Simplicity always wins: Building a corporate function’s operating model based on the “Guide, Deliver, Receive (GDR)” framework

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How to further develop a company’s corporate functions by defining the best suited delivery model as a mix of Retained Organization, Center of Excellence and Shared Services.

As today’s market environments are more competitive and less stable, organizations are urged to put emphasis on fact-based decision-making as well as greater agility and flexibility. Corporate functions such as HR, IT, Finance, or Controlling with increasing efficiency, quality and cost targets need to achieve a high degree of process standardization, centralization and automation. Therefore, companies are continuously enhancing their operating model, which reflects who has which responsibilities and how to execute them. The “Guide – Deliver – Receive” (GDR) approach is a proven and pragmatic methodology to support a process-driven organizational transformation of corporate functions.

The “Guide – Deliver – Receive” Framework – a pragmatic view on corporate functions

To further optimize the corporate functions’ operating model, we focus on following building blocks: guiding Headquarter (HQ)/Center of Excellence (CoE), delivering shared service organization and receiving retained organization.

Guide – Center of Excellence/HQ:

“The visionist” – Strategic, guiding and process competencies are centralized either in the company’s HQ or one/more CoEs. The guiding organization leads by steering the global/corporate function following a strategic roadmap, defining goals and targets or managing global budgets. Furthermore, experts are defining function-specific global standards and policies (e.g. strategy, data governance, compliance or competence hubs), leading transformation initiatives and continuously driving improvements through further standardization, innovation and automation.

Deliver – Shared Services Delivery:

“The driving force for efficient and high-quality delivery” – The shared services organization can deliver human or virtual services or be a hybrid model of both. Along the received guidance it operates processes, services and tasks for and with the retained organization, business or regional units. The mission of the SSC is to ensure high quality delivery for a standardized service and product portfolio while realizing process and cost efficiency potentials. Furthermore, SSC organizations continuously increase the level of standardization and automation to reach the maturity stage of integrated business services, delivering client-focused, value-added services to the global organization.

Receive – Retained Organization:

“The internal client” – The retained organization provides strategic advantages such as specific local knowledge (e.g. regulations, expert knowledge), physical presence or further aspects such as language or cultural fit supporting the global delivery. On the one hand, the retained organization is the main receiver of shared service delivery, but it also either places requirements for the shared service delivery or is consulted by the SSC in case of specific questions, issues or escalations.

The GDR-Framework’s main building blocks in a Purchase-To-Pay example

Illustration 1: The GDR-Framework’s main building blocks in a Purchase-To-Pay example

The doing – how to define an optimal responsibility and process split using the GDR approach?

To design or enhance organization and processes, we apply the GDR methodology combined with a structured process analysis. A process-driven corporate function target picture is built using industry best practices and benchmarking as well as process design workshops and focus interviews with management and corporate function experts.
The GDR methodology is an efficient and pragmatic approach to define clear responsibility and process splits between the guiding, delivering and receiving organization via a simple and ambitious two-step evaluation using proven activity assessment criteria (see overview below):

  1. Why not centralized? – An optimization-oriented discussion is conducted, based on structured analysis and industry best-practices with centralization potentials. A pre-defined assumption that certain processes should be centralized remains valid until plausible reasons are objectively presented. This pragmatic and radical approach ensures an objective, goal-oriented discussion.
  2. Why not deliver? – In a next step, processes that can be centralized are evaluated to define an optimal responsibility split between the delivering organization and the HQ/CoE to leverage specific expertise or cost/ efficiency potentials.

Two-step process split approach

Illustration 2: Two-step process split approach

Results: What are an organization’s benefits using the GDR approach?

Our GDR methodology clearly shows that simplicity does indeed always win. It enables a fact based and process-oriented discussion while providing a simple, pragmatic and ambiguous approach. Process experts and decision makers are integrated in the process, which allows to leverage expert knowledge and to reach a strong buy-in across corporate functions, business divisions and within the HQ. The GDR approach has a proven track record in projects as a highly efficient tool for organizations across industries. Combined with deep process knowledge and industry experience, it enables your organization to build up an individual, validated, most effective Target Operating Model in a short period of time.

So start asking yourself today, “Why not centralize?” …

This article was written together with Katharina Hirsch and Laura Fiedler.

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