Sourcing Lecture 4 Shared Services Collaboration And Crowdsourcing

Frank Willems

Groningen9 January 2009

ITSM Sourcing specialization 2008-2009

Shared Services, Collaboration and Crowdsourcing

2© Twynstra Gudde 9-1-2009


Agenda

– Shared Services

– Collaboration as a sourcing solution

– 4th generation sourcing and Crowdsourcing

– Explanation of learning Task 3 about Sourcing



But first: how about the outcome of the Digital Selftest?



Experience with the outcome of the Digital Selftest

Name Yellow Blue Red Green White

Michiel 11 39 10 14 22

Jaime 12 10 35 19 20

Egbert 13 24 24 19 16

Gideon 10 24 24 20 18

Joanmis/Ioannidis 17 24 13 28 14

Ibrahim 17 24 21 19 15

Sofia 16 26 21 23 10

Raage 12 26 23 21 14

Rebin 19 19 24 24 10

Thijs 19 18 16 24 19

Test should be made on http://www.twynstragudde.nl/tg.htm?id=8635



Conclusion

– IT Service management and Sourcing is all about people

– People can share energy, knowledge and power together when they are aware of the differences and the comparability

– Organizational Change Management can help to manage the right interventions



Shared Services



Definition and goal of a Shared Service Center (SSC)

– We speak about an SSC as supporting processes within an organization on an approximately similar way, are delivered a new, semi-autonomous unit and on the basis of agreements it provides services to other units

– The goal of an SSC is generally to improve the service quality while cutting costs

– SSC versus centralization, service-oriented versus task



Measures in perspective

Measures at task level:Stopping investments

Orcutting down on currentinitiatives

Measures at a process level:Collaboration and joint investments

Measures at a functional level:Concentration, integration, mergers,

Take-over or outsourcing

Saving potential

Short term(0,5-1 year

Medium term(1-2 years

Long term(2-5 years)

Stopping projects

Cutting down on training and learning

Cutting down on engaging external consultants

System optimazation

Collaboration regarding purchasing, support, etc.

Optimization and standardization of processes

Integration, mergers and concentration

Outsourcing of parts of the organization

Shared Services Centre

Full outsourcing

Capitalizingeffects



Concentration leads to economies of scale

Internal SSC

Insourcing/External Supplier

Cos

ts

Volume

Efficiency-effects

Economyof Scale



Are the trends moving up and down?C

osts

Volume

Startingpoint

Impact Scale reached Impact Scale

reached

Complexity Costs will increase

Yes, to take maximum concentration and complexity there will be need for new solutions.



Potential services for a SSCFacility Management

- mailroom

- copying and printing service

- archive

- purchase

- catering

Customer Service

- sales service

- telephone customer service (call center)

Administration

- financial administration

- pensions administration

- Payroll

Personelmanagement (HRM)

- recruitment and selection

- Personnel administration

- training

ICT Services

- application development

- Helpdesk

- Management and operation

- Training

- Real Estate Management

- management buildings

- Security management

- Sales and marketing

- ad coordination

- direct mail

- sales

- Tele ordering

- Order administration



Variants of Shared Services

supportfunctions

Management

primairy functions

Shared SupportProcess

Shared Business Process

Sharedback-offices



The components of Shared Services

How to manage the environment, where the process is cut and who is responsible for what processes?

What is the proper organization, which staff and how are we ready for the future?

How are technology, process and organization knotted together?

The core of the service

Kantoorinformatiesystemen

Bedrijfsinformatiesystemen

TechnischeInformatiesystemen

Functioneel

Specifiek

Generiek

Fysiek

ICT infrastructuur componenten

User Support enApplicatie Management

SystemManagement

ICT infrastructuurlaag

ICT functionaliteit

NetwerkManagement

ICT Functie/processen

Kantoorinformatiesystemen

Bedrijfsinformatiesystemen

TechnischeInformatiesystemen

Functioneel

Specifiek

Generiek

Fysiek

ICT infrastructuur componenten

User Support enApplicatie Management

SystemManagement

ICT infrastructuurlaag

ICT functionaliteit

NetwerkManagement

ICT Functie/processen

SSC 1SSC 1

SSC 3SSC 3

SSC 2 SSC 2

SSC 4SSC 4

Opstellen van Business

Cases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projectenGovernanceGovernance

RegieRegie

ArchitectuurArchitectuur

Processes

OrganizationSystems

Customers



Name the change components

Ontwikkelenmaatwerk

Ontwikkelenmaatwerk

Beheerinfrastructuur

Beheerinfrastructuur

Beheer &draaien

pakketten

Beheer &draaien

pakketten

Support/HelpdeskSupport/Helpdesk

OntwikkelenmaatwerkSSC 1

BeheerinfrastructuurSSC 3

Beheer &draaien

pakkettenSSC 2

Support/HelpdeskSSC 4

Response, context and vision of SSC's clear and design direction activities

Target focus on service domains

ICT-governance

Governance

RegieRegie ArchitectuurArchitectuur

Opstellen

van BusinessCases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projecten


Cases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projecten

Make Governanceagreements

Professionalizedemand

ICT-governance

Governance


Transformdemand management

ICT-governance

-Governance


SSC 1SSC 1

SSC 3SSC 3

SSC 2 SSC 2

SSC 4SSC 4


Cases


Cases

Inrichtenvan

processen

Inrichtenvan

processen

Managenvan

projecten

Managenvan

projectenGovernanceGovernance

RegieRegie

ArchitectuurArchitectuur



An Change approach for Shared Services

Change idea

….

