Future of Work How to rethink the Service Delivery Model as a result of COVID-19
Controlling risk, restructuring the workforce, and rethinking location strategy for more resilient business services
Including: Why Oklahoma City has become a hub for over 50 shared service operations Featuring Bryan Jester from CACI; Thayla Bohn and Bev Wood from American Fidelity; and Carl Martincich from Love’s Travel Stops – on how they are leveraging Oklahoma City’s advantages to support their enterprise growth agendas
Introduction O perating at the front line, Shared Services have had a close-up view of the impact of COVID-19 on business operations and, indeed, have emerged as a reassuring constant in the face of general business chaos over the past five months. The pandemic has reinforced the value of the SSO model, proving it to be a sustainable element in continued business operations. As everything from production to supply chain, payments to receivables, experienced severe disruption, Shared Services have not just supported ongoing business operations, but also provided the resiliency needed to face the global crisis. Indeed, many senior leaders on SSON’s Global Advisory Board confirmed that productivity, where it did slip, did so only marginally; and that business-as- usual was quickly re-established in the newly remote environment. Nevertheless, there have been lessons learned as enterprises found themselves having to adjust quickly, and promising opportunities presented themselves. This report leverages data from SSON Analytics to highlight how these trends are playing out.
Table of Contents Shared Services Shifting Away From Traditional Model Focused On Offshore Resources
3
Customer Experience Shifts Into Focus Integrating ‘Future Of Work’ Concepts Is Unavoidable
5
6
Location And Offices Remain Key
9
Data Section: Oklahoma City Offers Strong Shared Services & Back- Office Presence And Quality Talent At Competitive Costs
10
Adaptability And Cross-Skilling Define The ‘Agile’ Enterprise
15
Rethinking Shared Services For 2020 And Beyond
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Interview with Jeff Seymour, Greater Oklahoma City Chamber Mid-Country, Mid-Market, Multi-Options: Oklahoma City Is Building For The Future
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COVID-19: A Workforce Revolution
22
Summary
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Barbara Hodge Principal Analyst and Chief Digital Content Editor Shared Services and Outsourcing Network (SSON)
Future of Work: How to rethink the Service Delivery Model as a result of COVID-19
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Shared Services Shifting Away From Traditional Model Focused On Offshore Resources S hared Services’ traditional value-add is based on taking advantage of cost- and process- based advantages like: Thus, we can expect to see customer proximity in terms of an onshore presence, as well as more virtual collaborations, dictate the shape of the future. To get an idea of the influence onshore-based
● ● shifting transactional, manual work to low- cost resources offshore, trading ‘proximity’ for ‘cost’ (i.e. BPO) ● ● promoting continuous improvement methodologies to optimize ‘back office’ processes ● ● rolling standardized processes out globally, and ● ● taking advantage of low-cost, offshore, operating environments This approach has benefited multinationals for nearly three decades. More recently, certain innovations have accelerated the model’s value – specifically, the recognition that processing can be optimized and accelerated through automation; and that the immense volumes of data passing through Shared Services offer valuable business intelligence, have shifted the narrative. The disruption caused by COVID-19 has driven an urgent rethink of the service delivery model (people, places and technology) as it currently stands. Indeed, people and places have proved vulnerable, while t echnology has shifted center stage. This has also presented significant opportunities, however. People remain critical, but today it is their ability to understand the business (the customer) and align on solving business problems and challenges, as well as culture, that make them attractive.
Shared Services can wield, look no further than global mission and enterprise technology services firm CACI, headquartered in Virginia, which set up a 400-strong team in Oklahoma City. Based at the Jack London CACI Shared Services Center (SSC), the SSC supports CACI’s 23,000 staff and operations in 155 countries. Although CACI set up its center two years ago, it was already thinking beyond standard cost/quality/scale opportunities. Bryan Jester, SVP and Shared Services Officer for CACI explains that the objective was to ensure CACI had the quality of staff and skills to scale business operations quickly – and this included smoothly integrating acquisitions. “CACI has acquired 28 companies over the past 10 years, so developing the capability to support expansions by plugging new businesses in quickly was critical,” he says. “Our value proposition is leveraging economies of skill as well as scale. And we found those skills in Oklahoma City.” Enabling CACI’s business on a global scale is the Shared Services’ key responsibility. Jester understands this all too well, having transferred from a customer-facing role where he was responsible for deploying Shared Services solutions in the federal government (for example, leading the financial systems integration of the Department of Interior) before pivoting to set up CACI’s own Shared Services Organization.
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“We moved many corporate services, including fairly complex ones, into the center and are still expanding,” he says. “Alongside IT support, Accounting and HR services, the center has also taken on more additional work in supporting contract, subcontract, and procurement, which define the lion’s share of the business.” Much of this work is fairly complex, he explains, reflecting the particular industry and the shifts it is undergoing. “Although we are not a GBS, we operate like one,” Jester adds. “Our job is to ensure we enable the business.” Automation drives resiliency as offshore falters An SSON survey conducted earlier this year confirms that nearly four out of 10 global SSO practitioners plan to accelerate automation initiatives to reduce dependency on manual skilled workers and out-of-country locations as a result of COVID-19 – and to ensure resilient operations no matter what . Robotic process automation (RPA) has been steadily gaining ground within Shared Services over the past six years, releasing humans from mundane, transactional work while at the same time – and perhaps more significantly – freeing up resources for more insight-based, knowledge-driven services.
