Service Delivery Transformation
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For many companies, pursuing the optimal Service Delivery model is nothing new. They’ve used this approach to achieve targeted improvements in different geographies and different parts of the business for years. As a result, they’ve benefited from lower costs and more effective service delivery, typically in the area of transactional functions such as Finance, HR and IT.
But leaders today are facing growing pressures to keep costs in check – and looking for new ways to get more value from their Service Delivery model. That means moving up the value chain into parts of the business that would have been considered untouchable only a few years ago. This is the new frontier of Service Delivery. And it can have a surprising impact on the top and bottom line. Learn more about Service Delivery Transformation.
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The growth factor
Cost isn’t the only consideration driving companies to transform their service delivery capabilities. They’re also looking for smart ways to grow. For them, the challenge isn’t so much about cutting costs today, it’s also about creating a foundation for growth that will help avoid costs in the future. That puts a lot more on the table, expanding the scope of transformation into knowledge-based capabilities like business analytics in finance, application enhancement and deployment in IT and workforce analytics in HR. This kind of expansion – especially when outsourcing is involved – can make executives nervous.
Bottom-line benefits
- Reduce the cost and increase the effectiveness of the global service delivery model
- Increase global service delivery consistency and quality
- Streamline the organization to eliminate waste and redundancy
- Achieve a flexible, sustainable cost management structure
- Improve the effectiveness and efficiency of the controls and compliance environment
- Develop systematic methods for reducing risks related to financial reporting
How to create more value now
Deloitte has helped hundreds of companies in their efforts to reduce cost and prepare for growth with service delivery transformation. Here are some practical tips we’ve learned along the way:
- Put on your after-tax glasses. Brilliant plans can end up hurting the bottom line if they don’t take taxes into account. Every business case should be done on an after-tax basis. Tax implications such as the effective tax rate, if not planned for properly, can easily throw a service delivery transformation initiative off track.
- Line up leadership. Nearly every Service Delivery Transformation effort encounters organizational pushback at some point. Sometimes it’s Operations, claiming that they’re missing their numbers due to shared services. Or it’s Sales, mistaking a temporary obstacle for a fatal flaw. At moments like these, it pays to have strong sponsorship to make the case and steer through the headwinds.
- Seek efficiencies of scale. In the past, companies have shown a tendency to compartmentalize their service delivery efforts. After all, what does a Finance shared services project have in common with a new call center? A lot more than you might think. When companies have multiple projects underway at once, it often makes sense to pool resources.
- Button down the business case. Every Service Delivery Transformation project needs a business case, even if it’s only high-level. Not only is it the best way to make sure the effort will actually be worth it, a good business case is a great tool to have when the project encounters internal resistance.
How we can help
We help clients answer the big questions about service delivery. What should they outsource – and where? How can they rationalize their real estate portfolio? How should they structure a shared services organization? Where should they locate their center of scale? How should they use call centers?
When companies have multiple service delivery projects underway at once, we can help make sure those projects come together seamlessly. We are known for our experience in connecting top-level strategy with front-line implementation. We’ve done this kind of work for the world’s most demanding clients – and have learned the ins and outs of implementation, from tax and controls to process, change management and beyond.
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