, central government directions and rising customer expectations create a need for modernising, improving and reducing the costs of transactional and support services.

What’s our compelling idea?

What outcomes are we striving for?

What we do to make this happen?

1

2

3

4

TheBig Idea

A performance culture

“Best Practice”transaction processes

• Deliver improved processes on an “end to end” basis. This work will be based upon work done in both Local Government and in other sectors

• Benchmark the processes against “best practice”using our experience of other public and private sector implementations

• Test redesigned processes with users to ensure that they are suitable for the shared services

• Ensure that the principle of standardisation is adopted where there is no business case for adopting non-standardised processes

• Implement the appropriate modules from SAP R/3 based on work done in Local Government and other sectors to ensure the approach to transaction processing is fully automated

• Extend the SAP “footprint” to replace as many legacy systems as possible. This will increase automation and reduce integration costs

• Adopt SAP as standard and only use other systems or bespoke developments where there is a business case for doing so

• Use the combined research and development capability of both IBM and SAP to ensure continuous improvement of the SAP system and system integration

• Develop a Service Level Agreement for the provision of shared services and deliver to this level of performance

• Use the information available from an integrated SAP system to create better performance management information for both Councils

• Ensure that the business cases for improving the systems and process are fed into the change management programme and continuous improvement becomes a norm

• Develop and extend the support servicesoffered to other organisations and thereby continue to reduce the overheads of the shared service centre

• Deliver the training materials and training management required to migrate people to the new ways of working

• Support not only those migrating to the new ways of working, but also support those remaining in the “legacy”organisation with the change

• Develop an organisation structure for transaction processing that supports the new ways of working

• Recruit people for the new roles in the shared services centre – this may mean re-training staff or recruiting new staff.

A system tailored to support new processes

People adopting the new ways of

working


IBM Confidential



How will we make this happen?

We will work with both Councils to deliver improved processes, an integrated ERP system and a shared service environment.

What else? The use of methodologies and related experience helps to reduce the risk of an implementation and also helps to speed up implementations since it reduces the need to “reinvent the wheel”.

The use of a “world class” ERP software supplier like SAP will ensure that the application has sufficient investment in its research and development to meet the current and future aspirations of ISiS.

The use of a “world class” ERP software supplier like SAP also provides opportunities for “office systems”integration (like Microsoft Office) as well as “back office” integration (including applications like SWIFT).

Shared services and the use of SAP will create employment opportunities for existing staff. It will also create roles that will be attractive to other employees currently working in this environment in different parts of the UK.

1

2

3

We will make this happen by adopting the relevant parts of our of our methodologies for business process re-engineering, SAP implementations and Share Service implementations.

HBS have wide experience of using a “Lean” methodology for redesigning processes within Local Government.

IMB have wide experience of using both its Ascendant SAP implementation methodology and its Shared Services methodology.

We will make this happen by running projects to improve processes, integrate systems and establish shared services in parallel as part of the project activity following “transition”. The schematic below broadly describes the approach:

1

2

3We will make this happen by making sure that the key interdependencies with the rest of the change programme are documented and managed – i.e. the interdependencies with the creation of a business centre to locate shared services, the upgrading of the infrastructure to support new systems and ways of working, the implementation of a SAP CRM system and the need to continue to deliver support services whilst this project activity is undertaken.

We will make this happen by phasing the “roll out” of SAP functionality and “rolling in” parts of the Councils to the share service centre.

We will make this happen by ensuring that there is appropriate governance of the changes to the design of the systems and processes over time to ensure that service levels are not undermined and sub-optimal processes are not adopted.

4

5

4

Start with consolidation/ standardisation within ISiS

Efficient Delivery of In Scope

Services

Enterprise WideTransformation

Social and Economic

Development

Improved public services through

multi agency Working

Creating Shared Services within ISiS:• Finance and Procurement• HR and Payroll• Property transactionsOnce created, adopting continuous improvement

Extending Shared Services offering:• To other parts of the Councils• To other Councils in the region• To the wider public/voluntary sector

Developing Shared Services offering:• Attracting business from outside the region

Enabling Efficiency & Modernisation

Extend to other parts of the Councils and the wider public sector

Extend to other sectors/regions



Services


Social and Economic

Development










Services


Social and Economic

Development










How will we make this happen?

We will work with both Councils to deliver improved processes, an integrated ERP system and a shared service environment.

What else? The use of methodologies and related experience helps to reduce the risk of an implementation and also helps to speed up implementations since it reduces the need to “reinvent the wheel”.

The use of a “world class” ERP software supplier like SAP will ensure that the application has sufficient investment in its research and development to meet the current and future aspirations of ISiS.

The use of a “world class” ERP software supplier like SAP also provides opportunities for “office systems”integration (like Microsoft Office) as well as “back office” integration (including applications like SWIFT).

Shared services and the use of SAP will create employment opportunities for existing staff. It will also create roles that will be attractive to other employees currently working in this environment in different parts of the UK.

