Tag

Pinnacle Model

Focus on Execution: Everest Group Identifies Highest-Impact Talent Strategies of Best-in-Class Shared Services Centers | Press Release

By | Press Releases

Talent strategies of Pinnacle GICs™ produce superior business outcomes and a ‘future ready’ workforce.

Shared services organizations are also known as Global In-house Centers (GICs), and in its recently released report, “Talent Strategy in Global In-house Centers (GICs): Pinnacle Model™ Analysis 2019,” Everest Group assessed the talent strategies of 43 GICs. Five GICs who rated highest in terms of the maturity of their capabilities and the impact delivered were deemed Pinnacle GICs™. In comparison to other GICs, Pinnacle GICs have achieved significant impact in three key areas:

  • Cost optimization: Twice as many Pinnacle GICs (as compared to other GICs) have kept their human resources (HR) costs to less than 5 percent of overall GIC costs.
  • Operational impact: The talent programs of Pinnacle GICs have improved operational metrics two to three times greater than other GICs.
  • Business impact: Pinnacle GICs deliver 1.5 times greater satisfaction from their talent programs than other GICs.

“With unemployment levels reaching generational lows in the US and other regions of the world, enterprises are desperate to know what talent strategies are delivering the most impact,” said Michel Janssen, chief research guru for Everest Group. “Our research on Pinnacle GICs shows that there is a cause-and-effect relationship between advanced capabilities and advanced outcomes. This means there are definitely concrete things enterprises can do to get the talent results they are looking for.”

Specifically, GICs are investing in five key capability areas to drive superior outcomes:

  1. Talent strategy. Pinnacle GICs have a 2.6 times higher proportion of their programs targeted to high-performing talent as compared to other GICs.
  2. Talent acquisition. Compared to others, Pinnacle GICs invest considerably more in partnering with educational institutions, hiring from adjacent industries and leveraging social media.
  3. Talent development. Pinnacle GICs are much more likely than other GICs to focus on developing in-house talent to be future ready. Examples include investing in learning and development tools such as gamification-based learning and employee-to-employee networks.
  4. Performance management and employee value proposition. Compared to other GICs, Pinnacle GICs are twice as dedicated to adopting structured career paths for most employees and are 1.6 times as likely to have invested in 360-degree appraisal approaches for performance management.
  5. Relative to other GICs, twice as many Pinnacle GICs have adopted cloud-based HR systems and 2.3 times as many Pinnacle GICs have invested more than 20 percent of their overall HR spend in next-generation technologies such as artificial intelligence (AI) and robotic process automation (RPA).

“One of the important takeaways of our research is that the talent strategies of Pinnacle GICs do not involve any secret tools and techniques that other shared services organizations lack,” said Rohitashwa Aggarwal, practice director of Global Sourcing at Everest Group, “Rather, what Pinnacle GICs have that others do not is a higher commitment to investing in talent strategies and a greater dedication to thorough execution of those strategies.’

More detail on the differentiating talent capabilities of Pinnacle GICs is provided in an Everest Group webinar, “Is Your Shared Services Strategy Future Ready? 5 Differentiating Talent Capabilities.”

***Watch the replay or download the webinar deck here.***

About the Pinnacle Model™

Everest Group’s Pinnacle Model™ approach explores what the very best organizations are doing in terms of optimizing costs, improving operations, and delivering strategic impact.  The journeys of these best-of-the-best companies provide insights into the key enablers needed to achieve desired outcomes and point to the investments required for the greatest speed to impact. By examining what Pinnacle Enterprises have in common, others can learn how to succeed, whether they desire to make incremental changes or achieve major transformations.

Sourcing Industry Group and Everest Group Announce Global Partnership | Press Release

By | Press Releases

SIG, the premier membership organization for sourcing, procurement and outsourcing executives, today announces a new partnership with Everest Group, a leading consulting and research firm that advises clients on strategic IT, business services and sourcing.

This relationship provides SIG buy-side members with insights and analysis to help them capture greater value from their contracts and provider relationships. SIG members can gain practical knowledge from the insights that Everest Group’s research leaders offer in session presentations at SIG’s Regional SIGnature Events and Global Executive Summits, including proprietary research that identifies and details what the best enterprises are doing to achieve exceptional outcomes through their sourcing strategies.

In March of this year, Everest Group and SIG will kick off joint research based on surveys and interviews to determine what the best-of-the-best companies are doing to achieve innovation in strategic sourcing. They expect to release findings of this Pinnacle Model™ analysis in October 2019. This will the first of several joint research projects the two organizations have planned.

“We are excited to partner with SIG, an organization truly dedicated to offering its members education, information, and insights to advance their sourcing journeys. With our keen focus on strategic sourcing and procurement, we are confident that the research we contribute will support SIG and its members’ objectives,” said Michel Janssen, Chief Research Guru, Everest Group.

Dawn Tiura, President and CEO of SIG, added, “We are delighted to partner with Everest Group to educate the market and provide our members with premier research that will assist them in making better decisions and understanding how to overcome the challenges of this radically evolving industry.”

This partnership also provides SIG members with special pricing on Everest Group’s Strategic Outsourcing and Vendor Management membership. To learn about the full benefits of this partnership and gain access to the research, visit our website.

