Pulling in the Data at Credit Suisse

Barbara Hodge
Posted: 07/09/2012

In Brief:

  • Most improved metric in SSO: PO Coverage, driving procurement compliance
  • Current ERP Platform: PeopleSoft
  • Current customer geography and functional scope: EMEA, Supply Management & Finance
  • Favourite pearl of shared services wisdom: "If we don’t take care of our customers, someone else will."
  • Why is Eastern Europe a unique location? Cultural and physical proximity to Western

"No-one really calculates whether it is worth taking a 2% discount to pay 14 days earlier. People like us, in the COEs, may work out that in fact it’s not worth doing. We have the information required to work this out; we are the ones who own it, who manage it, and we can share it with the client in order to influence their decisions. So we are moving from transaction processing to decision support."

Maciej, could you outline your operations to us? How is Credit Suisse leveraging global shared services to support the business’s success?

At Credit Suisse, there are three global bank divisions: private banking, investment banking, and asset management. We’ve built a shared services structure across all of these to provide high quality corporate services in support of Credit Suisse’s vision to become one of the world’s most admired banks. Our shared services organisation is established across three main delivery centres, called Centres of Excellence. They are not centrally managed but they all report directly into the businesses, which means they are closer to providing decision support and involved with strategic business decisions. The COEs provide services that are particular to each of the three divisions, but we also have overarching operations like Supply Management, IT, HR and Finance that support all divisions.

So do you run separate shared services operations for each of the three divisions you mentioned from each of the three locations?

Yes and no. Take private banking; if this division wants back office support from one of the COEs, it can get it. But procurement, on the other hand, cuts across all three divisions of our business and supports the whole bank.

What is your role?

I’m currently focusing on transforming the way purchasing is done at the bank. We’ve been planning a new initiative for a couple of years now and have just launched a full-blown procure-to-pay project. Initially, we focused on transforming the procurement organisation itself – implementing one standard application worldwide, separating various types of expenses, working out what should be expensed through the travel and expense management systems, etc. We have rolled this out in one of the regions already. Based on that experience, we will be taking strategic decisions to influence the cash flow of the bank and to increase the days payables outstanding. We are also tracking other metrics that will provide much-needed intelligence, as right now this is pretty much fragmented across various countries.

I’d like to ask you a little more about these metrics, Maciej, because we are seeing so much interest in data analysis, right now. How are you approaching this? What’s the challenge in getting the data together? How could companies improve this?

If you look back at why various shared services centres were set up across the globe, the basic driver, of course, was and perhaps still is labour arbitrage. The simplest operations were outsourced or delivered from different locations. People started creating various statements of work and they were very focused on just delivering to their statement of work and calculating the metrics that were in there. They did not see the world outside their operation. So if they operated from A to B, they weren’t interested in what happens prior to A or what happens after B. Right now, as we are getting more and more processes into the centres – and these are not necessarily the simple operations anymore – we start connecting the dots in between the various operations and we see that in order to continue developing and growing we have to shift from pure transaction processing into providing valuable information for decision support. I think this is the next step for shared services centres, and BPOs, across the world.

So how do you do it? Well, you need to ask yourself the question, "What kind of additional information can I give my client so that he or she can take the right decision?" Looking at accounts payable, if I share on-time payment metrics with my client, how does that help him? It just tells him whether the service he is paying for was delivered correctly or not. But, if you now consider this data alongside procurement data, you can calculate a lot more. You start with "days payables outstanding" and then you calculate the impact of increasing payment terms by one day. That generates additional cash flow benefits. So we can help the business drive operations because we provide the right information, come up with the ideas, and have the right people.

Another example relates to early payment discounts. No-one really calculates whether it is worth taking a 2% discount to pay 14 days earlier. People like us, in the COEs, may work out that in fact it’s not worth doing. Maybe we’ll be saying, "All right, if somebody offers us a discount to pay 14 days earlier it needs to be at least x% because the cost of capital is simply too high for us otherwise." We have the information required to work this out; we are the ones who own it, who manage it, and we can share it with the client in order to influence their decisions. So we are moving from transaction processing to decision support. The next step will be that we are asked to take on more work and perfect it, because we have proved that we have the capability.

What stage are you at with regards to the kind of data analytics you’ve just described?

I am still at the planning stage but it’s just a matter of time until I have the systems stable enough and the operations running smoothly. The next step is to get the right resources to do this analysis and drive projects across the company.

And will this necessitate a new role? Or do you imagine that it’s something that could be incorporated into every role?

That depends on the size of your operations. I have seen companies like HP create a huge organisation purely for data analytics – I mean thousands of people! What’s really important is what you can do in the short term. I believe that if you hire the right people, with the right level of understanding, then you can do it with the resources you have got on your team. But once your organisation grows and your scope expands, it will be useful to have a separate group of people segregated out to do this, because they’ll need to look across the various functions and think creatively. It may not be so intuitive to connect the dots. You may have to connect marketing with finance and HR data, and then you need somebody who has got the ability to look top down at all the operations available in the centre.

Barbara Hodge:Thank you very much Maciej.

Barbara Hodge
Posted: 07/09/2012

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