COVID-19’s impact on global service delivery operations 37% of global SSOs surveyed say “We will accelerate our automation initiatives”
37%
Source: SSON survey Q1 2020
As part of this shift, outsourcing and offshoring strategies have also come under the microscope. While the real impact on outsourcing is not yet clear, some of the BPO providers in India, for example, have recently seen significant setbacks in productivity, faced with remote employees who don’t have ready access to the Internet. Separately, SSON surveys also indicate growing interest in exploring on- or nearshore solutions for Shared Services. As a result, traditionally popular, low-cost offshore locations may lose their luster as enterprises decide that control trumps cost and determine to shift the balance of their centers back to the U.S..
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Customer Experience Shifts Into Focus
S hared Services remains a numbers game: The ultimate driver has always been – and still is – cost. At the same time, the ability to offer control has become more relevant as Shared Services have developed efficient and effective services.
What are the most important benefits of Shared Services to your enterprise?
74%
Control / standardization / optimization
56%
Cost and time
37%
Scaling and agility
30%
Customer service
Leveraging competencies around data analytics and process automation Improving enterprise-wide decision support / business problem solving
23%
21%
17%
Innovation
15%
Platform integration
Driving top line revenue growth / profitability
5%
Source: SSON survey: State of the Shared Services Industry 2020
A shift towards global process ownership and control, combined with the ability to tap a digital component of the workforce, have spotlighted a brand-new opportunity to offer customer service in the form of improved experience and more customer-centricity. New AI-driven solutions based on cognitive and machine learning insights provide more transparency over customers’ needs in a way that elevates the partnership element. Knowing the customer and the customer’s business has become more important – and at the same time easier to achieve. This translates into the ability to partner more effectively with the business not just to solve its problems but, through data analytics, even predict and preempt them; and it opens up a brand-new channel of value-add services based on a new understanding of how and where value is delivered.
Future of Work: How to rethink the Service Delivery Model as a result of COVID-19
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Integrating ‘Future Of Work’ Concepts Is Unavoidable A s a result of the impact of COVID-19 on global operations, nearly eight out of 10 GBS / SSO leaders are already adopting a Future of Work (FoW) approach in their operating models – rethinking what they do, where they do it, how they do it – and who does it. Indeed, alongside automation, FoW has emerged as the leading strategy to guarantee today’s most critical corporate imperative: enterprise resiliency.
Are you currently developing a “Future of Work” startegy for SSO/GBS
If yes, does it include the following? (Respondents could select all that apply)
69%
Rethinking ‘where’ work is done
as a response to COVID-19?
65%
Rethinking ‘how’ work is done
55%
New processes
52%
Enhanced automation
Yes 78%
Rethinking the nature of current work (‘should it be done’)
49%
37%
Rethinking ‘who’ does work
33%
Location-less delivery strategy
Use of new types of resources such as temporary workers, contractors, third party agile teams.
23%
We have no Future of Work plans in place right now
12%
Source: SSON’s Office ‘ Re-entry” Strategies for SSO/GBS (May 2020)
6%
Other
Under the impact of the pandemic, business continuity plans were severely tested, and those that relied primarily on shifting work to alternate centers were found to be ineffective. However, center leaders that had already prepared for offsite work – often in areas tested by vagaries in weather or power supply – found themselves better prepared. CACI’s Bryan Jester explains that he had signed off on a revised business continuity plan just weeks before the pandemic truly hit operations in the Oklahoma City center.
FoW has emerged as the leading strategy to guarantee today’s most critical corporate imperative: enterprise resiliency.
