csc news Realização____ Uma empresa do grupo _______ THURSDAY September 29th 2011 YEAR 2 | No 22 Successful Shared Services Leadership Characteristics: Sustainable Energy By: Simon Brown ssonetwork.com How do you manage the peaks and troughs of staff energy and productivity? What should you look out for? Some easy tips to avert melt-downs, recognise the “strain zone,” and build a better team... page 4 Study Finds SS Executives Accelerate C-Suite Visibility By: Business Wire marketwatch.com Constant Care is a Core Tenet at Maersk By: Barbara Hodge ssonetwork.com With five shared services across the globe supporting Maersk’s world-wide shipping business, any systems failure would be costly. Kristina Beckendorf describes the careful planning that goes into contingency preparations. page 2 Executives who lead shared services organizations, designed to reduce overhead costs by consolidating administrative or support functions in areas such as finance, human resources and information technology, are increasingly accountable to the corporate C-suite. page 6 Shared Services: Putting the Right People in the Right Jobs By: Mary Driscoll scottmadden.com This is the fourth and final article in a series jointly developed by APQC and ScottMadden on the topic of Financial Shared Services. The articles are based on interviews APQC conducted with ScottMadden partner Brad DeMent, who leads the firm’s financial shared services practice.... page 8 Constant Care is a Core Tenet at Maersk By: Barbara Hodge ssonetwork.com With five shared services across the globe supporting Maersk’s world-wide shipping business, any systems failure would be costly. Kristina Beckendorf describes the careful planning that goes into contingency preparations. By: Barbara Hodge, Online Editor BH: Kristina, could you share the strategy underpinning Maersk’s Global Shared Services? In particular, how have you developed “business continuity planning” as a key concept? KB: We started our shared services journey more than 10 years ago, with the first service centers serving specific countries or regions only. In late 2002, we underwent a farreaching Global Strategy Review, and out of that came an initial strategy – enforced top-down – to drive offshoring on a global basis for all standardized transactional processes. We then set up global services centers, with a small corporate team in our headquarters in Copenhagen. At that time, we had four service centers, and we offshored only those services most aligned with our businesses – for example the forwarding arm and supply chain management service arm. Up to this point, we’d really been organized by site, and had essentially started with data processing, but over time we got into some more advanced processes. For example, we took on IT support and operation support for the actual vessel operations. Through this, we became much more closely involved with our customers. We don’t support “voice,” so it’s all non-voice. We do have some small teams that provide web support on our website, either through chat or phone, and then we have the dealer support, and some telemarketing activities, all of which are supported from India or here in Manila – but other than that, we don’t do voice. It’s funny, because when I look around, most of the BPOs seem to think that the easiest way to start BPO operations is by providing “voice” support. We always felt that “voice” is too sensitive, because this is really where we can differentiate ourselves, and engage with the customers to create an outstanding customer experience – so we never wanted to change that part of our customer service. BH: If a customer issue needs to be escalated – ie human intervention – where do you route that call? KB: Actually, we still have front offices in the countries Maersk operates in. BH: How would you describe your customer care concept? KB: Customer care is closely linked to our company culture. One of our core values is called “constant care,” and that originates from our founder, Arnold Peter Moller. “Constant care” is all about ensuring that we take good care of what needs to be taken care of today. Don’t try to push things off for tomorrow. Similarly, we proactively prepare for tomorrow – meaning that we try to look ahead, and to anticipate potential risks as they come in. So it was natural to look at contingency planning from the outset. There are a couple of different levels at which you can plan for contingency – for example, a flooding in one location, which means “local contingency planning.” That means, if it’s an entire part of the city that is out, some other site needs to take over. What we used to do then was make sure we’d established sufficient back up in our local agency office. However, we have outgrown that option now. Today, we transfer the work over to one of the other sites that is ready and prepped to take it on. Of course, there’s another contingency scenario, and that is if global IT systems go down, then all sites are impacted, and then you need to take different measures. BH: Has that ever happened? KB: To some extent, yes, last year. Do you remember when all those IT viruses were around? Some of our servers got hit. We had to deal with that. I think almost everybody was hit globally. To work around that, we had to go back to some manual ways of handling data, where we had to use a back up server and similar. That was an IT contingency, which needed different actions of course, and different