“Shared Service Centre” Proposal
Shared Services - A Primer
Shared services no longer offer a distinct strategic advantage; they are a tactical necessity.
We believe the CFO of today is focused on striking and maintaining balance... increasing the top line and improving
the bottom line, while mitigating the risk within the appropriate levels of control.
The challenge for Finance is to maintain balance across these 3 dimensions. We found that the top concerns of the
CFO and the finance function were related to all three objectives
-
Profitability
-
Revenue Growth
-
Risk Mitigation
This can be addressed through outsourcing with the following specific benefits:
Standardized processes and systems
Streamlined tools and technology to mitigate risk
Provision of scale
Structured processes (e.g., procedure documentation)
Embedded analysis for repeatable analysis
Improved cycle times Visibility of costs and returns
Data managed as a strategic asset (data governance and integrity)
Enforceable contractual obligations
Centres of excellence in enterprise resource planning
2
Information on Existing Business
3
Business Structure
Sports Co.
Property and Community
Property Development and
Sports and Leisure
Management
Sales
Turf
Property
Management
Facility
Health, Safety
Development
Management
Environment
Food and
Sports
Venues and
TEC
Beverage
Academy
Events
Facility
Property Sales
Service
Cricket
SVLC
ICCA
Stadium
SOAMS
Football
Club
Entities:
Sports Park
Sports Co. HO
Finance*
Administration
Facility Services
SOAMS
Legal
Marketing
The ELS Club
SVLC
HR
Information Technology
Payroll*
Procurement*
*Proposed to be outsourced
4
IT Systems & Data Flow
Entries passed manually
(F&B - TEC, SVLC)
Entries transferred
automatically
Microsoft
(Venues &
(Merchandise sale
Events)
- TEC)
AX ERP
Service
Attendance
(Payroll)
(Payroll)
(Payroll)
5
Functional Areas to be covered
Finance
Payroll
Procurement
Revenue cycle
Rewards administration
Supply data management
Accounting & External
Payroll services
Requisition and PO
reporting
processing
Data management,
Tax management
reporting and
Supplier scheduling
compliance
Treasury management
Receipt processing
Staffing services
Compliance
Compliance management
management
Workforce
Customer management
development service
Planning and
Sourcing execution
performance
Organizational
Supplier management &
management
effectiveness
development
Business analysis
Total rewards planning
Sourcing & supply base
Function management
Strategic workforce
strategy
planning
Cash disbursements
Function management
Function management
6
Transaction Volume (Jan-Jul’18)*
Per
DSC - HO
TEC
SVLC
DSC FS
SOAMS
Total
month
Master Creation
No. of new customers created
5,590
205
-
167
174
6,136
877
No. of new vendors created
130
83
24
91
-
328
47
Transactions
No. of AR Transactions
2,486
10,351
31
5,328
499
18,695
2,671
No. of AP Transactions
141
7,131
3,751
1,663
18
12,704
1,815
No. of PR raised
1,356
1,681
1,371
1,366
1,340
7,114
1,016
No. of PO raised
209
184
40
339
6
778
111
No. of Bank Transactions
5,738
3,515
1,809
1,532
-
12,594
1,799
No. of JVs
51,217
9,851
133
10,048
825
72,074
10,296
Total No. of Transactions
66,867
33,001
7,159
20,534
2,862
1,30,423
18,632
Other Activities:
Bank Reconciliations
Revenue Reconciliations
Month close process
MIS
* Data received from Sports Co. team, extracted through Microsoft Dynamix AX
7
Proposed Process Flows -
Offshored Environment
8
Procurement
Procurement
makes the
Budgeted
documents
& share
PR in AX
-
Original and
daily report
and
final
of open PRs
quotations
in AX
negotiated
from AX
from
rates input in
Vendors
AX
PO > $ 25000
PO < $ 25000
-
-
Procuremen
Procuremen
Finance
Manager
t
t
Procuremen
t
Offsite
Onsite
New (Onsite)
9
Accounts Payable
Offsite
Onsite
of
New (Onsite)
Invoice
received
Creation
physical
received
Invoice
Issued
Payment
share on FTP
-
AP
Vendor
Authorize
in AX for
Ageing
Invoice with
invoices for
which the
report
-
PO, GRN and
booking
payment
payments
extracted
AP
Advances if
invoice in AX
process
needs to be
from AX
any
released
10
Accounts Receivable
- AR
customer and
Customer
creation
update Master
Acquired
form
data in MIS
share on FTP
Data
- AR
entries
-
Data
AR
entries in
daily/Weekly
AX with
customer
and
Micros,
ageing report
finalize
Concept,
and prepare
RA
MIS
Offsite
Onsite
New (Onsite)
11
General Ledger & Month Close
-
GL
Balance and
closure entries
Entries for the
corrected
Standalone and
Flow Statement,
reconcile
for the month
month
entries
Consolidated
Working Capital,
Ledger
and post
Financials
other MIS
balances
-
-
GL
Finance
/ Reject
Approval
Offsite
Onsite
New (Onsite)
12
MIS Reporting
Offsite
