Copyright © 2011 by ScottMadden, Inc. All rights reserved.Copyright © 20101by ScottMadden, Inc. All rights reserved.
Challenging Times Pose Unique
Opportunities for Shared Services
Judy McFarland, VP HR Shared Services,
HR&A Process and Technology Mission Assurance
Samuel T. Poston, SVP, ScottMadden, Inc.
March 1, 2011
Copyright © 2011 by ScottMadden, Inc. All rights reserved.
Judy McFarland
1
Vice President
HR Shared Services, HR&A Process and
Technology, and Enterprise Shared
Services
� More than 30 years HR and operations experience
� 2007 – Stands up HR Service Center for Northrop Grumman
� 2010 – Launches Security Shared Services
� 2010 – Payroll begins using HRSC tools
� Leads HR&A Process and Technology function
2
Evolution of Shared Services Evolution of Shared Services
Within Northrop GrummanWithin Northrop Grumman
Judy McFarlandJudy McFarland
Vice President
HR Shared Services,
HR&A Process and Technology
Mission Assurance
33
CorporateCorporate HeadquartersFalls Church, Va.
UK Headquarters London
Aerospace Systems Redondo Beach, Calif.
Information Systems McLean, Va.
ShipbuildingNewport News, Va.Pascagoula, Miss.
Electronic Systems Linthicum, Md.
Technical Services Herndon, Va.
Our vision is to be the most trusted Our vision is to be the most trusted
provider of systems and technologies provider of systems and technologies
that ensure the security and freedom that ensure the security and freedom
of our nation and its allies. of our nation and its allies.
• Grumman Corporation• Vought Aircraft (Later Sold)1994
• Westinghouse Electronic Systems Group
• Logicon
• Inter-National Research Institute
• California Microwave• Data Procurement Corporation
• Teledyne Ryan Aeronautical
1996
1997
1998
1999
• Navia Aviation• Comptek Research• Federal Data Corporation• Sterling Federal Systems Group
2000
2001 • Litton Industries• Aerojet • Newport News Shipbuilding
2002 • TRW • Fibersense Technology Corporation
2003 • XonTech• Illgen Simulation Technologies
2005 • Integic Corporation
2007 • Essex
2008 • 3001 International, Inc.
Our Road to Shared Services Begins
Northrop Grumman Acquisition HistoryNorthrop Grumman Acquisition History
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
Real EstateReal Estate
IndustrialIndustrial
Security Security
Environmental, Environmental,
Health & SafetyHealth & Safety
Enterprise Enterprise
Resource Resource
PlanningPlanning
Security Shared Security Shared
ServicesServices
HR Service HR Service
CenterCenter
Travel ServicesTravel Services
Procurement Procurement
Shared ServicesShared ServicesFinancial ServiceFinancial Service
CenterCenter
Information Security
Flight Flight
Operations Operations
Corporate Office Corporate Office
AdministrationAdministration
Jan 1, 2000Jan 1, 2000
NGC OpensNGC Opens
1 Service Line1 Service Line
20082008
Legacy ESS EstablishedLegacy ESS Established
4 Service Lines4 Service Lines
20102010
ESS ExpandedESS Expanded
12 Service Lines12 Service Lines
20002000
Leveraging Leveraging
Assets BeginsAssets Begins
Leveraging our talent and resources to provide Leveraging our talent and resources to provide
the best service at the best value to our sector and corporate pthe best service at the best value to our sector and corporate partnersartners
IQPC RecognitionIQPC Recognition••Best New Shared Service Best New Shared Service ––
20032003
••Best Use of Automation Best Use of Automation ––
20052005
IQPC RecognitionIQPC Recognition••Best New Captive Services Best New Captive Services
DeliveryDelivery
–– 20102010
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
Enterprise Shared Services Enterprise Shared Services is a single, integrated shared service organization focused on improving our company’s operating and financial performance by reducing operating costs,providing operationally focused and high quality services, and developing and executing strategies for continuous improvement.
We leverage our talent and resources to provide the best serviceat the best value to our sector and corporate partners.