contingency plans. BH: How do you differentiate services scope for contingency planning? KB: You really need to understand shipping a bit to appreciate this. In shipping, the data that we handle is critical. You can imagine, that when a vessel is in port, it’s pretty bad if it just sits there, waiting for plans, just because a site is down. We cannot afford that situation. So the principle by which we operate is that for all processes that are critical and especially time-critical, we spread them across at least three sites. Additionally, we have made great efforts to standardize these www.institutodegestao.com.br 2 processes as much as possible, and to document them all. And for all these critical transactions we run global systems, so that if any site goes down, another site can take over with immediate effect. BH: How do you test these processes? KB: We run tests regularly, depending a little on the process. It’s once a quarter for some, every half year for others. We run tests where we actually simulate that one of the sites goes down for a given process that we handle. BH: What have you learned from these tests? KB: I think the most important aspect is to actually conduct the test, because if you don’t test, you can have the best contingency manuals and procedures, but you don’t know if they will work until you run them. It’s like a fire drill. Also, when contingency scenarios happen, people need to react fast, and this is when the communication becomes critical. There will always be a certain level of shock or at least surprise. So you need to effectively program people so that they are more relaxed about the situation. Having gone through a similar scenario before, as part of a test run, helps. Like any process, “testing” is also a process, and you’ve got to practice it in order to improve on it. The other learning is that communication is everything. And you need very clear roles and responsibilities and governance – in other words who tells what, and to whom. It is absolutely key that impacted and involved stakeholders are informed as fast as possible, and with the relevant information. You need to ask yourself: How do I make sure that the right information gets to the right parties, through the right channels? Ie, you need to control information flows as effectively and efficiently as possible. You have to get people informed right away, but only once you really know the situation. Sometimes, on closer examination, even though some employee can’t get to work because of a typhoon or flood, the Service Level Agreement might remain unaffected. In that case you have to reassure your stakeholders of the situation being under control and no action being required from them. BH: How do you decide? KB: If we call for a contingency plan, there is a risk associated with that – it means that someone in another site takes over the work. The risk is that, since they are not used to these processes, errors may occur or some work may be overlooked. There is typically also a quality risk that comes with any contingency scenario. You have to be sure that it is the right person – with the appropriate role, subject matter expertise, experience, and authority – that makes the decision. BH: And how have you set up your contingency roles? KB: You really need to work closely as a team. We have formalized roles, and an overall site contingency manager, or contingency officer. Each of our departments here has a process contingency officer. At headquarters, we have a Global Contingency Officer. In the case of a contingency situation, all of these people are close to the operation and can make the best recommendations. At the end of the day, it is our top management who signs off their recommended plan of action and takes full accountability for it. That means responsibility not just for the process, but also for the people, because ultimately, if any lives are in danger, top management is responsible for making sure that we look after our people. BH: I assume that given your Asia-Pacific focus, this kind of local contingency planning is fairly important. We’re all too aware of the flood dangers that storms and winds can present in your part of the world. KB: Yes, to some extent. But I can also tell you that Copenhagen has just been flooded, and Germany and the UK were down with snowstorms last winter, so you can never say never, right? Our contingency planning is based on the fact that no customer in Germany should have their container or their documents delayed because of, for instance, flooding in another part of the world. We are now fairly well-trained in contingency scenarios because, especially during the Monsoon season, we do experience floods. I think, with the global climate changes, the weather has become less and less predictable, really. BH: Can you describe an example of when you had to kick in with your contingency plan? KB: Take for example the typhoon we experienced in July 2010, in Manila. There was a whole knock-on effect from that. First, the typhoon impacted our staff getting to the office. In fact, there was no heavy rain as with some other typhoons, but lots of trees were down and roads blocked. So although we advised our staff to come into the office, some were unable to, especially on the night it happened. As we run a 24/7 operation, that immediately impacted some processes. Then the storm caused a power outage, so certain areas were without electricity for days. It was really on and