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Tag Archives: shared services

Top 10 Developments that changed Shared Services

It’s remarkable to think that the space in which we operate – now a skein of connected activities across numerous industries and sectors employing millions of people and involving many billions of dollars – has only existed in anything like its current form for a mere handful of years. From concept to delivery, the shared services and outsourcing space has been granted a fraction of the development time which more established activities such as manufacturing have enjoyed – but nevertheless, in that time we’ve witnessed some truly remarkable developments which have utterly revolutionized the business environment – and, indeed, the very nature of business.

As Ed Kirkby, Senior Consultant at EquaTerra, recalls: “Having been involved in the IT industry since 1983 I have seen many changes – and much re-inventing of the wheel. Apart from the technology drivers and the advent of offshore (e.g. India) there are other developments over this period of: one-stop shop versus selective outsourcing (‘best in class‘), new business models (ASPs/ISPs and Legacy), Business Process Outsourcing, complexity and future proofing considerations, more sophisticated financial engineering, partnerships and joint ventures, commoditization of ‘me too’ deals in mature markets as well as Sole-Source versus Competitive Tender. These have all combined to make outsourcing one of the most interesting market sectors to be in, both from a historical perspective and the place to be in the future – why? Because outsourcing works!”

Recently SSON reached out to a number of experts and commentators from around the shared services and outsourcing space to give their thoughts on the developments which have made the space what it is today. Now, we present the result: our Top Ten Developments Which Changed Shared Services & Outsourcing. Enjoy!

1. Technological advances

No surprises that this one’s on the list; pretty much every one of our contributors mentioned technology in one form or another, whether it be the incredible facilitating impact of the internet or the development of specifically process-related tools boosting companies’ efficiencies and productivity. It’s impossible to imagine life today without many of the technological innovations which have taken place, or reached maturity, during the period of time in which the shared services and outsourcing space has blossomed and boomed; it’s even less possible to imagine that space without the technology upon which it is supported.

As The Hackett Group’s Tom Bangemann says: “the one big enabler is technology, because without technology developments – especially ERP 20 years ago – no global business service or shared service organization of any sort would work.”

2. Globalization 

Alongside purely technological advances, of course, must be placed the dramatic changes in the relationships between nations and individuals, and the contracting or removal of previously obstructive chasms between locations and businesses, which have become known as globalization. It is possible to conceive of a form of shared service, and a variety of outsourcing, emerging in a non-globalized environment – but it’s absolutely impossible to see how either of those two concepts could ever have reached the levels of complexity, or resulted in the remarkable gains in efficiency and effectiveness, which they have achieved thanks to what journalist and academic Frances Cairncross has so elegantly termed “the death of distance”.

“The key development that makes shared services and outsourcing the successful model it is today is globalization,” says CenterPoint Energy’s Julienne Sugarek. “Through technology, we can be connected instantly to people in other cities, states and countries. We can pass work products back and forth as if our offices were down the hall from one another. In addition, the promotion of free trade has led to reduced transportation costs and the harmonization of intellectual property laws has opened the doors to a new way of doing business – business without borders.”

The Hackett Group’s Tom Bangemann concurs: “There are today tens, possibly hundreds of locations able to provide GBS services. The supply side is also bolstered by the growth of the BPO and ITO industries. Without adequate supply the can be no match between supply and demand! Globalization has also led to organizations taking a more business and less local or nationalistic view on labor issues, hence the willingness to deploy GBS SDM has increased and today almost all medium and large organizations use this SDM (to some extent).”

3. The development of outsourcing as a distinct profession 

As outsourcing first touched upon, then burst into, the economic and corporate mainstream, it of necessity became an activity which required increasing specialization and particularization on the part of those engaged within it. Whereas at the beginning of the outsourcing boom developments were being driven by experts in other fields who were able to envision how radically outsourcing would impact upon business practice, today’s outsourcing practitioners are finely-tuned specialist professionals (you know who you are…) with an understanding of their environment immeasurably broader and deeper than that of those first pioneers.

“There was a time when professionals with general transaction skills were the primary architects of outsourcing transactions, and buyers typically engaged in shared services and outsourcing relationships with limited or no specialized expertise. Over the past 10 years, outsourcing advisory has grown into a distinct specialization for lawyers, consultants and procurement professionals. A host of certifications have also been created to validate this specialization. The specialization of these intermediaries has led to increased competitiveness and standardized industry transaction practices,” maintains Robin Rasmussen, Director, Shared Services & Outsourcing Advisory at KPMG.

4. The rise of value-adding finance roles

Just as the development of outsourcing has required the development of outsourcing specialists, so too changes in the nature of the finance function (with the evolution of shared services a notable contributory factor) have required the emergence of a new set of roles within finance – a development which is still very much ongoing. The requirement for added value, and the response of businesses to changes in the nature of businesses themselves, have created a new generation of professionals with remits often far beyond those of their predecessors, wrestling with challenges which previously might not have existed, or might at least have been considered to reside well outside the responsibilities of finance teams.

“Perhaps more ‘work in progress’ than completed development, the growth of value-adding finance roles outside both the traditional finance department and the shared service arena has certainly changed the culture within which SSO and BPO programs are implemented,” believes independent finance and shared services expert Jim Whitworth. “Early shared services had to fight their way through considerable resistance, often from finance management who sought to protect the traditional departmental structure and roles that had shaped their careers to date and had been expected to continue to do so. Businesses fuelled the conflict by failing to get to grips with building and executing a vision for the contribution that finance professionals could continue to make outside the newly acquired SSC or outsource partnership.”

Whitworth continues: “Fortunately, we’re now seeing many more alternatives for finance careers outside the Manager – Controller – Director route in a traditionally structured finance organization. Developing systems and processes in a technically complex world, ensuring compliance and controls to meet ever-increasing regulation and partnering business leaders in decision making have all become careers in their own right in recent years. As this greater range of options continues to develop, the shared services practitioner may no longer be the enemy threatening the finance management status quo but the key to future opportunity. Greater support brings faster implementation, easier stabilization and stronger sustainability as those retained from the old organization focus on new roles that challenge and add value.” 

