Service Industry Gets an Uptick From Recession’s Bottom

Most people do not realize it but the service sector of our economy in the US makes up the greatest portion of the jobs. Manufacturing is now the smallest well under 10% of the employment base. Retail is fairly large, but it’s nothing compared to the service industry. Having the service industry expand does indicate that we are coming off the bottom of the recession and things will be looking up from here on out.

Of course, we still have to worry about the commercial real estate market fallout, which will be significant and another huge hit on the banks, but the authorities, the fed, and the TARP monies are sitting on the sidelines ready to do something serious about it. Obviously, the service sector was hit hard as consumers in the middle class are spending less money going out to eat, and traveling. The hospitality industry has a huge chunk of service related jobs.

According to Industry Week in the first week of October 2009;

The ISM said the overall economic outlook remains clouded: “Even with the overall month-over-month growth reflected in the report this month, respondents’ comments vary by industry and remain mixed about business conditions and the overall economy. Services makes up the lion’s share of economic activity and employment, and is therefore critical to recovery from the long recession.”

The US economy cannot recover from the recession until the service industry recovers and starts replenishing those jobs that have been lost. As more and more companies see more and more customers, their profits will increase. They will have to hire back those workers they laid off. With more workers making a paycheck again, that means retail sales will go up, and therefore, manufacturing jobs will also increase because those retailers will need more inventory to replenish what they’ve sold.

This is a very good sign for economic recovery, almost as good as the stock market, which generally leads economy by 6 to 10 months, and it has been going up now for over six months. Please consider all this.

Taking Global Business Services to the Next Level

For those who have not read my previous post, “Moving from Shared Services to Global Business Services,” let me provide a quick summary. Shared Services (SS) is an operating model that has been around for decades. It enables function-specific resources (i.e., HR, IT, Finance, etc.) to be leveraged across an entire organization, resulting in lower costs with agreed-upon customer-service levels. Around the time of the 2008/2009 recession, greater demands were placed on the SS operating model and what evolved was Global Business Services (GBS). The GBS operating model offers better efficiency, wider geographic reach, and broader scope coverage, to handle greater regulatory scrutiny for the same or even lower costs. However, there are some obstacles to overcome to ensure the full value of the GBS operating model is achieved… which is the focus of this post.

State of GBS

Multiple surveys and commentary have been published indicating the widespread and increasing trend of companies moving from SS to the GBS operating model. An annual survey by the Shared Services and Outsourcing Network (SSON), one of the largest communities of shared services and outsourcing professionals, stated that nearly 70% of the respondents operate as a GBS or multi-function model. Although GBS adoption continues, we have also heard of examples of GBS initiatives not delivering the “promised” return on investment (ROI). In the first year, most initiatives seem to deliver a respectable 7-10% ROI, but what is concerning is that according to Genpact, a global leader in business process management and technology services, “as many as one-third of all such transitions fail to ever achieve anticipated cost savings.” Unfortunately, from my network of peers in this space, I personally know of examples where this has occurred. There are several reasons for this occurrence, so let’s discuss a few of the major ones.

ROI Shortfall

Fundamentally, there are a few main reasons why a GBS transformation may fall short:

1. Aligned Strategy and Governance – Many companies do not take the time to have ALL key stakeholders agree to an overall GBS strategy and governance upfront. Executive commitment is key.

2. Direct Linkage to Desired Business Outcomes – Misalignment between GBS Leaders and Business Clients on priorities, and/or not being able to adjust quickly as market conditions change. Alignment to client priorities is key.

3. End-to-End Scope Coverage – Only portions of an “end to end” process like Order to Cash are moved into GBS, without accountability (or a voice) to influence the balance of the “end to end” process not moved into GBS. “End to End” process accountability is key.

There are a myriad of other operational, process and technological constraints that impact success. Some of those areas include limited technology investment, an unclear talent management and acquisition strategy, under-resourced service and client management capabilities, to name a few.

Improvement Areas

So, what can you do to ensure that your GBS is positioned to get to the next level? As with most any enterprise transformations, it is critical to have executive commitment prior to moving forward. However, for a successful GBS transformation it is even more critical to have the CEO/COO and all the business and functional executives onboard, due to the potential enterprise impact. Obviously, there may be situations where select businesses or functions may be deferred (or even excluded) due to business model conflicts, but these need to be managed carefully so as to not encourage others to “opt-out.” Other improvement areas include:

1. Strategy – Alignment upfront and on an ongoing basis between GBS and Business Clients is critically important to creating value. If that is done, GBS is off to a good start. Some key strategy elements to “hash out” include short/medium term vision, value proposition, roles and responsibilities, decision rights, and governance structure.

2. Governance – Many companies prefer to not have a separate governance structure for GBS, but rather to add the responsibility to an existing structure. I think that is a mistake in the beginning because it is critical to get this right at the outset. Good governance establishes a clear mandate for GBS, removes board members from operational issues, and develops a separate “client voice” when business complexity requires doing so. In addition, as the GBS/Client relationship matures the concept of an enterprise process owners board could be considered, to help drive even larger areas of business value.

