Optimising financial processes

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Is GBS Ready to Weather the Post COVID Storm?

For over three months now, COVID-19 has been our one and only focus. It’s impact on our businesses, people, cash flow and future plans have dictated our everyday lives since early March. Yet, there is a bigger picture still; a substantial recession is predicted. Based on many measures, it is already here.

In the current environment, how can you prepare your organization to weather the post COVID storm? On June 25th we hosted a webcast with Steve Fox, former Head of GBS at Thermo Fisher Scientific, who answered this very question, along with how you can “move the needle” on GBS performance. This synopsis summarizes some of the key points of Steve’s talk.

Although COVID-19 has proven a difficult and disconcerting time, it has certainly done a great marketing job for digitization and remote working. We have done 4 remote month end closes already, and who would have predicted that in January? And, whilst many process flaws have been exposed, there is cautious optimism amongst GBS and Shared Services leaders. They are now looking ahead in three key areas as a result;

  1. Acceleration of digital transformation
  2. Efforts to increase agility
  3. Future of work – ‘the no-shore operating model’

As we navigate this recession, Revenue, Expenses and Cash Flow will absolutely stay front of minds. During the live webcast polls, 64% of attendees told us that ‘cash preservation’ is your number one priority at the moment. Alongside cash and cost containment, there is a real need to focus on:

  • Agility – faster responses are needed, so near real time data for decision making is key.
  • Technology for Efficiency – “sweat the assets” in existing technologies
  • Future of Work – what does the new model look like? How will it affect our business?
  • Raising the bar on Supplier Contribution – instituting supplier scorecards as a way to assess the health and value proposition of your supply base.

Steve described that COVID has not only changed business operations and results, it has also affected how we get to those results. It has been a wake-up call for digitizing any remaining paper based processes, such as those relating to checks/cheques, invoices and contracts. According to Genpact the adoption of e-Invoicing is set to increase threefold, along with other cloud-based technologies that support sustained distributed and remote work. Businesses are preparing to prioritize initiatives that will support the new way of working whilst keeping performance levels high.

Steve shared 5 strategic priorities that need executive attention now, and we gave some practical steps to deliver on these:

  1. Deliver a Cash and P&L Stimulus to the business
  2. Drive the agenda for value creation as well as cost reduction
  3. Exploit data for rapid decisions and response
  4. Drive to Optimize and Digitize processes
  5. Define the Future of Work

The audience rated them too, and you can see the results of this and other opinion polls we took in the webcast recording here

Thanks for reading…

Q&A Session with Steve Fox

We were delighted to be sent numerous engaging questions from those who attended the session. We thought the answers might be of interest to the wider audience, so we have collated the ones with common themes with greatest relevance below:

1. What were the main impediments to standardizing processes? 

I experienced a number of impediments to process standardization.  The key issues I had to overcome are noted below;

  1. Our multi-ERP landscape required me to implement technology solutions that were flexible so I could standardize nomenclature, work instructions, status codes, defect codes, etc. I called these solutions our “enabling technologies” so we could allow our processing teams to work in a common system regardless of source ERP.  I did not want to create a working environment where I needed experts in each ERP to process transactions.
  2. Our business stakeholders were used to the legacy KPI’s and the benchmarks of those KPI’s.  I had to recalibrate them to a new set of metrics and new benchmarks.  This required a great deal of influencing and being able to prove the value of standardized processes with common KPI’s.
  3. Educating the process owners who sat upstream and downstream from my Teams.  These individuals needed to be aligned with me on the value of the standardized processes and how they could gain value from the standardization.  This required a great deal of collaboration at a detailed level coupled with compromise on both sides to ensure end to end value was achieved. 

2. Steve, I like your prioritisation template for initiatives. What is the reality of making it work?. What is the hardest piece to get right?

It is simple, but covers important topics that are often missed. Encourage your team to come up with potential initiatives to meet your objectives and rate them using this model. The key thing is to break the assumption that benefits are delivered at the point of implementation. It is important to separate “time to realise benefits” from time to implement. There is always a lag, sometimes substantial. Focus on total costs, internal and external and ensure that the person that has to deliver on, or be held accountable for achieving the benefits, is part of the conversation.

3. I like the Daily Operations Dashboard you shared for ABP. How long did it take to implement?

The dashboard is part of a preconfigured Consider Solutions service, and is operational as soon as the data source is connected, typically in under 30 minutes, and when the initial data has been extracted and analysed, typically a couple of days.

4. $15m cash stimulus for zero cost? Can you explain? This sounds too good to be true

In every company we have looked at there are unidentified sources of cash (not just duplicate payments) and incorrect liabilities recorded. We have a service, that free of charge identifies these, we share them with you, and those that you don’t already have in progress to resolve, we get them resolved and updated with suppliers, and we get paid a fee dependent solely on the returns. So there is zero net cost.

5. Is a recession really inevitable or are we just talking ourselves into one? In our team 90% do not want to go back to five days a week working in the office.

They say “recession is a state of mind” but the technical definition is recognized as “two consecutive quarters of economic decline”. There is no doubt we have that. Most economists believe we hit recession in March. What with furloughs, rising unemployment, supply chain issues and continued social distancing, not to mention public fear, reduced economic activity is generally regarded as a certainty. CFOs are reining in cash, some industries are permanently damaged. I don’t want to wish myself into recession, but as a leader, it is probably irresponsible not to have an actionable plan which drives growth, even in a dampened economy.

With regard to home working, I think there are definite trends. Some never want to return to an office, some cant wait to go back 5 days a week and some want a balance. I think the business issue is “what is right for our business” and it might vary across functions and roles. Just because people prefer working from home, doesn’t necessarily mean it’s the right answer in all cases. I am particularly concerned about “collaborative learning and innovation”, which in my opinion, is reduced by distance.