1. Shared Services Open Forum April 9, 2008 Sponsored by Administrative Senate

2. Agenda Introducing Mark Hopton What is Shared Services? What does Shared Services mean for Ohio University? –Mark Howard - Accenture Current Efforts and Timeline Q&A

3. Introducing Mark Hopton Wickliffe, OH native Married Three children Community involvement American Greetings – SSC background

4. What is Shared Services? Business Process Re-engineering journey Shared Services is the destination

5. What Are Shared Services and What Are the Benefits? Shared Services is a customer-focused organizational structure and service model that provides back-office support primarily to internal customers and eliminates redundant processes, systems, and organizations. Standardization of processes and systems Increased levels of automation Reduction or containment of costs Improved controls Enhanced service levels Access to new technologies Optimization of skills/capabilities Shared Services Enables Built upon standard processes, policies, and systems Focuses on delivering excellent customer service Strives for continuous improvement Run as a separate organization Enabled by emerging technologies Key Shared Services Attributes Adopted from Oracle Presentation Shared Services in Higher Ed

6. Of Course, Higher Education has a Definition Shared services combine the non-competing administrative and business support functions of colleges and universities on a collaborative basis. The services may include a wide range of technical and functional business processes agreed upon for inclusion by the participating institutions who mutually benefit by realizing cost savings, improved access to technologies, and enhanced levels of service. By combining their resources, shared services institutions reap the full advantages of technologies that might be too costly if purchased on their own while realizing efficiencies in staffing and improved customer service through the collaboration. The shared services model allows institutions to focus more of their resources on their core competencies of teaching, research and service rather than technology services that are critical, but serve rather than drive their missions. Adopted from Oracle Presentation Shared Services in Higher Ed

7. BPR Example Procure to Pay (P2P) - $1.6MM savings –Reduced invoice processing time from 44 days to minutes –Increased EIP rate from 2% to 87% –Decreased PO error rate from 80% to 0.7% –Increased cash discount $300K –Reduced expenses of faxing, bank fees, postage and forms $200K

8. The Case for SSC Focus on processes and leverage technology Productivity increases Responsible, accountable, accessible Dramatic re-engineering of processes Business professionals focus on strategic initiatives University-wide focus on education and research

9. Ideal processes for Shared Services have low strategic impact and significant economies of scale Finance General Ledger Accounts Payable T&E Processing Accounts Receivable Planning & Budgeting Purchasing Cash Management Internal Audit Human Resources Payroll Processing Compensation Records Hire to Retire Benefits Administration Training & Education Travel & Expense Self Service Information Services Standards Technology/ Development Desktop Support Applications Development Data Center Operations Application Maintenance Telecommunications Hardware & Software Acquisition Legal Affairs Logistics/ Materials Management Strategic Sourcing Asset Management Warehousing Inventory Management Transportation Customer Service Call Centers Non-Emergency Service Calls Credit & Collections Order Management

10. Shared Services is often confused with the centralization of functions into one physical location. In fact, Shared Services is much more: Distributed Model Centralized Model Shared Services Model Scale & Efficiency Service/Responsiveness Ruthless pursuit of process standardization enabling more efficient processing Customer-service oriented mindset Back-office functions run as a front-office (“run like a business”) Service managed via Service Level Agreements, “contracts” between operating units and the Shared Services organization Skilled and scarce resources leveraged across multiple operating units Operating units focusing on their core processes and analysis Shared Services Objective

11. Only by addressing all three components ‘standardization, consolidation and re-engineering’, full benefits of implementing Shared Services can be achieved Establish a service culture Organize around end-to-end processes Implement best practice processes “If a company simply consolidates to get the economies of scale, 50% of the savings are left of the table.” - Hackett Research 2004 Standardize processes and policies Minimize number of different systems Reduce physical locations Typically move to a low cost location Streamline organization Outsourcing/ Co-Sourcing 25% 50% 25% Re-engineering Standardization Consolidation/ Centralization Process oriented organization Service culture through service level agreements Independent legal entity Single vendor master data base Central shared service center Moving to a low cost site Reduced finance staff and management layers Investment in leading-edge IT capabilities Implement global SAP standard Automation of core processes Examples Components Establish a service culture Organize around end-to-end processes Implement best practice processes Split of Savings

12. As-Is Administration Transactions Decision support SSC provides countries with more time for decision support; continuous improvement in the SSC secures efficiency in transactions Local F&A Reduction of transactional processes Focus on decision support Administration Transaction Local F&ASSC Decision support To-Be Decision support Automation Administration Economies-of-scale by standardization and centralization Efficiency and continuous improvement through automation SSC Benefits of Shared Services

13. Strategic  Scalable platform for future growth, improved capability to integrate new businesses  Business focus on core competencies  New business models enablement  Achieve process and systems standardization Efficiency / Speed  Reduced cycle times: e.g. Close, Authorizations, Credit evaluation, Billing, Sourcing  Timely financial analysis and reporting enablement  Speed up solution gathering of complex financial issues (legal, tax) Quality  Consistency and integrity of data and structures of all units across Europe  Improved satisfaction of internal customers through defined SLAs  Improved information for decision making  Enhanced focus on business unit operations and client satisfaction  Reduced error rates - quality at source Shared Services provides a variety of highly valuable intangible benefits that are not quantified in the business case Intangible Benefits

14. 3-5 Months6-12+ Months Assess DesignBuildDeploy Design the Business Processes Design the Organization Design the Enabling Technology Select Location and Real Estate Develop Hiring Plan and Recruit Shared Services Leaders Refine Communications Plan Create Workforce Transition Plan Develop Training Plan and Management Development Program Design Facilities Design Service Management Approach Details Develop Service Management Processes Build Performance Support and Training Materials Build-out Facility Recruit Shared Services Personnel Create Service Level Agreements Develop Key Performance Indicators Develop / Deliver Build Communications Build the Organization Conduct Deployment Planning Execute Deployment Plan Confirm Service Level Agreements Conduct Training and Work Shadowing Develop / Deliver Deployment Communications Test Shared Service Center Readiness Execute Workforce Transition Plan 2-16 months Typically Shared Services Projects have 4 Phases: Shared Services Vision Scope of Shared Services Current State Analysis Benchmarking/ Opportunity Assessment (done) High Level Operating Model Process Split Definition Change Management Strategy Business Case Implementation Roadmap Typical Shared Services Road Map NOTE: Timeframes above are illustrative and vary depending on organization size, Shared Services scope, global vs. regional objectives, Greenfield vs. Brownfield, ERP solution status, etc. Program-, migration- and change management (ongoing) Pilot Group 2 Group 3 Current Project Focus Management Checkpoint = 10-14 Weeks

15. Next Steps Project Team Kick-off – 4/9/08 Executive Leadership Team – 4/08 Hackett Benchmarking Workshops– 5/08 Prioritize Scope – 6/08 Process Re-engineering – 9/08 Leverage Technology - TBD

16. Questions?

17. Thank You! Mark Hopton Director of Shared Services 9 Factory Street 597-3269 hopton@ohio.edu