COVID-19

Tip of the Iceberg for

Tectonic Shifts in Shared
Services Delivery Models?

Sponsored by
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INTRODUCTION
To say current events are
dramatically reshaping our world
is an understatement.
At the front line, Shared Services leaders have a birds-eye
view of the virus’s impact on business operations. How has
what amounts to a global shutdown affected a business model
that has been at the vanguard of globalization? Will the model
help enterprises weather the storm? Will the value proposition
shift? Will we come out of this crisis with the Shared Services How many global
model intact – or will it, by necessity, morph into a new form? delivery or s
 hared
services centers do
To help the Shared Services industry understand the impact of you operate?
COVID-19 on operations, SSON asked SSO and GBS leaders to
complete a flash survey during the period March 10-13, 2020.
A word of caution: These survey results should be considered
a snapshot of the industry’s initial response to the crisis; as
the global economy goes into freefall, we can expect that the
responses will change dramatically. To help practitioners cope
with what is an unprecedented crisis, SSON will take the pulse
of the industry at regular intervals and share practices.

About survey respondents

First, a few words about the survey. Almost 250 companies,
Less than 3 71%
headquartered around the globe, took the time to respond.
These enterprises operate truly global delivery footprints, with 4-6 21%
an average of three centers spread across Asia, Europe and
the Americas. 7 and more 8%

- EDITORIAL TEAM -

AUTHOR Deborah Kops is a member of SSON’s Global Advisory Board. Her sweet
spot is helping enterprises develop new target operating models for a

DEBORAH KOPS
range of business functions by rethinking work content, structure, scope,
solutions, organizations and roles in the face of rapid digitization.

PRINCIPAL, Her career includes managing directorships at FleetBoston Financial’s

SOURCING CHANGE (now Bank of America) Technology and Operations Group, reporting to
Vice Chairman, and Deutsche Bank; consulting partnerships at Arthur
Andersen and PricewaterhouseCoopers; and CMO of an Indian-legacy
 outsourcing company.
She sits on the advisory boards of several tech startups, and has led
operations of two private equity-funded SAAS businesses. Deborah also
founded Liberty Source PBC, a U.S.onshore BPS company harnessing the
talents of military spouses. She speaks and writes frequented, and was
the presenter of SSON’s HardTalk series.

CO-AUTHOR & EDITOR The Shared Services &Outsourcing Network (SSON) is the largest
and most respected forum for executives tasked with promoting and
BARBARA HODGE delivering optimized business services.
Barbara joined SSON in 2000, having started her career in capital
GLOBAL EDITOR,
markets, before joining Armstrong Information, a specialist publishing
SHARED SERVICES
group. She is responsible for sharing best practices and thought
& OUTSOURCING
leadership with SSON’s 170,000+ member base, as well as promoting the
NETWORK (SSON)
value of the network worldwide.



2| TIP OF THE ICEBERG FOR TECTONIC SHIFTS IN SHARED SERVICES DELIVERY MODELS?
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KEY FINDINGS
Very few not concerned about COVID-19’s
impact on Shared Services operations
Even though the survey was conducted as the
initial effects of COVID-19 were being felt, the
level of concern was discernably high. As the
chart shows, 52% of respondents were highly
concerned about COVID-19’s implications on
services delivery, while another 36% professed
‘moderate’ concern. In addition, even at the outset
of the global spread of the crisis beyond Asia,
regional variations are apparent, with European
headquartered enterprises more concerned
(57%) than their counterparts headquartered
in North America (47%) and APAC (48%)
respectively.

How concerned are you about the impact of

COVID-19 on your global delivery operations?

3%
Not at all
52%
9% Highly
Marginally concerned
concerned

36%
Moderately
concerned
Source: SSON Survey conducted March 10-13, 2020

Distribution of survey respondents

Where are Where is

your global your corporate
delivery or HQ based?
shared services
centers
located?

