GBS Market and Maturity Assessment Analysis: Nordic Perspective
The latest trends and technologies driving GBS maturity
Transcript of The latest trends and technologies driving GBS maturity
The latest trends and technologies driving GBS maturity
1Q 2016 Pulse Survey Results
KPMG Global Insights Pulse
2©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG’s shared services and outsourcing advisory practiceKPMG has the ability to support member firms’ clients transform enterprise
services and help improve value, increase agility and create sustainable business performance.
Who we are
What we do
How we do
it
The Shared Services and Outsourcing Advisory practice brings a specialized team of more than 1,000 professionals within KPMG’s global network of independent member firms operating in 155 countries. We help clients design, build, and manage information technology (IT) and business processes across the enterprise.
We help clients align their business strategy, organization and execution to enable them to manage the entire IT and business process life cycle improving business performance, and laying the groundwork for genuine business transformation.
We apply focused research, automating tools, proprietary data, clear business acumen, and a forward-thinking mind-set to provide timely, objective, actionable advice and practical approaches for clients.
3©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG Global Insights Pulse
The surveys are a quarterly review of global business services (GBS) market trends and individual observations from the ‘front lines’.
Input sources: Topics evaluated: Primary functional focus:
— 1000+ KPMG sourcing advisors
— 12 leading global business, IT, and cloud service providers
— KPMG market research
— Drivers for GBS usage
— Demand and buying patterns
— Deal attributes
— Thematic topics for each Pulse Survey
— The role of the GBS executive
— GBS governance
— Update on process and cognitive automation
— Call center/customer care
— Finance and accounting
— Human resources
— Information technology
— Procurement
— Real estate and facilities management
— Vertical industry BPO
— Emerging BPO/KPO functions
Focus on performance, trends, and futures
— Launched in 2004 by EquaTerra*
— Part of a growing family of KPMG Pulse market research studies
* KPMG LLP (US) KPMG Holdings Limited (UK) and KPMG International acquired the business and subsidiaries of advisory firm EquaTerra, Inc. in February 2011.
The role of the GBS executive
5©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The role of the GBS executive
David Brown, KPMG’s Global Lead, Shared Services and Outsourcing AdvisoryKPMG in the US
“ “
— Creating strong GBS leadership at the executive level as a peer to other CXO roles is critical to enabling the drive to higher levels of GBS maturity and delivering meaningful and measureable business value and outcomes beyond cost savings.
— Most GBS groups are still organized and managed by function or geography, though this will change over the next three years, moving towards end-to-end process ownership and global management models.
— Functional or geographic GBS leadership rarely (in <10% of organizations) rolls-up into a single global GBS executive, though awareness of the need for this role and planning for its implementation is growing.
— GBS executive leadership, in whatever form, faces many challenges to improving GBS capabilities, especially in enabling end-to-end process ownership and gaining executive level support for GBS operations and improvement efforts.
Bringing GBS services into one organization that operates under one accountable executive leader is crucial in maximizing efficiency and effectiveness and driving greater business value.
6©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Advisors: GBS organization and management models —today and in three yearsToday
In three years
20%
19%
25%
16%
56%
65%
60%
56%
24%
16%
15%
27%
0% 20% 40% 60% 80% 100%
Organized and managed globally
By end-to-end process
By geographic region
By function
Uncommon Common Very common
71%
77%
22%
15%
26%
20%
63%
58%
3%
2%
15%
27%
0% 20% 40% 60% 80% 100%
Organized and managed globally
By end-to-end process
By geographic region
By function
Source: KPMG Global Insights Pulse 1Q16
7©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Advisors: GBS organization and management models —today and in three years
12%
21%
40%
32%
28%
28%
11%
7%
6%
9%
4%
4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
3Q14
1Q16
No plans, not on the radarAwareness but no actionDeveloping plans to install role/under discussionPlans being executed, 3+ year timelinePlans being executed, 1-3 year timelineRole already established
Source: KPMG Global Insights Pulse 1Q16
8©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Advisors: biggest challenges facing GBS executives
43%
49%
43%
35%
61%
52%
41%
43%
44%
45%
52%
42%
Expanding & integrating GBSoperations across processes &
functions
Enabling an integrated IT model,systems & applications to support GBS
Performing governance globally acrossall GBS processes
Executive level support to adopt and/orexpand GBS
Enabling end-to-end process ownership
Evolve GBS focus from cost savings tostrategic business value
1Q16 3Q14Source: KPMG Global Insights Pulse 1Q16
Governance best practices for GBS
10©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Governance best practices for GBS
“Liz Evans, Managing Director, Shared Services and Outsourcing AdvisoryKPMG in the US
“ “
In an integrated environment, the need to have clearly defined roles and responsibilities and hand-offs in your governance environment are extremely significant for success.