1

2

3

We will make this happen by adopting the relevant parts of our of our methodologies for business process re-engineering, SAP implementations and Share Service implementations.

HBS have wide experience of using a “Lean” methodology for redesigning processes within Local Government.

IMB have wide experience of using both its Ascendant SAP implementation methodology and its Shared Services methodology.

We will make this happen by running projects to improve processes, integrate systems and establish shared services in parallel as part of the project activity following “transition”. The schematic below broadly describes the approach:

1

2

3We will make this happen by making sure that the key interdependencies with the rest of the change programme are documented and managed – i.e. the interdependencies with the creation of a business centre to locate shared services, the upgrading of the infrastructure to support new systems and ways of working, the implementation of a SAP CRM system and the need to continue to deliver support services whilst this project activity is undertaken.

We will make this happen by phasing the “roll out” of SAP functionality and “rolling in” parts of the Councils to the share service centre.

We will make this happen by ensuring that there is appropriate governance of the changes to the design of the systems and processes over time to ensure that service levels are not undermined and sub-optimal processes are not adopted.

4

5

4



Services


Social and Economic

Development











Services


Social and Economic

Development










Services


Social and Economic

Development










IBM Confidential


IBM Confidential


Table of Contents

1 ............................................... 1 Description of the Shared Services Project

2 .............................................................. 3 Scope of Shared Services Project

2.1 ....................................................................................... 3 Scope of Project2.1.1 ...................................................................... 3 Our proposition2.1.2 ........................................................ 3 The transformation story2.1.3 .................................... 4 Anticipated scope of Shared Services2.1.4 ......................................................................... 4 Future Scope

3 .................................................................................... 5 Previous Experience

3.1 ................................................................................. 5 Previous Experience3.2 ............................................................................................ 5 Case Studies

4 ................................................................................ 6 Approach and Methods

4.1 ............................................................... 6 Approach, tools and techniques4.2 .............................................................. 6 Work Products and Deliverables

4.2.1 ...................................................... 7 Programme Management4.2.2 ................................................................... 7 Business Domain4.2.3 ............................................................. 7 Organisation Domain4.2.4 ................................................................ 9 Application Domain4.2.5 ............................................................. 12 Architecture Domain4.2.6 .............................................................. 12 Operations Domain

4.3 ....................................................... 15 Plans for the Delivery of this Project4.3.1 ............................................................................. 15 Timetable

4.4 ........................................................ 15 Strategic Partner’s Responsibilities4.5 ....................................................................... 15 Councils’ Responsibilities

5 .......................................................................................... 17 Cultural Change

5.1 ......................................................................... 17 Culture Change Method5.2 ................................... 17 Shared Services Contribution to Culture Change

6 .................................................................... 19 Link to Wider Transformation

6.1 ............................................................................. 19 Wider Transformation

7 ....................................................................................................... 21 Benefits

7.1 .................................................................................................. 21 Benefits7.1.1 ............................ 21 Benefits of implementing shared services7.1.2 ............................................. 21 Specific benefits of this project


1 Description of the Shared Services Project The Cabinet Office report “Transformational Government” states that “Government must move to a shared services culture – in the front-office, in the back-office, in information and in infrastructure – and release efficiencies by standardisation, simplification and sharing. Shared services provide public service organisations with the opportunity to reduce waste and inefficiency by re-using assets and sharing investments with others.”

Implementing a shared services framework supports the wider ISiS objectives:

It integrates the “front office” with the ”back office” to help with the objective of engaging with customers in Somerset;

It helps to transform the way in which the Councils work;

It provides a platform for sharing these services more widely across the public sector within the region;

It provides a platform for improving the quality of services delivered and an ethos of ongoing or continuous improvement; and

It creates opportunities for staff to develop and train in new processes and “world class technologies”.

There are a number of workstreams contributing to the delivery of shared services within ISiS:

The delivery of in-scope services will include an element of process re-engineering and organisation design as Somerset County Council (SCC) and Taunton Deane Borough Council (TDBC) transform transactional service delivery;

The Transforming the Working Environment proposal plots how space can be freed up and staff can move to a new Business Centre from where a multi-functional shared service will operate;

The Customer Access proposal outlines how the “front office” will be moved on to one system with standard processes for both SCC and TDBC; and

The SAP proposal applies the same principles to the “back office”.

This proposal is primarily about bringing together these workstreams to ensure that the final pieces in the jigsaw of delivering a “world class” shared service centre are completed. The proposal therefore includes:

An integrated project plan to deliver the shared service centre;

A final check and challenge of the process splits;

An assessment of the impact of moving to the shared service centre;

Identification of any further savings from process changes or implementing new technology specifically related to moving to the new shared service centre;

A transformation of the ISiS organisation structure to support the shared services framework;

A definition of service delivery and channel strategies for the shared service centre;

The design and delivery of a knowledgebase for shared services; and


IBM Confidential Page 1


Testing in preparation for migration to the shared service centre.