5. The rise (and fall) of the mega-deal 

It’s an old lesson in business as well as in math that the numbers just keep getting bigger over time (even if your own share of them seems to shrink by the day…). Once outsourcing built up a full head of steam, and companies got to grips with the advantages and attendant risks (and how to manage them) associated with the practice, it was only a matter of time that the deals taking place grew to occasionally jaw-dropping scale. Of course, that created a whole new realm of risk…

“The ‘mega-deal’ not only helped the outsourcing industry address the needs of large, multi-national companies, but it also elevated outsourcing decisions to the highest levels of the buyer organization, which in turn helped establish outsourcing as a permanent option for operations strategy. Ironically, the ‘mega-deal’ also exposed some of the limitations of the outsourcing business model, as it magnified the impact of execution and governance failures. Service providers, buyers and their advisors continue to look for ways to address the limitations and risks exposed by the mega-deal,” says Eugene Kublanov, Director, Shared Services and Outsourcing Advisory at KPMG.

6. Best-practice vision for support functions

Some of the developments that have contributed to the evolution of shared services and outsourcing have been very tangible – technological advances being a case in point. Others, however, have been extremely abstract – and an example of this is the emergence of the concept of best practice within support functions. Abstract or not, however, the impact of this concept has been all but immeasurable: the idea that support functions – particularly within finance – could be optimized and made efficient in the same way as an assembly line or a supply chain has revolutionized the back office and helped drive some of the most important advances in business practice in living memory.
“Shared services started in the mid 1980s in finance functions with some enterprising US-based corporations who took a look at finance costs as a percentage of revenue, realized they had a full accounting function in every manufacturing plant or depot, and thought they could halve the cost or better by co-locating it,” explains Philip King of Atos Consulting. “The name ‘shared services’ was invented to make it more palatable to concerned stakeholders. It was purely a cost-reduction play at the time. And to some degree this is still paramount – but, as most people who reads these pages know, there is more to it than that. The words ‘shared services’ now have real meaning: shared resources, shared responsibility and real customer service provision. However the real added value from shared services is realized when it is an integral and fundamental part of a functional transformation preferably aligned to business strategy or transformation. And this is applicable to any support function – e.g. Finance, Procurement, HR, IT, Facilities & Estates, Customer Management/Service.

“One of the key developments that have sustained and enhanced the role of shared services is the development of the best-practice vision for support functions. This can be traced back to consulting firms in the 1990s that began to spread the gospel of ‘the future of finance’ with a best practice organizational architecture including corporate ‘centers of excellence/expertise‘, ‘business partners‘, and ‘shared services’ – the three key functional sub-divisions of an optimal support function organization. This has since been applied to all support functions – the terminology might be slightly different, but the principle is the same. Focusing the right activities in each area and aligning the appropriate resources multiplies the benefits: e.g. shared services support the business partner role by taking away the distractions of routine transaction processing and providing consistent data. The organization will benefit from the strategic value the business partner can provide if the right type of resource is deployed and the objectives of the role are clear.

“Done well all three parts of this support function vision are complementary and the value of change is multiplied. If done poorly this leads to a lack of clarity and belief in the shared services idea, as the full benefits are not realized. The terminology differs slightly from one function to another, but the concept is proven. Many organizations still have not fully grasped this fundamental vision, but it is even more important in the current climate, so for those who have not yet picked up on this key development, I’d urge you to work at it.”

7. Increased buyer savvy

Outsourcing providers might be tempted to provide just a minimum satisfactory level of service (well, it’s human nature, maybe) but even if that weren’t a rather short-termist proposition, in today’s outsourcing environment it’s tantamount to commercial suicide. A major reason for this – alongside the proliferation of competing providers eager to snatch away every unsecured morsel of trade – is the increased savvy among buyers of outsourced services. As the industry has matured, so too has buyers’ understanding of what exactly can be gained – and at what cost – from the various providers offering their services.

“Outsourcing and shared services are now central to enterprise strategy and higher up the value chain, with most businesses having invested in new skills and re-organized themselves to identify optimum sourcing strategies, execute deals and govern the new service models. Whilst we still have further to go before sourcing can be thought of as a truly mature industry the trend is increasingly for more educated buyers, investing in new capabilities and expecting more from providers who in turn are maturing, consolidating and specializing to meet increased client expectations. These factors taken together have changed our view of what can be successfully externalized or optimized to include value and knowledge based requirements as well as commoditized services,” says Tony Rawlinson, Managing Director, Financial Services Advisory, Europe & Asia Pacific for EquaTerra.

8. The rise of India (and the rest)

“Outsourcing” might be excessively closely linked with “India” in the minds of many consumers in the developed world but there’s a reason why that link was forged in the first place. India has been the powerhouse of the offshore outsourcing boom: its hyperpotent combination of technological prowess, well-educated and -skilled employees and that all-important labor arbitrage has propelled the sub-continent to the very forefront of this dynamic space, resulting in vast gains for the Indian economy – and for many companies worldwide who’ve taken advantage of this incredible boom.

“The unmatched ability of top tier India-based outsourcers to recruit, train, hire and onboard hundreds of thousands of people each year established the offshore delivery center as a viable service delivery model for services providers. It also established a new competitive segment of outsourcing service providers that did not originate in the U.S. or Western Europe. This in turn led to new entrants not only from India, but from various other developing countries that began to compete with the top tier, multi-national service providers,” asserts Eugene Kublanov of KPMG.

9. Changes in the accountancy environment

Of course outsourcing and shared services aren’t just about finance – but a significant proportion of activity within the space remains driven by the finance function, and a proportion of that drive comes from the developments within the global accountancy environment which have had such an impact on business within and beyond shared services and outsourcing in recent years. Sarbanes-Oxley and similar regulatory efforts have created new realms of complexity which businesses have had no choice but to address – and shared services has become both a useful tool to address this, and profoundly affected by the very changes which new legislation has driven.