— Good governance coupled with strong change and program management is critical to the success of an organization’s global business services efforts, especially as focus shifts to delivering meaningful and measureable business outcomes above and beyond cost savings.
— Governance is a perennial challenge to the success of shared services and outsourcing efforts, especially with integrated delivery models comprising global business services.
— The bar of what constitutes “best in class” GBS governance is constantly being raised so even as organizations’ skills improve they are still often not able to keep up with the demands placed upon them by more advanced and aggressive GBS efforts.
— The biggest challenge to GBS governance efforts is a fundamental lack of governance maturity and capabilitiesat a level required to support existing GBS efforts.
— The top governance success factor to ensure expected value is delivered from GBS efforts is measuring business outcomes against original business case expected value.
— Clearly defined roles and responsibilities for the new governance & operating organization and end-to-end global process ownership are the top two critical considerations for GBS governance.
11©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Biggest GBS governance challenges
19%
32%
39%
41%
41%
50%
61%
0% 50% 100%
Inability to execute operationallyagainst GBS operating model
Lack of technicalautomation/integration in support
of GBS
Lack of enterprise-wide supportfor a new GBS operating model
Stakeholder misalignmentregarding business scope and
expectations
Lack of strategic alignmentbetween business strategy and
GBS strategy
Lack of clear ownership for GBSstrategy and execution
Lack of governance maturity andcapability to manage GBS scale
and scope
Advi
sors
Serv
ice
prov
ider
s
15%
10%
50%
55%
55%
35%
70%
0% 50% 100%
Source: KPMG Global Insights Pulse 1Q16
12©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Top enabling technologies for GBS governance
5%
14%
18%
21%
23%
30%
35%
39%
42%
51%
0% 50% 100%
Asset management tools
Mobility applications
Vendor managementtools/applications
Risk compliance andmanagement tools
Contractmanagement/procurement tools
Integrated custom developedtools
Sophisticated data analytics andreporting tools/dashboards
Microsoft products
Performance monitoring tools
Workflow tools for alerts,approvals, etc.
Advi
sors
Serv
ice
prov
ider
s
5%
26%
21%
37%
26%
37%
47%
21%
47%
32%
0% 50% 100%Source: KPMG Global Insights Pulse 1Q16
13©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Top governance success factors to ensure GBS value
Source: KPMG Global Insights Pulse 1Q16
18%
29%
35%
36%
48%
51%
71%
0% 50% 100%
Effective customer surveying andimplementation of appropriate action
plans
Ability to effectively extract andanalyze GBS information in support
of the business
Monitoring achievement of costreduction and efficiency objectives
Focus on continuous improvementfor key business/technical processes
Clearly defined process integrationbetween the GBS org. & bus.
units/suppliers
Effective monitoring of keyperformance indicators and service
levels
Measuring business outcomesagainst original business case
expected value
Advi
sors
Serv
ice
prov
ider
s
12%
41%
29%
29%
53%
35%
94%
0% 50% 100%
14©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Top considerations for successful GBS governance organization
25%
27%
33%
45%
53%
54%
57%
0% 50% 100%
GBS governance organizationalignment with regional operating
structure
Effective structure and focus ofjoint governance boards
Well-articulated scope and focusof the governance organization
Talent, experience, and skills ofGBS governance organization
Well-defined integration betweenthe governance org. & the
retained org.