Indian Eastern North America - 37%

33% - 33% 3%
subcontinent Europe
Central and
25% 5%
China 17% - Western Latin America
22% 26%
Europe
Philippines 23% - Australia and
- 5%
UK 10% 13% New Zealand
Asia 20% 15%
Africa and R.O.W. 17% 5%
Nordics - 2% 3% 2%
Middle East

TIP OF THE ICEBERG FOR TECTONIC SHIFTS IN SHARED SERVICES DELIVERY MODELS? |3
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Right now, service capacity is more or less holding up

yet operational implications widespread...
In the first few weeks of the crisis, 93% of Compared to your service capacity levels before
respondents said they had lost less than the COVID-19 outbreak, how much capacity has
25% of service capacity, likely in the regions been lost at this stage?
impacted by the virus early on. At the same time,
physical centers were closing, with over 67% of
respondents asking staff to work from home. Just
over half (55%) had cut all travel to and from
centers as enterprises lock down their employees 93% 5% 1% 1%
and governments close borders. Obviously, in the have lost have lost have lost have lost
<25 of our 25-50% of 51-75% of >75% of
ensuing days, these percentages have increased service our service our service our service
substantially. capacity capacity capacity capacity

Operations were already starting to pivot to Talking specifically about y

 our off- and nearshore
centres, h
 ow has the COVID-19 outbreak
cater to the health and welfare of the few
affected your operations?
employees who were still working from centers. We have shut down all our centers
Respondents reported that limiting the number 1%
of personnel at a facility at any given time, We have shut down centers in some regions
to promote social distancing, was becoming 6%
common. Splitting shifts was another approach. We have made it optional not to report to work
in certain centers
With staff impacted by the virus, resourcing 20%
strategies are starting to change. Just under 10% We have shifted work to other centers in
reported they were shifting work to other centers regions less impacted by the virus

or had increased their use of outsourcing or staff 6%

We have shifted work to our third-party providers
augmentation. In some cases, repatriation is
cited as a solution with a transfer of work back
1%
We have asked staff to work from home
to the retained team.
67%
As an operational strategy, work from home We have adjusted our SLAs
(WFH) looks good on paper but is likely more 9%
challenging in practice. Staff may not have We have supply chain challenges fitting out an office or
securing equipment such as laptops
homes that are conducive to remote work –
9%
with limited workspace, connectivity and the We have cut all travel to centers
distraction of entire households sheltering in 55%
place. Hardware provision is also proving to be There has been no impact
a challenge: Sourcing laptops for staff used to 23%
working in a standard delivery center with a Other
desktop computer and dual screens is becoming 10%
more difficult by the day, given global supply Source: SSON Survey conducted March 10-13, 2020

chain disruptions. Couple the ability to obtain

hardware with a complete stoppage of facility
build out and furniture provision, and it’s fair to
say that center expansion plans are on hold.
In some cases, enterprises are looking to benefit
from the operational agility of global Shared
Services models. Anecdotally, respondents noted
that their delivery network capacity had been
expanded to take on work from regional business
Controlling work from home
Think about it: Delivery centers are the 21st century
version of the factory floor: Centers from which to control
productivity and security for business support. With the
world suddenly upended, last month’s model is no longer
valid. What can Shared Services leaders do to foster
productivity and ensure that policies and processes
secure the business? Start here:
●● Ask staff to sign NDAs, helping them understand that
working on data out of the office doesn’t change their
obligation to the business;

operations hard hit by the virus — Italy is the best ●● As much as possible, require staff to only work in one
secure location — no coffee shops, no park benches;
example. and
●● Learn to trust!

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PRODUCTIVITY AT ‘NORMAL LEVELS’

BUT BUSINESS IMPACT INCREASING
One month into the global crisis, 75% of
respondents reported that they had been able to
meet their SLAs on time (albeit adjusted by 7% to
reflect the impact of profound changes in ways
of working). But even a few weeks into the ‘new
normal’, 12% of respondents reported an increase
in the cost of Shared Services operations, and a
decline in productivity of core Shared Services
processes such as collections, where 6%
reported declines.
In addition, gaps in back office capability were
already taking their toll on the business as
reported by 16% of respondents, requiring a
rethink of the work. Twenty-four percent said they
had ensured that the business had experienced
as little impact as possible by prioritizing
the delivery of mission-critical work, likely
deferring internal projects focused on process
improvement or automation. Eight percent of
respondents have ceased transitioning new
scope to centers.

Turn lemons into lemonade

Shared Services leaders now have a burning platform to eliminate policies and processes that create bottlenecks
and make investments in tools that previously seemed frivolous. Justify that collaboration tool or a larger automation
program. Push the controller to get rid of non-valued added T&E policies.