Intervention-oriented communication about plan and implementation

Support by Change help desk

Assessment by Change board

Consultation with Sounding board groupCIOClient …

Characteristics of interaction

Characteristicsof employees

Characteristics ofproducts, pro-

cesses & structure

Clients, Governance &

suppliers

History

Rea

son

Environm

ent

View on change Kick off

Change analysis + Culture scan

DD MM YYYY

Change goals

Aligning structure and processes

Organizing control and and prepairing SSC implementation

Contracting and realizing SLA’s

Culture change and competence development

Learning to collaborate

Inter-ventionsAnd (re) planning

Reconsider-Ing

goals

Measuringprogress

Plateau 2

Inter-ventionsand (re)planning

Reconsider-ing

goals

Measuringprogress

Plateau 1



Example of a Target Efforts Network

More innovative power and sharing knowledgeMore innovative power and sharing knowledge

Higher efficiency pension processesHigher efficiency

pension processes

Better quality ICT services and

products

Better quality ICT services and

products

75% Reuse pension processes

and systems (FO & BO)

75% Reuse pension processes

and systems (FO & BO)

20% Faster market

introductionpension products

20% Faster market

introductionpension products

30% Cheaper implementation

processes

30% Cheaper implementation

processes

20% Less duplication20% Less duplication

60% Knowledge pension products

more accessible

60% Knowledge pension products

more accessible

95% Reliable service in

accordance SLA

95% Reliable service in

accordance SLA

MissionMission

GoalsGoals

Measurable

goals

Measurable

goals

Projects

and activities

Projects

and activities

Mission Develop a Shared Service Center that is a

knowledge-and information-engine around pension products, by sharing forces to deliver better innovation

and deliver at lower cost high quality products and services to



Collaboration



Collaboration is not obvious

“Working together requires the courage to stand away from yourself without losing sight of. That is the great challenge”. Edwin Kaats

Own control

Give up part autonomy

Alignment

Domains

Give away

knowledge

Slow decision-

making Sharing

Trust



Organizing between organisations

Choos youe position in the group!

Build an effective collaboration!

Develop a legitimated organization for cooperation!

Way of descision makingWay of descision making

Le

ng

th o

f th

e r

ela

tio

ns

hip

Le

ng

th o

f th

e r

ela

tio

ns

hip

MarktetMarktetbehaviourbehaviour

OrganisingOrganisingBetweenBetween

organisationsorganisations

ConcernConcern

Gomes-Casseres

organisation

organisation

III. Organisation

II. Collaboration

relationorganisation

organisation

organisation

organisation

I. Group

organisation



Consent

Condtional

Assim

ilatio

n

Independant

Exchangeable

Appropriate

partners

Consensu

s

Prim

ary

importa

nc

e

Coëxistential

Mutually

dependent

Exclusiv

e

Unique partners

Better Different

Stability and continuïty Creativity

Result Description Ambition and goals

First order solutions Second order solutions

Tomorrow Future

Client - contractor Similar

Step by step Innovation

Transactional Exploring

Functional Entrepeneural

Build an effective collaboration

Control

Target subsystem

Behavioral Agreements

Operational developmentDiffe

rent in:

Find, get, start, run, restructure!



The Kraljic Purchasing model

Purchasing Risk Is it a standard or a specialized product?

What

is t

he e

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to w

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roduct

/ s

erv

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adds

valu

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usi

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Less

added v

alu

eLa

rge a

dded v

alu

e

Standard Specialized

StrategicLeverage

Bottleneck Routine



The sourcing solutions plotted on this model


What

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StrategicLeverage

Bottleneck Routine

Business ProcesOutsourcing

Backofficeoutsourcing

Outsourcingworkplace mgt

Businessdevelopment

Shared ServiceCenters

DataCenteroutsourcingFacilities

outsourcing

Workinnovation

1e generation sourcing 2e generation sourcing

4e generation sourcing


2e generation sourcingCrowd

sourcing

Operationsoutsourcing



Crowd Sourcing



Definition of Crowd Sourcing

Due to deep changes in technology, demographics, business, the

economy and the world, we are entering a new age in which people

take part in the economy like never before.

The growing accessibility of information technologies puts the tools

required to collaborate, create value and compete at everybody’s

fingertips.

This new mode of innovation and value creation is called crowd

sourcing, peer production or peering.