What follows is wider than a description of the components of the proposal outlined above. This document:

Looks at the scope of the shared services – including a brief analysis of the type of activity we would like to complete in extending the scope to Avon and Somerset Police Authority;

Outlines some of our previous experience;

Uses our shared service centre method to ensure the completeness of the work required to deliver a “world class” shared service centre;

Outlines the timeline and interdependencies in delivering the shared service centre;

Looks at the respective responsibilities involved;

Assesses the links to the wider ISiS transformation; and

Reviews the benefits.




2 Scope of Shared Services Project

2.1 Scope of Project

2.1.1 Our proposition

We propose to transform the ISiS joint venture to a fully customer-centric, multi-functional shared service centre, providing a platform on which to become the leading shared service centre for the public sector in the south west. This shared service centre will provide the full range of transactional processes including finance, procurement, property, HR, payroll, revenue and benefits.

2.1.2 The transformation story

SCC and TDBC will start out on the journey to shared services from day one of the ISiS joint venture. Many of the projects within the Standard Bid and the Variant Bid contribute to the transition.

While the Standard Bid projects make progress towards greater integration, this project covers the final elements required to transform the service delivery to a fully operational, multi-functional shared service centre, capable of attracting business from other organisations within the South West, in line with our growth objectives outlined in the standard bid. This is therefore the platform for delivering some of the wider ISiS objectives.

In our discussions with you we have discussed a “four box” framework to summarise our understanding of these wider objectives. The illustration below shows how shared services maps on to the wider ISiS objectives:


Services


Social and Economic

Development










Figure 1: Transformation of Services




2.1.3 Anticipated scope of Shared Services

Although the detailed organisation design of shared services will be determined by this project, it is anticipated that all the services of the ISiS joint venture will fall within the scope of the shared services management structure.

However, not all staff within the scope of shared services will be physically located within the shared service centre. For example the HR and finance professional advisors will remain in the directorates which they serve while the benefits team (included in transactional processing below) will need to be in a location accessible to the public. The diagram below illustrates a management structure for shared services, given our current understanding:

ICTProfessional

AdvisorsTransaction Processing

Contact CentreService

Relationship Management

Head of Shared Services

Figure 2: Potential Organisation Structure for Shared Services

2.1.4 Future Scope

We are aware that Avon and Somerset Police Authority (ASPA) may wish to join the ISiS partnership in the near future. When we have confirmed this commitment we will then work with ASPA to understand the impact that this would have on the shared services we are currently planning to deliver for ISiS. This review will include:

Understanding the implications for locating the staff involved;

Understanding the processes included in and excluded from the shared services responsibility;

Understanding the impacts on the organisation and people;

Understanding the impacts on the technology that supports the shared service operation; and

Understanding how the Service Management Relationship will be affected.

Although we have obviously not undertaken this work so far, our approach and methodology, discussed below provides a clear framework for approaching a scope change of this nature.




3 Previous Experience

3.1 Previous Experience

IBM has deep experience in the implementation of shared services in many different organisations and geographies in the public and private sectors. This includes work on recent and current UK public sector shared services initiatives.

We have been involved in scoping, feasibility, design, implementation and delivery work for many hundreds of shared services projects around the world. We have also been responsible for a large number of shared services operations for major global organisations. Our work has included process design; reengineering and change; organisation design and change; people management and training; as well as technical architecture design, deployment of leading-edge technology, infrastructure and contact centres to support shared services.

Below are a few case studies to demonstrate our experience:

3.2 Case Studies

Walking the talk: IBM

IBM is one of the world’s largest organisations with more than 329,000 employees. Big and complex, it has faced many of the challenges it now helps other enterprises overcome. In 1992, facing break-up, IBM needed to find significant reductions in its cost base. The company focused on seven key processes, making its infrastructure consistent and consolidation throughout its operations. Between 1992 and 2004, infrastructure consolidation saw the company go from 128 CIOs to one; 31 networks to one; 155 data centres to six; and 16,000 applications to 4,200. In HR, it consolidated 38 operation centres into one (known as Ask HR); 21 data centres into one; and achieved a global HR: staff ratio of

1:109, an improvement from 1:59. Through its own reorganisation to a shared services model, IBM learned the value of consolidation and delivering one process across the business, and how necessity gives a strong impetus to finding a new, more efficient operating model.

REDACTED SECTION (41) THIRD PARTY INFORMAITON SUPPLIED IN CONFIDENCE




4 Approach and Methods

4.1 Approach, tools and techniques

For projects of this scale and complexity it is important to adopt a tried and tested method. We therefore propose to use IBM’s Shared Service Centre Method to coordinate the delivery of the many components of shared services within the standard and variant projects. The Shared Service Centre Method is an end-to-end delivery method for designing and implementing multi-functional shared service solutions. This method is described in more detail in the method statement for redesigning transactional service delivery (See Volume 2 Section C 6 Appendix A2).