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Future of Work: How to rethink the Service Delivery Model as a result of COVID-19
People management challenges are to some extent explained by location. BPOs show a greater concern around people factors, reflecting their main employee base in Asia, where many staff don’t have WFH environments that meet the connectivity or even space requirements of a modern-day worker. Roughly 75% of BPOs concede that their service delivery has been severely impacted by workforce challenges (i.e., remote teams) compared to just 42% of enterprise (i.e. captive SSO/ GBS) respondents. Similarly, availability of staff is a much more significant concern for BPOs than it is for captives, most of which operate outside typical BPO locations. SSO vs BPO: What is currently limiting your ability to deliver services? [multiple options chosen] People Management Challenges Location-Driven
“We had already thought ahead and redefined our BCP on the basis of ‘mobile’ operations by heavily leveraging technology,” he explains. “As a result, on March 16, when we determined that we would work from home, we were ready with a plan for a truly mobile workforce.” Jester’s priority was to ensure the infrastructure was in place so that all staff could switch seamlessly to remote operations. “That meant laptops, full connectivity, and access to all necessary systems. Our operations were already virtually paperless, so that made it much easier,” he adds. “This preparation allowed our team to shift to remote very quickly.” At American Fidelity, the story is similar. The Corporate and Human Resources team, a short drive from CACI’s Oklahoma City-based operation, had laid the necessary groundwork 10 years earlier, when the bird flu hit. As Bev Wood, VP of Business Continuity, explains, that event set in motion an experiment to evaluate business continuity plans in the face of a pandemic. “We got to test scenarios that involved working in the office with N95 masks. The truth is, we didn’t like it!” Wood says, “So it initiated a shift towards telecommuting and the WFH movement, which we took advantage of right away.” At any given time, says Wood, at least a third of American Fidelity’s 1,300 home office colleagues work remotely. As a result, most of the team based at their Oklahoma City headquarters were able to pivot to ‘home offices’ fully equipped with laptops. “We were even able to provide additional office amenities like office chairs from our reserve stock. And where there were connectivity issues we set up hotspots for employees.” While SSOs like CACI and American Fidelity found themselves suddenly forced into operating via ‘remote’ teams, productivity was nevertheless well sustained. The main issues that have emerged during this period are around ‘people management.’ Indeed, roughly half of the global SSO leaders surveyed cite significant challenges in managing remote teams, which presents the most significant limitation to the new way of working. With ‘remote’ likely to form part of the new service delivery model, re-imagining work for disparate teams and increased reliance on technology will be key.
Enterprise GBS or Shared Services
45%
42%
36% 38%
29%
24%
18%
Business process outsourcing provider
74%
48% 48%
41%
What is currently limiting your ability to deliver services? [multiple options chosen]
26%
22%
49%
Challenges managing remote teams
7%
39%
Inadequate infrastructure / hardware
Insecure networks Lack of system bandwidth Inadequate infrastructure / hardware Challenges managing remote teams Mental and phyiscal health of employees Availability of staff Other
37%
Mental and physical health of employees
31% 31%
Lack of system bandwidth
Availability of staff
18%
Insecure networks
27%
Other
Source: SSON survey Q1 2020
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Shared Services are, in fact, well-positioned to manage FoW rollouts as they have been taking the lead in business model change for years, successfully determining who, where, and how work is done to improve performance. Today, the challenge is to develop new capabilities that support agility in the face of internal and external shifts, while at the same time ensuring a positive employee experience and customer engagement.
● ● First, the nature of work itself, eliminating non-
value adding tasks and driving touchless . ● ● Second, given a remote
element to the workforce , flexibility and new management routines will be key, in addition to integrating more digital and gig workers. ● ● Third, given the right infrastructure, work can be done anywhere, so workplace is being reconsidered to include home or hubs. ● ● Finally, new workways are primarily about a changed mindset in support of productivity, connectivity, transparency, and experience within an increasingly virtualized and automated environment.
Four dimensions in successful FoW According to SSON’s recently published report: “Future of Work: the shape
of things to come,” there are four critical dimensions that enterprises need to address right now:
Future of Work: How to rethink the Service Delivery Model as a result of COVID-19 8
Location And Offices Remain Key N one of this means, however, that SSO on-site teams and offices are a thing of the past. By mid-August roughly half of American Fidelity’s
“What enables us to continue to attract talent – both locally as well as nationally sourced – is the combination of affordability as well as ‘big city’ amenities in a smaller market,” explains Thayla Bohn, SVP of Corporate and Human Resources at American Fidelity. “It’s allowed us to attract senior talent for some of our top C-suite positions from outside our area. We’ve also been on Fortune’s ‘Best Companies to Work For’ list 14 times – so our culture is a big asset.” Many locally-based SSOs also cite the fact that Oklahoma City is positioned in the middle of the country, and that within a few hours both east and the west coasts are easily accessible. “In terms of maintaining business relationships nationally , that’s pretty important,” confirms Bohn.
staff were working from the office at least a few days a week. Indeed, according to SSON data, enterprises’ primary concern is how to get workers back into the office safely – whereby new capacity limits and health guidelines will dictate density and location. And while breaking up teams (office / remote) may form part of future scenarios, many SSO leaders tell us they do plan for management to be present onsite as soon as possible. This means that choosing the right location as a base for operations is more important than ever. Factors that attract SSOs include a reliable talent source, particularly for those capabilities that are in demand, combined with a good work / life balance and an affordable cost of living.
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Future of Work: How to rethink the Service Delivery Model as a result of COVID-19
DATA SECTION Oklahoma City Offers Strong Shared Services & Back-Office Presence And Quality Talent At Competitive Costs
Quality Talent To Service SSOs Oklahoma City has more than 50 headquarter operations, Shared Services, and Call Centers, making it a great place for quality talent with the functional know-how and experience required to support business services delivery.
