Operating Shared Services off the Beaten Track

SSON News and Analysis
Posted: 07/09/2012

 
At the forthcoming 10th Annual Shared Services & Outsourcing Week (to be held 24-27 May in Edinburgh, UK) Simon Cramond, Head of Shared Services at LIME (formerly Cable & Wireless Caribbean) will be bringing his considerable experience of international shared services and sourcing to bear on the topic of "Global shoring decisions: your long-term guide to locations". In advance of his presentation at the event, SSON held a Q&A session with Cramond to get a few insights into his SSC, based in Kingston, Jamaica. As we found out, running shared services in the Caribbean can be quite a different proposition from operating an SSC in some of the more established sourcing hotspots…

SSON: Simon, thanks for joining us today. Let’s kick off with a bit of info about your company: can you please explain a little about your organization - and give a bit of background on yourself and how to came to your current position?

Simon Cramond: I’m working here as an interim specializing in SSCs; I’ve been with Cable & Wireless in the Caribbean since February 2009. Cable & Wireless is the incumbent telco operator in the English-speaking Caribbean islands, covering 13 islands from Jamaica - the largest - through to Montserrat. There are approximately 3,500 employees across those islands, with over $1bn in turnover; C&W provide mobile services, fixed-line broadband internet and entertainment on a couple of islands, delivering TV. Cable & Wireless has a very long history; it was, essentially, the telecommunications company for the Empire - however politically incorrect that sounds! - and today C&W Communications, the company that was recently spun off, has operations in Panama and expanding elsewhere in Central America; it has the Caribbean; and other activities dotted all over which include, interestingly, Afghanistan. The SSC here is being built as part of a project to take the Caribbean from being geographically organized - having a finance department for each island - to being regionally organized, and this change is taking place for all the functions of C&W Caribbean, so IT network support, sales and marketing, HR: the whole organization is being moved towards a functional basis, and the deployment of SAP and the introduction of an SSC are part of that process. The project itself has been running for a couple of years now, and the component I’m working on - the SAP implementation and the establishment of the SSC - is due to run through until the end of 2010.

Prior to Cable & Wireless I’ve been involved in shared services with a number of different companies including Seagram, Universal Studios, electrical distributor Hagemeyer, Body Shop International, and COLT Telecom, and just before coming to Cable & Wireless I was working with the British Council.

SSON: What’s the headcount within your SSO at present?

SC: Target headcount in my area is about 100 for the SSC itself, and then about 17 to 20 people on various islands supporting finance and administrative tasks, and acting as the "feeders in" to the SSC. The SSC itself here in Jamaica principally handles financial reporting and accounting, financial administration of projects, fixed assets, accounts payable, bank reconciliation, data maintenance on SAP, and inter-company.

SSON: You’re based in Kingston, Jamaica, which is somewhat off the beaten track as far as shared services go! What were the drivers behind choosing that specific location?

SC: Initially the organization looked at a number of sites including Panama, Miami and Puerto Rico, but it was really considered that the SSC should be collocated on one of the 13 islands, and Kingston being the largest city in the English-speaking Caribbean made it a primary choice. Jamaica has a population of approximately three million; it’s also got a well-developed market for accountants and accounting services, so it was a natural choice as being a) the biggest labor pool; b) the largest island; and c) the largest operation inside Cable & Wireless Caribbean. I think the other alternatives of siting outside the region were discounted because it was felt that this ought to be a Caribbean entity run by Caribbean nationals operating in the Caribbean.

SSON: Operating in Jamaica has some unique aspects, doesn’t it, in terms of cultural implications that might not be in play in other locations? You’re going to be discussing some of these at the event; let’s take a look at one or two here. Firstly, can you tell our readers about one element in particular that may surprise many people: the local attitude towards prayer and the need for regular prayer meetings?

SC: Yes. Jamaica probably has per head of population one of the largest numbers of churches, and to one extent or another nearly 100% of the population attend church, or are involved with a church in some way. That’s had an effect on the SSC to the extent that it’s now quite common that when we start a staff meeting we begin with prayers, which are given by one of the members of staff. Whenever we have food in for a staff meeting someone will lead a blessing. A number of times we’ve had colleagues who’ve been taken quite seriously ill, and the staff have spontaneously organized prayer meetings on the floor of the SSC to pray for those people involved.