The illustration below shows at a high level the component parts of our Shared Service Centre Method:

Ass

ess

Def

ine

Des

ign

Mig

rate

&

Tra

nsiti

on

Ope

rate

&

Opt

imis

e

Program Management

Business Domain

Organisation Domain

Application DomainBui

ld

Architecture Domain

Operations Domain

Solution Design Solution delivery

Figure 3: The IBM Shared Services Method

The method identifies six domains containing activities and deliverables with a common or related purpose. The following section details the main work products and deliverables within each domain and addresses how these will be delivered by either this project or other projects.

4.2 Work Products and Deliverables

Many of the standard and variant projects contribute to the overall transition to a fully operational, multi-functional shared services centre. Below is an analysis of the six “domains” within our approach to identify those activities that need to be undertaken to pull other parts of the programme together and ensure that a truly “world class” shared service centre is delivered.

The analysis therefore falls into six headings:

Programme Management;

Business Domain;

Organisation Domain;

Application Domain;

Architecture Domain; and

Operations Domain.




4.2.1 Programme Management

Project plan and cross workstream / project integration:

Within this shared services proposal a detailed project plan will be produced which identifies key milestones and resource requirements, and integration between workstreams and with other projects.

4.2.2 Business Domain

Future end to end business process design:

As part of the delivery of in-scope services, the ISiS operational teams will have conducted systems thinking reviews to start to optimise and harmonise processes, within the limits of the technology employed. Where possible, a common process for TDBC and SCC will be adopted except where there is a strong customer requirement for divergence.

Further process improvement will be delivered by the SAP implementation and process maps will have been produced. This project will review the ‘as-is’ end to end processes and the split of activity between the transactional shared service centre, the professional advisors (within ISiS but located in the business) and the retained business.

Within this shared services proposal the activity split will be assessed against agreed criteria and changes recommended where appropriate. The process maps will be updated as required.

Shared Service Centre (SSC) operating framework:

As the scope of shared services is envisaged to be the same as the scope of the ISiS joint venture, the governance arrangements and operating model will have already been defined (See Volume 2 Section A1) . It is not anticipated that any further changes to governance will be required as a result of this project.

Within this shared services proposal we will identify the impact of the transition to shared services on the ISiS administration and support activities. New policies and standard operating procedures will be documented.

Benefits realisation:

Within this shared services proposal any FTE savings to be derived from the revision in activity split or deployment of additional enabling technology will be calculated and a plan for realising the benefits established.

4.2.3 Organisation Domain

SSC organisation design:

Initial high level organisation design will have been delivered at the start of the joint venture, including the ISiS senior management structure.

Within the shared services proposal we will conduct a comprehensive review of the ISiS organisation structure. Organisation design will need to start from day one of the joint venture so that a consistent approach is adopted for all staff movements within ISiS both during the initial integration of common services and later during the transition to multi-functional shared services.




The timing and ordering of the redeployment of staff is critical. Issues to be resolved will include ensuring the right spread of staff across the ISiS business units while giving staff maximum individual choice for their new roles.

Reporting Structure• Structure charts• Reporting relationships• Number of grades / levels• Staffing numbers: current and historical• Staffing costs and benchmarks• Locations of units / positions• Ways of grouping work• Spans of control

Role Design• Unit mission statement• Role descriptions• Accountabilities• Skills / competencies required• Relevant work procedures• Benchmarks• Decision making processes

Performance Measures• Unit measures• Job measures• Process measures• Benchmarks• Planning and control systems• Rewards and incentives

Work Group Design• Group / team interaction• Authority bases• Say/Do matrix• Communications patterns• Problem resolution mechanisms

Integrating Mechanisms•Links with suppliers / partners• Indirect / matrix reporting mechanisms• Cross-functional teams / committees• Executive committees• Internal communications processes• Other HR management systems

Figure 4: Components of Organisation Design

Figure four shows the scope of the organisation design work we propose to undertake - not just the organisation structure and roles but the supporting governance structures that are essential if the organisation design is to function effectively.

This shared service proposal will encompass the following:

Roles, job descriptions and grading;

Work groups;

Integrating mechanisms;

Reporting structures; and

Performance measures.

We expect the design process to be collaborative with the highest level design being agreed through workshops with the ISiS Board at least 12 months before implementation. Once the overall structure is agreed, the same approach will be taken for each large work group involving appropriate people from each organisation within ISiS that is going to be party to the changes.

People Transition:

Within this shared services proposal the following will be undertaken:

Design and implementation of HR transition processes that are fair and equitable but also fast, practical and effective in moving staff from the old structures to the new;

As it is envisaged that staff from each professional community (Finance, HR etc) will be spread across the contact centre, transaction processing and advisory services groups, it will not be straightforward to match all staff to new roles. It is likely there will have to be a preference exercise and a formal application/redeployment process to ensure fairness and meet staff expectations as far as possible; and

Redeployment of staff to new roles and work groups within the shortest time possible using approved HR transition processes.