Source: Greater Oklahoma City Chamber
70,000+ talent pool with “SSO” experience Based on SSON Analytics’ proprietary indexing method, more than 70,000 professionals in Oklahoma City have included the keyword “Shared Services” in their current job role (Finance & Accounting, HR, IT, Logistics, Procurement, Analytics, Marketing, Sales and Supply Chain Management) across professional qualification websites and social networks.
Number of Function-Specific SSC Professionals in Oklahoma City (Self-Tagged, Current Role)
7,543
Finance and Accounting
8,130
Human Resources
8,318 8,263 8,115
IT
Logistics
Procurement
7,746
Analytics
8,626 8,371
Marketing
Sales
7,506
Supply Chain Management
Source: SSON Analytics’ City Cube (Aug 2020)
Oklahoma Outranks Competitors In Talent Pool Comparing other top SSC cities in the United States with similar population size, Oklahoma City outranks Nashville, Atlanta, Minneapolis and Tampa for the number of self-tagged SSC professionals. Oklahoma City also scores highest in terms of the percentage of SSC professionals out of the total city population.
Total Number of Function-Specific SSC Professionals
% of SSC Professionals out of City Population
Top SSC Cities in the United States
Estimated 2020 Population Size
(Self-Tagged, Current Role)
OKLAHOMA CITY, OKLAHOMA, UNITED STATES
72,618
11.1%
655,407
NASHVILLE, TENNESSEE, UNITED STATES
62,761
673,167
9.3%
ATLANTA, GEORGIA, UNITED STATES
53,129
523,738
10.1%
MINNEAPOLIS, MINNESOTA, UNITED STATES
437,069
40,876
9.4%
TAMPA, FLORIDA, UNITED STATES
36,899
413,704
8.9%
Source: SSON Analytics’ City Cube (Aug 2020) and US Census Annual Estimates
Number of People with Post-Graduate Accreditation Oklahoma City has one of the highest numbers of people with a post-graduate accreditation (CPA, MBA and PMP)
7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
Number of People with CPA Accreditation
Number of People with MBA Degree
Number of People with PMP Qualification
Oklahoma City, Oklahoma, United States
Nashville, Tennessee, United States Minneapolis, Minnesota, United States
Atlanta, Georgia, United States Tampa, Florida, United States
Source: SSON Analytics’ City Cube (Aug 2020)
Monthly Rental of Commercial Area Oklahoma City is highly competitive with one of the lowest monthly rental costs of commercial areas, compared to the other top SSC cities.
$20 $15 $10
$16
$14
$14
$12
$12
$5 $0
Oklahoma City, Oklahoma, United States
Nashville, Tennessee, United States
Atlanta, Georgia, United States
Minneapolis, Minnesota, United States
Tampa, Florida, United States
Source: SSON Analytics’ City Cube (Aug 2020)
Cost of Living
Oklahoma City is one of the least expensive cities to live in, amongst top US SSC cities. It leads in the table below, across peer cities, in terms of affordable cost of living.
Oklahoma City, Oklahoma, United States
Nashville, Tennessee, United States
Atlanta, Georgia, United States
Minneapolis, Minnesota, United States
Tampa, Florida, United States
Cost Of Living Variables
$0.60
$0.72
$0.73
$0.70
$0.67
Gasoline (1 liter)
Basic lunchtime menu (including a drink) in a business district
$11
$12
$14
$13
$15
$130,000 $262,000 $259,000 $270,800 $219,400
Median home price*
Meal for 2 People, Mid-range Restaurant, 3 Course Monthly Rent For Furnished Studio (1 bedroom) Volkswagen Golf 1.6l (Or Equivalent New Car)
$67
$83
$74
$83
$66
$657
$1559
$1496
$1267
$1360
$20,827
$23,002
$20,510
$21,741
$19,175
Source: SSON Analytics’ City Cube (Aug 2020) * https:/ www.bestplaces.net
Cost per FTE Oklahoma City has the lowest Cost per FTE compared to Tampa, Atlanta, Minneapolis and Nashville. Cost per FTE is the average monthly cost of a full-time employee (FTE) hired in a Shared Services Center in a particular city, taking into account salary & overhead operations costs.
Co-located data centers offer advantage One of the city’s top data centers is located within a 1.6 million square foot campus that currently houses several SSCs and business operations, too (see map). Having the data center on-site has been a tremendous advantage for those SSCs that have chosen to locate within the campus – as well as others that utilize the data center’s colocation services / opportunities. Newworkforce- focused tax credit SOFTWARE/CYBERSECURITY WORKFORCE TAX CREDIT Software or Cybersecurity employees of an Oklahoma qualifying employer with a degree/ certificate from an accredited program, can receive a tax credit of up to $2,200 annually for up to 7 years.