End-to-end global businessprocess ownership
Clearly defined roles &responsibilities for the new
governance & operating org.
Advi
sors
Serv
ice
prov
ider
s
17%
11%
50%
33%
67%
44%
78%
0% 50% 100%Source: KPMG Global Insights Pulse 1Q16
15©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Top relationship management components for GBS governance
18%
23%
30%
36%
38%
38%
43%
48%
0% 50% 100%
Clearly identified personnel match-ups and working relationships
Well-defined and communicatedchargeback and cost allocation
methods
Internal and external service levelagreements
Clearly defined decision rightsamongst key stakeholders
Dedicated relationship managersbetween the bus. units & the
governance org.
Well-defined service catalogshared with the business
Appropriate stakeholderrepresentation on jointmanagement boards
Service agreements in placebetween the GBS org. & the bus.
units
Advi
sors
Serv
ice
prov
ider
s
22%
28%
33%
28%
78%
6%
50%
44%
0% 50% 100%Source: KPMG Global Insights Pulse 1Q16
Process and cognitive automation
17©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The evolution of process automation
Basic process automation
Enhanced process
automation
Cognitiveautomation
Rules engine
Screen scraping
Work flow
Machinelearning
Large-scale processing
Adaptivealteration
Artificial intelligence
Big data analytics
Naturallanguage processing
Processing of unstructured data
and base knowledge
RULES
LEARNING
REASONING
01
02
03
— Artificial intelligence— Natural language recognition and
processing— Self-optimization/self-learning— Digestion of super data sets— Predictive analytics/hypothesis generation— Evidence-based learning
— Built-in knowledge repository— Learning capabilities— Ability to work with unstructured data— Pattern recognition— Reading source data manuals
— Macro-based applets— Screen scraping data collection— Workflow— Visio®-type building blocks— Process mapping— Business process management
18©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Levels of client automation activity by maturity levelAdvisors
Service Providers
72%
41%
19%
27%
40%
43%
3%
19%
19%
1%
4%
26%
0% 20% 40% 60% 80% 100%
Cognitive automation
Enhanced process automation
Basic process automation
15% 40%
29%
14%
30%
33%
24%
15%
43%
67%
0% 20% 40% 60% 80% 100%
Cognitive automation
Enhanced process automation
Basic process automation
No activity Self-education and planning Experimenting and running pilots Live implementationsSource: KPMG Global Insights Pulse 1Q16
19©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Biggest challenges to process automation
38%
48%
10%
19%
24%
33%
0% 50% 100%
Disparate underlying IT systems;lack of integration
Inconsistent and non-standardbussiness processes make it
impractical
Immaturity of RPA technologies
Client inability to build compellingand realistic business case
Lack of client appetite, budgetand skills to make required
process standardization
Determining where to start anddeploy RPA technologies
Advi
sors
Serv
ice
prov
ider
s
25%
29%
32%
39%
40%
41%
0% 50% 100%
Source: KPMG Global Insights Pulse 1Q16
20©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Potential job losses by delivery model - next three yearsAdvisors
Service providers
26%
16%
17%
5%
42%
32%
44%
42%
21%
21%
22%
26%
5%
26%
17%
26%
5%
5%
0%
0%
0% 20% 40% 60% 80% 100%
Retained organization
Shared services
ITO operations
BPO operations
0-10% 11-20% 20-30% 30-50% 50%+
52%
23%
26%
23%
32%
40%
37%
36%
11%
26%
25%
27%
4%
9%
11%
11%
1%
2%
2%
2%
0% 20% 40% 60% 80% 100%
Retained organization
Shared services
ITO operations
BPO operations
Source: KPMG Global Insights Pulse 1Q16
21©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Potential job losses by delivery model - next five yearsAdvisors
Service providers
20%
5%
6%
10%
20%
17%
15%
45%
20%
28%
40%
20%
35%
39%
20%
5%
20%
11%
25%
0% 20% 40% 60% 80% 100%
Retained organization
Shared services
ITO operations
BPO operations
0-10% 11-20% 20-30% 30-50% 50%+
25%
17%
16%
13%
42%
26%
28%
28%
25%
32%
31%
33%
7%
20%
15%
19%
2%
5%
9%
7%
0% 20% 40% 60% 80% 100%
Retained organization
Shared services
ITO operations
BPO operations
Source: KPMG Global Insights Pulse 1Q16