Team
- MIS
Onsite
New (Onsite)
update the
Budget for the
period
Reports
monthly,
Financial
respective
and prepare
Final MIS reports
quarterly,
Planning data
teams for
Variance
in FTP and share
yearly MIS
with Actual v/s
Variance
reasoning
with Users
Budgeted
reasoning
MIS
-
-
MIS
Finance
the MIS
Strategy
circulation
reports
Planning
13
Payroll
- Payroll
New joinee,
update Time
Actual hours in
in Attendance
Monthly Payroll
Payroll MIS with
Bank details,
and Attendance
T&A and hours
Software with
MIS from
Finance Team
ESS Password
daily in ESS
posted by HOD
Civilsoft
CivilSoft
e
Balances
p
-
-
-
Payroll
AP
AP
balance Dump
for salary
Payment
Offsite
Onsite
New (Onsite)
14
Proposed Process Offshoring -
Implementation
15
Infrastructure Requirement
Information Technology:
Information Technology:
Server space - On-site or cloud
VPN Access to server or Web Access to
Good quality scanners - 3 to 4
cloud*
Backup and data security
Licenses and Access setup for
Accounting software*
Personnel:
Workstations (Desktops / Laptops)
1-2 persons to scan documents and
Personnel:
upload on FTP
Local Cashier to maintain and reconcile
A team of 14 including the team lead
cash balances on daily basis
and functional managers
Procurement team members for vendor
negotiations and interactions
*to be provided by Sports Co.
16
Example Governance Structure for Shared Service Centers
COO
SSC Leadership
Steering Committee
Service delivery strategy
Scope expansion
Advisory Board
SSC Management
Significant issue resolution
First Escalation Level
Funding review
SLA approval
Process & strategy review
Issue resolution
Operation unit behavior
influence
SSC Operations
User Committee
Continuous improvement
First Point of Contact
Resolve service performance
feedback
issues
Continuous improvement ideas
New requirements
Quality, Accuracy and Timeliness driven through a weekly review and monitoring mechanism
17
Impact of Transformation
Satisfy customers by delivering services which meet expectations
fulfilment / OLAs
Empowered People
Enable workforce to have the necessary skills and confidence to succeed
10% improvement in employee
engagement
Better value
Understand costs to maximise on value for spend
Cost Ratio - 20%
Implement end-to-end service ownership, and clarity of accountability to reduce
Improved stability
downtime and risk
25%
18
Ensuring Successful Shared Services Implementation: Best Practices
6
Communicate extensively
1
Clearly define the Shared Services vision
Establish a clear communication plan (message outline, timing, audience,
-
Senior executive driven process with operating unit leader
communicator)
participation
-
Communicate to potentially affected employees early-on
-
Clear alignment of Shared Services vision with overall
7
Start transition planning early
organizational goals
-
Start transition activities up to 180 days prior to SSC implementation
2
Develop a detailed business case for change
Focus on knowledge transfer, data conversion, and training activities
Develop “case for change”͖ include both hard benefits (e.g.
8
Use technology as a strategic enabler
labor cost reduction) and soft benefits (e.g. service
improvement, better visibility, etc.)
Streamline/consolidate core transaction processing systems (ERP, HRMS,
etc.)
-
Do not under-estimate the implementation and transition
-
Invest in workflow capabilities, case management solutions, and self-
costs
service tools
3
Define scope for economies of scale and skill
9
Recruit and train the “right” team for the Shared Service Center
-
Scope includes “scale” based processes (e.g. Payables, invoices,
Use a mix of internal and external hires to develop the SSC team
etc.)͙.
Develop and implement an enduring training plan
-
͙and “skill” based processes (e.g. legal, marketing, tax, etc)
Over support each implementation
4
Establish appropriate executive leadership
10
Over staff the organization during the transition and stabilization periods
-
Steering committee includes HQ and operating unit executives
On-site project representatives for support & issue resolution during
Use distinct leadership for SSC development vs. operations
stabilization phase
5
Select the right people for the project
-
Select the “right” resources, not the “available” resources for
the project
-
Release SSC project resources from their day-to-day
responsibilities
19
Shared Services - Risks Register
Risk
Likelihood
Impact
Mitigation
Responsibility
Separate
workstream
on
change
Lack of organizational buy-
enablement. Coordinated change strategy to
‘Change agents’
High
High
in among affected teams
communicate, facilitate
change and
at Sports Co.
motivate staff.