Monthy Cost of SSC FTEs
$3,000 $2,500 $2,000 $1,500 $1,000 $500
0
Finance & Accounting
HR
Marketing Procurement Supply chain
Oklahoma City, Oklahoma, United States
Nashville, Tennessee, United States Minneapolis, Minnesota, United States
Atlanta, Georgia, United States Tampa, Florida, United States
Source: SSON Analytics City Cube (Aug 2020)
Tax Comparison When it comes to taxes associated with doing business, Oklahoma offers a great tax structure that is very lucrative to organizations: (Note: a low ranking is most favorable)
Top SSC Cities in the United States
Unemployment Insurance Tax Rank
Corporate Tax Rank Property Tax Rank
OKLAHOMA CITY, OKLAHOMA, UNITED STATES
8
1
19
NASHVILLE, TENNESSEE, UNITED STATES
24
31
24
ATLANTA, GEORGIA, UNITED STATES MINNEAPOLIS, MINNESOTA, UNITED STATES TAMPA, FLORIDA, UNITED STATES
6
28
39
26
44
34
9
13
2
Source: Tax Foundation 2020 State and Business Tax Climate Index; Rank 1 indicates lowest tax
AdaptabilityAnd Cross-Skilling Define The ‘Agile’ Enterprise T he ongoing momentum towards recruiting and developing new skill sets is continuing. Enterprises were already on a digital journey, the speed of which has only increased through the experience of the pandemic of 2020. The ability to drive more value to the business will depend on specific skills, most of which are not yet available to the extent required, SSON surveys confirm. These are primarily around automation, data analytics, customer centricity, and knowledge-based services; other priorities will likely include adaptive and design thinking, innovation and creativity, and problem-solving – all of which important in remote environments and in the absence of traditional structures. At American Fidelity, a lot of effort has gone into building a homegrown automation team. “It’s a testament to the quality of our colleagues that our automation initiative has been so successful,” says Bohn. “We wanted to ensure that a large segment of our employees was being trained, and that the capability did not just sit with one particular team. Our efforts as a result of our AF Automate initiative have been very successful so far, certainly in part because our business includes a lot of technology-savvy actuaries and finance experts. Many of these volunteered their time to support the projects and played a significant role in the widespread adoption of automation.” Another factor that has played well to American Fidelity’s talent requirements is the close relationship that has been formed with local universities. These mutually beneficial relationships have enabled the company to develop a strong pipeline through its intern program, many of which continue to full-time positions. “This has been particularly significant for IT and actuarial roles,” explains Wood. “In fact our partnership with the University of Central Oklahoma has led to them launching an actuarial degree to ensure we have a ready supply of talent. We also support that through scholarships,” she adds. “We bring in around 50 interns a year, and disperse these throughout our operations – IT, data, actuarial. In my own area – Business Continuity – we managed to fill a recent job this way. It’s a critical strategy to ensure we develop a robust talent pipeline.” One initiative that has been particularly successful for American Fidelity is the cyber security team it set up within a matter of months in Oklahoma City. “We recognized cyber security as a critical area for expansion two years ago, and determined to develop a team quickly,” explains Bohn. “We were looking for a particular skill set, based around controls and technology. We managed to fill our positions fairly easily – I believe our culture, as well as our competitive remuneration, had a lot to do with this.”
While culture is a critical differentiator, the local talent pool is very much defined by the caliber of jobs available. What characterizes Oklahoma
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City is the fact that it developed largely on the back of the energy industry. Oil and gas has, for decades, underpinned the local economy and as a robust, but also cyclical, industry its impact on the talent market has been keenly felt – but also very positive. “It has brought us a number of very analytical and technically adept people who tend to be problem solvers and innovative types,” explains Carl Martincich, VP of HR, Risk Management and Government Affairs at Love’s Travel Stops. “These professionals bring resilience and diversifying skillsets that are highly transferable to other industries! We are all benefiting from the solid foundation laid by that industry.” Love’s has gained directly through some high-profile roles: Its head of Compensation and Benefits came from Chesapeake Energy; and its CIO, who joined eight years ago, previously held leadership positions at both Devon Energy and Chesapeake Energy. “It’s tremendous to have people with the expertise of such a prominent industry on our team,” Martincich says. Today, Love’s employs 27,000 staff across the United States, with nearly 2,000 at the corporate campus in Oklahoma City, where Martincich is based. Designated an “essential business” during the pandemic, the company maintains a fleet of more than 1,000 trucks on the road to ensure its wide network of 520 travel stops and country stores in 41 states remains stocked and ready to support travelers through its motto, “Clean Places, Friendly Faces.” The enterprise has grown six-fold over the past 15 years, and relies heavily on the corporate support center to maintain business-critical services. As to what he is looking for today, Martincich confirms the trend toward dynamic and entrepreneurial people, who at Love’s are known as “difference makers.” “They help move our company forward,” he explains. “We are all a long way from wading through stacks of paper resumés, sitting down to talk to individual applicants for hours or developing and analyzing countless reports. Today, we have robust, sustainable systems that leverage AI and data analytics to scroll through vast amounts of data and come up with the right answers. So we need the staff with the skills to develop this capability
and we’ve typically been able to find great talent in Oklahoma City. We’re also glad to be able to attract people from throughout the country, and from other parts of the world, who know that Oklahoma City is a vibrant community and are thrilled about moving here.” Going forward, adaptability will be a defining characteristic as part of the shift towards Future of Work strategies. That includes preparing staff to wear multiple hats. Cross-skilling for deployment where resources are needed at a particular moment will prove a valuable differentiator for SSOs that recognize the future as it unfolds before us.