Change management activities to support staff through the changes and ensure that they stay motivated and productive, understand the changes, why they are required and the part they need to play to achieve them. Activities envisaged at this stage are:

Roadshows that enable all staff to see what the different business units in the new organisation will look and feel like so that they can make informed decisions about where they would prefer to work;

Opportunities for staff to talk one to one with ISiS leadership;

Coaching and developing a consistent approach with existing change agents/communications champions in the population to ensure the right messages are given out;

Leadership coaching specifically around leading through change as soon as leadership roles for the new organisation are agreed; and

Regular communications through all of the above as well as email/intranet so that staff feel comfortable that they understand the process and where they fit in it.

SSC performance management:

Skills and competencies, career planning and reward mechanisms will all be addressed by the Professional Excellence Programme which will be closely integrated with the organisational design changes required for shared services (See Volume 2 Section 3.1)

Training:

The planning and delivery of training to support the transition to shared services is covered by the Learning and Development section (See Volume 2 Section A 1)

4.2.4 Application Domain

Single, Integrated ERP System:

The design, configuration, testing and implementation of a single, integrated ERP system will have been delivered by the SAP solution. The SAP project will deliver simplified and fully integrated business processes with increased automation (for example through the use of Employee Self Service and workflow). Process maps will have been produced down to SAP transaction level and detailed work instructions documented.

For this reason there is no additional activity included within this shared services proposal.

Business case for enabling technologies:

Within the shared services proposal we will review the business case for investment in enabling technologies to further increase process automation and improve service delivery. The business case for enabling technologies is likely to become stronger as the shared service centre starts to deliver services to other councils and organisations. In addition such technologies may be required to achieve a level of service and efficiency capable of attracting extra business.

Examples of the way in which enabling technologies may be used to improve service delivery and increase efficiency are demonstrated below:




Scanning and electronic data capture (ICR/OCR)

The use of scanning technology can be used to great effect in the area of invoice processing. All invoices are sent by suppliers to the shared service centre where they are scanned upon receipt. Electronic data capture technology is then used to ‘read’ the scanned image (see figure 5 below) and automatically record the invoice in the accounts payable system. Used in conjunction with purchase orders, many invoices can be matched to orders and goods receipt and then paid with virtually no manual intervention.

This technology can also be used for other types of manual documentation received such as job application forms.

Figure 5: Electronic Data Capture for Invoice Processing

Electronic records management

One challenge often faced by HR shared services is what to do with the paper personnel file. HR business partners (residing in the retained organisation) and the shared service centre staff all have a legitimate need to view the contents of these files. While this can be overcome to some extent through the use of an ERP system such as SAP, including ESS and MSS, there will always be some documentation received in manual format. In addition, where personnel files are moved to the shared service centre, storage space can quickly become an issue. An electronic records management system can be used in conjunction with scanning to effectively create an electronic personnel file. All paper documents received from staff can be scanned and stored in the records management system. These documents can also be linked to the appropriate records in the HR system. All appropriate staff, regardless of their location can then view all documentation relating to employee. The figure below demonstrates how




scanning and electronic data capture can be used in conjunction with SAP and records management to create the electronic personnel file.

Figure 6: Example of creation of electronic personnel files using TIS eFlow and SAP

Process performance management software

Performance management software can be integrated with your finance and HR systems to enable you to monitor the performance of your processes. This information can then be used to monitor performance against Service Level Agreements (SLA), resolve short term issues and also identify process bottlenecks which require redesign. Figure 7 below shows a typical process performance management dashboard for invoice processing.




Figure 7: Example Process Performance Monitoring Dashboard

Where there is a proven business case for any of these technologies then they will be implemented as part of this project. Detailed costs and benefits will be produced at that time.

4.2.5 Architecture Domain

All aspects of the architecture design and delivery (including aspects such as data security and integrity) will be covered by the SAP ERP project and the customer Access projects.

For this reason there is no additional activity included within this shared services proposal.

4.2.6 Operations Domain

Physical premises and facilities:

Interim accommodation moves are included within the “standard bid”. This will enable common process teams to be co-located (although not all processes will be located in the same place). This co-location of teams will allow the first steps towards process optimisation and harmonisation.

The Transforming the Working Environment variant project ” (See Volume 2 Section C 5) will deliver a business centre in Taunton to accommodate the ISiS teams. This will be a modern, flexible work environment, capable of meeting the requirements of shared services. Any technology and facilities required to support non territorial working, the costs of designing the new facility and transitioning staff to the new premises are also included in that project.

Although there are clear interdependencies here between Transforming the Working Environment and the shared services proposals, this is a matter of co-ordination rather than additional activity.

Service Delivery & Channel Strategy:

The methods by which customers (whether internal or external) will interact with the shared service centre will be established (both the channel – such as email,




phone, letter or face to face, and the initial point of contact). We will normally recommend use of a tiered service delivery model (see figure eight) supported by the use of CRM software to manage service requests through their full lifecycle. All contact with the shared service centre, whether internal or external, will therefore be channelled via a dedicated customer support function. For example: A service request is raised via the portal requesting set up of a new vendor on SAP. The service request automatically creates a case record in CRM and the request is routed to an appropriate team or individual. After set up of the vendor the service request is closed and an email is automatically sent to the requestor informing them of the new vendor number.