“The evolution of the accountancy space over the past couple of decades has really provided a huge driver for many of the developments we’ve seen in back-office structures and the outsourcing profession,” says independent finance professional Keith Osborne. “Added complexity in terms of compliance frameworks – not to mention the increased severity of sanctions for those failing to comply – has driven compliance up the corporate agenda and created an opportunity for shared services to become centers of accounting excellence, alongside the need to keep down costs during this leap in complexity. And of course several of the leading accountancy firms have been at the forefront of the outsourcing and shared service revolution in an advisory capacity as well as transforming their own businesses…”

10. Governments’ acknowledgement of outsourcing’s influence on the economy

The impact of the outsourcing boom on the Indian economy was mentioned above – but of course it isn’t just India that has enjoyed the fruits – and had to deal with the issues arising from – the globalization of outsourcing. Both provider locations and governments of countries from which work is being outsourced have had to face up to the ways in which outsourcing impacts upon local and national economies, and international trading relationships. Policy must now encompass the economic realities which outsourcing has forced upon pretty much every country on earth – giving rise to many challenges to which the solutions have not yet been found.

“Various governments in the developing world (India is a salient example) have acknowledged the shared services and outsourcing sector as a substantial and positive influence on their economy. That acknowledgment has led to policies which encourage human capital development, and the modernization of infrastructure and commercial regulation. This in turn has facilitated the globalization of the shared services and outsourcing sector beyond its geographic origins,” believes KPMG’s Matamba Austin.


This article was first published on the Shared Services & Outsourcing Network (SSON) – Read it here:

About The Shared Services & Outsourcing Network (SSON)

SSON is the largest and most established community of shared services and outsourcing professionals, with over 25,000 members.

SSON provides the roof under which key industry experts and organizations share their experience, knowledge and tools, and practitioner peers connect with other all over the world, both face to face and online.

SSON focuses on developing its members through providing training, tools, and networking opportunities. SSON staff works from international offices in New York, London, Singapore, Sydney, Berlin and Dubai to research current trends and developments in shared services.

More information visit the Shared Services & Outsourcing Network (SSON) website. Stay up to date with SSON’s latest twitter posts at, connect with global practitioners, providers and advisors on the Shared Services & Outsourcing Network (SSON) LinkedIn group and Sign up to receive SSON’s weekly updates today

Q&A: Davide Laghi, Y6Sigma Solutions

SSON: Davide, you’ve said that “if shared services organizations are either struggling or failing in 2009, it is not due to the current economic climate, but rather the fact that these organizations do not have all of the right solutions to deliver the real business case of a true ‘value-added’ shared services center”. Can you explain your thoughts on this?

Davide Laghi: The current economic climate is placing additional pressure on shared service organizations (SSO) to produce more immediate working capital and top & bottom-line improvements.  This is no different from any other contingency.

This kind of pressure should always be there and the true business case of the SSO should be delivering these kinds of benefits anyhow.  If SSOs are either struggling or operating sub-optimally in 2009, it is not due to the current economic climate, but rather the fact that these organizations do not have all of the right solutions to deliver the real business case of a true “value-added” shared services center, which entails segregating the transactional processes and enabling what is left of the upstream, now client support function (i.e. finance), and transforming it into a value adding business development support engine capable of the following:

  • Finance: Driving core business improvements (top & bottom-line)
  • Procurement: Delivering the best mix of quality and cost of supply
  • HR: Driving cultural transformation and change enablement
  • Marketing: Selling business transformation
  • IT: Enhancing business process competitiveness

SSON: So what does it take to become a high performance & transformational SSO?

DL: The right culture, the right methodologies and the right technologies.

On the right culture side of things, corporations would have to drop the ever-present “culture of conflict and blame” in order to benefit the mindset of collaboration and partnership.  Whereas, Lean & Six Sigma would have to become foundational pillars of the organization’s approach towards continuous improvement, and information technology would have to become a tool of true process control and automation.

Process automation can only become a true vehicle for process efficiency when defects are effectively eliminated out of business processes; otherwise, exception-handling will take away all of the benefits of process automation.  The process capacity developed out of process streamlining and automation has to be channelled towards process-scope-development, taking on additional responsibilities from the upstream client support functions and enabling them to become true value adding business partners.  In “good” times it would mean to maximise market and profitability opportunities, and in “bad” times it would mean to become leaner and maintain market leadership.  This was true 20, 10 and 5 years ago, even now and it always will be.

Eventually, the only difference will be that in the future, the pace, the force and the frequency of economic climate changes will happen with very little to no predictability.  Therefore, having the capability to change and add more value will challenge SSOs to “transform” even quicker.  All of this represents a stronger challenge for cultural, methodological and technological instruments to become more qualitative, innovative and effective, and to do it all faster.

SSON: How can shared services leaders help resolve some of the issues around governance and oversight which have contributed to the current economic downturn and how important a role do you think shared services will play in corporate governance going forward?

DL: There is one distinguishing factor about the last couple of shaking crises which have stormed the Western Economy (WorldCom & Enron) and the global economy (financial & banking sectors), and it is simply due to the poor quality and lack of effective governance processes and ethical conducts of businesses.  This represents a tremendous challenge as well as an outstanding opportunity for the end-to-end purchase-to-pay, order-to-cash and financial accounting processes led by SSOs to become the cultural and process control gate keepers who will ensure the prevention of unethical business conducts. 

SSOs can become engines of cultural transformation that will enable collaborative continuous improvement efforts.  In becoming specialists in organisational cultural transformation, SSOs can help their organizations by enabling values and beliefs-based ethical behaviour and conduct.  From a process control perspective, finance shared services is the best placed business unit to become the “SOX-Type” compliance control gate keeper.

SSON: What steps can and should SSOs take to combine the agility and reactivity required in today’s market with the requirement to keep sufficient headcount, and sufficient infrastructure, in place to maintain the integrity of critical processes?

DL: When we think about maintaining business process integrity, we don’t necessarily have to think about it in terms of accountants by the masses checking every single corner of the accounting environment.  This is a possible solution, but not necessarily the right one from a process efficiency and effectiveness point of view, and ultimately a cultural point of view as well.

