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April 2014
Martin W. O’Connor – Director, ProcurementHelen Salov – Manager, Procurement
“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”
www.pwc.com
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Agenda
About PwCPolling QuestionsCase Study Critical Success FactorsKey Take Away’s
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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About PwC
PwC US helps organizations and individuals create the value they are looking for. We are a member of the PwC network of firms in 158 countries with more than 180,000 people. We are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US.
Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google +.
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Polling Question 1
What type of transactional Facilities and Office Services does your organization outsource today?• Facilities Management Services• Real Estate Brokerage• Project Management• Hospitality• Records Management• Catering and Food Services
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Polling Question 2
How does your organization manage the supplier relationships in Polling Question 1?• Governance framework• KPI’s/SLA, fees at stake• Periodic business reviews• Management by exception• Wing it
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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“When you collaborate on something that is fundamentally creative, you get to places that you would never get to on your own.”
- Comic icon John Cleese
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
The Power of Strategic Partnerships
PwC
Case Study - White Paper Objective
Redesign transactional Office Services and Records Management model - by leveraging industry leaders with innovative solutions.• Leverage best in-class service providers to gain increased
subject matter expertise, scalability, and advanced technologies
• Achieve greater agility in our operations model• Capitalize on the real estate redesign to improve occupancy
and facilities management services• Increase customer productivity by delivering a higher
quality customer experience• Further reduce risk related to physical information
protection and client confidentiality
7April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
PwC
Service Bundles for Office Services and Records ManagementDocument & Records Management Facilities Maintenance • Reprographics (incl. tax processing in medium & large offices)
& binding• Printer fleet management• Convenience print• Mail—USPS & accountable• Courier/messenger services• Office supplies & stationery• Records management & archiving – Records Center management• Digitizing records• Document destruction• Large print, print on demand
• Furniture & fixture maintenance (proactive & reactive)• Supplemental cleaning• Recycling & waste management coordination• HVAC• Painting & handyman services• Parking maintenance• Internal signage maintenance• Physical security/security maintenance• Mechanical & electrical• Locksmith services• Life safety
Welcome Program & Occupancy Services Leadership & Management • Customer relationship focused • Reception• Switchboard• Hoteling support (system admin, change management, policy
enforcement)• IPP – Information Protection Principles (clear desk policy)• Floor Hosts• Visitor management & security badging• Storage & hoteling locker allocations• Room configurations• Collaboration space maintenance• Meeting room management & support – catering services on
request• Local directory maintenance• AV coordination
• Crisis management, business continuity and security operations• Building management and landlord relationship management• Purchasing• Ergonomics assessment• Oversight of local operations• Supplier integration and management• Budget creation and adherence• Local occupancy strategy• Space /occupancy management• AP Invoice Payment Review• MAC• Real Estate projects & office moves
Catering & Food Services• Canteen management • Cafes and catering
88April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Outsourcing Drivers
• Non-Core• No in-house expertise• Marketplace expertise• Tactical vs. Strategic• Scalability to allow for business cycles• Day-to-Day service delivery• Advancement opportunities for staff• Service delivery improvement• Improve internal customer satisfaction
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Approach Understanding
the market(innovation,
capability, fit)
current service partners
competitors
PwC business requirements
best practice innovation and
adaptabilitybusiness
requirementsvision
future directionvoice of customerour competitors
Benefits vs. risks
current costsservice risks
benefit/opportunitiescost of changeevaluation of alternativescompliance/regulation
• Cross functional team focused on managing costs and risks and documenting business requirements
• RFI process to understand market trends and the service provider capabilities
• Design and implementation of new OS and RM service delivery model
10April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Benefits of Outsourcing to a Strategic Partner
April 2014
• Create strategic relationships to drive continuous improvement/ innovation for shared benefits
• Provide a streamlined, flexible, scalable delivery model• Drive consistency in service delivery• Reduce costs• Utilize technology to improve data and reporting• Allows retained staff to focus on core strategic activities• Utilize best in class providers, leading practices• Expand the career path for OS/FM professionals• Advancement opportunities for outsourced staff