Tier 0 (Self-service)

Predefined answers Basic to complex inquiries

Tier 1 (Advisor - Generalist)


Full range of HR/Finance/Payroll support Transaction processing

Tier 2 (Specialist)

Interpretation and problem solving Program delivery

Tier 3 (Business Partner/ Consultant)

Forecasting/policy Policy/program design

Special studies/audit Critical incident support

Advice & counsel

Transaction processing

Bu

sine

ss Partn

er

Sh

ared

Se

rvices

Tiered Service Delivery Model

Tier 0 (Self-service)


Tier 1 (Advisor - Generalist)


Full range of HR/Finance/Payroll support Transaction processing

Tier 2 (Specialist)

Interpretation and problem solving Program delivery

Tier 3 (Business Partner/ Consultant)

Forecasting/policy Policy/program design

Special studies/audit Critical incident support

Advice & counsel

Transaction processing

Bu

sine

ss Partn

er

Sh

ared

Se

rvices

Tiered Service Delivery Model

Figure 8: Example Tiered Service Delivery Model

Implementation of SAP CRM is described in Volume 2 Section B 2.

Within this shared services proposal we will define the service delivery and channel strategies for the SSC.

Service Management Framework:

Initial SLAs (based on the Output Specifications) and charging mechanisms will have been established as part of the joint venture set up.

However, this shared service proposal includes a comprehensive review of the performance management framework including further development of the service level agreements and key performance indicators. We will draw on the IBM Global Benchmarking Programme to provide appropriate targets against which to measure performance.




SSC Knowledgebase:

The shared service proposal includes the design and delivery of a knowledgebase for the shared service centre – a central repository of user support materials for use by both ISiS staff and its customers (see example figure nine). User support documentation will take the form of detailed business process procedures and frequently asked questions.

The knowledgebase will probably be provided via an internal customer portal. The portal framework and technology is described in Volume 2 Section 4.2.

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Submit the approved prompt payment report to the Treasury.

4[1.7.8.9]

Prepare the prompt payment report and send it to the Business Unit.The Business Unit will either approve the report or approve the report subject to required changes.

3[1.7.8.7]

Investigate the reason for any payments which have exceeded the payment target.If necessary email any late payment queries to the Business Unit.

2[1.7.8.6]

Go to P2P009 -Prompt Payment Report for more information.

Log on to BW and run and download the prompt payment report.To do this Select report P2P009 - Prompt Payment Report

1[1.7.8.5]

More informationActionStep

Submit the approved prompt payment report to the Treasury.

4[1.7.8.9]

Prepare the prompt payment report and send it to the Business Unit.The Business Unit will either approve the report or approve the report subject to required changes.

3[1.7.8.7]

Investigate the reason for any payments which have exceeded the payment target.If necessary email any late payment queries to the Business Unit.

2[1.7.8.6]

Go to P2P009 -Prompt Payment Report for more information.

Log on to BW and run and download the prompt payment report.To do this Select report P2P009 - Prompt Payment Report

1[1.7.8.5]

More informationActionStep

Shared Service CentreKnowledge Base

How do I ….. produce the prompt payment report?

•intranet

•internet links

•forms

•search

•queries

Contact the SSC

About the SSC

Figure 9: Example knowledge base

Service readiness and cut-over plan

The shared service proposal includes a service readiness review and production of a cut-over plan for the transition to the new ways of working. If required, this may include a phased transition to meet local customer requirements.

Testing

The shared service proposal includes planning and conducting full end to end process testing as part of the migration to the new business centre and the new shared services organisation design. This will take the form of a ‘day in the life of shared services’ and will involve a run through of all manual and automated steps in key processes to ensure that the solution is fully integrated.




4.3 Plans for the Delivery of this Project

4.3.1 Timetable

The project is planned to deliver a multi-functional shared service centre by September 2009. The timing of the project is dependant on the several other variant projects, in particular SAP ERP, Customer Access and the new business centre. The broad timelines for the projects are:

June

07

Delivery to New Operating Model

(Variant)

Roll In to New SSC (Variant)

Prepare New Multifunctional SSC

(Variant)

New Business Centre Project

(Variant)

Back Office ERP System Project

(Variant)

Customer Access Project (Core)

Service Improvements

(Core)

Service Transition

(Core)

December

09

June

09

December

08

June

08

December

07

Six Month Period Ending

New Customer Access Solution Available (i.e. SAP CRM etc) and Service Delivery Roll Out starts – June 08

New Business Centre Available – June 09

Take on of Existing Services by HBS/MP

HBS/MP Redesign Process and migrate TDBC to SCC “Back Office Systems” –i.e. Single Function Shared Services

New Back Office Solution Available (i.e. SAP R/3) and Payroll Functionality Roll Out Starts – April 08