For someone coming from Western Europe where religion is much more of a personal thing, and where society is much more secular, one has to be very careful because when one works with people for whom religion is such an important component in their lives, one has to be very careful to pay due respect and recognition for the part that religion plays. Another thing I would say is that the quantity of swearing within the organization is almost zero, which for somebody who’s worked in an American company in times of high stress is very unusual indeed!

SSON: Have you had to retain, for example, a full-time priest or chaplain or similar within the SSC? Or is it a less formal structure than that?

SC: We have at least three deacons working within the SSC, and a variety of faiths from Seventh Day Adventists, Jehovah’s Witnesses, Catholics, Anglicans, Baptists, Presbyterians, etc; it’s usually one of the deacons who will stand up and lead the prayers. We don’t have a room set aside for prayer; that wasn’t considered necessary, since people will hold a prayer meeting on the floor of the SSC there and then, and this is considered quite normal.

SSON: OK, let’s move on to another challenge particular to the region. You’ve mentioned travel - both within and outside Jamaica - as being a special obstacle at times. Can you explain why?

SC: Again, coming from Western Europe where you can just get on a plane to go to most places, initially coming to the Caribbean the islands seem quite close to each other and therefore travel to and from a particular island shouldn’t be a problem. You then find out that actually direct travel between islands is limited; for instance, to get from Jamaica to anywhere in the Eastern Caribbean usually involves two or three flights. Typically this involves a flight to Miami which is the hub for the Caribbean, and then from Miami either down to the island concerned or to another island and then a third island flight. What this means is, actually getting out on the ground to support people is very expensive because there aren’t any budget carriers around and flight costs are a very large part of the travel budget. So one of the hidden costs of running the SSC here is the amount of money we have to spend on travel, when either there’s a glitch, or reeducation required, or any of the usual things when you have to go to the customer’s site and work with them.

It also involves quite a bit of planning, because although there is the CARICOM organization in the Caribbean, which is kind of like a minor version of the European Union, there are still quite strong visa restrictions between islands, especially between Jamaica and other islands in that Jamaican nationals require visas to travel to other islands; these can be either generic - for the life of the passport - or for the year; at other times they can be very restricted and getting hold of visas can take anywhere from four to six weeks, so for instance to go to Turks & Caicos a Jamaican national would need to submit their visa to the passport authorities, and because passports for Turks & Caicos are administered in the UK that means their passport has to be sent back to the UK to get formal approval stamped - and then returned to the Caribbean for them to make the trip. And when you consider Turks & Caicos is only about 500 or 600 miles away, it’s quite an effort to actually get out to go and see the people we need to see. When I first came to the Caribbean it wasn’t apparent to me just how expensive and how difficult it is to get between certain islands.

SSON: Is there any way of getting around those bureaucratic roadblocks? How’ve you managed to minimize that kind of hassle?

SC: What we’ve done is work through the staff to see which visas and passports they have. For instance, it’s easier to get into Turks & Caicos if you have an American visa than if you’ve just got a straight Jamaican passport. So we’ve identified staff who have got American visas. If an island needs support in an emergency or at short notice, we have got a number of staff identified who could get there fairly quickly. We have to be far more flexible in terms of who can support what, according to the dictation of terms, in a way that we wouldn’t have to be if we were, for instance, in Western Europe.

SSON: Are there any recruitment challenges associated with your location?

SC: I think the main one is that there are no staffing agencies at all in Jamaica. You can’t just ring up Manpower or Michael Page or someone like that and ask "have you got anyone qualified who could come and work next week?". That doesn’t exist, so short-term staff resourcing is amazingly difficult. If we get into a backlog and we need specific skills, finding people who can come and help us quickly is difficult. We usually have to go down to friends and family - so somebody who knows somebody who’s looking for work at the moment, or somebody who knows somebody who left the organization a year or two ago and is willing to come and work short-term. These are the things you have to look around for. You have to factor in the fact that you simply can’t let things get into backlog, or behind, because you’re going to be pretty stuck trying to find resources who can come in and cover. We do have agencies but not for accounting persons really.  It’s usually for administrative personnel.  Otherwise it would be the audit / accounting firms to assist in this regard.

I think the second thing is, the SSC we have - with the exception of senior managers - is 100% unionized (as are all the C&W operations in Jamaica), and there are three major unions that represent the staff. There is collective bargaining and there are a number of factors to deal with when working with the unions. This has a big influence on grades and remuneration, and the packages we can offer to staff coming in here. It also acts as a brake on promotions because things have to go through a certain process and a certain tiering of grades. For instance: we recently promoted someone to act as a team leader, and then found out that they will have to go through a six-month process before we can actually pay them the rate to fit the grade, because of the union arrangements.