off, but mostly off. In our office, of course, we have backup generators that kicked in, but these are usually meant to run short periods, for a typical scenario where the city comes back on-line after a short while. This time, the generators were running for 24 hours, causing one to overheat – and consequently our server malfunctioned as the cooling systems failed. So, although our staff could now come into the office, they were unable to work – not because of the typhoon itself, but because of the knock-on effects. On the first night we’d already implemented contingencies for some of our processes that were on very tight SLA timelines, like two hours or four hours; we handed that work to our colleagues in India. We took the work back the next day, but again, had to declare a contingency on the following www.institutodegestao.com.br 3 evening. It’s one thing to take over a process – but quite another to transfer work mid-stream, when the team is not able to finalize a task, and someone else has to take over right where the other left off. Our employees were wonderful. Very committed. A lot was arranged over cell phones, and many found functioning Internet cafes where they could log into work securely. Although they could not access all of the data, they could at least help oversee the work that their colleagues in India were taking on. used to a lot of natural disasters. It impacts their daily living, and so they just have to handle the challenges in the best, most positive way every time. Successful Shared Services Leadership Characteristics : Sustainable Energy By:Simon Brown ssonetwork.com BH: For each of these contingency plans that you had to activate, was it always the same decision? In other words: stop operations where you were and transfer to India? KB: In principle, yes, but it was for different processes, because the one server that was down only impacted one part of our operation. Many of our floors were still operational, but that one server failing meant that we were not able to operate some processes completely on our own. Also, some of the processes have tighter timelines or more volume to handle on certain days of the week, because they support specific countries where a vessel departs from a given port on a specific week-day, for example. So on the other days of the week, there might mainly be “pre-work” to do. BH: You’ve been in Manila over a year now. Are you enjoying living in the Philippines? KB: Yes indeed. It’s very interesting to get to know the culture a bit better. The people are really service-minded, and caring. People here are really quite selfless, hard-working, and generally very positive. What most of our visitors take away is that people here seem to smile a lot – and this despite the fact that many are coping with different kinds of hardships. Most people lead a very basic life, although there is now a growing middle class. One of my colleagues explained it to me as follows: Whenever someone here thinks that there is something they could feel sad about, they just look around and see so many people worse off than themselves – so they don’t take themselves so seriously, but instead they look at the big picture. And so they are all right. Also, people here are _ How do you manage the peaks and troughs of staff energy and productivity? What should you look out for? Some easy tips to avert melt-downs, recognise the “strain zone,” and build a better team... Since April when we conducted a global survey to identify the characteristics of effective shared services leadership – good boss quality – we have looked at three key principles: 1. Having and positively communicating a clear vision for future success. 2. Taking time to fully engage with your team and your clients and proactively managing the change agenda. 3. Being an effective team boss – delegating, empowering, coaching and supporting your team to play to their strengths versus playing the traditional role of micro management and control. In the last of our deep dive follow-up articles, building on the Shared Services Leadership Survey we conducted globally via SSON in April, lets focus on what is often overlooked: 4. Creating a positive working environment based on trust, transparency, and with genuine work/life balance. This is all about the leader role-modelling and enabling a working culture in the shared services environment where a balance of energy, resilience to deal with deadlines, peaks, and high volume demand, can be managed effectively. So how do we categorise this area, this key principle for effective leadership, which sometimes feels like wrestling with something not quite tangible? You only feel it when you don’t get it right –that’s when you or your team experience burn-out. Is it work/life balance or life /work balance? Is it a soft touchy-feely topic with no business value, or is it building resilience for stronger performance, sustainable over time? My vote is that there is a strong business case for building resilience in your team and creating sustainable energy to www.institutodegestao.com.br 4 deal with the ongoing demands of change, high volume transactional excellence, and the ever present quest for continuous improvement…in all that we do. High achievers tend to set high targets for themselves and their teams. Conscientious individuals hate to say no to extra challenges, additional objectives, more opportunities to please the customer, or to stretch further the performance