Packaging the Value Proposition of the SSC Satish

Packaging the Value Proposition of the SSC Satish Paul CIMA Loughborough Shared Services Forum 17 th October 2012 © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 1

Agenda Moving from traditional to global Introducing KPMG Research How do we measure value © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 2

Moving from traditional to Global What is a value proposition? Introducing KPMG Research How do we measure value “The benefits that a product or service provides to customers, especially bythat being different or better thanespecially a competitor's “The benefits a product or service to provides to customers, by being different toor or services” better than a competitor's products or services” products Source: Financial Times Lexicon “We in Shared Services have to ask ourselves every day what value proposition we are delivering…because if we don't continue to give value, we cease to exist. ” Source: Rick Stephens, President, Shared Services Group, The Boeing Company “The Value Proposition – Key to Business Success” speech © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 3

Moving from traditional to Global Considering Shared Services - Traditional View Introducing KPMG Research How do we measure value The biggest driver of Shared Services is cost reduction and service efficiency, in addition there are some strategic benefits associated with Shared Services. Costs n Critical mass to develop and sustain skills n Higher productivity, n Lower cost location, n n n Reduced working capital, n n Reduced expenses, Reduced systems infrastructure costs. Strategic Quality n Improved service supporting the business (e. g. higher quality of information for decision making), Increased controls, SARBOX n n Enable new business models, Support growth, Achieve process and systems standardization, Accelerate merger & acquisitions. Reduced error rates - quality at source. © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 4

Moving from traditional to Global A KPMG research effort Development in Global Business Services (GBS) Introducing KPMG Research How do we measure value Process ■ …in mature GBS organizations: – In a leveraged model for 5 years or longer – Involved in shared services (for current and past employers) for 7 years or longer Leaders Level 4 – Strategic 1/3 of KPMG Survey Participants 2/3 Avera g of Su e Pe rve r y P form art ers icip an ts ■ …representing a wide range of industries (including life sciences, high-tech, CPG, financial services). . . Value Capture and Performance Sustainability ■ Ongoing series of interviews with GBS executives from Fortune 500 companies Level 5 – Integrated Level 3 – Optimized Level 2 – Rationalized Level 1 – Sub-optimized The Journey. . . Development Stages. . . Time Some of this change is about recalibrating traditional shared service objectives, but collectively its about fundamentally challenging and redefining GBS’s role in innovation and strategy execution © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 5

Moving from traditional to Global Business Service (GBS) models are evolving to… …deliver a much broader value proposition Linkage Across Broad, Multifunctional Scope Integrated Resource View of Human Capital Function Talent Strong Alignment and Governance between GBS, Customers & Business Stakeholders Business Data & Analytics Intelligence 10 9 1 How do we measure value End-to-End Process Ownership Process 2 Fully Integrated Global Business Services 8 Combined with Transaction Services Introducing KPMG Research Solution 3 4 7 Sourcing 5 6 Globally Networked Delivery Centers Integrated Process & Technology Platform Seamless Delivery Across Hybrid Portfolio Commercial Supply Chain Seamless Connectivity with Trading Partners Financial Transparency Across Enterprise © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 6

Moving from traditional to Global Breaking through Functional Boundaries. . . Corporate Site Development Introducing KPMG Research How do we measure value From a set of disparate activities and departments. . . Site identification Construction management Leasing Negotiations Relocations Facility design Real Estate IT infrastructure Staffing plan Equipment sourcing HR Procurement Legal Training Hiring Site start-up Provisioning Facilities Management IT . . . To an integrated process to open a new facility Site start-up Provisioning Training IT systems Hiring Equipment sourcing Relocations Staffing plan Infrastructure design Construction management Site identification © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 7

Moving from traditional to Global Breaking Into New Functional Areas. . . Introducing KPMG Research How do we measure value Engineering Communication Travel Management Import / Export Master Data Distribution / Logistics Sustainability Customer Service / Contact Center HR Marketing Facilities Management Quality Management Outsourcing COE Radiating from the Core Finance Analytics Legal Consulting Procurement IT Business Process Management Corporate Affairs Environmental Health & Safety © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 8

Moving from traditional to Global Breaking Through Functional Boundaries Introducing KPMG Research How do we measure value End-to-End Process Orientation • • Level 1 Level 2 Level 3 Level 4 Level 5 Sub-Optimal Rationalized Optimized Strategic Integrated Processes managed exclusively within functional silos Limited use of KPI’s • • Processes managed exclusively within functional silos by corporate KPIs oriented around compliance metrics • Limited process integration across functional silos • Processes managed by broader set of service levels consistent with customer requirements and price points © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. • Full integration across silos at the enterprise level for key or critical processes • Processes managed end-toend across silos, leveraging functional capabilities as needed and managed by a single global process owner • Metrics shift to value contribution rather than operational efficiency 9

Moving from traditional to Global The Challenge of Finding Value in Data – Business Perspective Introducing KPMG Research How do we measure value ■ Use the high volume of data to capture its value and compete more effectively ■ Collect, manage, and analyze data effectively for better business decisions and provide a critical competitive advantage “Companies that invest heavily in advanced analytical capabilities outperform the S&P 500 on average by 64%. ”* * An interview with Thomas H. Davenport and Jeanne Harris, “Analytics and the Bottom Line: How Organizations Build Success, ” Harvard Business Review, September 23, 2010. © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 10

Moving from traditional to Global Current State Assessment Integrated Information & Analytic Capabilities Introducing KPMG Research How do we measure value Two Dimensions of Company Maturity Outcomes & Analytic Capability Integrated with Mature Analytics Capabilities Siloed but with Advanced Analytics Capabilities Somewhat Integrated/Building Analytics Capabilities Starting to Integrate/ Beginning Analytics Capabilities Siloed with limited Analytic Capabilities Enablement Siloed © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Integrated Information & Organization 11

Moving from traditional to Global How do we measure value? Introducing KPMG research How do we measure value ■ Traditionally, performance has been evaluated through benchmarking ■ However, a Value assurance exercise offers provides a route to effectively align service expectations, perceptions and realities to optimise value. ■ KPMG uses the “ 6 P” framework to assess value: © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 12

Moving from traditional to Global KPMG 6 P Framework Introducing KPMG research How do we measure value © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 13

Any Questions?

For further information please contact: Satish Paul Financial Management Advisory +44 (0)7825 054395 satish. paul@kpmg. co. uk © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks or trademarks of KPMG International Cooperative (KPMG International).

Value Capture and Performance Sustainability The Journey: typical stages of development in Global Business Services maturity Level 5 – Integrated Globally integrated services portfolio with aggressive use of alternative and mixed delivery models Level 4 – Strategic Optimized balance of internal and external delivery capabilities, global sourcing with multifunction focus Level 3 – Optimized Traditional outsourcing relationships with global delivery; nonintegrated internal shared services capabilities Level 2 – Rationalized Single function shared services with tactical onshore or offshore provider relationships Level 1 – Sub-optimized Decentralized and duplicative functions ; little central control over business support services Top Third of Respondents Key Differentiators • Multifunctional • Global • End-to-End Accelerators • Governance • Commercial Orientation • Talent Management The Journey. . . Development Stages. . . Time © 2012 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 16