Manual process downstream controls add a significant layer of cost to the processes by detracting resources from more value-added activities and contributing them to fostering a culture of low trust – defects elimination does not necessarily benefit from this manual approach.  Despite the introduction of SOX, we see history repeating itself again with the current economic crisis triggered by the collapse of the financial and banking sectors.  What we have to realise is that our information systems (the famous ERPs which cost millions to implement) let in all sorts of accounting monstrosities through their very lose filters, which causes the need for intensive manual quality control of the final financial accounting output.

The answer to your question is that the balancing element between keeping lean and controlling processes is represented by the right utilisation of the latest information technology possibilities.  An old and deeply respected mentor of mine used to say all of the time that “implementing preventative financial control solutions through IT means transferring financial accounting knowledge into the information system…”

SSON: You’ve written on the importance of “transformational leadership” – particularly in relation to the implementation of methodologies such as Lean Six Sigma. Can you explain why this is such an important factor, especially now, and especially for LSS in particular?

DL: Transformational leadership is crucial in driving sustainable LSS and should be incorporated into the “extrinsic” management by objectives framework.  However, it does not mean to simply embrace LSS, place it as a high priority within organisations and include it with the “extrinsic” motivational process – translating company objectives and cascading them down to all hierarchal levels (this is a given).  The real difference behind transformational leadership is realised through the “intrinsic” motivational levels across the whole chain of command, which ultimately reaches the entire work force across an end-to-end process.

Stimulating the “intrinsic” motivational process requires profound cultural preparation work, which first and foremost must begin with the leaders themselves.  If leaders are incapable of aligning to the required cultural mindset of their organisations, in order to stimulate end-to-end process transformations (a culture of performance measurement to leverage internal/external business relationships and partnerships) and make “change” a sustainable effort, then they themselves are not credible leaders and will fail to foster and generate the required behavioural patterns to empower their teams/followers to execute and ensure that LSS projects become sustainable efforts.  This leadership misalignment is the root-cause behind why many LSS projects ultimately fail.

If SSC leaders want their LSS efforts to produce sustainable results then they themselves must become Transformational Leaders who will “lead-by-example and walk-the-talk.”  Organizations need leadership that is aligned and congruent to the principles of performance improvement and sustainable change, beginning with the individual, and leaders need to possess the highest levels of “integrity” and “congruency” in order to be followed. 

If however the case is that SSC leaders choose not to include LSS projects into their business objectives framework, projects will fail on their own accord even with the consideration of a few one-off successes. 

SSON: What are the qualities which define a Transformational Leader?

DL: A Transformational Leader is someone who walks-the-talk with the principles of collaborative partnership works.  He/She is a strong motivator who is attentive of others, possesses cross-functional influencing skills across the organisation, and is capable of putting together departmental teams and leaders in collaborative efforts towards the identification of process improvement root-causes and seeking out the right solutions.

SSON: And how can organisations identify and nurture those individuals who possess these qualities?

DL: Using an approach based on values & beliefs driven behaviours. Organizations can measure the values, beliefs and behaviours of individuals and teams to identify and nurture the career development of those who possess the right abilities to use these approaches effectively as leaders.

SSON: You’ve written that “if leaders do not include LSS projects into their business objectives framework, then projects will fail even with the consideration of a few that may become one-off successes.” The logical conclusion of that perspective, surely, is that you’re recommending that all shared services leaders must be adept in Lean Six Sigma – would you agree with that? And if so, why do you think LSS in particular is such a critical methodology?

DL: LSS is such a critical methodology because it is the only effective tool which can be used to systematically understand the root-cause of process errors and eliminate the need for manual detection and rework.

SSC leaders do not necessarily have to be adept in LSS, but they do have to understand the concepts of LSS and the benefits realised if LSS is implemented correctly.  As outlined in one of my earlier answers, SSC leaders have to walk-the-talk with the principles of collaborative partnership works and become strong motivators who possess cross functional influencing skills across their organizations.  They must be able to put together departmental teams and leaders in collaborative efforts towards identifying process improvement root-causes and seeking out the right solutions, in order to maximise delivery of service and value. 

The technicalities of LSS deployment is left to operational leads and improvement specialists.  However, SSC leaders must ensure that their organizations work collaboratively without conflict through the production and sharing of performance measurement frameworks, which will surface needs for improvement and point the teams in the right direction.

Lean Six Sigma (LSS) principles and methodologies can be used to help SSOs reduce costs, decrease cycle time and improve quality. However, unless there are clear commitments from organisational leaders (top to bottom), LSS will only deliver minor improvements for departmental processes and nothing more.

SSON: Finally, how can and should companies adopt LSS to ensure that the philosophy is applied at all levels of the business? 

DL: The answer is quite simple; companies can adopt LSS and ensure that the philosophy is applied at all levels throughout their organisations by sharing a higher purpose and fully understanding the strategic alignment between their corporate strategy and their shared services intent.  What I mean by shared services intent is the degree of SSO alignment with the organisation’s overall strategic direction.  A few thoughts to keep in mind are:  What is the organisation’s view and approach about the sourcing mix as a strategic mean/tool (i.e. captive on-shore, captive off-shore, BPO on-shore, BPO off-shore)?  How will the organisation leverage this view and approach within their strategic imperatives? 

All organisational leaders (top to bottom), impacted by the shared services change journey, must share the same higher purpose in wanting to transform their organisations for the better – whatever that may be.  As long as a higher purpose is shared, the technical tool to achieve it can be called shared services, LSS or whatever else – nothing else will really matter and no one will ever oppose it as long as it works.


This article was first published on the Shared Services & Outsourcing Network (SSON) – Read it here:

About The Shared Services & Outsourcing Network (SSON)

SSON is the largest and most established community of shared services and outsourcing professionals, with over 25,000 members.

SSON provides the roof under which key industry experts and organizations share their experience, knowledge and tools, and practitioner peers connect with other all over the world, both face to face and online.