What are the biggest skills deficits within your existing SSO staff?
48%
Data Analytics
37%
Automation/technology
33%
Innovative thinking
27%
Process excellence
25%
Digital competency
23%
Leadership skills
16%
General business acumen
14%
Functional expertise
11%
Communication
Negotiation/Relationship management
9%
8%
Customer service
5%
Financial skills
3%
Other
Source: SSON survey: State of the Shared Services Industry 2020
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Rethinking Shared Services For 2020 And Beyond FoW pressures will impact Shared Services’ operating and service delivery models in a number of ways, at the same time presenting opportunities to leverage flexibility and critical capabilities. Cheap offshore gives way to low-cost onshore While cost may not drive operations offshore as much Develop your culture as a brand differentiator
The threat of other firms poaching your valuable employees is, of course, real. But you don’t need to be a victim to this. Firms can avoid falling victim to poaching by preemptively implementing measures to make workplace culture welcoming and nurturing. FoW provides ample opportunity to differentiate your corporate brand and its culture in a positive way. Offering flexible work hours and work locations may be commonplace soon, but rethinking rewards and incentives to reflect short-term goals as opposed to long-term employment; presenting locations that offer a positive work/life balance; offering improved training for critical skill sets; and providing ample opportunity to cut one’s teeth on new projects… will serve to attract and retain talented staff. Thinking outside the box and embracing FoW concepts will put you ahead of the game. New skills One key skill that has emerged in the the SSC industry is customer centricity; an extremely sought-after characteristic that will be hired wherever it is found. To support cultural affinity and understanding, it is likely that such roles may shift onshore. At the same time, cross-skilling will become a valuable element of employees’ development, providing the agility enterprises will come to rely on. Revisit recruiting and talent strategies Talent acquisition and onboarding needs to be rethought, starting with process. Personalization will cover things like work hours, location, and engagement to attract new talent. Shared Services are expecting marked changes in the way their teams are staffed, whether in the shape of gig workers or agile teams (see chart on next page). Moving work back inhouse and onshore is also in the cards, which opens up new career opportunities, multi-skilled resources and an improved talent pool. The future may be more gig-oriented than the past
as it did in the early 2000s, cost still matters. But the attraction of cheap offshore will fade given the opportunity for low-cost onshore . Today’s automation solutions are increasingly stepping in to take on work that would have been a candidate for offshore outsourcing in the past. What also counts today is a culture of understanding and alignment. This will be an advantage to US-based SSOs. Workforce: Less emphasis on cheap, more emphasis on highly skilled In the past, the ability to execute relatively mundane transactions meant decisions were driven by cheaper FTEs for the same work. That is no longer the case given standardization’s impact on efficiencies, as well as the ability of automation to take on some of this work. Today, the focus is on new skill sets that drive value. Automation skills rank alongside analytics, customer service, and problem-solving. Many of these are centralized in a Center of Excellence model, which supports far-flung business customers. Finding a market with a ready supply of graduates that offer these skills – with an eye on scaling up – will determine location.
Go where the labor pool is plentiful (and experienced)
Future human resource strategies may include flexible work contracts and on-demand staff, or even teams. What this means is that a reliable, experienced talent pool will dictate where Shared Services choose to set up. For, while the war for talent is real, the fact is that it makes sense for similar operations to locate in close proximity to each other. Just as many cities find car dealerships or pharmacies located across the street from each other, so too, does it make sense for Shared Services to cluster where the market is plentiful.
Future of Work: How to rethink the Service Delivery Model as a result of COVID-19
17
Howmight your talent soucing strategy evolve in the post COVID environment?
so retention strategies will need to be redefined to reflect that long-term incentives may be less successful than short-term ones.
