Global In-house Centers (GIC)

2018
For private circulation only Risk Advisory
 Global In-house Centers (GIC)

Contents
The GIC Maturity Model 4
Deloitte Modular Solution Framework for GICs 6
Brief Description of Solutions

•• Governance & Compliance 8

•• Process 14
–– Process (Operations) 15
–– Process (Monitoring) 22

•• People 24

•• Technology 28
How we have helped clients (Illustrative case studies) 30

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Global In-house Centers (GIC) Global In-house Centers (GIC)

The GIC
Over the last few years, more than 1000 Initially, GICs were driven based on cost and
multinational corporations have established Global talent arbitrage benefits that significantly helped
In-house Centers (GICs) in India to leverage the organizations in their business functions. In today’s

Maturity Model
nation’s highly skilled, low-cost talent pool and rapidly changing business environment, GICs are
reduce cost of ownership and delivery. This helps looking for better ways to deliver value. This has led
them to serve the fast-growing global and regional to evolution of the role of GICs on the ‘Maturity curve’
markets more effectively and efficiently. from cost or resource centers to centers of excellence
delivering innovation, quality, and strategic value.

The Maturity Curve

Resource Center Quality Center Global Delivery Center Innovation Center Market Expansion
The primary objective The focus broadens to The parent leverages The focus is on Center
is to reduce cost of improving quality of the captive to manage innovating for the The parent leverages the

Maturity
ownership of certain modular products and end-to-end delivery of parent’s business –the captive not just for global
business functions and/ services through process global products through GIC is responsible innovation but also local
or provide resource that standardization and improved coordination for conceptualization market expansion and
helps the parent scale its optimization with the parent and design and delivery of management of strategic
operations other centers new products local market expansion
and management
of strategic local
partnerships

Evolution

90s 2000-2010 2010-present Future Future

•• Emergence of captives •• Transition of business •• Emergence of Global •• Global skills hub for •• Global
•• Emergence of Indian IT processes to captive Business Services the enterprise transformation &
outsourcing providers centers •• Increase in breadth, •• Generating revenue innovation partner
•• Lift and Drop approach •• IT vendors’ increased depth and coverage of impact •• Integrated

Key trends
focus on BPO + services governance &
standalone BPO •• Emergence of CoEs management of
providers (Center of Excellence) capability center
•• Increased focus on and early adoption of ecosystems
efficiency and quality analytics
•• Emergence of hybrid •• Platform based
sourcing models services from service
and focus on global providers
delivery model
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Global In-house Centers (GIC) Global In-house Centers (GIC)

Deloitte Modular
Governance & Compliance
Financial Crisis Business Risk Business Ethics
Control/SOX Management Management Framework

Solution Framework
Assistance

for GICs Delegation of

Authority (DOA)
Standard Operating
Procedures (SOPs)
Fraud Risk
Management

Process Level Assurance

Co- Source/ Outsource Internal Audit
Third Party Claims Management
Employee Reimbursement Review Business Dashboards
Real Estate and Facilities Management Review
Management Information System
Process Transition Management
(MIS) Review
Operations Payables Process Review Monitoring
Compliance Framework Project Management
Contract Compliance
Cost Allocation Model Review Control Self Assessment (CSA)
Account Reconciliations
Employee Transportation Process Review

People Technology

Staff Digital / Robotic Data

Staff Augmen- Augmentation Training and ERP Imple- Process Cyber Analytics
tation Process Development mentation Automation Security
Review Advisory Review
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Global In-house Centers (GIC) Global In-house Centers (GIC)

Governance & Financial Controls/ SOX Assistance

Key Challenges / Focus Areas

Delegation of Authority (DOA)

Key Challenges / Focus Areas

Compliance •• Strengthening of control over key financial

reporting transactions
•• Compliance with statutory requirements
•• Framework for Delegating authorities
•• Improper delegation
•• Coverage of all transactions in DOA
•• Internal controls are ineffective and provide
inadequate assurance to the management

Brief Description of Solution Brief Description of Solution

•• Walkthrough of existing processes and sub- •• Reviews of existing roles and responsibilities
processes •• Data or transactions analysis/ profiling
•• Conduct Test of Design (TOD) •• Review of load balance & segregation of
•• Conduct Test of Effectiveness (TOE) duties
•• Identify process and entity level gaps, •• Assist management to identify personnel /
improvement opportunities, and mitigation designation of delegation
activities / plans •• Prepare DOA, discuss with management and
•• Conduct a workshop / challenge session with release
management / stakeholders •• Conduct workshops