SSON focuses on developing its members through providing training, tools, and networking opportunities. SSON staff works from international offices in New York, London, Singapore, Sydney, Berlin and Dubai to research current trends and developments in shared services.

More information visit the Shared Services & Outsourcing Network (SSON) website. Stay up to date with SSON’s latest twitter posts at, connect with global practitioners, providers and advisors on the Shared Services & Outsourcing Network (SSON) LinkedIn group and Sign up to receive SSON’s weekly updates today

Vijay Rangineni, CEO, Mahindra Satyam BPO, Part II

SSON: Looking at the aforementioned economic turmoil, do you consider this to be a period of crisis for the outsourcing industry (and the Indian outsourcing industry in particular)? If so what do you see as being the biggest challenges facing outsourcing providers at present and how are you positioning Mahindra Satyam BPO to overcome these?

VR: Let us look at it from the perspective of our primary stakeholders – our customers. What are the challenges they are facing? Once we understand that clearly, we will be able to create symbiotic relationships.

For instance, one of the key customer challenges that we see is the need to balance immediate concerns with the long-term interests of the business. How can outsourcing help customers make this decision? In fact, is there a decision to be made in the first place, or can both objectives be achieved through outsourcing?

Secondly, we realize the importance of agility in the current scenario. Today, we have lesser time to scope the customer’s needs, discuss the deal, transition the process and begin operations. How can we reduce the cycle time?

Thirdly, several customers today are expressing interest in a pay-per-use model. How do we create multiple engagement models for customers?

So, we are seeing that challenges can be converted to opportunities as long as we have a solution-focus, rather than a problem-focus. In fact, we see the recession as a huge opportunity for outsourcing. With increased pressure on eliminating fixed expenses, customers are looking at third-party vendors like us. This pressure – of staying competitive and sustaining the business – might just result in outsourcing being resorted to by more organizations and gaining more acceptance globally.

SSON: Do you foresee more consolidation among providers (Indian and otherwise)?

VR: Yes. Consolidation is the current reality. Whichever form this consolidation takes, organizations will want to combine resources to address the current circumstances better. I see this trend continuing for the next 18 to 24 months.

SSON: Your organization is very India-centric in terms of the location of its delivery centres. Do you have plans to change this and if so where would be the logical next steps for you beyond the subcontinent?

VR: With Tech Mahindra’s strategic investment, one of our biggest strengths is now our global delivery presence. Put together, Tech Mahindra BPO and Mahindra Satyam BPO have 10 centers globally – eight in India and two in Europe (Belfast and UK). In terms of expanding our global presence, we will clearly not do it simply for the sake of doing so. As I mentioned, the key today is to be able to meet diverse customer needs successfully. If that means setting up additional centers closer to the customer’s business or expanding to locations that help us deliver better, we will certainly expand. It is all dependent on what the customer wants.

Also, we must not overlook the vast geographic spread of the parent company’s delivery and technology centers. Through them, we have presence in countries such as Malaysia, Singapore, Egypt, South Africa and others. If the need arises, they can also be looked at for BPO delivery.

SSON: As well as the domestic market we looked at a moment ago, where will Mahindra Satyam BPO be getting its clients from as the world economy moves into the recovery phase? Will traditionally profitable markets like the US and Western Europe still be the foundations of the Indian outsourcing industry or are you looking further afield?

VR: Yes, I think that traditional markets – US and Europe – will certainly continue to be important. However, we will need to strengthen our presence in the MEA and APAC regions. In fact, one of the biggest deals that Tech Mahindra has recently won has been from the Middle East – Etisalat DB Telecom. Such large deals show there is business here to be done. This will necessitate additional manpower and financial investments in these regions, as well as enhancing our knowledge about what challenges business leaders in these areas face. I am confident that as a combined entity, Tech Mahindra and Mahindra Satyam will be one of the strongest players in the consulting, IT and BPO space globally.

SSON: What do you consider to be your organization’s USPs? Why should potential new customers sign with you rather than your competitors?

VR: Our biggest USP today is that we are keener than ever – to prove that we are still the organization to go to when you need a service provider who will go that extra mile for you. That is what outsourcers globally are looking for. Mahindra Satyam has always been known for its delivery excellence and quality focus. The strategic investment from the Mahindra Group has further enhanced our customer centricity and corporate governance.

Also, with Tech Mahindra, we have a much larger portfolio of offerings. The two organizations complement each other and there is hardly any overlap.

Customers globally have seen how Mahindra Satyam has delivered beyond SLAs even under tremendous stress. That is certainly a positive and reassuring message to customers. An interesting recent experience of mine was a meeting with the former Dean of Kellogg, Dipak Jain. He asked me how I had managed to lead the organization in such trying circumstances. He mentioned that the kind of experience I have gained over the last eight months cannot be had even at Kellogg or any other institute. That shows that our stakeholders are looking at Mahindra Satyam as a strong recovery story, and there is great respect for what we have pulled off.

SSON: Outsourcing is such a rapidly-changing business. Other than the global economic fluctuations of recent months what do you see as being the major drivers of change within the industry and how does its reactions to these factors determine the ways in which Mahindra Satyam BPO operates?

VR: Technology is constantly evolving. How businesses globally adopt these technologies and extend resultant benefits to customers vastly determines the extent and type of outsourcing. For instance, communication technologies are booming. Several new customers are being added on each day. Obviously, companies will outsource to meet this additional demand.

Companies are also expanding their global footprint. At the same time, there is greater focus on providing a consistent customer experience with the brand. I see outsourcing playing a major role in enabling this.

Governmental regulations certainly play a major role in determining the extent of the outsourcing industry’s success. But that is an issue that can be addressed by outsourcing organizations and BPOs combining to present a case that outsourcing only creates greater competitiveness…and greater competitiveness only strengthens the economy which, in turn, creates more jobs.

Service providers’ ability to manage more high-end work will only help in proving the case for outsourcing further. India has a vast pool of educated individuals who are extremely competent at high-end work such as analytics, research, engineering, virtual manufacturing and the likes. We only need to build more success stories around these high-end services and penetrate deeper into customer’s businesses.