22©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Likelihood process maturation will drive use of less outsourcing
16%
16%
12%
10%
25%
26%
26%
25%
44%
47%
40%
50%
9%
11%
15%
5%
6%
7%
10%
0% 20% 40% 60% 80% 100%
ITO - Advisors
ITO - SPs
BPO - Advisors
BPO - SPs
1 - Not at all likely 2 3 - Moderately likely 4 5 - Highly likely
Source: KPMG Global Insights Pulse 1Q16
23©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Leveraging trends and technologies to drive GBS maturityThere are a variety of levers organizations have at their disposal to drive GBS maturity and deliver meaningful business benefits above and beyond cost savings
Move towards global, CXO level leadership on GBS
Drive end-to-end process ownership tied to global GBS governance efforts and leverage key technologies such as D&A and automation
Prioritize investments related to GBS governance (people, processes, technologies, authority) to get ahead of the curve rather than playing catch up
Clearly define GBS roles and responsibilities against retained organization and business units and ensure GBS governance value is measured in terms of business outcomes
Drive process automation maturity by defining a roadmap and prioritizing investments in efforts and technologies that bring the greatest business value; you cannot “skunk works” yourself to greatness
Recognize and account for the potential business value different types of automation can bring and the associated costs and complexities to implement
Recognize that white collar job loss due to increased automation is inevitable and take proactive steps to address ramifications
About global insights pulse survey
25©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG’s shared services and outsourcing advisory practiceKPMG has the ability to support member firms’ clients transform enterprise
services and help improve value, increase agility and create sustainable business performance.
Who we are
What we do
How we do
it
The Shared Services and Outsourcing Advisory practice brings a specialized team of more than 1,000 professionals within KPMG’s global network of independent member firms operating in 155 countries. We help clients design, build, and manage information technology (IT) and business processes across the enterprise.
We help clients align their business strategy, organization and execution to enable them to manage the entire IT and business process life cycle improving business performance, and laying the groundwork for genuine business transformation.
We apply focused research, automating tools, proprietary data, clear business acumen, and a forward-thinking mind-set to provide timely, objective, actionable advice and practical approaches for clients.
26©2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
KPMG Global Insights Pulse
The surveys are a quarterly review of global business services (GBS) market trends and individual observations from the ‘front lines’.
Input sources: Topics evaluated: Primary functional focus:
— 1000+ KPMG sourcing advisors
— 12 leading global business, IT, and cloud service providers
— KPMG market research
— Drivers for GBS usage
— Demand and buying patterns
— Deal attributes
— Thematic topics for each Pulse Survey
— The role of the GBS executive
— GBS governance
— Update on process and cognitive automation
— Call center/customer care
— Finance and accounting
— Human resources
— Information technology
— Procurement
— Real estate and facilities management
— Vertical industry BPO
— Emerging BPO/KPO functions
Focus on performance, trends, and futures
— Launched in 2004 by EquaTerra*
— Part of a growing family of KPMG Pulse market research studies
* KPMG LLP (US) KPMG Holdings Limited (UK) and KPMG International acquired the business and subsidiaries of advisory firm EquaTerra, Inc. in February 2011.
David J. BrownGlobal Lead, Shared Services and Outsourcing AdvisoryKPMG LLP (US)
Thank youFor more information visit: http://bit.ly/1RK8emU
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© 2016 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
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