of the team and deliver success. There’s a big adrenalin rush when we start shared services… all that planning, then the Go-Live, the migration in of extra work from the business, the management of new vendor relationships. This creates a high energy feeling that, over extended time, can move: • from pumped to drained • from eustress (positive stress ) to distress Anne Pringle , a colleague at GSK, and now Occupational Health Manager for the London Olympics, advises that pressure is inevitable within our personal and professional lives, in fact, we need a certain level of pressure to perform as the below curve shows (see Figure 1). People perform best when they are in the “stretch” zone. It is inevitable, though, that you will tip into “strain” at some point. This is the zone where you start to experience signs and symptoms of stress. If this does not happen and people continue into the “crisis” zone, we tend to see exhaustion, serious health problems, breakdown in relationships/mental well-being, and burnout. It is also important to emphasise that people do not have a separate pressure performance curve for home and work. They both interlink, which is why it is important for managers to know their people as people, and not just as company workers. Figure 1: The pressure-performance curve Look out for these indicators – in yourself and also in your team: Performance • missing deadlines • errors • memory lapses Physical • sleep loss • heart and stomach problems Interpersonal • withdrawal • bullying • moody, irritable • sensitivity Other behavioural • increased use of alcohol, drugs, smoking, coffee • acting out of character Other strong Occupational Health advice tips include: Be open with your team about work life balance/resilience as an issue to address, encourage team and ultimately individual responsibility to ensure we: • Organise ourselves – Stephen Covey’s Urgency and Importance Matrix is a good tool to help prioritise our time. • Know our limits. • Learn to relax. • Give ourselves some space and regular breaks away from the PC or telephone. And: • If you feel yourself getting stressed, take a step back and have some time out – take a walk or listen to some music. • Go home at a sensible time – There is no record of anyone, on their deathbed, saying “I wish I’d spent more time at the office”. • Look after your health consciously. • Be kind to yourself. • Identify what causes you to feel stressed at work. Is it the work itself, your boss, demanding customers, unreliable suppliers ? Take steps to address the root causes. • If you are still struggling, see your GP or call the Employee Assistance Programme, if available. It is not a weakness to ask for help. Figure 2 – The balance wheel – encourage individuals in your team to map this for themselves – it’s a simple but truthful www.institutodegestao.com.br 5 diagnostic tool. To add to this occupational health advice I have developed these additional leadership tips, which I strive to apply: • Measure outputs not hours at the desk. Trust people to deliver, rather than check their every move or record their presenteeism. • Virtual working is ok – there are times when your team can work from home to balance and manage external factors. Technology enables this so easily now. [See also my article on Virtual Working Teams] • Recognise in yourself and your team when you have peaks and troughs of energy in your day. Every team has early birds and night owls – go with your energy. • When you have team meetings – provide time for regular breaks. Our concentration span is usually no more than 40 minutes anyway, so build into your meeting agenda breaks of 5 or 10 minutes every now and then. The body language of the group will usually signal when it’s time to do this ! • Often, in HR, we are keen to please, to help, to do things for our clients. That’s positive intent but being a pair of hands doesn’t get you where you want to be. And true business partners are able to contract and consult for service levels and set and agree standards, rather than chase the wishes of the client who shouts loudest. Sometimes we need to be better at saying “no” with a smile. Particularly where we have a self-service intranet and clients can be directed to go find the answer themselves, in a couple of simple clicks. • Yes is not always best – redirecting the traffic to tier 0 selfservice is a great win-win for the client and ourselves, freeing us up time to focus on added-value activities and outputs. • Teach them to fish – encourage self-service direct access. As the old proverb says: “If you give a man a fish, he eats for one day. If you teach a man to fish, he eats for life.” Teaching your client managers and employees to fish rather than giving them the fish is the difference between a traditional HR generalist, who absorbs administration and subservience, and a fully-fledged shared services team member, who sees every opportunity to enable rather than rescue their clients. Create a climate where fun and laughter are allowed –it’s a great stress buster to be enabled to share and show humour from time to time. Better to laugh than cry when the going gets tough. Confession: Burnout. It’s happened to me at times in my career, particularly early on, in my late twenties, Dinky (dual income no kids yet) phase, when carving my career and spending long hours at the office. Also, I remember that time just after Go-Live of the new shared services model, when all the