At the end of the day, the challenge lies in not just coming up with innovative solutions, but also communicating them to customers. It is up to BPOs to prove that we are much more than just ‘call centers’. We are doing much more today, and customers deserve to know the high quality of our work.

SSON: How is Mahindra Satyam BPO tackling the issues raised by the rise of cloud computing? Do you offer cloud-based services?

VR: We are having discussions with our customers on these lines. Through the use of cloud computing, we will be able to: reduce costs; deliver per specific customer requirements; and aggregate all the knowledge that exists across levels in the customer organization. Opportunities significantly exist where infrastructure expenses could be reduced. There are some concerns from a data security perspective, but we are able to assure customers that we can deliver value to them.

SSON: Which industry sectors do you think will provide you with the greatest scope for expansion over the next few years?

VR: I see tremendous scope in telecom, manufacturing, pharma, healthcare (especially with the likely upcoming reforms in the US) and BFSI. In addition, we are looking at some very interesting possibilities in areas such as geospatial services (GIS).

SSON: Let’s close with a couple of personal questions. What do you consider to have been your greatest achievements in your professional career to date?

VR: If I look back at my career and think of the things that have helped me, the first thing that comes to mind is that I did not stick to one specific segment. I started off in the technology side of the business, moved to finance, then operations. At Morgan Stanley, I worked on Fraud and Risk Management. Finally, at GE Money, I was given the responsibility to lead their India Operations as COO – primarily due to the learning I had generated by working in different areas.

To put it in a nutshell, what worked for me was taking on lateral roles, challenging roles, risky roles. Don’t worry about the risks. More risks that you take, the more rewards you get.

SSON: What are your ambitions for Mahindra Satyam BPO over the next year or two?

VR: Firstly, at this stage, we have this tremendous sense of gratification from having the opportunity to be part of an organization that went through its share of troubles, but one on which we worked, as a group, to stabilize and sustain as an ongoing entity.

Going forward, I see the combined entity – Mahindra Satyam BPO along with Tech Mahindra BPO – as one having a strong presence across verticals. Tech Mahindra is already the No.1 player in the telecom space. Mahindra Satyam has several clients across verticals. This puts us in an enviable situation. We will certainly capitalize on this.

Additionally, we will continue to be a people-centric organization. C P Gurnani has often mentioned the need to create a happy workplace. That is such an important objective to have in a young organization like ours.

SSON:  What’s your definition of the perfect outsourcing relationship? And the perfect client?

VR: I see a good outsourcing relationship as one where: both – outsourcer and service provider – see long-term value from the relationship; both have an equally strategic view of the relationship (it is important that both parties realize the possibilities of the relationship and how it can transform both organizations); and there is consistent and proactive communication between both parties

Essentially, it’s not really too different from a good personal relationship – one that can mature over time, but still stay as exciting for both parties involved.

SSON: Finally, how would you like to be remembered when you retire?

VR: I’d like to be remembered as someone who loved to come to work and added value at the end of the day. Also, I’d be glad if I’m remembered as someone who was strategic, analytical and worked with teams across the company to deliver value to the company and its customers.


Afterword & about Vinjay Rangineni
With a resolute focus on end-customer delight, Vijay Rangineni, Mahindra Satyam BPO’s CEO rallies the entire organization towards the objective of undertaking wing-to-wing ownership of key customer relationships.
Leveraging more than 20 years of global operations and leadership experience in the service industry, Vijay helps Mahindra Satyam BPO create propositions that deliver lasting value to customers.

With an equally strong belief – in Associates as key drivers of customer value – Vijay devotes substantial time on the operation floors, engaging with and motivating Associates to stay focused on deliverables. A firm believer in the language of metrics, Vijay guides teams in the creation of frameworks to evaluate their
performance and undertake consistent process improvement initiatives.

Prior to Mahindra Satyam BPO, Vijay worked with Fortune 100 organizations like American Express, Morgan Stanley and GE, focusing on critical assignments and turnaround stories ranging from Delivery to Technology and
Business Process Reengineering.

At GE Money India, Vijay led multiple customer segments, including credit cards, home loans, private loans and auto loans. At Morgan Stanley, he set the pace by focusing on bringing down fraud rates and effecting operational
changes that would benefit the bottomline. He was also responsible for certain key processes like collection strategies that helped the organization save collection losses. At American Express, Vijay operated from Chicago, gaining experience in Operations, Finance, Marketing, Project Management and Technology. He was part of a pioneering team that propagated offshoring as a strategic imperative to improve quality.

Vijay is an alumnus of Kellogg School of Management and also holds a Master’s degree in Industrial Engineering from University of Texas. He has addressed many international industry forums and seminars on Operational Excellence.


This article was first published on the Shared Services & Outsourcing Network (SSON) – Read it here:

About The Shared Services & Outsourcing Network (SSON)

SSON is the largest and most established community of shared services and outsourcing professionals, with over 25,000 members.

SSON provides the roof under which key industry experts and organizations share their experience, knowledge and tools, and practitioner peers connect with other all over the world, both face to face and online.

SSON focuses on developing its members through providing training, tools, and networking opportunities. SSON staff works from international offices in New York, London, Singapore, Sydney, Berlin and Dubai to research current trends and developments in shared services.

More information visit the Shared Services & Outsourcing Network (SSON) website. Stay up to date with SSON’s latest twitter posts at, connect with global practitioners, providers and advisors on the Shared Services & Outsourcing Network (SSON) LinkedIn group and Sign up to receive SSON’s weekly updates today

Top Ten Tips for Implementing Six Sigma

As companies continue to cast their nets for ways to improve efficiencies across the board, the appeal of process improvement methodologies – and in particular that arcane-sounding discipline Six Sigma – continues to grow. Developed at Motorola, and since implemented to a greater or lesser extent by a majority of Global 2000 firms, Six Sigma seeks to identify and excise the causes of defects within processes – as such, it’s easy to see why an increasing proportion of process-facing business areas such as shared services are turning to Six Sigma in the hope of further refining their processes and keeping errors and queries to a minimum.

