Shared Services: Five Reasons for Internal Customer Engagement

by WGroup

The best performing shared services operations go beyond cost efficiency and service effectiveness and focus on delivery value to the business. As part of their brand and value proposition to their internal customers, these shared services operations make “customer engagement” a critical component of their shared services strategy and delivery model.

Five simple yet informative reasons why customer engagement is so important:

  1. Clarity on what work is truly valuable and important to the customer
  2. Mutual understanding of the customer’s needs for service and information
  3. Creation of a culture where the customer feels “ownership” of services being delivered
  4. Incorporation of the customer’s perspective and experience in service improvement
  5. Prioritization of workload through demand management

Further Reading: Learn more about WGroup’s perspective on 5 disruptive trends impacting business and IT strategy


Five Mistakes in Outsourcing that Destroy Value

by Steve Coper

Sourcing can drive tremendous value for an organization but unfortunately far too often, sourcing strategies built with the wrong approach do not create value and often destroy it, leading to years of recovery. 

Here are five straightforward yet common mistakes in outsourcing that destroy value: 

  1. Not having a clear service strategy aligned to business outcomes
  2. Failure to engage in sufficient upfront planning and analysis resulting in a sourcing strategy that does not align to overall business strategy and complement the business its serving
  3. Too narrow of focus on cost reduction and short-term results vs. tangible opportunities to drive growth, innovation and operational effectiveness which can be achieved through the right outsourcing arrangement
  4. Deficient workload and transaction tracking resulting in inaccurate data in an outsourcing RFP, and simply a bad deal for both the client and service provider
  5. Underestimating the management effort and attention required to successfully develop and manage an outsourcing relationship to ensure it delivers on the intended business case

Further Reading: WGroup recently published a Strategy Brief titled “The Next Generation IT of Outsourcing.” Click here to download a complimentary copy.


What the CFO Needs to Know About the Convergence of ITO and BPO

by Bill Fowler

Many organizations have turned to outsourcing to help with cost reduction, and to improve operating efficiency. Historically, we thought of two types of outsourcing – IT Outsourcing (generally referred to as ITO) and Business Process Outsourcing (generally referred to as BPO).  For some organizations, ITO and BPO are treated as separate initiatives, with separate business owners.  But a new generation of outsourcing, fueled by experience, technology trends, and economic factors is causing a convergence of ITO and BPO.  The lines between process and technology have blurred. The silver lining is that this can be good news to the CFO, and business executives.

Pioneers in leveraging the convergence of ITO and BPO outsourced IT and one or more business processes at the same time, frequently to the same provider. Examples include outsourcing the company’s ERP, finance applications and finance & accounting processes to one provider. They quickly realized that the contract structures could be identical, the value of outsourcing both the IT and the process at once brought them benefits faster, the structure was less expensive to operate (i.e., one governance organization, one contract manager, and one bill) and there was typically only one provider to deal with if there were issues (i.e., less finger pointing).  The primary challenge was that IT, Finance, Procurement, HR, and other business organizations had to agree to one provider, one contract structure, and one governance organization.

If leveraged correctly, ITO/BPO convergence can result in lower cost and better control—two priorities on the CFO’s agenda.  Lower cost is obtained through both simplification and standardization of outsourcing deal structures and ongoing outsourcing provider management.  For example, standardization of outsourcing agreements reduces the cost of negotiating the contract and allows companies to leverage their experience in contract structuring across multiple agreements. Essentially, we’re seeing that the more comfortable and experienced an organization gets with outsourcing, the easier it is to go through the process of outsourcing other areas of IT or business process.  Cost reduction also results from the convergence of ITO and BPO deals in the management of the agreement.  Fewer employees are required to manage multiple agreements due to their common structure, and better still, these fewer employees can conduct a more consistent analysis of agreements costs, service levels, provider performance, and value to the organization.

Further Reading: Learn more about WGroup’s perspective on 5 disruptive trends impacting business and IT strategy