Benefits Benefits
•• Control framework that enables to achieve its •• Processes comply with the requirements of
operational and financial reporting objectives policies
•• Increases accountability to detect and •• Ensuring the effectiveness of controls
prevent risk supporting the exercise of authorities
•• A structured monitoring program to achieve •• Transactions are not processed without
sustained SOX / IFC compliance adequate approvals
•• Board and management’s increased •• Defined roles, responsibility and
confidence in the financial reporting process accountability

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Crisis Management Standard Operating Procedures (SOPs) Business Risk Management Fraud Risk Management

Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas
•• Availability of up to date crisis management •• People Dependency rather than process •• Adequacy of framework to identify critical •• Adequacy of framework to identify critical
plan dependency risk affecting the organization fraud risk affecting the organization
•• A significant incident that could jeopardize •• Awareness of responsibilities & timelines •• Efficient risk monitoring and reporting •• Efficient risk monitoring and reporting
critical assets, reputation and/or financial •• Interface & integration between defined mechanism mechanism
standing policies & practices followed
•• Brand and reputation risk •• Standardization across processes and
business unitsç

Brief Description of Solution Brief Description of Solution Brief Description of Solution Brief Description of Solution
•• Preparation of enterprise crisis programs •• Perform process walkthroughs to •• Identification of business risks •• Fraud risk assessment
•• Testing GIC’s crisis readiness using crisis understand the “as-is” processes •• Assessment of risks based on discussions •• Developing key policies
simulations •• Perform gap analysis, identify the control with key stakeholders •• Defining control system
•• Responding rapidly to a crisis using gaps, improvement opportunities and •• Review of risk management process including •• Implementing and monitoring the
experienced crisis specialists communicate automation opportunities (monitoring & reporting of risks) effectiveness of controls
effectively to stakeholders during a crisis •• Document “to be” processes in the standard
operating procedures
•• Conduct workshops for employees to familiarize
them with the “to–be” processes
•• Evaluation of effectiveness of the existing policies
and procedures

Benefits Benefits Benefits Benefits

•• Crisis situation readiness •• Articulating clearly the purpose and flow of •• More effectively identifying critical risks •• An effective fraud risk management
•• Mitigating Reputational Risk information and documents for the to the organization and their potential framework will enable organizations to have
processes implications controls that first prevent the fraud from
•• Minimal business disruption
•• Enabling the introduction of preventive •• Preparing for the unexpected by developing occurring, detect as soon as fraud happens
•• Control over distress cost controls to replace backward looking reactive and respond effectively to fraud incidents
risk programs capable of identifying, tracking
mechanisms and post-mortem analyses and management preparing to adapt or when they occur
•• Aids in the integration of business processes address those risks
and facilitates monitoring of process efficiency
by defining realistic performance measures

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Business Ethics Framework

Key Challenges / Focus Areas

•• The “tone at the top”, including explicit moral
guidance is not established and extent of its
communication throughout the organization
is not adequate

Brief Description of Solution

•• Code of Conduct development, roll-out,
awareness and signoff
•• Investigation and action measures
•• Insider trading policies
•• Setting up policies for both Vendors and
employees
•• Global Market Policies

Benefits
•• Attention to business ethics promotes
business sustainability
•• Ethics programs align employee behaviors to
the management tone to the top, inline with
management vision and mission

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Process Process (Operations)

Co-Source/ Outsource Internal Audit Third Party Claims Management

Key Challenges / Focus Areas Key Challenges / Focus Areas

•• Inadequate / unavailable independent •• Processing of invalid claims
assurance that an organization’s risk •• Over / Duplicate payment of claims
management, governance, and internal
•• Absence of Supporting Evidences
control processes are operating effectively
•• Non-adjustment of advances
•• Payments without approvals as per DoA

Brief Description of Solution Brief Description of Solution

•• Walkthrough of existing processes •• Review of accounting of claims, policies and
and sub-processes procedures
•• Conduct risk assessment and prepare risk •• Identify samples to be reviewed
programs
•• Review of evidences relating to the claims
•• Identify samples and conduct deep dive
•• Review of approvals in accordance with the
reviews of the process, underlying documents
DoA
and transactions.
•• Identification of Gaps and process deficiencies •• Identification of Gaps, process deficiencies

•• Develop recommendation and corrective •• Assistance in remediation of Gaps identified

plans

Benefits Benefits
•• Effectively identifies critical risks to the •• Ensuring appropriate policies and
organization and their potential implications procedures are in place
•• Identifies opportunities for value creation •• Claims are claimed and paid in accordance
•• Preparing for the unexpected by developing with the existing approved policies
risk programs capable of identifying,
•• Appropriate controls and adequate SoD for
tracking and management preparing to
claims authorizations
adapt or address those risksEnsuring there
are appropriate monitoring and exception •• Ensuring there are appropriate monitoring
reports in place and exception reports in place