The last thing is, when running recruitment programs, usually the only option is advertising. Some of the major accountancy firms will assist for senior-level positions, and you can run recruitment campaigns, but it’s quite an expensive way to hire. Consequently advertising and all of the administration involved with that has to be borne in mind. For instance, when we advertised for approximately 25 posts a few months back,  we were inundated with over 600 replies - which took quite a lot of time to work through, and to screen to get down to likely candidates for interview.

SSON: Simon, you’ve also talked previously of the region’s banking infrastructure posing certain obstacles. Can you go into any more detail on this?

SC: Sure. There are very few banks in the region that will operate on every island. And of the 13 islands on which C&W operate, only three have clearing systems. Consequently the ability to pay people electronically in domestic currency is rather hindered, because of those clearing systems not all the banks are members. The big knock-on effect of that is that physical checks are still the preferred method of payment and receipt across most of the Caribbean. It gets more complex; when one looks at certain islands, for instance the British Virgin Islands, you’re not talking about one island but three, maybe four islands; and you then find that the bank you can use on Island A isn’t really represented on Island B. So you start then having to use a variety of banks just to enable customers to come in and pay, and also to be able to pay your vendors.

The consequence of that is for the area C&W are using 30 major banks with probably about 150 accounts. It greatly adds to the banking complexity for cash operations and the more traditional SSC model of using one disbursement account and one receiving account isn’t really feasible in the Caribbean because it’s going to take time for the infrastructure to develop the levels of automation more common in, say, Western Europe.

SSON: Living and working in the Caribbean means having to cope with the threat - and occasionally the reality - of hurricanes during a good part of the year. Can you tell us about your disaster prevention / business continuity strategies and how they’ve been tested thus far?

SC: The organization as a whole has quite good business continuity plans for hurricanes - and also earthquakes. On the day that the earthquake hit Haiti - which is about 120 miles away -  the building that I work in in Kingston actually shook, and at the time nobody could understand why: there was a partial evacuation and people were wondering what was going on. And of course then the news came in from Haiti. So the organization refreshed its earthquake recovery plan. Last summer there were a number of practices for the hurricane plan, although we didn’t go to the full extreme of a Category Five hurricane, which is: go immediately to the shelters, do not stop for anything else; get there as fast as you can. Essentially we are reliant to a large extent on the technology infrastructure, and being a telco that’s quite useful…

There are a number of back-up data centers and back-up work centers on the island that we can go to and start using. We’re just finalizing our plans at the moment for our arrangements to get key staff to these centers. We’re fairly confident that we could maintain service up to a Category Four; I think for a Category Five we’d just have to shut down like everybody else on the island...

SSON: How have you had to work to overcome preconceptions among customers and other parts of the business? And how successful have you been?

SC: I think the first thing is that the concept of an SSC has been discussed within Cable & Wireless Caribbean for a number of years, and its scope has varied from time to time. I think when we first started there was an expectation from a lot of customers that we’d be doing a lot more than we actually do. For instance it was said at some point that most of procurement would be inside, most of tax, most of treasury - so when we did start there was a very common misconception that we were actually responsible for a lot more than we actually were.

We got round this by having scope discussions with various parties to try to establish exactly what they thought we were responsible for and why, and eventually got to it by having a communal workshop with various different parts of the business to go through exactly what the SSC did, what they did, and how all those interactions worked. That did create a lot of problems when we got started. It meant we had to spend an awful lot of time going round various people really straightening out what we did, what they did and how the SSC worked for them. We’ve recently done a customer satisfaction survey with the first group of users we went in with, and we’re very pleased with the results, so obviously the things we’ve been doing seem to have worked and it seems to have settled down.

I think another thing is that because of the fact that a lot of the heavy lifting on SAP is done by the SSC, it’s starting to be seen more and more as a very useful center of expertise for people to ask questions about SAP and "how do I…?" - which is great for us but the downside of it is, we start getting calls about how do people deal with their shopping carts for procurement, and other things outside our expertise. But hopefully people accept this as a disappointment rather than a failure!

SSON: All of these may sound like pretty hefty challenges for many people used to operating in more established service delivery locations but you’ve overcome them with aplomb in terms of the success of your organization. What do you think have been the secrets to your success?