Infrastructure,
Connectivity,
Data
Low
High
Back-up links / Disaster Recovery Process
Practus
Retrieval Issues
Errors, Omissions, Delays
Maker-checker process for all transactions
Low
High
Practus
at SSC
and reports; weekly review mechanism
Estimates of transaction volumes for 3 years;
Fluctuations in Transaction
High
Low
ability to scale-up / scale-down operations
Joint
Volumes
based on volumes
Continuous people availability in the SSC to
High Employee Turnover
Low
High
Practus
stop the disruptions
20
Process Offshoring - Schedule &
Commercials
21
Proposed Organization Chart
Team Lead
Finance
Payroll
Procurement
Function
Function
Function
Senior Finance
Head of
Co-ordinator
Manager
Procurement
Senior
Junior
Manager Finance
Adminstrator
Procurement
Procurement
Purchasing Officer
(2 nos)
Officer
Engineer
(2 nos)
Asst Manager
Accounts
Finance &
Executive
Accounts Assistant
Taxation
(5 nos)
Offsite
Onsite
(to be managed & paid for by Sports Co.)
22
Implementation Roadmap
Particulars
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Job Shadowing
Deploy On-site team
In-depth walkthrough of processes
Process Documentation and Sign-offs
Documentation of SOPs, JDs, TATs, KPIs*
Sign-offs on the above
Execution Phase
Commence processes off-shore
Continuously review and Stabilize
Optimization Phase
Process Improvement efficiencies**
Manpower Optimization
*SOPs: Standard Operating Procedures
TATs: Turn-around times
KPIs: Key Performance Indicators
JDs: Job Descriptions
** This would be brought about through, including but not limited to, the following: Scanners with OCR (Optical Character Recognition),
development of Vendor Portal, Customer Portal, Approval Workflow System, Automated 3-way matching, Master Data clean-up, Service
Activity Code Optimization and automated employee solutions.
23
Project Commercials
Phase
Duration
Team
Onsite / Offsite
Fees per month
Job Shadowing
1 month
4 member team
Onsite (UAE)
$ 70,000
Process Documentation &
$ 70,000
1 month
4 member team
Sign-offs
Offsite
Execution phase
3 months
14 member team
(Shared Service
$ 145,000
location)
Optimization phase
3 months
14 member team
$ 145,000
$ 120,000 per month
Starting
Steady-state phase
14 member team
(Savings through process efficiencies
month 9
and manpower rationalization.)
Measurable direct bottom-line impact
ROI* of > 50% over a 3-year period
Our proposal is for a 3-year contract duration with a 12-month lock-in period; mutual exit is possible with 3 months’
written notice beyond the aforementioned lock-in period.
In the spirit of true partnership, Practus will pass on the benefit of generating higher cost efficiencies for Sports Co. by
moving the fee structure to a ‘per transaction’ basis after a period of 12 months from the commencement of this
engagement (that is, from Year 2).
*ROI = Savings generated through SSC / Project fees
24
Our Team
25
Our Team
Middle East
Middle East
Advisor
26
Ramnath S
Highest Qualification
Education from
Experience
Industries
Location
Chartered Accountant
ICAI
35 years
Materials, Finance, IT, Professional Services
Mumbai, India
Ramnath is a key member of Practus' Leadership team and leads the Finance Effectiveness practice. He carries extensive experience in setting up Shared Services
across geographies. He has been a senior business leader with over 25 years of MNC and large corporate experience, having worked in leading corporations like
BASF, IL&FS, Fujitsu ICIM (now Zensar Technologies) and Rallis India, having served in India, Hong Kong and Sri Lanka.
Prior to joining Practus, Ramnath spent 18 years at BASF, a Diversified Chemicals conglomerate with a market cap of over $95 billion. In his time at BASF, he held a
number of key positions including Director - BASF India Limited, Managing Director - BASF Lanka Limited, Colombo and Director - Finance - BASF Hong Kong.
Some of his key responsibilities as part of these roles included:
Playing a lead role in coordinating the development of a value-maximizing overall corporate strategy.
Developing, recommending and executing overall financial strategy that supported the business strategies and captured maximum value for
shareholders.
Ensuring effective, timely and high quality reports and analysis to help steer the business.
Playing an active role in SAP implementation.
Implementing restructuring for various businesses and supporting turnarounds of lagging business units.
Facilitating Regional Management in steering business & cost management in the region.
Leading the roll out of business partnering concept for controllers in various business units.