euphoria of building the new solution transforms into the downside of needing to make the inevitable adjustments to process or resources to get the right fit, and we all get sucked into the habit of just staying on a while, to get things fixed. As a leader and as an employee we have all been there – when we feel overloaded, there are not enough hours and days in the week, or we are under-resourced. Think back to the bad times – when did you get closest to burn-out and why? What can you do differently now to avoid a repeat performance? What are the key learnings for yourself that you can share with the team? What stories can you share as examples of what not to do? Openness about these issues creates a culture of trust and can definitely lead to a team support network. This is where we help each other to build resilience and sustainable energy. Final Thought: Shared services is a journey and we evolve along that journey. Take time to enjoy the journey of life, be here in the day, rather than always striving for the end destination, which other than death does not exist, in any case. ________________________________________ About the Author Simon Brown has over 25 years experience in HR Management working in the change management, talent acquisition and talent management space, with a range of FMCG, B2B and Pharmaceuticals sector organisations including Duracell Batteries, GlaxoSmithKline, Premier Farnell and has successfully completed a 3 year change management assignment at Coca-Cola. Simon has recently left Coca-Cola to launch his own consulting business, specialising in shared services design and selection, virtual working, coaching and mentoring. He has been involved in the design and deployment of Shared Services four times since 1995, including vendor selection for outsourced partners. Simon has a strong expertise in selection and development of HR Shared Services teams and has worked with both onshore captives, off-shore, outsourced, and virtual working teams where a blended solution of retained and outsourced has been chosen. Based on his own learning Simon advises companies to choose carefully the right HRO mix for them relevant to their business profile and current situation. Simon is currently assigned to NCR as HR Shared Services Director, Europe Middle East and Africa. Study Finds SS Executives Accelerate C-Suite Visibility By:Business Wire marketwatch.com Executives who lead shared services organizations, designed to reduce overhead costs by consolidating administrative or support functions in areas such as finance, human resources and information technology, are increasingly accountable to the corporate C-suite. Executives who lead shared services organizations, designed www.institutodegestao.com.br 6 to reduce overhead costs by consolidating administrative or support functions in areas such as finance, human resources and information technology, are increasingly accountable to the corporate C-suite, according to a new Accenture study released at its eleventh annual Global Shared Services Conference, which is attended by nearly 300 executives from around the world. In fact, 59 percent of the shared services executives polled report to C-suite level officers, including their company’s top finance, operations, human resources and information technology officers. And, 17 percent of them report directly to the CEO. In a similar study completed by Accenture two years ago, only 8 percent of the shared services executives reported to the CEO. According to a report on the study’s findings -- “Trends in Shared Services: Unlocking the Full Potential” -- as their popularity grows, shared services programs are evolving, and they are being designed to deliver services that require more skill than basic administrative functions. Among the more advanced shared services organizations, the Accenture study identified the emergence of integrated business services (IBS) that leverage the company’s global corporate resources and contract with outsourcing partners to deliver costcompetitive one-stop services to their entire enterprise. For instance, one pioneering IBS organization cited in the report provides end-to-end support for sales and marketing organizations covering trade promotion management, consumer contact, digital marketing and merchandising initiatives and consumer and merchandise analytics, as opposed to performing a collection of individual functional activities such as sales order management, or contract management, or customer invoicing. Ninety percent of the companies represented in the survey have already added more geographies and markets to the scope of shared services they deliver. And, within the next five years, 49 percent of the executives said their shared services organizations intend to deliver innovation services as well as other value-add services, such as data analytics and research. Nearly half (48 percent) said their organizations would provide communications, treasury, legal and other services that are not typically part of the shared services mix today. “As shared services organizations demonstrate their ability to deliver greater strategic value to enterprises they serve and create awareness for the value they create by marketing it within their organizations, their reputation will grow and with that demand for their services,” said Paul Boulanger, managing director, Accenture Finance & Performance Management service line. “That demand is likely to cut across back