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Employee Reimbursement Review Real Estate and Facilities Management Review Process Transition Management Payables Process Review

Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas
•• Processing of invalid claims •• Adequacy of controls over vendor on •• Inability to Scale •• Over / Duplicate payment of invoices
•• Over / Duplicate payment of claims boarding/ selection •• Non - compliance to regulatory requirements •• Payment processing without adequate
•• Absence of Supporting Evidences •• Standardized and legally vetted terms and •• Employee / customer dis-satisfaction supporting evidences
conditions •• Non-adjustment of advances
•• Non-adjustment of advances •• Ineffective co-ordinations between functions
•• Approval of contracts in line with DoA •• Payments without approvals as per DoA
•• Payments without approvals as per DoA
•• Monitoring of contractual terms and
conditions

Brief Description of Solution Brief Description of Solution Brief Description of Solution Brief Description of Solution
•• Review of accounting of claims, policies and •• Vendor Onboarding review •• Prepare transition and mitigation plan, along •• Process review of accounting of claims,
procedures •• Contracting and Compliance review with list of regulatory requirements policies and procedures
•• Review of evidences relating to the claims •• Establishing controls for Transition •• Identify document requirement, payment
•• Review of SOPs and existing documentation
•• Review of approvals in accordance with the •• Concurrent testing of controls and fixing of threshold and DOA
•• Analyzing deficiencies
DoA accountabilities •• Verification of Purchase order/agreements
•• Reporting of Gaps and providing
•• Identification of Gaps, process deficiencies •• Post transition set up with the vendor
recommendations
•• Assistance in remediation of Gaps identified •• Reconciliation of asset counts •• Verify relevant supporting documents / Invoice
•• Monitoring of performance & payments
•• Ensuring continuity of operations •• In case of exceptional payments send to SOA
personnel for approval

Benefits Benefits Benefits Benefits

•• Processing of invalid claims •• Better control over maintenance expenses •• Comprehensive coverage of all critical •• Ensuring appropriate policies and
•• Over / Duplicate payment of claims activities procedures are in place
•• Enhanced controls over vendor onboarding
•• Invoices are duly authorized as per SOA
•• Absence of Supporting Evidences •• Seamless coordination between various
and paid in accordance with the existing
functions
•• Non-adjustment of advances approved policies
•• Minimal destruction to the ongoing regular •• Appropriate controls and adequate SoD for
•• Payments without approvals as per DoA
business activities invoices authorizations
•• Pro-active identification of transition related •• Ensuring there are appropriate monitoring
risks and mitigation plan and exception reports in place

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Compliance Framework Contract Compliance Cost Allocation Model Review Account Reconciliations

Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas
•• Implement regulatory compliance framework •• Total amount charged to the company •• Improper/ inaccurate allocation of cost •• Standardized process for account
or plan exceeds the permissible payment amount as •• Inability to make accurate/ timely decisions reconciliations
•• Proactively prevent regulatory non compliance per work order relating to cost •• Segregation of duties (adequacy of maker
•• Assess compliance frameworks for alignment •• Incorrect rates, absence of relevant •• Unavailability of effective/ accurate data for checker controls)
with risk appetite and strategic objectives underlying documentation decision making •• Non reconciling balances in accounts
•• Incorrect mark-ups •• Aged reconciling items in accounts

Brief Description of Solution Brief Description of Solution Brief Description of Solution Brief Description of Solution
•• Develop a Compliance philosophy and •• Contract management framework review •• Understand Direct / indirect costs involved in •• Define standard process for account
checklist, and document the roles and including assessing contract life cycle, providing services, project and skill set reconciliations
responsibilities Develop a compliance Identifying contractual process maturity •• Conduct analysis based on past data of •• Implementation and review of controls to
repository of applicable regulatory and level, Identify process gaps and develop employee utilization, growth trends and ensure completeness & accuracy of account
statutory laws recommendations schedule of charges for various services and reconciliations
•• Conduct compliance review by testing actual •• Identify high risk contracts, and review amenities •• Root cause analysis of non reconciling items
documents to identified non compliances operational and financial compliance at •• Prepare pricing template and take and aged items in accounts
•• Prepare report and discuss with relevant transactional level. management buy-in
stakeholders •• Develop recommendations •• Conduct workshops