For those contemplating implementing Six Sigma in whatever form, SSON reached out to the experts for their advice on what makes the difference between success and failure, Six Sigma-style. The result? SSON’s Top Ten Tips for Implementing Six Sigma. Are you sitting comfortably? Then let’s begin…

1. Engage senior leadership

As with so much in this life, a successful adoption of Six Sigma simply isn’t going to happen without getting the requisite buy-in from the top. A clear mandate from above will be an indispensable aid in pushing through what for many people might seem a particularly exotic – even downright incomprehensible – methodological transformation. Getting this mandate, however, might involve overcoming similar befuddlement at a senior level, so be prepared to present your proposals with a minimum of Six Sigma-specific jargon and paying particular attention to the bottom line.

“There is a big difference between executive commitment and engagement,” says Scott McAllister of Breakthrough Management Group International (BMGI). “The key here is real engagement meaning key executives play an active role participating in regular planning, implementation and review sessions.  This means making Performance Excellence an organizational priority, not just assigning budgets and delegating accountability to lower levels in the organization.  To engage senior leaders, you must speak in the language of leadership which means developing clear links to strategic objectives and measurable ROI.”

2. Go Six Sigma, go Lean (all the way)

The marriage of Six Sigma with lean manufacturing to create Lean Six Sigma involved a combination of two of the most successful improvement methodologies in business. While Lean Six Sigma is not without its detractors, its evangelists are adamant that – properly implemented – the lean manufacturing philosophy should now be an absolutely indispensable component of Six Sigma implementation.

“In a Shared Services setting, the real power of Six Sigma is released when a Lean approach is taken right at the front of the process (Lean Six Sigma: LSS),” explains Davide Laghi, founder and leader at Y6Sigma . “For Lean to be successfully introduced, Teams need to be engaged in the activity analysis and value stream mapping of their own processes.  In a traditional structured organizational situation, with all its managerial layers and typical direction and control style, which to this day still represents the norm, a Lean approach that requires team members to analyze and measure what they do on a daily basis at a granular level is the main reason behind why a vast majority of the cases get rejected, creating a big deal of resistance to change.  This ‘Big Brother Effect’ is ultimately what causes the initiative to fail and is the main reason behind why an upfront and substantial Change Leadership investment is such a fundamental critical success factor.”

3. Don’t expect training alone to fix your problem

Having a well-trained, correctly-focused team is of course an absolute must for any firm looking to operate along Six Sigma lines. But training alone isn’t a panacea and, indeed, will almost certainly lead to serious problems if it’s not accompanied by the organization paying proper attention to the other requirements of the methodology.

“Far too many organizations look at Lean Six Sigma as predominantly a training exercise without establishing the proper framework for execution,” warns BMGI’s McAllister. “At a bare minimum, companies must address project selection, competency development and project coaching to ensure the effective application of the methodology to deliver results. Too many consultants have focused on selling training without setting up a system for execution and this leads to frustrated executives and often times more frustrated change agents (Belts).  While it might be a significant part of the overall deployment plan, training should be a means to an end and the focus should be on solving business problems that matter to the executives.” 

4. Develop a suitable infrastructure

Six Sigma – like pretty much every other improvement methodology, understandably – is far from a cosmetic practice: indeed, it’s pretty much the opposite, going deep into the cogs and springs of a business to get the very best out of the areas of operation it touches. As a result, it needs to be supported by a suitable organizational infrastructure catering for the specific requirements of the new methodology. Think of what’s required as a somewhat holistic approach reaching throughout your business – it might sound like a big task, but in order to make the most of Six Sigma you need to go well beyond the implementation team.

“Develop an infrastructure to accelerate and sustain results,” urges McAllister. “If you expect to deliver sustainable results from the implementation of Six Sigma or Performance Excellence, you must create a system or basic infrastructure that enables your success. This involves developing policies, procedures and guidelines in key areas of Finance, Human Resources, Communications, Project Management, etc.  Examples include establishing financial validation policies to ensure that operational improvements can be translated into financial terms in a consistent way. Without this, you are likely to create a lot of PowerPoint benefits that do not track to the bottom line. In Human Resources, this involves addressing selection of change agents, competency models, reporting and compensation policies, retention strategies, re-integration guidelines, etc. For communication, it involves establishing a strategy with tactical plans that time messaging with real results. In project management, this involves defining project deliverables, tollgate review structures, reporting requirements, tracking mechanisms as well as standardizing tools and templates. The reality is that you will need to address each of these issues in the first year anyway so it’s recommended to do it early in the deployment process, understanding it can be run in parallel with the other deployment activities.”

5. Don’t forget the change leadership

As already noted, fully comprehending what Six Sigma entails can prove a rather formidable prospect for many. Such a radical departure from traditional operating practices will almost certainly be accompanied by numerous traumas all along the chain of command if the correct message isn’t communicated consistently and thoroughly. Always remember that this is a significant change project and, as such, needs to be reinforced by the requisite high degree of change leadership.

“Six Sigma is a process improvement technique that tends to struggle in delivering sustainable results, particularly in a non-manufacturing setting such as Shared Services, for lack of consideration towards the human dimension of change and with little or no concern for upfront change leadership interventions,” warns Y6Sigma’s Laghi.

McAllister adds: “Don’t underserve change leadership principles: share a compelling vision; establish a shared sense of urgency; create a strong guiding coalition; communicate consistent messages; recognize, reward and celebrate success.”

6. Get your measurement systems right 

Metrics are of course the very life-stuff of Six Sigma – how can you improve if you don’t know what to improve or by how much? – so it’s crucial to develop accurate, consistent and sustainable measurement systems. Once in place, these can be leveraged in a number of ways – including in the development of service-level agreements, either entirely new (if Six Sigma is being introduced right at the beginning of a shared services or outsourcing journey) or renegotiated.

