Sizing with precision Driving efficiency in an HR shared ...
Transcript of Sizing with precision Driving efficiency in an HR shared ...
© 2014 Deloitte LLP. All rights reserved.
Sizing with precision Driving efficiency in an HR shared services environment
Neera MayorCraig Renshaw 19 November 2014 Deloitte
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Agenda
• Introductions
• The traditional approach to SSC sizing
• A new approach to sizing
• Tools and techniques available• Overall approach• Marrying quantitative and qualitative research techniques• Tools for efficient sizing (inc. Demos)
• Questions
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Introductions
Neera MayorManager
People & Workforce Analytics
Craig RenshawSenior Consultant
People & Workforce Analytics
© 2014 Deloitte LLP. All rights reserved.
The traditional approach to SSC sizingA static approach that may not maximise efficiency or effectiveness
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A rear-view mirror approach
No clarity on what ‘good’ looks like
Relies on intuition to identify skills and capability needed
Productivity and service levels not
known
Unable to articulate the relative linkage between the drivers of cost and quality*
and the output
* Based on the 2013 Deloitte Global Shared Services Survey, these are the top 2 considerations when running a SSC
A significant improvement to SSC sizing can be gained by working
additional data harder
What value does this approach create? What
impact does this approach have on sizing?
SSC
val
ue c
reat
ed
Analytics maturity
Input
Information
Insight
Intelligence
Sizing is not agile or pro-active
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A new approach to sizingBalancing cost, quality and risk
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Service excellence
Cost
Commercial framework
Waste and productivity
Quality
Process optimisation Capability
Risk
Analytic driven insights
Business impact
SSC sizing analytics tools can be used to underpin the cost, quality and risk levers and optimise the sizing profile in light of the
Service excellence can only be achieved by
balancing the (potentially
conflicting) levers of cost, quality and
risk
Labour quality and cost are identified as the two most important factors to consider when planning a SSC** Based on the 2013 Deloitte Global Shared Services Survey
Understand the current waste and relative productivity of the
SSC, in the context of the commercial framework to optimise the cost profile
Optimise the processes that are sub-optimal/’broken’ and
understand the capability of the staff involved in each process to improve service quality
Gain insight as to the key drivers of risk (e.g. low
retention) and understand the business impact to reduce the
business risk
TOOLS AVAILABLE
Solution impact
analysis tool
T&A AnalysisProcess
Workshops
Process Optimisation Performance Index
Sizing Engine
Dashboards
PAM
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How the approach enables sizing decisionsThe new approach enables higher value questions to be answered
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SSC
val
ue c
reat
ed
Analytics maturity
Input
Information
Insight
IntelligenceIf I was to introduce automation into process A or develop
more capability in process B, what does that do to my capacity and sizing levels in the future?
Which of my processes could be further optimised and by how much?
What happened to customer satisfaction scores when attrition levels increased?
How many days were lost due to absence?What were my case volumes by channel last year?
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Tools and techniques availableAnalytical tools and big data can drive better sizing and capacity planning
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Waste and productivity
Time and Activity Analysis
Process deep dives
Process Analytics Modeller (PAM)Sizing Engines
Process optimisation and capability
Understanding where the biggest costs are incurred and where the biggest benefits can be
achieved
Solution impact analysis tool
Analytic-driven insight Business impact
Using PAM, and live dashboards to dynamically monitor the ongoing impact of the sizing
Commercial framework
Process Optimisation Performance Index
Understanding where productivity is compromised and where the most waste is seen
Understanding how processes can be optimised and the capability
needed toimprove quality
Understanding what the sizing looks like and the key drivers of
cost and quality
Live dashboards
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Understanding waste and productivity
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The Time & Activity analysis revealed what HR looks like today, identifying high-level opportunities to optimise labour distribution across 18 HR processes. The findings have helped us understand how we can work more effectively to position ourselves to support the business in this time of change.
Time & Activity Analysis
Over 60 HR processes were mapped with reviews held against to quantify their effectiveness and efficiency against measures like automation. The process guidebooks that were produced documented the level of opportunity for each process area.
Process Deep Dive
The business issue What have we achieved?
The client wanted to understand in detail the current state of HR function i.e. how people in the HR function are spending their time across the different processes and activities that made up the taxonomy.