Benefits Benefits Benefits Benefits

•• Documented approach to compliances •• Better visibility into operations and •• Accurate cost and profitability •• Standardized process of account
•• Continuous update on the happenings management of risks of third parties, •• Cost allocation model for future business reconciliations
reduced costs •• Elimination of accounting errors
•• Accountability for Compliances •• Accurate decision making
•• Reduced revenue and cost leakages
•• Escalation matrix for non-compliances •• Accurate and complete cost allocation
•• Deep understanding of contract terms
•• Improved relationships and increased trust
with third parties
•• Flexibility to ramp up/down assessments

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Employee Transportation Process Review

Key Challenges / Focus Areas

•• Inefficiencies in day to day operations
impacting employees
•• Processes are people dependent and not
documented
•• Dealing with unorganized vendor market
•• Non-compliances with existing contractual
terms and conditions
•• Accounting of transport costs

Brief Description of Solution

•• Detailed Employee Transportation Process
Review to identify process/ control gaps
•• Assistance for remediation of identified
process/ control gaps
•• Designing of Standard Operating Procedures
(SOP) for Employee Transportation Process

Benefits
•• Robust and scalable process documentation
•• Enhanced controls around routing and
scheduling
•• Enhanced controls around payments
•• Enhanced controls over compliance

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Process (Monitoring)
Business Dashboards Management Information System (MIS) Review Project Management Control Self Assessment (CSA)
Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas Key Challenges / Focus Areas
•• Availability of structured data for analytics •• MIS is not aligned as per book of accounts •• Adequacy of project management and •• Adequacy of internal controls policies and
•• Availability of information for decision •• Inconsistent application of policies monitoring mechanism procedures
making •• Deviation between MIS vis-à-vis business •• Project costing & monitoring of expenses •• Pre-defined accountability
plans, resulting into risk of non-achievement •• Delayed project delivery / project delivery •• Increase audit fatigue due to complete
of business goals not in line with expectations universe testing

Brief Description of Solution Brief Description of Solution Brief Description of Solution Brief Description of Solution
•• Identifies key matrices, performance •• MIS drawn in accordance with the books of •• Development of project budget and •• Develop control self assessment framework
indicators and key factors impacting accounts schedule and checklists
business performance •• MIS is in conformity with the existing •• Assistance in drafting RFP and Tender •• Review implementation and test
•• Dashboards provides critically identified practices Documents effectiveness of the framework
information on real time basis •• Evaluate consistency in application of •• Monitoring and reporting project •• Assistance in continuous auditing and
•• Provides insight and underlying for company policies execution monitoring
management forecast •• Identify gaps, develop recommendation and
take management buy-in

Benefits Benefits Benefits Benefits

•• Real time dashboards and data •• Accuracy in financial reporting •• Project management provides a •• Inculcates a culture of self-accountability
visualization for reporting •• Greater management reliance “roadmap“, foresee the exception and across the organization and reduces
•• Broader coverage and sharper focus leads to better management of the independent testing effort
•• Thorough check of the financials
projects •• Enables benchmarking business units
•• Provides key information for business •• Preventive check in place, to identify gaps
decision making and solutions •• Enhanced Effectiveness in Delivering against each other and against leading
Services industry practices
•• Improved / Increased / Enhanced •• Prioritizes independent testing efforts in
Customer Satisfaction high risk areas

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Global In-house Centers (GIC) Global In-house Centers (GIC)

People Staff Augmentation Process Review

Key Challenges / Focus Areas
Staff Augmentation
Key Challenges / Focus Areas
•• Mapping of ‑ definitions •• Availability of resources with required skill
•• Appropriate data access to contract staff sets to perform business operation

•• Contractor non-compliant with key statutes •• Significantly high training and development
cost for resource readiness
•• Bandwidth of existing staff
•• Increase in staff attrition

Brief Description of Solution Brief Description of Solution

•• Walkthrough of existing processes •• Resources with matching skill sets,
•• Review contractor agreements, KPIs, billing operational from first day of work initiation
and access levels •• Provides insight based on past experience
•• Identify samples and conduct deep from similar and different sectors
dive reviews of the process, underlying
documents and transactions.
•• Identification of Gaps and process
deficiencies
•• Develop recommendation and corrective
plans

Benefits Benefits
•• Vendor Management and disputes •• Lower turn around time, from recruitment
resolution on billing to job allocation
•• Compliance with key statutes •• Lower / negligible training cost
•• Contractor invoices are validated before •• Across sector expertise
payment.
•• Data access and data security
•• Enhanced control over monitoring of time
sheets