office services and beyond, with the most successful of the shared services organizations being those that continually improve their processes and services while embracing new technologies.” To that end, the Accenture study found that high-performing shared services organizations continuously look for ways to improve. In fact, 42 percent of the respondents said they allocate 10 percent or more of their annual operating budget for continuous improvement initiatives. Currently, information technology is the type of service most frequently offered through shared services organizations, according to 75 percent of the executives. More than half (58 percent) said their organizations also deliver finance services, client-facing services such as billing and collections (51 percent) and human resources (50 percent). In the future, 42 percent of the executives said that computing technologies, such as cloud, will have the greatest impact on their organizations. As their clients’ service needs evolve, cloud computing may provide a platform for shared services organizations to scale quickly to meet business needs and still manage their risk mitigation responsibilities in a costeffective, virtual manner. Eighty percent of the executives said they are proposing flexible work arrangements for shared services employees who support their global organizations. These arrangements typically allow shared services employees to work from home, which provides these organizations a way to tap into skilled labor pools in a cost-effective way. And, more than two-thirds (69 percent) of the executives said their organizations began using outsourcing to fulfill their global service requirements within the first four years of establishing shared services programs. As shared services programs continue to evolve, the study shows many of these organizations are struggling with the fundamentals of achieving process excellence while elevating the quality of their service delivery to meet the demands associated with assuming a more strategic role as an IBS organization. Just under half (49 percent) of the executives surveyed reported that their shared services organization www.institutodegestao.com.br 7 had standardized its policies, processes and supporting systems; 26 percent had standardized the policies but not the processes and supporting systems; and 25 percent lacked the supporting systems. According to Accenture, the struggle to standardize policies, processes and systems may stem from the fact that 78 percent of the organizations included in the study define their processes at a global level but 48 percent still implement them locally. Standardization is necessary for process and service improvements. Looking ahead, social media is expected have an impact on shared services, according to 90 percent of the executives surveyed, with 57 percent suggesting it may offer them the opportunity for greater collaboration among employees and greater productivity. Nearly as many (56 percent) expect it to lead to improved client collaboration and service delivery and 43 percent said it may increase satisfaction among shared services employees. However, the executives are generally taking a “wait and see” approach, as they evaluate how to use the social media most effectively in a time of rapid technology change and varying levels of social media adoption. “What is clear is that IBS will define the next generation of shared services as top-performing organizations demonstrate the value they can contribute to enterprises they serve, as they become independent, end-to-end service businesses with C-level leadership that are viewed as strategically important to the enterprise as other operating units,” said Boulanger. About the Study The Accenture study, “Trends in shared services: Unlocking the full potential,” is based on qualitative and quantitative research, including a series of in-depth interviews with executives with three to five years experienced in the management of shared services organizations. Additionally, over 100 executives across 16 countries completed a telephone survey that delved into the trends and prospects for shared services in the years to come. Shared Services: Putting the Right People in the Right Jobs By: Mary Driscoll scottmadden.com This is the fourth and final article in a series jointly developed by APQC and ScottMadden on the topic of Financial Shared Services. The articles are based on interviews APQC conducted with ScottMadden partner Brad DeMent, who leads the firm’s financial shared services practice. This article focuses on determining the scope of shared services, changing roles for the finance personnel supporting the business units, identifying the skillsets needed in your shared services staff, and qualities of effective shared services leaders. The concept of shared services has been in the management lexicon for more than 20 years. But enthusiasm for process improvement and optimization in this area has waxed and waned—largely in sync with broad economic conditions. Recent APQC studies, including a member survey, indicate a period of renewed enthusiasm. The newcomers to the shared services model have a lot of pointed questions, while the pioneers are climbing further up the maturity curve. Of keen interest to APQC is the organization that, until now, has put off moving transaction-oriented administrative activity, such as payables processing, into a shared services model. What should the