ITV: Overcoming Customer Resistance, Final Part

SSON News and Analysis
Posted: 07/09/2012

The second in the two part series; this presentation was delivered by Ian Butterworth and Louise Weaver of ITV plc at the recent Shared Services & Outsourcing Week in Budapest.

Click here for Part I 

Ian: The project initially started in, let me think about this, Feb ‘07, and we had 12 months on the project and then went live in July ‘08.

We looked at it from a few ways, so what we wanted to do was get experience round the table; people who’d been through this before. We had a solution partner, which was Deloitte: we had a build partner which was Capgemini, and then we utilized people within the business so ultimately those people could go on and use that experience going forward, and keep that knowledge.

Louise: We had a business plan in place in terms of the costs as well, in terms of what we expected it to cost. 

Ian: Yeah - which was blown out of the water, as these things usually are. So yeah, there was an awful lot of planning in there, but you know, because I was on the project as well, so looking back at that, did we plan enough? No, I don’t think we did. I think in certain areas we got it completely wrong, so for example the fact that we didn’t mandate training was the wrong thing to do. We’ve got basically anybody who joins ITV with the ability to buy, so anyone can raise a purchase order. Again I think that’s completely wrong. So we’re really struggling there. We’re turning the corner, we’re starting to get reports and things like that which help us break down these barriers, but it has been really difficult.

Audience member: So you’re planning as you go along?

Ian: Yeah, absolutely, when I said earlier, we’ve got five change managers at the moment who are continually looking at process and procedure.

Audience member: Which functions of the organization are you providing services in?

Louise: We’ve got Finance and Payroll, so within Finance we’ve got an R2R function, so management accounting, back office treasury, Group finance. We’ve got a payroll function, we’ve got an O2C; order to cash function in terms of the accounts receivables, we’ve got an Operational Systems Service Delivery, so systems side, the servicing side. Obviously the purchase-to-pay, so the Accounts Payable team. That’s it isn’t it?

Ian: Yes, five departments.

Audience member: Did you deploy any kind of quick wins ?

Ian: It’s quite funny initially because Dan - you’ll know  Dan, obviously - his initial reaction was "let’s pull up the drawbridge", so Fortress Foley started, didn’t it? And at the time we weren’t that engaged with our customer at all, it was just about trying to get through the processes, and get the transactions correct, so that’ s what we did for the first three months really. At that point we started to roll out, get engaged, get on the road, talk to different people, and then we’re talking about the two-way buy-in so you get your SLAs, your KPIs. In hindsight we’d have done that first. But we were too late in the day.

Louise: I think we’ve been firefighting for so long, haven’t we, so we’re just now getting out and about in the business, and we need to be getting out and about in the business, being more visible. But we have, we’ve been firefighting for the last…

Audience member: Was it considered a risk to actual scheduling?

Ian: I think the biggest risk that we got was the pushback from our production business. So whatever we tried to do, they always had answers and were quite vocal about why it wouldn’t work. Certainly with certain elements, and on my side, the purchase-to-pay side, they wrote seven pages about why purchase-to -pay doesn’t work. There wasn’t one comment in there about how it could work for them, so that was where - if you’re looking at broadcast, certainly starting at the production side they were really quite vocal about saying "we can’t make programs working in this control environment."

Louise: We had the experience where Dan went out on site that day - where did he go that day when they hadn’t been paid?

Ian: Yeah, so we were - what was the program? We were making a program just over the road from the main studios, and the basis was that we had an awful lot of freelance population that were being paid weekly, and for a number of different reasons we hadn’t paid any of them. So Dan had to go over and face off against these guys and he walked into the set past a load of people and sat down in the middle of a room. And eventually these guys started to walk back in and they were sort of walking in with baseball bats and things, you know…  So Dan being the man he is, he managed to sweet-talk them round, you know, and we did manage to pay everyone, but yeah, it’s been interesting.

Audience member: Were your customers ever able to form a group to articulate what they thought they needed, or was it all negative?

Louise: It was all negative, the majority of the customers out there in the business were negative, there was the odd FD or finance controller that was good and did have a few positive words to say, but the majority were negative, it’s like Ian said, a list of: "how and why we can’t do it" but no realistic solutions in terms of "if you did it like this it would really help us". They didn’t deal in facts; it was all noise.

Audience member: So given those comments, did you end up adapting any of your processes to the s of the business?

Ian: It’s not about adapting the processes; it’s about adapting and changing the mindset of the business. So we know the controls we’ve got in place work, and so the focus has to be from the other side, so when you’re planning a production you know months in advance where you’re going to be shooting, what your location is, and it’s just changing the mindset. So if they plan correctly know - and that’s what we’re working with them on - if they plan it correctly they can build everything through the systems and get everything done and achieve what they need.