Empowering the team to explore market needs and turn them into customer solutions.
Optimizing resources according to long-term needs and strategic goals.
Prior to that, he spent 2 years as Assistant Vice President for an Infrastructure leasing and Financial services company where his key responsibilities included:
Setting up Private Equity Funds and initial deal initiation.
Business development and validation of new financial products.
Support new ventures until they are fully independent.
Carrying out feasibility studies for new ventures.
Acting as a financial advisor for various domestic and international mandates
Ramnath began his career at Lovelock and Lewes, now known as PWC, before progressing and taking on roles at Rallis, Fujitsu and RPG Richo.
Key Areas of Expertise:
Global Shared Services, Business Strategy, SAP Implementation, Turnaround Strategy, Compliance, Business Restructuring, Financial Processes, Feasibility Analysis, Cost
Management.
27
Ravindra Joshi
Highest Qualification
Education from
Experience
Industries
Location
Integrated Masters - International Finance
London Business School
28 years
Professional Services, Finance, IT, Retail, Industrials.
Mumbai, India
Business
Development, Strategy & Operations for the Technology driven Off-shoring / On-shoring domain (Global Shared Services) as part of EY
Global Offshore / Outsourced Advisory & Consulting Services Practice.
He has been instrumental in setting up, executing and leading large client specific End to End FA / HR / IT Captive projects via SSCs /
GBS / GDS & providing Software Product / Structured Technology Solutions globally for the clients diverse domains / businesses for
US, European, EMEA clients in global TMT, IT, Manufacturing, FMCG, Healthcare domains; and has been responsible for over 10 00
employees across multiple Technology Delivery Centers, Verticals, Practices, Geographies with P & L responsibility. He has handled CFO
responsibilities for EMEA, SE Asia, ANZ.
Some of his other areas of expertise and highlights include:
Global Accounting, Financial Controls, MIS, Reporting, Audits, Company Secretarial duties and Compliance.
Managing Global Tax, Debt & Capital Markets.
M&A & Monetization of Assets.
Leading the firm’s global Business Development, Strategy & Operations for the Technology driven Off-shoring / On-shoring
domain.
Working with the client Board and CEO to identify and evaluate the capital needed and investment returns of potential new
projects, including acquisitions, investments, and expansion projects.
He has spent 9 years at the Business Process Outsourcing arm of a global $100 billion conglomerate, where he started out as Risk &
Compliance officer and then went on to become the youngest CEO to head any group company in 9 years. He was integral in setting
up and managing the operations servicing end to end back office operations for some of the largest banks in India. He also played a
key role in increasing the margins and profitability in company SBU’s.
Key Areas of Expertise:
Global Shared Services, Business & Financial Planning, Business Development, P&L Management, Risk Assessment & Compliance, Investment Operations, Change Management
Technical Expertise:
Oracle, SQL, SAP.
28
List of Clients - Process Outsourcing
Client Name
Number of
Roles Managed
Tenure
positions
TT
11
FP&A, Financial Reporting, Vendor Management
March 2018 till date
PE
4
Preparation of Stand-alone and Consolidated Financial
July 2017 to Jan 2018
Statements, MIS, Inter-company reconciliations,
Compliance
FD
2
Accounts Payable, Accounts Receivables, Bank
Jan 2018 till date
Reconciliation, MIS
MST
3
FP&A and Fixed Asset Accounting
April 2018 till date
SCT
5
Accounts Receivable, Accounts Payable, Bank
August 2017 till date
Reconciliations, MIS, Financial Reporting, Audit, Payroll
DBG
3
Accounting for US entity outsourced to Practus and
July 2018 till date
being managed at their India office by our team
IES
7
Accounts Payable
Currently at migration
stage
ENS
2
Accounts Payable, MIS, Month-close, ledger scrutiny
March 2018 till date
VNS
4
Accounts Receivable, General Ledger, IT (Zoho)
August 2018 till date
SKR
16
Accounts Receivable, Accounts Payable, Bank
April 2010 to March
Reconciliations, MIS, Financial Reporting, Audit
2012
29
Client site - TT
30
USA
805 Birchfield Drive,
Mount Laurel,
New Jersey
UK
2, Wollaton Vale,
Nottingham,
NG8 2NR
UAE
# 112, Level 1, C1 Building,
Dubai World Trade Center District,
Sheikh Zayed Road, Dubai
India
18th Floor, The Ruby,
Senapati Bapat Marg, Dadar (West),
Mumbai
Thank You
DISCLAIMER
This document has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This document cann
g,
upon the information contained therein without obtaining specific professional advice. Please contact Practus Advisors to discuss these matters in the
es
and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the infor