newcomer expect to gain? What challenges are inevitable? Looking for answers, APQC’s Mary Driscoll, the senior research fellow for financial management, conducted the following interview (the final article of a fourpart series) with Brad DeMent. Brad DeMent leads the financial shared services practice at ScottMadden Inc., a management consulting firm. He is also the leader of the firm’s Latin American shared services operations. DeMent has extensive experience designing, improving, and merging shared services operations. APQC: Let’s assume a management team is launching a financial shared services organization (SSO) for the first time. How do they best determine what work—and which people— should move into the SSO and what/ who should be retained at the business unit level? BD: Start with the following assumption: a number of senior finance and accounting personnel at the business unit level are spending more than 50 percent of their time doing lowvalue, transactional or administrative work. It tends to creep up on people over time, and they do not realize the extent of it. Spend some time specifically defining what types of work business unit staff should be relieved of. Then, conduct a broad survey to measure the amount of work, and determine www.institutodegestao.com.br 8 who is performing the work and at what position or grade. BD: All things being equal, yes. However, you have to be discerning about this. Some work, by nature, should stay decentralized. It helps to ask a few key questions: allocate capabilities or skill sets so that they can reorganize the work that remains into full head count increments. This may mean modifications to organization design and employee roles in the business units, as well as the SSO. On the bright side, all this can be a great opportunity to create professional challenges and career paths for people who were previously buried by transaction processing tasks. • Is the work unique and/or core to that business unit? • Does the work require detailed knowledge about the business unit? • Does the work need to be in close, physical proximity to the business unit (e.g., requires frequent face-to-face discussions)? APQC: One of the main objectives is to release finance people (inside the units) from time-consuming transactional work. But how can you be sure that these liberated people will transform into strategists or analysts capable of producing insightful decision-support? If the answer is “yes” to any of these, careful consideration is required before transferring the work to the SSO. BD: That’s where it can get tricky. It is certainly a mistake to assume that everyone retained at the business unit level can step easily into more strategic activities. It is important to understand that some people simply aren’t strategic or analytical in nature; and moving them in that direction is counter-productive. So skill assessments are needed in the SSO and also in the retained organization(s). The answer may be that the SSO has liberated enough transactional work to replace several non-strategic thinkers with one new strategic thinker. APQC: So, off to the SSO it goes? APQC: Looking at roles and job descriptions that remain at the unit level, what changes can be expected after moving transaction work into an SSO? BD: This touches a common concern: the move to an SSO will take away parts of people’s jobs, but often not always enough to warrant a full head count reduction. The fact is that people typically wear multiple hats, particularly in smaller business units. Someone may have payroll responsibilities as a portion of their job, but also have invoice payment processing or even core business unit work. So, a unit manager may logically ask: “What happens if I have to start paying a centralized service group to perform these services, but I can’t afford to lose a full head count? APQC: Wouldn’t that be ultimately more expensive for the unit? APQC: Once the management team knows what work should be done in the SSO, how should it determine the mix of skill sets needed in the SSO? BD: The first step is to categorize the type of work. Is it administrative, transactional, customer support, or analytical? The next step is to assign people to the types of work that fit their skills, which is what they naturally enjoy and gravitate to but are not necessarily doing. Most often, the plan calls for moving the majority of administrative, transactional, and customer support work into the SSO. Then you face a couple of questions: 1. What analytical work is strategic to the business units and should remain in the field? 2. Do the analytical skills reside in the field to accomplish this work? If the right alignment of skills to work does not exist in the business units or in the SSO, then it is best to search elsewhere in the organization, or externally, for an appropriate match. BD: That’s only correct if workloads, roles, and structures do not change in the business units. You cannot let that happen. So, keep the original goal in mind. The idea is to move transactionprocessing burdens into a place where they can be managed with more efficiency, productivity, and control. If some of this work is intentionally left in the businesses, maybe marked for later transition, it too should be assessed with a view toward consolidation. Unit managers need to figure out how to better APQC: During our first interview in this series, you stressed that an SSO, if it’s successful, will have a