Archives For outsourcing

By Anna Tumidajewicz, finance and accounting practice delivery manager, Infosys

Infosys delivers an innovative approach to talent management challenges. One of the key challenges that we successfully responded to was the transition from a shared service centre to a business process outsourcing enterprise for one of our key clients. In this project we had to shift our focus from the transactional processes provided for the client to offering higher-level finance and accounting services (such as audit, controlling, financial planning and analysis), as well as having increased our services portfolio, and streamlining and improving finance processes to offer higher quality solutions. It was an upward development curve opportunity for our employees, and for us, remains a requirement of a real blend of financial, management and business capability we need to deliver services of higher value. Outsourcing is a fast-moving, changing environment so on top of strong domain knowledge we need to develop project management, change management abilities as well as specialist skills, such as language competency, are also highly useful.

Solutions – the development curve in mature operations

The described challenge required from us strong and focused solutions that had already been part of the overall employee development approach. We find the following practices a successful way of staff development:

  1. Tailor learning processes to ensure their efficiency – We have established a dedicated leverage on F&A Centre of Excellence and global training programs to develop our specialist finance capability, but we recognised that it must be complemented by more targeted interventions at a personal level. We conducted extensively more than 150 training programmes based on the company’s strategic plans, as well as the needs of particular finance and accounting units and individuals. We also conduct an individual development needs analysis for our employees, which are a part of bi-annual employee evaluation. Our training function is enhanced by the pool of over 100 internal process and domain trainers separately developed as experts in particular areas. Additionally, we have created ‘The Practice Ambassadors Program’ giving access to coaching and mentoring, as well as more tailored development plans based on performance reviews. Ten per cent of our employees are covered by a higher education policy that relies on financial contribution to support their external educational activities. Our finance and accounting ‘high potentials’, leaders and managers are a part of the Leadership and Management Academy and our ‘Diamond Mind’ programme.
  2. Recognise the importance of experiential learning – In developing the required broader business and management capabilities, we have systematically established a secondment and rotation programme, supported by a formalised workforce planning strategy, which is connected up to personalised career paths, giving individuals a wider perspective on career and learning options.
  3. Proactively manage staff engagement in a change environment – We recognise the constantly changing environment in which we operate, so on-going engagement interventions are key; we use a wide range of development activities, reward and recognitions aspects, an open-door policy, as well as satisfaction surveys to gauge engagement. Crowdsourcing opportunities and staff workshops also allow us to continually receive employee input. The organisation is very focused on on-going employee social interaction through regular meetings, social events, diversity programmes, and corporate social responsibility activities. Engagement practices are reviewed on an annual basis and benchmarked.

This case study appeared in an ACCA report on Talent and capability in global finance functions. As part of ACCA’s qualitative research leading organisations shared their approaches.

By Arnold van Boven, director finance and accounting operation, Unilever

At Unilever we operate a hybrid model, using a number of BPO relationships to provide transactional finance activities, but also we are now setting up operating centres that offer finance services further up the value chain to the organisation to drive the effectiveness of our finance operations.

In terms of the talent challenge there are some issues from the operating centre perspective – our work is focused on higher value finance activities and, as we have moved in-country finance operations and centralised them, we have lost some experienced F&A people. So, trying to recruit that level of finance ‘capability’ and tacit knowledge into the centre is always going to be a challenge. It’s about counter-balancing losing the tacit knowledge in the retained finance function/in-country by the benefits and expertise you get from standardisation and centralisation in the operating centres. Our aim is to build and retain valuable deep ‘Unilever’ accounting knowledge in conjunction with centralised finance models, standardised finance processes and increased automation.

Solutions – ensuring balanced capability

  1. Think carefully about your location selection and recognise access to talent is a factor. We look at the major Business Process Outsourcing organisations as important strategic partners; we share the potential talent pipeline to bring in candidates with finance and management experience. Our operating centre location strategies always consider where the major hubs are to mutually benefit from the talent in the region in various stages of their careers. The quality of local universities is equally a factor in ensuring we get the right mix of talents and skills.
  2. Balance tacit knowledge of the business and operational and process expertise. We encourage mobility into the finance operating centres from country finance roles to bring deep Unilever expertise as well as bringing people in from other functions of the business to drive a better business understanding and help contextualise the role and purpose of the finance and accounting activities in the bigger picture. Equally we offer finance careers from our operating centres into the business for the best talents. Successful shared service operations need a tacit knowledge of the business but this must be combined with operational mastery, process knowledge and specific capabilities such as six sigma and lean.
  3. Think creatively about where your talent can come from. We have begun an open dialogue with other organisations in the market, in a particular location, to consider how businesses can work together to facilitate attracting talent to the area as a whole and also to help facilitate career movement between different organisations through more visible opportunities.

This case study appeared in an ACCA report on Talent and capability in global finance functions. As part of ACCA’s qualitative research leading organisations shared their approaches.

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By Deborah Kops, founder and managing principal of Sourcing Change

Over the past few weeks, it seems as if everyone in the accountancy world is talking about GBS, GBS, GBS. Shared services organisations encompassing one function in a few countries with a centre or two purport to be running global business services.