By way of example, one of the critical services that CACI’s Shared Services moved to Oklahoma City is talent acquisition. Explains Bryan Jester: “We moved talent acquisition into the center because we realized, even two years ago, that the ability to recruit quality staff to support our operations is key – and that Oklahoma City presented not just the right talent pool but also a solid base from which to build this critical capability.” Oklahoma City emerged as the location of choice for this Virginia- headquartered business after a nationwide search, led by both an outside consulting firm and internal CACI team. “We narrowed it down to three cities, but Oklahoma City proved the right fit,” explains Jester. “Not just for cost reasons, but because we found a ready and available workforce here – and that’s the critical differentiator in our type of business [Shared Services]. This workforce – and its willingness to adapt and step up – has proved its worth over and over, in the past five months.” Data determines value-add Intelligent automation and data analytics are the capabilities enterprises are looking for. Both help to enable digitized operations, which are the future. Alongside new roles like Chief Data Officer, enterprise data strategies will come to define the ability to grow and succeed. Data centers, which coordinate vast data lakes, integrating with the Internet of things, will drive enterprise performance. Locations that have already invested in the resilient infrastructure to support such data centers will be ahead of the game. Such locations must also ensure they follow up in supporting and developing relevant skill sets to attract Shared Services operations. Digital collaboration The pandemic has pushed teams towards collaboration platforms for everything from basic communication to brainstorming to project implementation. A lot of the technology functionality extends beyond the obvious video chat and document collaboration, such as whiteboards and breakout groups. Organizations will need to ensure these options are utilized, and staff are trained in their usage. At the same time, while the technology is working, it may be working too well, worries Jester. “It’s difficult for staff to switch off. Everyone is working long days and working from home doesn’t make it any easier. The challenge is that it becomes harder to switch off and to devote time to family and self-care. The easy connectivity, which enables everything we do, can become a problem – and it’s one we, as SSO leaders, need to be thinking about how to solve.”
20%
3%
27%
19%
8%
23%
20%
Bring more work inhouse to control knowledge supply chain Increase use of outsourcing to provide more flexibility and access to talent Leverage wage artitrage via offshore locations Increase use of gig workers / agile teams
19%
8%
23%
27%
No change
3%
Other
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Mid-Country, Mid-Market, Multi-Options: Oklahoma City Is Building For The Future
Interview with Jeff Seymour , Executive Vice-President, Economic Development Greater Oklahoma City Chamber
Q: What characterizes Oklahoma City’s business environment? Jeff Seymour: Oklahoma City has an interesting history and one that has always been very entrepreneurial. It emerged more or less overnight during the land run of the late 1800s, growing rapidly until the late 1980s / early 1990s when it became apparent we needed to focus on economic diversification and community reinvention. Oklahoma City’s specific business focus over the past thirty years has been on building a community where people and families would enjoy living, through strategic public and private investments in quality- of-life infrastructure, knowing new business growth would follow. This strategy, of having the right people with the right ideas living in the Oklahoma City metro, has led to the creation of a much more robust local economy.
Q: Given that tomorrow’s world is going to be more digitally connected and customer-centric, how is Oklahoma City ensuring its investment strategy meets these new requirements? JS: Oklahoma City leaned heavily into the ‘place- making’ conversation before it became the standard. But it has to be about more than a good place to live. The ecosystems and infrastructure that surround a modern city are vital in presenting it as an attractive option to businesses as well as people. COVID-19 has launched us into a new iteration of our economic future built around forward-looking innovation ecosystems, with the center of this ecosystem being technically skilled and talented people prepared for a digital future. This ecosystem must be based on collaborations between the private, public and philanthropic sectors. As a Chamber, one of our primary missions right now is to work with these partners to better align, recruit and retain digital talent, working with existing and new training providers, and ensuring that these digitally skilled individuals are connected to career opportunities. Simultaneously, we are also working to ensure that businesses of all sizes have more robust opportunities to participate in inclusive innovation work moving forward. That work includes increasing our capacity to start and scale companies, developing more robust local platforms for corporate innovation, and creating and recruiting connectivity to innovation best practices from other markets.
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Q: How are local universities providing the talent pool required to meet the automation, data, and knowledge-based requirements of modern enterprises? JS: When we look at the new ecosystem model, having the right talent and skills sits squarely in the middle of that conversation. Universities, technical training facilities, non-traditional institutions … they are all embracing this disruption to evolve their agendas. That includes rethinking research partnerships in order to pivot towards the digital future as well as reimagining the way we deliver skills and training delivery. These pivots have led to broader engagement by our education partners to create more non-degree certificates and short-term coding and software programs – all of which offer agile solutions and support nimble careers. Education partners are also re-thinking how more traditional programs, including liberal arts degrees, can provide a valuable framework for strategic and creative thinking within the business environment. Universities are a big part of this movement, and we want to make sure they stay at the table so we can engage them in adjusting their strategies to fill the talent needs of our local businesses. Many are expanding on their existing relationships with business affiliates, which is a good thing. Q: What enables Oklahoma City to attract prominent brands? JS: We leaned into the place-making conversation early to build a strong foundation for the long-term, and it shows in terms of an overall quality of life residents have become very proud of. Our culture feels ‘big,’ while also being approachable – but our cost structure has remained ‘small,’ creating a brand the business community has embraced. This combination of quality and affordability has attracted brands like CACI, Costco and Heartland Payment Systems (part of S&P500-ranked Global Payments), all of which recently decided to set up large Shared Services or operations centers here. Costco recently affirmed (in the Summer of 2020) a plan to open a 1,500-person operation center in Oklahoma City, after a multi-state search. Companies and their employees are buying into the “energy of the market.” It’s that energy and
excitement, coming from a number of recent successes in the public and private sphere, that people are buying into.