Louise: I think that’s one of the things: the staff had to be really bold and thick-skinned, because in terms of the abuse they got, they couldn’t just roll over, they had to get them to comply with the processes, otherwise they’d never comply. Now we’ve got, what, 80% of the business raising POs? So I think if we’d have said "don’t worry, carry on doing what you’re doing, don’t raise POs," I think we’d never have got to where we are. So we have had to be strict, and say, "look, if you want them paying, you have to raise a PO." I think there is an element of standing your ground, saying "look, it may have been like that for 20 years, but we’ve got processes, we’ve got controls, if you want payments to be made, or you want your expenses paying, you’re going to have to come in line and adhere to the processes."

And I think the other thing we’ve found, like, Dan probably had about 20 grievances against him, but there was no consequential management within ITV, so they could give whatever abuse they wanted, but they were never disciplined for it. So we started escalating things to HR, and saying "look, we’re just not going to tolerate this sort of behavior towards our staff, or we will start to lose them." So they did start listening, and there have been a few individuals disciplined for their abusive and aggressive behavior towards us.

Audience member: Where was your sponsorship coming from?

Ian: it’s a great point - because if you are kicking off on a project like this you really do need the sponsorship from the top.

Louise: The Group FD did sponsor it, didn’t he?

Ian: He did, yeah. Unfortunately the Group FD’s now leaving… But…

Louise: I think the other thing is, people don’t seem to listen, whether it’s the Group FD or the CEO. I think there’s something like 40 per cent of the business actually open the CEO’s emails, so if they don’t listen to him when he sends out an email, what chance has anybody got further down the line? I don’t know if it’s just media or if the BBC find the same, but it is a very odd industry.

Audience member: Did you expect this kind of resistance when you started the project?

Ian: Not at all, not at all. I think as much as we tried to mandate everything, everybody was always looking for a workaround because they’re used to their ways of working, they’ve always done it this way, and you know ITV’s not really very good at change. It’s very red-tape controlled if you like, and people just didn’t get it.

Audience member: If I were to think about a bunch of artists and filmmakers and freelancers and stuff; that’s probably the worst nightmare you can have… So I’m not completely surprised by the reaction. And I was thinking, where would a sponsor, ahead of time, redress these things - because otherwise you have to through these things, it’s funny but it’s not so funny…

Louise: That’s it. Certainly from Dan’s experience, Dan is the business service centre director. He’s set up various shared service centers in the past, he’s been at Diageo, he set up the Marks & Spencer service centre, and he said he’s never experienced anything like ITV, and said that he could never have envisaged it.

I think I’d certainly have… The selling of it, I think obviously it was sold as a finance project rather than as a complete cultural change project. I think you need to do the cultural change within the business. I’d certainly have mandatory training of staff within the business; I wouldn’t give them the choice. I’d ensure that they all had to have the training. I I think I’d have restricted access: rather than having everybody have access to raise POs I think we’d have less users restricting POs. And I think the other thing we’ve found is we’ve basically replicated the past and put it into the new system, and I think with hindsight we should have had a lot more data cleansing and getting it right rather than just transferring it over. In terms of go-live, I think possibly we could have delayed the go-live. Because certainly things like data migration, certainly in my area, have caused massive problems. 

Ian: I think the other thing I would have done as well is have more communication with the business. Because I think communication through the start of project would have been good just to get that buy-in, and I think that’s where we lost out big-time.

Louise: I think certainly at the moment we’ve got the KPIs in place that we‘ve measured from Day 1.… We’ve discussed SLAs with the customers in the business. What we’ve found with SLAs is that they’re all there drafted but the customers are reluctant to sign them - I think because of the two-way thing, so we have reverse KPIs in there, so for instance "we’ll deliver all your balance sheet reconciliations but you need to clear all your outstanding items." And they don’t like the visibility. It’s as if we’re uncovering something. So we’re finding we need to get out more into the business. We’ve been to, in the shared service centre we’ve not been out in the business enough promoting it and because we’re based in Manchester and we’ve got some customers in Leeds, some in Manchester, a lot in London, we’ve got them all over the country, so we need to be more visible and now hand over the operation to the next level of managers, and for us to go out and actually sell it, and really get to the bottom of some of the issues.

Audience member: I’m just wondering if you can put your finger on a particular point in time that you could put your finger on or one event that helped you turn the corner?

Louise: I think when we went business-as-usual at the end of March. Year-end was hell, you know, December, year-end, the audit, lots of long hours worked, and I think the end of March we actually did see the light at the end of the tunnel, we’d turned the corner and declared business as usual at the end of March, and the volume of emails reduced, the volume of calls reduced, the abuse did reduce…

Ian: Thankfully, yeah… I think the other thing from me about when it started to reduce was probably the beginning of March for me, on the basis that the number of questions that were being escalated up to me were reducing, and also when the questions did arrive, we’d done everything from our side correctly, and then it’s usually the business that’s done something incorrectly as the result of a non-payment.

 

SSON News and Analysis
Posted: 07/09/2012

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