How would you gauge the impact of the virus thus Which of the following
far on your center’s productivity? is your most significant
75% business impact as a
result of the COVID-19
outbreak?

24%

7% 4%
3%
8%
We are still We have We have We are We have Other Decline in collections 6%
hitting all adjusted all prioritized missing deferred
our SLAs on our SLAs mission- SLAs transitioning Increased cost of operations 12%
time critical work new scope
but have to our Gap in ‘back office’ service
16%
deferred centers delivery/processing capability
other less
Supply chain disruptions 15%
critical
tasks, There has been no impact 41%
delivering
selective Other 10%
processes/
SLA

Source: SSON Survey conducted March 10-13, 2020

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What’s most concerning about Shared Services’ ability to deliver

for the business is the human implication of COVID-19. Even at the
outset of the crisis, almost a quarter of respondents acknowledged
that panic and general hysteria was affecting productivity. Others
report that manpower numbers are already impacted – as much
as 5% in a few short weeks. With a quarter-end close upon us in
many geographies, fear, less-than-conducive WFH environments,
and the requirement to work on laptops rather than dual screen
monitors may further impact business performance.

What are your major

BCP challenges?

29%
24% 23% 23%
20%
18%
12%
9%
5%

We did Our We cannot Our staff Our Our clients Our staff are Panic and Other
not have infrastructure shift work do not have connectivity do not permit infected; we general
sufficient and as alternate access and security off premise do not have hysteria is
time to hardware centers are to space environment operations sufficient affecting
mobilize does not also shut conducive is not (e.g., data human productivity/
allow people down to work sufficiently privacy) resources/ causing
to work from remotely equipped to manpower staff to take
home remote work unnecessary
measures

Source: SSON Survey conducted March 10-13, 2020

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LIMITED ARSENAL
OF BCP TRICKS
The speed at which COVID-19 has impacted
operations has put a spotlight on the lack of
preparedness. Standard Shared Services BCP
plans never considered the extent and severity
of a virus, nor the potential that its implications
would grind business operations to a global
standstill.

Respondents had overwhelmingly deployed the

work from home lever (95%), while those who
had the ability (17%) were pulling the trigger
on fall-over plans — sending work to other, less
impacted, centers wherever feasible. Fourteen
percent are deploying other resourcing strategies
such as staff augmentation, moving work to
third party providers or sending work to other
enterprise resources such as the retained team.

Which statements most closely Even with the deployment of these strategies,
Which statements
approximate yourmost closely
current
approximate respondents reported plenty of challenges
service delivery BCP delivery
your current service
including insufficient time to mobilize and
BCP (Business Continuity Plan)?
(Business Continuity Planning) ensuring that corporate policies and procedures
reflect a new reality.
17% 8%
Send work Deploy 7%
to other other Run Although WFH is the predominant solution,
centers resources
re more putting it in place was easier said than done. For
shifts
95% example, 29% reported that their connectivity
Ask staff to and security environments were not sufficient to
work from home permit remote work in light of data privacy, while
11% 12% said off premise operations were simply not
6% Other allowed by existing policy. The lack of hardware
Move and infrastructure conducive to WFH was cited
work
by 24%, while 18% of respondents stated that
back to
retained their staff simply did not have access to a
team workspace that supports remote working.
Source: SSON Survey conducted March 10-13, 2020

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LOOKING
FORWARD
As the implications of COVID-19 on global
services delivery are changing daily, respondents
are understandably not currently obsessed with
what impact this will have on global delivery
operations.
At the time of the survey, almost 60% of
respondents believed there would be no long-
term impact on Shared Services models, and
that ‘back to normal’ would be the most likely
scenario. Others (12%) see an imperative — or
opportunity — to recalibrate global service
delivery models, even changing the value
proposition of Shared Services by rethinking
what is transactional work and what should stay
with the business (9%).