Methodology
• Quantitative information -conducted a survey to identify time and cost metrics associated with HR function
• Qualitative information - interviews with key stakeholders to identify current challenges and opportunity
• Developed analytics framework to carry out the analysis and gather complete view of HR organisation
Process Optimisation Performance Index (’POPI’)
POPI is measured index that can be used to rank the processes in terms of time efficiency, related cost and quality. This combines findings from the Time & Activity Analysis with Deloitte’s subjective interpretation of information identified from the process review workshops. The output of this work will be a prioritised profile of processes relative to their opportunity for improvement.
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Planning for the future
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Driving towards operational excellence with leaner HR function
The precision analytics model is a tool that has been developed to add granularity to the process optimisation performance index.
Precision Analytics Model
The business issue What have we achieved?
• How determine impact of changes in different process components to help measure how changing different leavers affects the client processes and shared service centre.
Methodology
• Modelling impact – build a sizing engine which will be assumption-based, volumetric-driven model against the service catalogue to consider demand relative to intended service levels.
• Precision Analytics – use this to understand the impact of changes in different grades etc.. on the current cost metrics of the processes.
Sizing Engine
Helps to understand the financial impact of changing different components that affect the HR function. E.g. reducing level of FTE of certain grade in administrative tasks
Flexibility of changing factors identified through T&A and process workshops to determine ultimate impact on POPI score. Therefore, how the level of opportunity changes as different leavers are adjusted.
Analytics & Insights
Analytics utilised across HR services to create
visible easy to use measures and identify
key trends, hotspots and interventions that help support the business going forward. Using
case volume metrics and organisational design data, forms basis of
transformation assessment.
Proactive and real time support for the business
Size the HR transformation to deliver effective service based on agreed HR operating model. The model has been used for estimating the size of the HR function, considering the right number of resources.
Three key variables were identified:1. volume of work2. number of people3. target level of service
These variable are interrelated and by movement in these it affects, effort level, productivity and balancing factors.
The goal of the model was to ensure the
variables remain in balance and improve
service level
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Value driven by solution initiatives
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Driving out areas that can increase costs and reduce benefits
Solution initiatives were analysed across four broad categories i.e. technology, service delivery, people and process.
Business case framework
The business issue What have we achieved?
• High pressure to reduce costs and improve efficiencies
• Inflight IT Roadmap for Oracle Fusion with a need to understand potential benefit realisation
• Inconsistent HR Services structure and productivity
• High level of activity rework• Multiple inflight organisational
transformation programmes• .
Methodology
• Used a comprehensive excel model to calculate the net benefit over a five year period.
• The model analysed the financial cost/benefit associated with each initiative identified for the HR function.
• Assumption were made around WACC, length of roadmap etc… and relied on information from HR team
Financial analysis
Encompassed with cost and benefit assumptions from other work streams e.g. shared service centre, business partners and resourcing. The three key deep dive areas for this client.
Ability to hold HR accountable to deliver
against Business Case whilst delivering
value. Formed foundation for HR
transformation and provided target sizing
and service scope for HR operations that was key to understanding the
end state requirement for the shared service
centre.
Over the 5 year period the technology and process supported net benefit was c. £20.8m which was mainly solutions related to implementation of Oracle fusion.
£46m net benefit from solutions clustered under HR and organisation optimisation.
Benefits realisation
Sources of value are created
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New ways of working
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Improving service value by redesigning the structure of the HR function
3 phase organisation view created in OrgVue using a top down and bottom up approach
Bottom up – inputs from functional streams and key stakeholders from the client
Top down - numbers from business case and 45% resizing ratio
3 Phase OD design
The business issue What have we achieved?• Opportunities for efficiency were
identified by consolidating transactional activities into a single shared service centre over two years
• Bringing the opportunity to life required visualising the phased transition so the client could better understand how their HR organisation would change over the transition period
Methodology • OrgVue was used to visualise the
current As-is organisation
• To-be organisations were developed in OrgVue over 3 phases to visualise how the organisation would change
• Key inputs were the business case and transformation journey. T&A analysis provided context for developing assumptions and principles
HR Operations into One HR
Based on the scoped challenges and
opportunities, leading practice and design principles the To-Be operating model for HR Shared Services
was developed to achieve the business
case targets
HR operations formed one of the three key pillars of the new HR Operating Model
Objective was to transition as much transactional activity as possible into shared services, creating operational efficiency and truly strategic Centres of Expertise
3 phase plan sees shared service centre double in size as services transition over
Sources of value are created
© 2014 Deloitte LLP. All rights reserved.
© 2014 Deloitte LLP. All rights reserved.
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