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Training and Development

Key Challenges / Focus Areas

•• Focused / customized training programs for
employees
•• Employee training needs are not identified
and acted upon

Brief Description of Solution

•• Training program designed as per
employee needs to enhance knowledge and
productivity
•• Training conducted considering real
business scenario and issues, making
employee equipped to perform in typical
business situation

Benefits
•• Increased job satisfaction and morale
among employees. Increased employee
motivation. Increased efficiencies in
processes, resulting in financial gain.
Increased capacity to adopt new
technologies and methods

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Technology Digital / Robotic Process Automation

Key Challenges / Focus Areas
Data Analytics
Key Challenges / Focus Areas
•• Process selection for Robotic Process •• Availability of structured data for analytics
Automation (RPA) •• Unavailability of information for decision
•• Development of ‘fail safe’ bots making
•• Change management

Brief Description of Solution Brief Description of Solution

•• BOT Control Architecture - Strategy, design •• Trend Analysis (comparison of the same
and review item over a significant time period to
•• Compliance Optimization & Modernization detect a general pattern of a relationship
between factors)
•• Application License Compliance
•• Outlier based analysis to identify events
•• Controls Automation
that are outside the scope of what is
•• Process and Access Control Design and considered a normal range and which
implementation could potentially lead to exceptions
•• Development/ modification of existing •• Exception based analysis to identify events
policies and procedures including new/
that clearly breach the business rules
revised delegation of authority
defined for a particular process
•• Review process design and accuracy of input
data provided to the robot
•• Post implementation special reviews
to ascertain achievement of business
objectives/ ROI

Benefits Benefits
•• Higher average availability than humans •• Real time dashboards and data
•• Increased Efficiency / FTE benefits visualization for reporting

•• Higher Volume Tolerance •• Broader coverage and sharper focus

•• Greater Accuracy / Risk Management •• Insight and foresight

•• Process Enhancement

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Global In-house Centers (GIC) Global In-house Centers (GIC)

How we have helped clients Assessment of compliance framework

(Illustrative case studies)

Objective Work done

•• Assis the Management in assessing Understand and develop

the India statutory compliance status •• Understood the nature of business through
as required under section 134 of the discussions with identified functional heads
Companies Act 2013 for GIC of a leading of the organisation
global financial institution
•• Identified statutes applicable to the
Company based on the nature of
operations
•• Discussed the list of statutes with each
functional heads to clarify the applicability
Benefits •• For the finalised list of statutes developed
questionnaire for each statute including
•• Platform was established for setting up the recent changes/amendments, notifications
mechanism as required under Companies etc
Act 2013
•• Discussed the questionnaire with the
•• List of Statutes which the Company was not stakeholders to explain the contents and
aware of and had to comply the expectations from the stakeholders
•• Incorrect / incomplete compliances
requiring corrective action from the
Assess and report
Company
•• Circulated the questionnaire to the
functions and obtained responses on
compliance
•• Obtained the list of completed
questionnaire from stakeholders &
prepared a compliance dashboard to
present it to the senior management for
continuous monitoring of compliance

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Global In-house Centers (GIC) Global In-house Centers (GIC)

Partner review for compliance and efficiencies

Objective Work done

•• Verify Company’s compliance with the revenue recognition Planning

requirements of the Securities and Exchange Commission •• Determine project scope
(SEC) and external auditors
•• Conduct Business Risk Assessment and
•• Assess Company’s Partner compliance status with operation Walkthroughs with key process owners
programs and contractual T&C
•• Evaluate efficiency of Company’s internal operational and
Fieldwork
compliance controls
•• Conduct walkthroughs with key process
•• Identify areas and opportunities for process improvements
owners
•• Potential Partner visits
Benefits
•• Perform analyses
•• Cost savings and timely completion of •• Complete tests of examination
consulting projects by addressing the
•• Interim updates to management
extra ordinary delays in implementation of
solutions and strengthening of monitoring
Reporting
•• Plugged leakages on account of favoritism
whereby a few partners were paid excess •• Review preliminary findings with business
commissions owners
•• Streamlined revenue recognition through •• Conduct close meetings with business
establishing documentation standards for owners
revenue booking and review mechanism •• Issue Management Report

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Global In-house Centers (GIC)

Contacts
Anthony Crasto
Partner | Risk Advisory
[email protected]

Chandrashekhar Mantha
Partner | Risk Advisory
[email protected]

Mahesh Ramakrishnan
Partner | Risk Advisory
[email protected]

Nitin Naredi
Partner | Risk Advisory
[email protected]

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