Create the Multifunctional Shared Service Centre – Sept 09

Roll In Single Function Shared Services to Multi-Functional Share Service Centre

Adopt new way of working and continuous improvement

June

07

Delivery to New Operating Model

(Variant)

Roll In to New SSC (Variant)

Prepare New Multifunctional SSC

(Variant)

New Business Centre Project

(Variant)

Back Office ERP System Project

(Variant)

Customer Access Project (Core)

Service Improvements

(Core)

Service Transition

(Core)

December

09

June

09

December

08

June

08

December

07

Six Month Period Ending

New Customer Access Solution Available (i.e. SAP CRM etc) and Service Delivery Roll Out starts – June 08

New Business Centre Available – June 09

Take on of Existing Services by HBS/MP

HBS/MP Redesign Process and migrate TDBC to SCC “Back Office Systems” –i.e. Single Function Shared Services

New Back Office Solution Available (i.e. SAP R/3) and Payroll Functionality Roll Out Starts – April 08

Create the Multifunctional Shared Service Centre – Sept 09

Roll In Single Function Shared Services to Multi-Functional Share Service Centre

Adopt new way of working and continuous improvement

Figure 10: Timeline to Shared Services

4.4 Strategic Partner’s Responsibilities

In meeting the timetable above there needs to be a clear understanding of who is responsible for each task. This is important as the overall objective here is to ensure that the service delivery under ISiS is not compromised by the shared services implementation. ISiS resources split into two broad groupings:

The ISiS Operating Team are those staff working in the Joint Venture (i.e. from SCC, TDBC, IBM, HBS and Mouchel Parkman) delivering the “in-scope” services;

The ISiS Project Team are those staff working in the Joint Venture (i.e. from SCC, TDBC, IBM, HBS and Mouchel Parkman) delivering the defined project.

The project team will be staffed with appropriate resources with recent or current operational experience as well as consultants. They will be responsible for the production of all the identified work products and deliverables. However, they will work closely with the operating team to ensure that processes and designs will meet their needs. Operating team responsibilities will include attending workshops, specifying requirements and reviewing and signing off documents.

4.5 Councils’ Responsibilities

Implementing shared services will impact the full end to end business processes and so it is inevitable that this will impact on the “out of scope” services within the




councils. Staff involved in the end to end process will need to engage with the project team to help identify any changes required to the scope of services delivered by the shared service centre.

The success of the shared service centre is also dependent, in part on the behaviour of “out of scope staff”. For example, invoice processing efficiency cannot be fully achieved unless all employees comply with policies regarding the selection of vendors and the raising of purchase orders. The Councils must therefore ensure that all ‘out of scope’ staff receive the appropriate culture change and ways of working training to effectively partner with the shared service centre.

The broad responsibilities of the staff within the “out of scope” services are described below:

Responsibility Matrix

Task Out of Scope Services’ responsibilities

Business Process Design

Attend workshops to review the split of activity between the ‘out of scope’ services, the professional advisors and the SSC

Sign off the revised activity split

Re-engineer impacted ‘out of scope’ services in readiness for migrating to the new ways of working.

Benefits Realisation Provide baseline FTE data and transactional volumes for any currently ‘out of scope’ activities to be transferred to the SSC

People Transition Identify staff impacted by any change to the activity split

Review and approve the HR transition processes

Redesign the retained organisation structure following any change in responsibilities

Training Ensure that all staff are trained and supported in the new ways of working.

Service Management Framework

Review and approve revised SLAs and ensure that the operating requirements placed upon the directorates (in order for the requirements of the SLA to be met) are adhered to




5 Cultural Change

5.1 Culture Change Method

Our culture change method, the “Magic Carpet” is set out below.

Why “magic carpet”?

Efforts to achieve cultural change often rely on a few levers of change. Given the complex nature of personal behaviour, these seldom achieve a lasting result. However, if a coordinated approach is taken with as many levers as can be used, then desired change will ‘get off the ground’, just like a magic carpet.

How a person’s physical and virtual environment shapes their styles of working and modes of interaction

How a person’s physical and virtual environment shapes their styles of working and modes of interaction

How a person is rewarded and

sanctioned

What a person’s objectives are and

how they are assessed

What training a person receives and whether the

content is placed in behavioural context

How a person is engaged in communication and whether behavioural

aspects of the message are covered

What types of person people see being

recruited and promoted

How a person’s role is defined, and work reporting lines &

relationships exist

How a person is influenced by the behaviours of

leaders, others they regard highly and peers

What processes, policies and procedures

a person is asked to work with

•Objective

1

•Objective

2

•Objective

3

•Objective

4

•Objective

5

How a person is rewarded and

sanctioned

What a person’s objectives are and

how they are assessed

What training a person receives and whether the

content is placed in behavioural context

How a person is engaged in communication and whether behavioural

aspects of the message are covered

What types of person people see being

recruited and promoted

How a person’s role is defined, and work reporting lines &

relationships exist

How a person is influenced by the behaviours of

leaders, others they regard highly and peers

What processes, policies and procedures

a person is asked to work with

•Objective

1

•Objective

2

•Objective

3

•Objective

4

•Objective

5

Figure 11: The Magic Carpet: 9 levers for culture change

Our People Excellence approach describes this in more detail (See Volume 2 Section A 3).