Impact on global service  Few things done well

delivery operations ‘Nice to haves’ pale in comparison

No long-term impact; we will deal with the current
implications and then revert to business as usual
We will retain our model but
move some work back onshore
We will retain our model but move more work to nearshore
locations (i.e., shift away from offshore reliance on Asia)
We will more aggressively design and
implement Future of Work concepts
We will rethink our outsourcing strategy
to incorporate more outsourcing
to Shared Services leaders’ ‘have
to haves.’ It’s time to focus on
the priorities that drive business
59% outcomes — paying suppliers,
collecting cash, and managing
4% employees, for example. Stop
restructurings or other longer-term
transformation programs that were
3% predicated on delivering the ‘old
normal.’ You’d be surprised how
31% many ‘projects’ you have going on.
Redirect your resources to the
4% things that matter now.

We will rethink our outsourcing strategy

to rely less on less outsourcing 3%
8%
We will rethink what is transactional work
and what should remain with the business

We will accelerate our automation initiatives to

reduce our dependency on physical locations/humans 37%
We will rethink our global service delivery model 12%

Source: SSON Survey conducted March 10-13, 2020

What do respondents Although not to the extent

anticipate might change? Over
a third believe that they will
accelerate initiatives to reduce
delivery dependency on people
and physical locations, while
31% see themselves more
aggressively designing and
implementing Future of Work
of other changes in delivery
models, outsourcing and
offshoring were also on the
minds of respondents: 4%
expected to outsource more,
while 3% expected a retraction
in the amount of outsourcing.
Similarly, location strategy
Offshore/onshore/
no shore/no source?
With the virtual shut down of the
global services delivery model,
will lower cost locations lose their
luster? Will enterprises determine
that control trumps cost? Will we
finally see the promise of digital
Shared Services? Will providers
rethink their strategies? What’s
‘GBS Next’?

concepts, potentially rethinking could be affected as even at

employment as a workforce this early stage (mid March),
management concept. 7% of respondents believed the
model would evolve to move
more work near-or onshore.

8| TIP OF THE ICEBERG FOR TECTONIC SHIFTS IN SHARED SERVICES DELIVERY MODELS?
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WILL SHARED SERVICES

AS A MODEL ENDURE?
Understandably, right now respondents are not
spending much cycle time thinking about the
future of Shared Services delivery. However, as
the implications of the crisis on the economy
become clearer, enterprises will likely take a
closer look at the efficacy of the Shared Services
model.
Early on, respondents were generally optimistic
that the Shared Services model would endure,
with 19% seeing no change in operations after
the business digests the implications of the
pandemic. However, 24% see an enterprise-
wide Shared Services/GBS model as taking
on increased importance in services delivery;
while six percent anticipate a retrenchment of
the model, with work being moved back to the
retained team or delivered regionally as opposed
to globally.

What impact do you believe COVID-19

will have on global business
services delivery models?

52% 19%
No change
GBS / SSO
models will
become
increasingly 24%
digitized GBS / SSO as a
business
services model
will become
more important

5%
GBS / SSO models will
retrench and certain work
will move back to the
business / be centralized

Adjust your sights: Time to

change the global services
delivery value proposition?
The better, faster, cheaper mantra
may have run its course. Perhaps
we should be talking about
resiliency, agility and flexibility,
and refocus our attention from
‘run the business’ to being able to
continually ‘change the business.’
SUMMARY
Galvanized by this crisis, we may finally see Shared Services
organizations stop talking about digital and actually crossing the
chasm – aggressively automating processes in order to minimize
the implications of globalization on the supply of human labor.
Who knows what will transpire? To help practitioners cope with
what is an unprecedented crisis, SSON will take the pulse of the
industry at regular intervals and share the resulting practices.
Please check back, and – just as importantly – contribute to the
data when invited.

TIP OF THE ICEBERG FOR TECTONIC SHIFTS IN SHARED SERVICES DELIVERY MODELS? |9
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ABOUT THE SHARED SERVICES

& OUTSOURCING NETWORK (SSON)
The Shared Services & Outsourcing Network (SSON) is the largest and most established community of shared services and
outsourcing professionals in the world, with over 140,000 members.

Established in 1999, SSON recognized the revolution in support services as it was happening, and realized that a forum was
needed through which practitioners could connect with each other on a regional and global basis.

SSON is a one-stop shop for shared services professionals, offering industry-leading events, training, reports, surveys,
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TIP OF THE ICEBERG FOR TECTONIC SHIFTS IN SHARED SERVICES DELIVERY MODELS?