strong customer-service orientation. But I have spoken to a number of finance and accounting people who readily admit they are not “people pleasers” by nature. How can the SSO leadership team prepare for and mitigate that? BD: Training is certainly one technique. But before marching down that road, start by looking really hard at your people’s natural talents. You know the ones already that will thrive in a position requiring a genuine service orientation. You’ll only need a small but talented group of people in the www.institutodegestao.com.br 9 SSO to deal with the customers. Perhaps you’ll need to bring people in from the marketing group, the HR group, or from another organization where they had a service-related job. The point is that you need people that have experience and enjoy talking to customers and resolving their problems. Then, you can train these people to answer the financial questions. Prioritizing service culture over functional knowledge is not an intuitive approach, but I’ve seen it work well. There is an art to delivering good customer service, and it involves much more than delivering a quick answer. APQC: When it comes to the SSO leadership, presumably the ideal candidate would be someone who has that experience. Where can a CFO or controller find a good director of financial shared services? BD: For the organization setting up an SSO for the first time, the most important question is whether you bring someone in from the outside. This really depends on the desired startup speed and the resistance that you may be facing in the organization. In situations where you need a fairly quick startup and you don’t have time to bring someone up the learning curve or correct for mistakes, then it may make sense to look in the external market for a candidate with SSO managerial experience. If you’re looking to build a green field operation and people aren’t willing to relocate, then you will be required to look in the external market. However, we’ve seen situations where it makes sense to look internally. This is especially true when there is a great deal of customer resistance to the SSO model. If you can bring the right person in from the field to run the SSO, you will have a familiar face working with customers and reducing resistance. Over time, that person can learn how to become an SSO leader by attending conferences, gathering ideas on process innovations, and building networks with other SSO managers. Eventually, if you’ve chosen well, this SSO operator will learn the ropes of this unique role. regulations, accounting standards, cross-border charge-back regulations, country tax requirements, currency arbitrage, regional economic risks, political instability, and so on. APQC: When you observe a strong SSO leader in action, what do you notice right away? BD: I notice a group of motivated employees who are passionate about the work they are doing. Employees tend to adopt the qualities of their leaders. Strong SSO leaders are also curious in nature. They try to glean insights from the data streaming through the SSO. They are looking for new ways to analyze that data and deliver insightful decision-support to their customers. They are not satisfied with the status quo. Though it may seem counterintuitive, a strong SSO leader often possesses the qualities of a “general” as well as a “statesman.” They face tough customers demanding customized service on a daily basis, and they must be able to take a firm stance to defend the integrity of the SSO model. The statesmanship is often left to other arms of the SSO organization in early challenging environments. At the end of the day, the great leader ensures that the SSO is a vibrant environment that continues to add value to the organization while maintaining a motivated work force and satisfied customer base. ________________________________ ABOUT APQC For more than 30 years, APQC has been on the leading edge of improving performance and fostering innovation around the world. APQC works with organizations across all industries to find practical, cost-effective solutions to drive productivity and quality improvement. We are a member-based nonprofit currently serving more than 500 organizations in all sectors of APQC: What special skills does the global SSO leader need? BD: A leader of a regional or global SSO will need a few more skills than the leader of a domestic SSO. The person running either the global or regional SSO must have superb political instincts and be able to influence others to get things accomplished in a complex environment. Consider the Latin America region. An SSO leader for that region will have seven or eight diverse countries to serve. That means pushing an agenda with multiple country managers, who may report to different executives and are ultimately responsible for only their country’s operations. These country managers may have the final decision rights over SSO strategies in their country. Standardization takes on an entirely different challenge in this environment. So the global SSO leader must be sensitive to multiple cultures and how they interact with a centralized unit located in a foreign country. On a technical level, that leader must have a solid understanding of financial reporting Editores Conselho Editorial Rodrigo Lang Thaissa Lemos Vanessa Saavedra Caio Fiuza Eduardo Saggioro Vitor Marques Diagramação Jessica Müller Contato: pesquisas@institutodegestao.com.br www.institutodegestao.com.br 10