3. Scope – The discussion of scope is a topic that is covered upfront as part of the strategy dialogue, and remains an ongoing discussion at the Governance Board. It should be clear what migrates to GBS at the start, over time (as long as ROI and business value commitments are achieved), and what scope still needs further dialogue. There needs to be continual dialogue to ensure alignment, and to minimize any strategy changes especially as executive changes occur.

4. Service Management – Experienced GBS operations (of a decade or more) all seem to have a well-developed service management capability and view it as critical to their success. This team is initially focused on driving a consistent service delivery strategy across GBS, communicating operational performance and business value in a consistent/branded fashion to clients, and coordinating all the behind the scenes KPI measurement activities efficiently. However, as the GBS matures, this team shifts to more of a “services marketing accountability” driving services strategy, design, M&A migration, and new service offerings jointly with operating leaders and business clients.

If the above items are implemented, the chances of a successful GBS transformation are significantly enhanced.

External Perspective

A few years ago, I attended a conference made up of Fortune 500 companies interested in trends and best practices for functions and SS organizations. A large Fortune 50 company who implemented GBS over 10 years ago delivered the keynote presentation. I was “blown away” by how GBS had transformed their company, and how its scope had grown from Finance and IT to non-traditional areas such as Logistics and Joint Venture support, as well as delivering tremendous business value along the way. When you see the potential of GBS in action, it can be a tremendous motivator! Please take advantage of the learnings from others to help accelerate your ROI. For me personally, I did leverage the learnings from select conferences but, I also proceeded to do plenty of targeted benchmarking. We engaged more than 25 companies, with many outside our home industry. The primary focus was to share best practices, but also to get a deeper understanding of GBS optimization methods, and exchange learnings on similar “pain points”. If you are trying to improve your GBS, in addition to the above recommendations, I wholeheartedly suggest utilizing the concept of benchmarking to get some “fresh” ideas.

Next Step

In this article, I have only “skimmed the surface” in how you can take your company’s GBS to the next level. So, in my next post (3rd in the series), I will focus on one of the key improvement areas and do a deep dive on the “Importance of Strategy and Governance.”

Food Service Jobs for Felons – How to Find Jobs for Felons in the Food Service Industry

The food service industry can be a great starting point in your search for felon friendly jobs. It’s no secret that right now even non-offenders are finding it hard to get a job which means that it can be really difficult for ex-felons. It’s not all bad news though since there are certain industries that offer felon friendly jobs such as the food service industry.

The turnover rate for staff in the food and restaurant industry is very high, around 113 percent which means that they are constantly hiring new staff. Certain times of the year such as August (when college-age employees turn in their aprons and go back to their studies) are peak times for job applicants.

So what jobs are available?

Servers – food and beverage servers like waiters/waitresses, bartenders and baristas. You don’t need a degree to get a job as wait staff but you need good customer service skills. Servers work long hours and spend most of it on their feet. Tips can make up a good part of the servers’ income.

Managers – food service industry managers typically handle the day-to-day operations of the establishment and supervise the servers. Experience in the food service industry is the primary requirement to get a job as a manager.

Kitchen staff – chefs, cooks and other food preparation staff. Culinary degrees or training from a culinary school, college or community college are very helpful although not strictly necessary to get a job as in food preparation.

These are the main types of food and restaurant industry jobs that are typically available for felons. However, if you have a real passion for food then you aren’t limited to these jobs. You can start your own food business such as a restaurant, bar, weight loss food shop, catering business, etc.

For example, if you can bake the most delicious apple pies imaginable then that skill has a lot of potential for earning money. Start off small by selling pies to friends and relatives. Then if you want to pursue this further, check out places where you can sell pies such as your local food market or farmer’s market.

The food service industry has endless possibilities for felon friendly jobs so don’t feel depressed about not being able to get a job. The statistics show that the food service industry is one of the leading industries that offer jobs for felons. Employment in the food service industry may not be your top choice but it is a great place to start when looking for jobs for felons.

Public Relations for Business Services

Many small-businesses offer business-to-business services and they make their money on helping companies do what they cannot do in-house, but not all corporations want to outsource for business services. Therefore it can get a little tricky trying to market and advertise such a service business.

It therefore makes sense to do a little public relations in the industry sub-sector that you are in. If you are a generalist and work within a specific area with all companies then you will need local publicity and local community goodwill, which is not easy to develop either.

One great way to do public relations for business services is to write articles for the local business column in the local newspaper or write specific industry articles for various trade journals. Now, writing will not be easy but it gives you a chance to show some of your expertise and to put it out in the marketplace so people know that you are good at what you do and you know what you are talking about.

There really is no easy way to develop local community goodwill or industry goodwill, but giving away information in the proper format can help you attract a paying clients that you need. If you get good enough at public relations that in itself is a good business service that you can offer other corporations. Perhaps you might think on all this and let it sink it in 2006.