SC: I think the secret of the success here is great staff; I’m lucky to work with  high caliber colleagues in Kingston. I think in terms of the quality of accountants my Jamaican colleagues are excellent. They have great understanding of IFRS, of process. The people I work with are very hard-working - and that’s not just in finance: I see people across the weekend supporting one another and working to get things resolved come what may. There’s a real "can do" attitude within the team here and within the wider Cable & Wireless culture here in Kingston that has certainly made things much more doable.

SSON: What lessons could other SSOs learn from your operation, from situations which they might not encounter elsewhere in the world but which could teach important concepts for their own organizations?

SC: I think the first thing is that you’ve got to do a big dive into the cultural issues. Coming into the Caribbean I thought that it was a homogenous culture and that there was for example such a thing as Caribbean cuisine, music etc etc. Working here I’ve realized that actually that’s not true at all. In some respects the perception of Jamaica among other islands of the Caribbean is actually one of apprehension. We’ve noticed it in terms of colleagues on other islands when we’ve proposed SSC opening days; some of them have been very very reluctant to travel to Jamaica, because there’s sometimes a perception that it’s a dangerous place.

I think another thing is that one doesn’t come across rivalries between different islands that have been long ongoing. And there are quite subtle differences between islands in culture and the way that people work with one another - or not at all - that one needs to pay attention to. These have a way of showing up in working patterns as well. I think again, coming from Western Europe, we all joke about the relationship between the British and the French and that kind of thing; in actual fact it’s much more subtle and insidious in the Caribbean than you would at first think. Certainly, were I to be setting up somewhere else I would pay far more attention to the intercultural differences between the SSC and the countries it would be serving, and actually think about how it might be getting in the way of providing great service.

Another thing I’m working through here is the simultaneously moving from geographic to functional management and onto an ERP, and deploying an SSC, and all of those things happening together make it a very uncertain time for people, and this tends to exacerbate the cultural differences.

SSON: All that borne in mind, what are your ambitions for your organization for the next few years? And how are you going to set about achieving them?

SC: I think for the center here it’s, number one, finish the roll-out of SAP which is always a challenge… I think the second thing is to expand service scope: people here are already talking about wanting to put more work into the SSC - which is great. I think one of the things we haven’t had which I’ve experienced in other places is, where an SSC sets up there’s usually a tug of war, there’s separation anxiety from local finance when it gives it up, and the finger of blame can become a problem. I think we’ve been really lucky here in that we haven’t had that much at all, and in fact the working feedback that we’ve been getting from the colleagues that we’re serving is really really good stuff. I hope that that will be built upon. There’s definitely scope for the expansion of the SSC - and I think the thing we’re now looking at is maybe getting the SSC to be a competency center for SAP skills, and actually formalizing that and taking that forward.

SSON: Obviously we’ll be able to hear a lot more about these and other topics when you present at the event in May, Simon: do you have any other thoughts on your location you’d like to share with us in advance of your presentation?

SC: I’d say - and this is going to sound churlish, but - actually working in a holiday destination is a lot harder than it seems! There can be the tug of regret as you leave the hotel and the beach behind and have to go to work… There’s the fact that every day is a nice, hot, sunny day and you’ve got to go to the office. It sounds like crocodile tears, but in some respects it’s harder to work in a holiday location than it would be if you were in, say, Warsaw or Manchester or the back end of beyond, where it’s just work work work and you just get on with it. I think that it’s a preconception that a lot of local people have when they see people coming in from outside the region, that "they’re just coming here on holiday" - and I think maybe in the past too many people have done just that. So one has to work pretty hard here with the locals to overcome prejudices on both sides.

SSON: Is that something that you personally experienced? Have you had to perhaps go even further above and beyond the call of duty to earn that respect?

SC: Yes, absolutely. Gaining the respect of colleagues in the Caribbean you have to work very hard at, because there is a view that  of "well, you’re just here on holiday, you’re just here for a little while: why on earth should I talk to you? You’re a waste of my time." So you have to work harder, you have to work longer, you have to be better, to earn their respect - to show that actually "you being here is helping us, so we will now work with you…" I think there is also a sense that persons within the organization have to train individuals that come in, and yet they are here and don’t get the same opportunities. 

UK_Brochure You can come and see Simon Cramond speak at the 10th Annual Shared Services & Outsourcing Week 2010, 24-27 May 2010, Edinburgh International Conference Centre, Scotland, UK.
SSON News and Analysis
Posted: 07/09/2012

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