“Lean measurements do not need to be onerous manual exercises, which once completed are hardly ever repeated and therefore fail again to make the improvement initiative a sustainable effort,” says Laghi. “Easy-to-use desktop Lean applications are nowadays available on the market to make activity analysis a practical and sustainable exercise. Measuring rework and areas of non-value-add is not the end of the game however, as the root-causes behind these waste silos still need to be understood in order to identify the real continuous improvement opportunities. This is where the Six Sigma integration of Performance Measurement systems with ERP transactional platforms come into play, where identifying and measuring defect transactional types are the key to success (80/20 rule). The developed Lean Six Sigma Performance Measurement Systems should become the backbone of the shared services SLAs or SPAs (Six Sigma-based Service Partnership Agreements) if a true collaborative culture with the shared services customers and stakeholders is successfully introduced upfront by the adequate change leadership intervention.”

7. Leverage the technology

It should be no surprise to learn that Six Sigma is another area of business which is supremely enhanced by (if not utterly dependent on) the judicious application of IT. The full potential of Six Sigma will only be accessed by organizations which can truly leverage the appropriate technology, in order to allow the methodology to bloom at both micro and macro levels: using IT to shine the Six Sigma spotlight into the smallest and murkiest of nooks and crannies will eventually, through the correction (or even avoidance) of defects, have a substantial and delightful impact upon the company’s bottom line.

“Six Sigma solutions do not normally represent sustainable improvements if they are not leveraged by information technology (in shared services this would generally happen by leveraging ERP systems),” cautions Laghi. “A true Six Sigma solution is an automatic preventative process control driven by a system functionality that prevents a defect from being generated. In many instances, these functionalities cannot be found within the vanilla capabilities of the ERP products generally in use. But no worries: the time of the ERP bespokes has come to an end as today we have the technology available to evolve the standard functionality of our systems without customizing.”

8. Understand the wider environment

Six Sigma can do great things – but that doesn’t mean it’s automatically and always the right time to put it in place, either on a small or large scale. Just as discretion is the better part of valour, so timing is the better part of transformation: you don’t want to take steps which will through your organization – even a small part of it – off balance at a critical time. Yes, Six Sigma can prove an important tool in cutting costs and improving efficiencies – but it might be that – for whatever reason – now simply isn’t the time…

“No matter how small the project you’re proposing, you must never fail to consider broad-scale factors such as the prevailing economic climate and the challenges facing your organization generally,” advises independent F&A specialist Graeme Ludlow. “Always ask yourself: is this the right time to be making the changes you’re suggesting? And what are the ramifications of introducing those changes? It might be that the steps you’re taking – or proposing – will lead to radical transformation within the organization. That’s fine if the business environment is such that such transformation can be accommodated fairly freely – not so fine if existing operating pressures and restrictions mean that any such change might be too destabilizing at a time when all hands are already at the pumps.”

9. Establish a robust project selection process

Making a project work is, in part, a matter of choosing the right project in the first place, and it’s no different in the Six Sigma space. In order to make the most of Six Sigma it’s important to engage in a well-thought-out, consistent and intelligent project selection and prioritization process with significant attention paid to how each potential project impacts upon the business as a whole. This is especially important once initial projects have been implemented and have proven successful; the advances and savings made by a successful Six Sigma approach can very quickly prove exhilarating for those at your organization’s heady heights; it’s imperative that you can point to a smart project selection methodology to explain why your firm can’t just go off and do the same thing to every other area of the business all at once.

“The DMAIC [Define, Measure, Analyze, Improve, Control: one of the two major project methodologies within Six Sigma] methodology has proven to work in hundreds of organizations across almost every industry imaginable when it is applied correctly. They key to successful project execution is effective project definition, prioritization and scoping.  Projects must have a clear link to the strategic objectives of the business, a business case that justifies allocating scarce resources, a manageable scope and a clear definition of success.  Many companies mistakenly view project selection as an event when it needs to be seen as a process, with an owner and a schedule for periodic review and approval.  It is also important to note that project selection is a learned skill that usually takes at least one round of application to fully understand,” says McAllister.   

10. Deliver quick wins

Everyone knows walking the walk matters more than talking the talk – and nothing’s going to make the boys and girls at the top more likely to endorse subsequent – perhaps larger scale – projects than a quick and successful turnaround on initial Six sigma ventures. Sure, bear in mind the dangers of rushing things through – it’d be a particularly bitter irony if an over-hurried process improvement methodology implementation were to lead to a decline in process quality – but if you can show quick wins initially you’ll have the ear of those who matter when it comes to getting cracking on more ambitious, lengthier and costlier projects.

“In today’s challenging economic climate, it’s imperative to deliver results in days or weeks, not months or years,” points out McAllister. “Gone are the days when you have 12-24 months to prove value to the organization.  For this reason, many companies have integrated more lean principles into a traditional Six Sigma approach and the concept of Kaizen events or rapid improvement events has become increasingly popular. The best way to generate momentum and gain support is to demonstrate an immediate impact by delivering project results fast.  Determine where the ‘low hanging fruit’ and ‘just-do-it’ opportunities are in the business and make sure to execute them early in the implementation process.  It’s also important to note that the ability to deliver quick wins is often a result of a robust project selection process.”

i: Y6Sigma is a registered trademark of Y6Sigma Solutions Ltd. For more information see 


This article was first published on the Shared Services & Outsourcing Network (SSON) – Read it here:

About The Shared Services & Outsourcing Network (SSON)

SSON is the largest and most established community of shared services and outsourcing professionals, with over 25,000 members.

SSON provides the roof under which key industry experts and organizations share their experience, knowledge and tools, and practitioner peers connect with other all over the world, both face to face and online.

SSON focuses on developing its members through providing training, tools, and networking opportunities. SSON staff works from international offices in New York, London, Singapore, Sydney, Berlin and Dubai to research current trends and developments in shared services.

More information visit the Shared Services & Outsourcing Network (SSON) website. Stay up to date with SSON’s latest twitter posts at, connect with global practitioners, providers and advisors on the Shared Services & Outsourcing Network (SSON) LinkedIn group and Sign up to receive SSON’s weekly updates today