5.2 Shared Services Contribution to Culture Change

This shared services project contributes towards culture change within ISiS by introducing tools and processes which focus on the customer (whether internal or external). Every contact with the shared service centre will be treated as a service request and the progress of that request will be monitored from its inception to successful conclusion. In addition, service level agreements and key performance indicators will be refined to focus management attention on the ability of the organisation to meet customer expectations.

The design of the organisation structure will also be modified, with a dedicated team focussing on the customer interface while the channels by which the customer can contact the SSC will also be reviewed to ensure the needs of all customers are met.




The following diagram illustrates how culture change is core to establishing an effective shared services organisation.

Figure 12: Building the culture of shared services




6 Link to Wider Transformation

6.1 Wider Transformation

The implementation of a SSC links to the wider ISiS transformation objective in the following ways:

ISiS objective Impact Key SSC inputs Outcomes

1. To improve access to and the delivery of customer facing services

Low Structure and management processes that facilitate frontline staff in doing their job, innovating and going the extra mile

A governance structure over data and processes that helps improve the quality of information available when answering queries

New roles and work groups that support customer focussed service and a “can do” attitude

Processes integrated with the “front office” requirements of a Customer Relationship Management solution

2. To modernise, reduce the cost of and improve corporate, transactional and support services

High The advantage of the SSC approach is the avoidance of inefficient back office processes through process redesign

Cost reductions in the processing of transactions in the areas of finance, procurement, HR and payroll – to be finalised as part of the implementation.

3. To help modernise and transform the overall workings of the Councils

Medium Implementing processes used in world class organisations.

Providing a platform for integrated “self service”.

Freeing up resources from transaction process to enable a greater focus of “value adding” strategic/advisory services

4. To invest in world class technologies to improve productivity

Low/Med Review business case for enabling technologies such as scanning and data capture which would significantly increase productivity

Appropriate enabling technologies employed, reducing the need for manual intervention

5. To create an excellent working environment and a more sustainable employment for council staff in

Medium Provide a scaleable organisation structure to enable business growth

Provide career paths and skills development for staff

Core staff with superior skills and competencies.






ISiS objective Impact Key SSC inputs Outcomes

the future Implement structure and mgt processes that enable flexible and mobile working

Staff will be trained in the new processes and new ways of working. This represents an opportunity for staff development

6. To generate economic investment by attracting a partner willing to invest in Somerset

Medium The SSC will have the capability and capacity to provide transaction processing services to other organisations

A greater chance of attracting additional work to the ISiS partnership from others (in sector/region), which will have the impact of reducing the overheads of “back office” transaction processing

7. To promoting sustainability and ethical business practices

Low


7 Benefits

7.1 Benefits

7.1.1 Benefits of implementing shared services

The benefits of implementing multi functional shared services are that it provides:

Significant cost reductions. Although dependant on the baseline, previous shared services implementations have delivered cost reductions of between 25% and 40%;

A focus on standardised, efficient transaction processing service with clear accountabilities regarding the delivery of this service;

An opportunity to free up professional/front line staff resources to focus on “value adding” tasks by allowing processes to be delivered by specialists who excel in that process rather than people for whom it is a distraction from the more central elements of their job;

The use of cost effective technologies (such as an integrated ERP systems, workflow, scanning, electronic records management) which would not be affordable for a single organisation – and thereby enabling them to receive a more efficient and better standard of service than would otherwise be the case;

A platform for integrating consistent information for reporting purposes across processes rather than through “silos”;

An opportunity for staff to develop from an “inputting” approach to transaction processing to a “quality” control approach via the use of extended technology/automation;

An opportunity to create a new way of working, underpinned by a performance culture (including continuous improvement), within the shared service centre that can act as a beacon for the ISiS partnership;

A service management approach with a focus on customer service through service level agreements, performance reports and account management.

7.1.2 Specific benefits of this project

This project will provide the following specific benefits:

Improved process efficiency through the refinement of the activity split and the implementation of enabling technologies for the SSC (where a business case can be established). Although it is not possible to be definitive at this stage, the introduction of invoice scanning and electronic data capture (for example) can achieve staff savings of over 25%;

Improved service delivery and better response to service requests through a more formalised and standardised customer interface;

Revised organisation structure which ensures ISiS is structured in the most appropriate way to deliver services to its customers;

Fully documented procedures, advice and guidance available to all ISiS staff and its internal customers, increasing self help and reducing the demands on the staff to respond to queries;






Enhanced service management through the deployment of CRM functionality to manage service requests, ensuring all customers’ needs are met in a timely manner.

Shared Services Proposal (Final) REDACTED

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