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Complex Outsourcing Relationships PDF

18 Pages·2016·2.01 MB·English
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Complex Outsourcing Relationships: Managing the Million Dollar Honor Code Assurant Abhishek Breja Vice President: Global Delivery Office Akash Gupta Director, Sourcing Strategy EY Sudarshan Choudhury Senior Manager sig.org/eval Complex outsourcing relationships – managing the million dollar honor code Presentation 19 October 2016 Presenters Abhishek Breja Akash Gupta Sudarshan Choudhury VP ⎯ Global Delivery Director ⎯ Global Senior Manager – Office & Transformation Delivery Strategy Advisory Services Strategy Assurant Inc. Assurant Inc. Ernst & Young LLP Managing the million dollar honor code 3 Assurant Inc. Assurant provides specialty protection products and related services to safeguard against risks. With a strong commitment to service, sophisticated technology and an array of flexible tools, Assurant builds solutions to meet customers’ needs. Assurant is a global company with approx. $30b in assets and $6b in revenues.* Housing: Working with mortgage lenders, property managers, manufactured ▶ housing firms, auto finance companies and insurance agencies, Assurant Specialty Property provides client-centered solutions to protect homes and personal property. Lifestyle: Specializing in providing extended service contracts and other risk ▶ management solutions, Assurant Solutions offers a wide range of products that protect appliances, electronic devices, mobile phones and family finances through preneed insurance. Assurant has leveraged outsourcing as a key pillar of its operating model and has an annual spend of approx. $200m on outsourced services. * As of June 2016 4 Managing the million dollar honor code Ernst & Young LLP Building a better working world 150 41k $7.3b countries Advisory revenue professionals Americas EMEIA Asia-Pacific Japan 14,000+ 18,000+ 5,500+ 1,000+ Advisory Advisory Advisory Advisory professionals professionals professionals professionals Managing the million dollar honor code 5 Outsourcing is core to Assurant’s operating model for serving its customers Background Assurant works with global service providers to source multiple services ► (e.g., IT, customer service, core insurance processes). Global delivery model is a key component of Assurant’s operational strategy. ► Challenges Vendor proliferation ► Non-standardized, non-centralized and opaque governance ► and sourcing strategy Adoption of leading edge practices for operational innovation ► (i.e., robotics, analytics and digital) Rigor on value realization ► Managing the million dollar honor code 6 Outsourcing strategy and governance group (Assurant): overall charter Manage risk Compliance risk ▶ Contractual risk ▶ Financial risk ▶ Strategic/ ▶ relationship risk Performance risk ▶ Global Vendor Effective sourcing selection and governance strategy contracting Protect economic value Maximize value ▶ Enterprise-wide Vendor selection Monitor, measure from outsourcing sourcing strategy and deal structuring and control Reduce cost ▶ in collaboration aimed at mutually vendor and Modernize deal structure ▶ with business beneficial relationship deal value Optimize service level ▶ agreements (SLAs) and KPIs Value tracking and ▶ business case mgmt. Managing the million dollar honor code 7 Target “803 : 80% visibility > 80% under governance” > 80% fully governed Current status Target (2016) ▶ Spend amount? Visibility ▶ Vendor metadata? $140m $160m (Spend knowledge) ▶ Service profile? ▶ Client profile? ▶ Compliance risk Under governance $60m ▶ Contractual risk $128m (Risk governance) ▶ Financial risk ▶ Performance risk ▶ Maximize deal value $102m Fully governed $30m ▶ Modernize deal structure (Value governance) ▶ Optimize SLAs and KPIs ▶ Value assurance Cost Benefits Typical savings: Mature governance at an annual cost ▶ 10 to 30% for existing deals < 6% of spend under management ▶ 25 to 70% for new outsourcing 4% enterprise sourcing office (ESO) + 2% all other spend. Industry benchmark is 6–12%. -EY Experience Managing the million dollar honor code 8 Value leakage in outsourcing contracts due to ineffective governance Value leakage due to ineffective governance Lost Efforts productivity and duplicated unnecessary change orders Issues not managed Performance below Service expectations providers aligned to wrong goals Opportunities 10–15% value loss untapped Operational challenges 15–25% value loss Performance challenges 5–10% value loss Portfolio mgmt. challenges A B C D E F G H Total potential Net value value gained gained from from outsourcing the outsourcing relationship relationship -EY Experience Managing the million dollar honor code 9 Tenets of effective outsourcing governance Tenets of effective outsourcing governance tn ss e emeganam ecnamrofr tnemeganam laicnaniF tnemeganam tcartnoC enisub dna noitpmusntnemeganam esac margorp dna tcejorPtnemeganam selbareviled dna seusstnemeganam ecnailpmoc dna ksiRtnemeganam gnahc dna pihsnoitaletnemeganam e o I R P C Innovation, optimization and transition management Governance can help achieve cost savings and add value beyond contract compliance by access to data and information to further transform the relationship Managing the million dollar honor code 10

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Assurant Inc. Sudarshan Choudhury. Senior Manager –. Advisory Services. Ernst & Young LLP. Managing the million dollar honor code. Akash Gupta.
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