About SIG
SIG, https://sig.org/ is a membership organization that provides thought leadership and networking opportunities to executives in sourcing, procurement and outsourcing from Fortune 500 and Global 1000 companies and the advisors who serve them. SIG is widely known as a forum for sharing “next” practices and thought leadership through live networking events, virtual forums and a comprehensive online SIG resource center (SRC), which was developed by and for professionals in sourcing and outsourcing. The organization is unique in that it blends practitioners, service providers and advisory firms in a non-commercial environment. SIG is also the parent organization for SIG University, a one-of-a-kind certification and training program for professionals and executives seeking deep expertise in sourcing and governance for themselves or their teams, as well as Future of Sourcing, which provides unrivaled digital content for the opinion-formers and decision-makers at the heart of the outsourcing space.

Understanding Differences In Results Of Implementing Digital Technologies | Sherpas in Blue Shirts

By | Blog, Digital Transformation

I believe it’s now apparent that all companies will go through one of two different forms of digital journeys over the next 20 years. Why? These journeys are inevitable because of the irresistible forces of competitive advantage and lower cost as outcomes. It’s not a question of “if;” it’s a question of when and to what results. However, the result or potential outcome is an aspect of digital that executives sometimes misunderstand and, in doing so, they end up with failed initiatives. So, let’s clear up the possible misunderstandings and look at what digital journeys are about, the types of results that companies can achieve and how digital platforms fit into that picture.

Read more in my blog on Forbes

Is a Bigger Shared Services Center (or GIC) Always Better Performing? Maybe Not | Sherpas in Blue Shirts

By | Blog, Pricing, Shared Services/Global In-house Centers

We recently conducted a deep analysis of the digital maturity of almost 60 shared services centers, (also referred to as GICs) across diverse industries and geographies, and disseminated summary findings through a series of round tables across different Indian cities, including Delhi NCR, Bangalore, Mumbai, and Pune. You can read the detailed results in our recently released Digital Maturity in GICs | Pinnacle Model™ Analysis.

Here, I want to focus on a question that recurs in most of our conversations: Does the size of a GIC have any implication on its Pinnacle performance on digital maturity? Note that we define Pinnacle GICs™ as those that achieve superior performance because of their advanced capabilities.

The answer to this question is not as objective as it seems.

Related: Commercial Options for India GIC Setups

Our study revealed that scaled GICs (those with 3,000+ FTEs) have consistently delivered better impact across cost savings, operational KPIs, and even strategic metrics such as contribution to revenue growth. It also showed that small (those with less than 1,000 FTEs) and mid-sized GICs (those with 1,000 – 3,000 FTEs) have demonstrated lower improvement across all business outcomes.

Is a Bigger Shared Services Center or GIC Always Better Performing Maybe Not blog image

Does this Mean that all Scaled GICs are Pinnacle GICs? Not Really

Based on our analysis, less than one-third of scaled GICs have been able to demonstrate Pinnacle performance, while multiple small and mid-sized Pinnacle GICs (~30 percent of the Pinnacle performers) have achieved superior outcomes because of their advanced capabilities.

  • For instance, a multinational conglomerate’s GIC (mid-sized with 1,000-1,500 FTEs) delivered 20-30 percent improvement on operational KPIs such as process agility and SLA compliance. This GIC operates as the global competency center for IT solutions development with end-to-end ownership across the application development lifecycle, thereby allowing it to drive process transformation changes and yield impressive improvements
  • A U.S. food & beverages major’s GIC (also mid-sized, with 1,500-2,000 FTEs) is leveraging pricing analytics to drive competitive advantage for its parent. The GIC developed a competitive intelligence and analytics platform, which allowed the firm to view what its competitors are selling and make recommendations on the necessary price changes to its merchants. This platform is tied to a machine learning engine that dynamically prices their products.

Related: Learn more about Everest Group’s Shared Services Center capabilities

Common Threads across all Pinnacle GICs’ Journeys

We believe it is the triumvirate of the approach to demand creation, strategic focus of the digital strategy, and orientation towards cross-functional collaboration.

Demand Creation

A pull-based approach to demand creation – i.e., a proactive approach to creating Proof of Concepts (POCs) and showcasing capabilities – has not only helped shared services centers secure CXO-level sponsorship, but also increase the existing breadth and depth of services to enable end-to-end process orchestration. For instance, a European BFSI major’s GIC currently operates as the RPA CoE, and champions the end-to-end global RPA program for the enterprise. However, this was not the initial mandate for this shared services center. It proactively started developing POCs, capitalized on visits by onshore C-level executives to showcase their capabilities, and subsequently received buy-in from the parent company. The CoE now operates in a hub and spoke model, wherein the India GIC (hub) provides global governance and drives RPA for Europe through the CEE shared services center (spoke).

Strategic Focus of Digital Strategy

While other GICs solely focus on technology adoption, most Pinnacle GICs focus on using technology to enable operational improvement, which consequentially results in employee and/or customer experience enhancement. With achievement of these objectives, financial benefits – both top-line and bottom-line growth – follow suit automatically. Technology adoption per se needs to be viewed as a means to the end, not the end itself. Pinnacle GICs’ more holistic approach allows them to see both higher chances of success and ROI.

Cross-functional Collaboration

The third – and most underrated – differentiator is the focus on cross-pollination of resources by breaking functional barriers. We believe that a siloed approach to digital enablement will not work, and that shared services centers need to break silos and provide employees with wider exposure to functional roles across the firm. This will not only improve knowledge flow and increase productivity, but also stimulate innovation. For some GICs, creating CoEs for select digital capabilities has significantly enhanced the pace of adoption, and sharing of skills and best practices

All these aspects, along with dedicated enterprise leadership, have enabled Pinnacle GICs to champion organization-wide digital services delivery.

If you’d like insights on how your shared services center stacks up against the competition on the digital maturity front, please feel free to reach out to me at [email protected].