Companies with transactional accounting processes operating around the world declare that they are GBS leaders. Sourcing leaders managing an outsourcing deal or two are trying to link governance together under the guise of GBS. Procurement heads are dangling the notion of GBS in front of their bosses as a strategy to move up the proverbial value chain. Newcomers to shared services and outsourcing are even christening their first forays into consolidated business models as GBS. The chatter has become so pervasive, it’s starting to sound like cicadas mating in the summer.

If you take a cynical view of GBS, it’s almost as if changing the name of the processes and systems that serve the business, and putting as much of them as possible under one organisation will magically create new prestige and impact. With a new moniker, and more scope, will CXOs will suddenly be clamouring for GBS leaders—whose calling card is adept cost containment, reasonable customer service, some level of stakeholder management, and a track record of process excellence to join them, putting their two cents into every strategic decision.

But does organising under the banner GBS elevate the importance of business operations execution, making it more strategic? Will knitting services together really earn a seat at the corporate high table? Or is the value that business services ultimately delivers to the enterprise remain reliable, out of sight/out of mind operations? And, by the way, that’s no mean feat. As process operations become more sophisticated and industrialised, it not only increases cost-effectiveness, but boosts agility.

Any good corporate leader or manager aspires to create value for his or her organisation. There’s no doubt that the roles we variously group within shared services, sourcing or outsourcing leadership have as their mission to deliver consistent and predictable business processes that underpin operations to a range of corporate stakeholders by manipulating the levers consolidation, standardisation, process improvement, sourcing and technology enablement. But isn’t creating a reliable operating platform that delivers the ultimate means to an end – providing better service to the organisation so that they can get on with the business of being strategic good enough? What’s unimportant about taking over the management of the tasks critical to corporate operations to the next level, increasing efficiency and effectiveness, by performing them on a silent running basis?
There’s a difference between execution value and strategic value. I suspect that corporate leadership will look to GBS in any of its iterations as operations, not strategic direction; in fact, troll the internet for mention of GBS and the entries supports that observation: “GBS optimises the mix of resources, process acumen, and technology to deliver… services on an enterprise-wide basis to support business strategy” according to HfS Research. That’s still pretty important stuff.

It comes down to one word: service. The root of both service and servant is the same. Servants don’t dine with their families, and I’d posit that those who provide service don’t have a seat at the top table.

tall building, modern CFO

By Deborah Kops, founder and managing principal of Sourcing Change

If you think about our efforts to transform business functions through shared services and outsourcing, are we just trying to make them more efficient and cost-effective? Are we really tackling enough change to make them more relevant to today’s business needs? In effect, aren’t business functions as we know them obsolete, and changing them in-situ is just fodder for conference agendas, full employment for consultants, and topics for bloggers (such as yours truly)?

If you think about it, nothing much has changed in horizontal functions such as finance, IT, HR, marketing and legal for years. Sure, we tweak reporting lines – corporate versus business lines versus geographies; implement technologies to standardise; invest in “transformation” to gain incremental improvement; and change the delivery model through outsourcing and shared services, near-shoring and offshoring. But when it comes down to it, we haven’t really changed the relationship of these functions to the business. We merely focus on cost and efficiency of the same old delivery.

Contrast the dynamism of the so-called ‘front of the house’. Business lines constantly merge, spin off, or break apart in response to the market. Companies merge or divest in order to become more competitive. Yet we hold on religiously to the concept of standardising and consolidating business support platforms, thinking by managing cost we’ll add a lot of value to the business. By setting up shared services and outsourcing, aren’t we just moving the deck chairs to one side of the ship?

That’s not to say that cost-effectiveness and harmonisation are not corporate virtues, and do not create value. But when we focus on building generic platforms, maybe we’re missing a bigger bet. Perhaps it’s time to look at what component of business support functions should be close to or actually within the business. Perhaps, in the thirst for business model innovation, it’s time to admit that it’s conceivable that one size does not fit all. Mono-functional teams may not be our best bet.

If you are an avid follower of the daily HBR blog, you may have read Paul Leinwand and Cesare Mainardi’s 8 February post, Rethinking the Function of Business Functions. In it, the authors submit that “Wal-Mart doesn’t succeed just because of a strong operations group. It has built impressive capabilities that include logistics, inventory processes, buying standards, real estate practices and labour models — most of which it created for itself.” And the post goes on to cite Amazon’s ability to mix it up in new and different ways. In effect, the authors believe that we consider these companies great in part because they incorporated business functions into the business cross-functionally to create value.

The blog goes on to say that mono-functional teams are only oriented to the short-term, conflicting needs of all of their constituents. And, by implication, the value they create sinks to the lowest common denominator. There’s almost no ability to break out, or combine business support functions with the business in new and different ways.

Isn’t this true of shared services and outsourcing? The success of these models is predicated on consistency in structure, performance, service levels, and, most importantly, a customer relationship as opposed to a collaborative relationship. As a result, the perceived value is cost and predictability rather than problem solving and innovation.

Perhaps, after we go through a shared services and outsourcing phase which results in eliminating excess, it will make sense to tear it apart, moving processes closer to the business to create value. One day, sourcing just could be obsolete.