“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Possible Risks of Outsourcing
April 2014
• Loss of knowledge/control over business processes• Difficult to bring back in house• Risk of confidentiality• Staff turnover• Service provider financial performance/mergers• Disputes/litigation
“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Supplier Selection ProcessThe Art of Sourcing• RFI/Problem Statement - White Paper
- Structured as a problem statement so as to understand the level of innovation in the responses and leverage it into our final solution
- RFI supplier list compiled -- ~35 potential partners identified
• Resources used to identify potential service partners:- Previous bidders, referrals, and clients- Sourcing Interests Group (SIG)- Institute of Supply Chain Management (ISM)- Building Owners and Managers Association (BOMA)- International Association of Outsourcing Professionals
(IAOP)April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Supplier Selection Process
• Collaborative Supplier Working Sessions - Critical to moving beyond transactional model - Hold design workshops with short listed providers- Engagement from day one- Both parties take ownership in the creation of a
successful solution- Understand what it is like to work with each service
provider- Taste of culture and methodology- Quality of people delivering the services is key
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
PwC
The review team, including various Service Owners, engaged with35 suppliers. • Top supplier questions were:
- “What are the next steps?”- “When do the current contracts expire?”
• A few queried PwC’s “pain points” but most failed to take the opportunity to learn more about PwC and some struggled to relate to PwC’s business needs.
• Many suppliers told us what they thought we wanted to hear.
• Most missed the key goals of the white paper and simply moved back to the transactional model.
Understanding the Market
15April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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• Suppliers (unsurprisingly) tended to accentuate their own strengths in their own market analysis, including promoting non-core services.
• There were no ground-breaking bundle combinations as compared to the bundles PwC had developed.
• PwC model of breaking out the soft services (i.e., hospitality) appears to be market-leading.
Understanding the Market
16April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
PwC
Approach
Proposal
Benefits vs.
costs
PwC business require-ments
Understanding the
market
Phase 1 - RFI Phase 2 - Working Session
Phase 3 - Implementatio
n
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PwCrequirements
Supplier capabilities
Service delivery model
PwC / Supplier – One team
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Implementation Options
• Design & Develop as One - Immediately takes over existing operations while redesigning workplace experience and service architecture with PwC and later implements a second soft transition to new paradigm.
- OR –
• Big Bang Effect - Is engaged to work through discovery and design up front and then proposes a service architecture and cost that is measured against current baseline spend to satisfy procurement objectives before taking over workplace experience delivery.
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Elements of a Successful Implementation
• Start to build relationship before the contract is signed• Detailed, agile transition plan - break into phases• Focus just as much time on building the relationship as you
do on the contract, KPI’s, etc … (in-person contact)• Spend time outside the office … set dinners, luncheons,
social events to ensure your cultures align and you are both working towards the same goals
• Communication, communication, communication - before, during and after the contract is signed!!!!
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Elements of a Successful Partnership
• Transparent, expect and embrace challenges together, real-time feedback that is mutual
• Focus on areas of mutual benefit• Work in collaboration with the partner to design the core
elements of the delivery model• Joint focus on year-over-year efficiency, willingness to
change scope over time• Clarity in roles/responsibilities • Forward looking communication• Above all, working together seamlessly beyond service
boundaries and despite ongoing change
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
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Key Take Away - to Issues to Adoption
Breaking old habits – focus on fundamental change• Change selection process
- Move away from traditional RFP - White Paper or Problem statement - Test and Re-test for understanding
• Focus beyond cost savings (quality, competitive advantage, and people experience)
• Build a trust-based relationship from day one• Eliminate supplier bashing, share success• Culture change to joint problem solving from casting blame• Celebrate the small successes, focus on the big goals
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.
Thank you
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
© 2013 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
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Presenter Contact Information
Martin W. O’Connor – Director, Procurement [email protected](203) 539-3476
Helen Salov – Manager, [email protected](203) 539-3470
April 2014“Saddling Up: Moving Beyond Transactional Processes to Harness the Strategic Value of Partnerships”.