Building the Community of the Future

While hierarchies are not vanishing, profound changes in the nature of

technology, demographics and the global economy are giving rise to

powerful new models of production based on community, collaboration

and self-organization rather than on hierarchy and control.

Smart companies are encouraging, rather than fighting, the heaving

growth of massive online communities.

As a growing number of firms see the benefits of mass collaboration,

this new way of organizing will displace the traditional corporate

structures as the economy’s primary engine of wealth creation.



Internet is the infrastructure for the crowd

New low-cost collaborative infrastructures — from

free Internet telephony to open-source software to global

outsourcing platforms — allow thousands of individuals

and small producers to co-create products, access

markets and delight customers in ways that only large

corporations could manage in the past. People can contribute

to the “digital commons” at very little cost to

themselves, which makes collective action attractive.

Indeed, peer production is a very social activity.



Four principles of Crowd Sourcing

Crowdsourcing is based on four powerful new ideas:

– Openness

– Peering

– Sharing

– Acting globally



Being Open

Today, companies that make their boundaries porous to

external ideas and human capital outperform companies that

rely solely on their internal resources and capabilities.

People and institutions that interact with firms are gaining

unprecedented access to important information about corporate

behavior, operations and performance.



Peering

Peering succeeds because it leverages selforganization —

a style of production that works more effectively than

hierarchical management for certain tasks.

Its greatest impact today is in the production of software, media,

entertainment and culture.



Sharing

Smart firms are treating intellectual property (IP) like a mutual

fund — they manage a balanced portfolio of IP assets, some

protected and some shared.

Of course companies need to protect critical IP. But companies

can’t protect knowledge and should encourage sharing



Acting Globally

The new globalization is both causing and caused by changes

in collaboration and the way firms orchestrate capability to

pioneer and produce things.

Winning companies will need to know the world, including its

markets, technologies and people.



The Lego Prosumer Community

– One of the earliest, and still most vibrant, prosumer communities has formed around Lego products. Lego itself has become a flagship for how to get your customers deeply involved in cocreating and co-innovating products. Though Lego is perhaps best known for making little interlocking plastic bricks, the company is increasingly focusing on high-tech toys. With Lego Mindstorms, for example, users build real robots out of programmable bricks that can be turned into two-legged walking machines, or into just about anything a teenage mind can envision. When the product first made its debut in 1998, marketing officials were surprised to discover that the robotic toys were popular not only with teenagers but with adult hobbyists eager to improve on them.

– Within three weeks of its release, user groups had sprung up and tinkerers had reverse engineered and reprogrammed the sensors, motors, and controller devices at the heart of the Mindstorms robotic system. When users sent their suggestions to Lego, the company initially threatened lawsuits. When users rebelled, Lego finally came around, and ultimately incorporated user ideas. It even wrote a "right to hack" into the Mindstorms software license, giving hobbyists explicit permission to let their imaginations run wild.

– Today Lego uses mindstorms.lego.com to encourage tinkering with its software. The company benefits hugely from the work of this volunteer business web. Each time a customer posts a new application for Mindstorms, the toy becomes more valuable.

– The Mindstorms experience has proven to be so successful that Lego has transferred its customer-centric development practices to its more conventional Lego brick toys with a service that lets customers design their own custom Lego sets.



Crowdsource Design Principles

So how should leaders go about applying the principles of

wikinomics in their businesses? Your planning must allow for

a high degree of learning on your part and the flexibility to

respond to new opportunities that arise out of the interplay

among participants in your business web. Peering is a design

and production innovation, and the firm must learn how to

operate in this new environment.



Which Change Colour is dominant?

– For learning, sharing and developing Crowd Sourcing?

Name Yellow Blue Red Green White

Michiel 11 39 10 14 22

Jaime 12 10 35 19 20

Egbert 13 24 24 19 16

Gideon 10 24 24 20 18

Joanmis/Ioannidis 17 24 13 28 14

Ibrahim 17 24 21 19 15

Sofia 16 26 21 23 10

Raage 12 26 23 21 14

Rebin 19 19 24 24 10

Thijs 19 18 16 24 19



Which examples do we have together?

– Of crowd sourcing

– In an IT Service Management Environment



Tips for building succesfull Crowd Sources

You must:

– Take cues from your lead users

– Build critical mass

– Supply an infrastructure for collaboration

– Take your time to get the structures and governance right

– Abide by community norms

– Let the process evolve

– Hone your collaborative mind



The sourcing solutions plotted on this model


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Less

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StrategicLeverage

Bottleneck Routine




Businessdevelopment



outsourcing

Workinnovation





sourcing




Dominant change colours per sourcing generation


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Less

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Businessdevelopment



outsourcing

Workinnovation





sourcing




All rights reserved. No part of this presentation may be reproduced or published in any form or by any means without the prior written permission of Twynstra Gudde.

Frank [email protected]

www.twynstragudde.nl