Gloria FlachGloria Flach
Corporate Vice Corporate Vice
President & President &
ESS PresidentESS President
Customer Service is our #1 PriorityCustomer Service is our #1 Priority
Customer Intimacy is our CornerstoneCustomer Intimacy is our Cornerstone
Enterprise Shared ServicesEnterprise Shared Services
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
7
Five Value AreasFive Value AreasA Formula to Improve PerformanceA Formula to Improve Performance
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
Product, Process & Technology LeadershipProduct, Process & Technology Leadership••Common & IntegratedCommon & Integrated
••SecureSecure
••AffordableAffordable
••greeNGgreeNG
Service ExcellenceService Excellence••ExecutionExecution
••ComplianceCompliance
Culture of EngagementCulture of Engagement••IntegrityIntegrity
••AccountabilityAccountability
••PartnershipPartnership
••Diversity & InclusionDiversity & Inclusion
Culture of PerformanceCulture of Performance
LLee
aaddrreesshhii pp
EE xx cc ee ll ll ee nn ccee
Ennggaaeegg
mmee nntt
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
Numerator: Numerator:
Value Delivery Value Delivery
Savings + Cost AvoidanceSavings + Cost Avoidance
Denominator: Denominator:
Enterprise OpportunityEnterprise Opportunity
Delivery Cost & Corporate Spend Delivery Cost & Corporate Spend
ESS Value Delivery Formula ESS Value Delivery Formula
Operating Margin %Operating Margin %==
Improving the companyImproving the company’’s operating & financial performance s operating & financial performance
as a single, integrated entity that effectively reduces operatinas a single, integrated entity that effectively reduces operating costsg costs
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
2010 Performance Scorecard2010 Performance Scorecard
ShareholdersShareholders
Financials
Customers (Internal)Customers (Internal)
Quality
Customer Satisfaction
EmployeesEmployees
Engagement
Diversity
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
IT SolutionsIT Solutions
• Customer Base: All NGC Employees
• Network
• Mobile Devices, PCs, Servers
• Unified Messaging
• Applications
Procurement Shared ServicesProcurement Shared Services
• Sourcing Customer Base: Enterprise-wide
• Buying Customer Base: OneSource sectors
• Purchasing Transactions
• Enterprise Agreements
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
12
Financial Service CenterFinancial Service Center
• Customer Base: Corporate, ESS, NGAS,
NGIS, NGTS
• Central Accounting
• Payroll
• Cash Management
• Cost Accounting Travel ServicesTravel Services
• Customer Base: > 53,000 travelers
• Domestic and International Coverage
• Company Travel Card
• Online Booking
Office AdministrationOffice Administration
• Facility services, administration and planning
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
13
Environmental, Health & SafetyEnvironmental, Health & Safety
• Environmental, health and safety risk mitigation
• NGC environmental impact reduction
• Remediation execution
• Operational audits
• EH&S Leadership Council
Industrial SecurityIndustrial Security
• Emergency preparedness and crisis management
• Badging and physical access control
• Proprietary Information control
• Awareness training
• Corporate Security Council
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
14
HR Service CenterHR Service Center
Customer Base: 90,000 employees
• Tiered delivery service
• Over 35 harmonized HR policies/processes
• Automated document management
• Administer Leaves of Absences
• Continuous process improvement
Security Shared ServicesSecurity Shared Services
Customer Base: 90,000 employees
• Pre-employment investigations
• Initial security clearance processing
• Periodic reinvestigations
• Security awareness
• Compliance
Enterprise Resource PlanningEnterprise Resource Planning
• Customer base: ~56K SAP system users
• Average 7K concurrent users
• > 17M transactions/month
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
Focus on HR Shared ServicesFocus on HR Shared Services
Standup
first HR
Service
Center in
Northrop
Grumman
• Move to Texas
• Build the Facility
• Harmonize Core HR
Processes
• Hire-Train Staff
Grand Opening Dec 9
Serving 10,000 Serving 10,000
CustomersCustomers
2008200820072007
• Phase transitions
• Leverage tools &
technologies to
support newly
established Security
Shared Services
Serving 67,000Serving 67,000
CustomersCustomers
20102010
• Phase transitions
• Improve processes
• Enhance tools
• Measure performance
• Satisfy customers
• Manage change
Serving 57,000Serving 57,000
CustomersCustomers
20092009 2011
• Last transition in
January
• Begin functioning
entirely as an
operation
Serving 90,000Serving 90,000
CustomersCustomers
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
ESS Mission Assurance FocusESS Mission Assurance Focus
Strengthening the Basics . . . Creating a Quality MindsStrengthening the Basics . . . Creating a Quality Mindsetet
StructureStructure
ProcessProcess
Tools Tools
ComplianceCompliance
CULTURECULTURE
HEADER / FOOTER INFORMATION (SUCH AS NORTHROP GRUMMAN PRIVATE / PROPRIETARY LEVEL I)
• Integrated, consistent
service & solutions
• Risk mitigation
• Measure performance
• Service excellence
Enterprise Shared ServicesEnterprise Shared Services
BENEFITSBENEFITS
• A seat at the corporate
table…ESS is
regarded as a sector
• Stakeholder support
• Customer satisfaction
• Leverage tools and
technologies
ENABLERSENABLERS
• Demonstrate value
• Ensure
competitiveness
• Revalidate existence
• Resistance to change
• Do what we say
CHALLENGESCHALLENGES
Real Estate
IndustrialSecurity
Environmental, Health & Safety
Enterprise Resource Planning
Security Shared Services
HR Service Center
Travel Services
Procurement Shared Services
Financial Service
Center
Information Security
Flight Operations
Corporate Office Administration
ESS Value Delivery Model: Process & Technology Leadership, ESS Value Delivery Model: Process & Technology Leadership,
Culture of Engagement, and Service ExcellenceCulture of Engagement, and Service Excellence