Q: What factors play a role in attracting Shared Services Centers to your community? JS: I think it’s the long-term value proposition that attracts SSOs. They are looking for a robust talent pool, which we offer; a competitive cost model, which they find here; and an attractive real estate play, knowing that – even in a modified work environment – some amount of office space will continue to be required in the corporate office model. What also works well is that we have successfully developed clusters around certain operational units, which is very attractive to organizations because they know they can find relevant skillsets, and there are lots of opportunities to develop lucrative and interesting careers. We have more than 100,000 professionals working in headquarters, SSOs, and operational centers that have set up shop in Oklahoma City and support a variety of industries. We’ve seen particular interest from operators in the defense industry looking for a lower-cost location to relocate or expand high-end back-office work. This cluster originally was based around Oklahoma City’s aerospace cluster keystoned by Tinker Air Force Base (home of the Air Force’s Sustainment Center headquarters) and the FAA, with thousands of employees in the market – many of them providing back-office functions for other government agencies. This cluster has grown to include software, cyber security and engineering workloads, among many others. Another factor that sets us apart is that we have developed a strong and reliable infrastructure in support of digital networks. Our customers need robust digital pipelines and data security. On the west side of the city, a former AT&T manufacturing plant has been turned into a multi-tenant modern office space called 7725 CONNECT, which is highly popular with Shared Services and administrative / operational centers and data center users. It also acts as a carrier hotel, porting multiple providers into the building and managing on-site data centers. It’s a real boon for the Shared Services and BPO sector in that they can plug into secure
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network capabilities. As a low-cost energy market, we’ve also worked closely with our local energy partner OG&E to conceptualize the data center concept, and to support local operations with cost planning etc.
Q: COVID-19 has caused some companies to rethink their business location strategies and look at less densely populated areas and middle-tier markets. What advantages does Oklahoma City have over other mid-size markets in attracting SSOs? JS: We have definitely seen more interest from SSO-type organizations looking to move out of high-cost locations but also looking for more flexibility. As a midsize market in the middle of the country, we offer a unique opportunity for hub-and-spoke models, which more Shared Services are considering as they rethink their service delivery models. It’s especially good for hybrid operations that want to leverage a centralized office location alongside, or as a complement to, remote workers. And Oklahoma City offers great amenities and connectivity for young people and families along with a robust business infrastructure. It’s really about overall connectivity – externally as well as internally. We’ve been very much building for the future from the start, combining a modern business environment with options for multiple lifestyle preferences, investments in transportation infrastructure, and ensuring we’re building a community for our residents at the same time as we’re building out a modern, dynamic city. We also offer incentives that support Shared Services. For example, we partnered with the State of Oklahoma to create a software / cybersecurity workforce tax credit that helps to recruit and retain these highly skilled workers in our market. This incentive works alongside other state and local incentives including the City of Oklahoma City’s Strategic Investment Program (SIP), which provides cash awards based on newly created jobs within Oklahoma City. (To qualify, Shared Services Centers must hire a minimum of 50 full-time employees and produce an annual payroll of US$1.75 million.) I think another factor in our favor is that we work closely with a number of site location and business consultants providing high levels of customer service to their clients while also matching them to opportunities for growth in our market. This focus on relationship management has provided a lot of “return customers” who become comfortable with the Oklahoma City brand and its value in the back- office / Shared Services space.
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Future of Work: How to rethink the Service Delivery Model as a result of COVID-19
COVID-19: AWorkforce Revolution
The underlying shifts impacting the workplace and workforce are now all too apparent. The pandemic has shifted Future of Work strategies center stage. Teams like CACI’s, American Fidelity’s and Love’s are ready. “In early July, our staff started to come back to the office on a 100% hoteling basis,” says Jester. “At any given time, we have only a third of our staff in the office, and are operating on a strict six-week rotation with two weeks in, and four weeks out, however.” Time spent on-site is primarily to maintain activities that were proving challenging in a remote environment – things like training, customer service reviews, and onboarding new employees … which, as Jester confirms, “still require a certain on-site presence.”
These rotations are currently being revised to just one week out of six in the office, as teams have made a lot of progress in figuring things out. The past month and a half have provided sufficient learnings to optimize the on-site presence to solve the most critical needs, says Jester. “The real challenge now remaining is how to build on our SSO’s culture.” “After months of working remotely, many of our team feel that they are working in an echo chamber, and the challenge today is to deal with the rising feelings of isolation. That’s what we’re focused on right now, as we look to a new future,” he says. “We’re advancing many of our communications to motivate employees and because we’ve been so successful in executing standard activities, we have the
resources to shift onto this as a priority. I believe that in the long run, it will provide a key differentiator for our center.” The important thing, all SSO leaders agree, is to build more flexibility into teams. Right now, schools are still largely closed around the world and when they will re-open is not confirmed. Shared Services need to ensure employees have the flexibility to care for family and children, as well as do their work. This is the part that leaders need to take very seriously, because alongside delivering to the business and delivering to shareholders, delivering to employees also flows into a brand’s valuation in the modern world.
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Future of Work: How to rethink the Service Delivery Model as a result of COVID-19
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