Q&A: Mike Colicchio, Celanese Hungary

SSON: In this current economic downturn it’s very important to keep robust lines of communication open throughout the business. Can you tell us a little about the steps you’ve taken at Celanese to enforce this?

Mike Colicchio: Of course. We’re carefully monitoring our overdues and looking for any signs of softness in our very structured collection process. I stay in close contact with our sales directors in the EU and we strategically determine proper collection protocol in these challenging times. Being a relatively new SSO our recent hires have received exceptional training and job-shadowing; however, being rookies they’re not as well-versed on the qualities of different types of customers. They also need to understand the histories of our customers, and even when the customer is also a vendor. This is sometimes a point of interest. I bring the sales directors to Budapest for a "learn the customer" day. To serve our customers we must understand their customers. This gives the sales organization leaders and the credit and collection staff an opportunity to set expectations and parameters, but most importantly it opens up even more the communication channels, which is tantamount to success today.

SSON: Obviously part of that is based on the need not to react too drastically to the economic downturn – but how can we in shared services know exactly what is "too drastically" and what isn’t?

MC: We can’t possibly begin to assess the depths of this global financial crisis. It’s not my role, nor is that the role of the shared service center. However, building the shared service center in Budapest and the companion improved processes and workflow software upgrades allows us the flexibility to quickly react to our sales organization’s need for information on customer trends, and other vital information: very specifically, customer payment trends. We have a large group of credit analysts and we measure credit file coverage with an enhanced sense of urgency these days.

SSON: As well as improving communication what other steps can shared services take to mitigate against the worst effects of the crisis?

MC: We really can’t influence the negative effects of this downturn – this is a business-driven result – but all we can do in the SSC is keep abreast of the trends, read the trades, maintain a heightened sense of awareness, while we adhere very strictly to a rigorous collection process. Again, understanding what’s going on in the markets is very important to us. Our business is very closely tied to the automotive industry, so with all the issues surrounding that industry these days, we have to be very very careful with how we extend credit.

SSON: Finally, other than increasing the importance of cost-savings, what impact will the current crisis have on the shared services model? For example, do you think that value-add is now a non-starter?

MC: Quite the contrary. The shared services model, developed properly, is a long-term sustainable cost saving, process enhancement and always in-season back office and accounting function that adds value every day. The challenge that I see is not to bury your head in the sand but to actively seek out opportunity to leverage the service offering and cross-functionality opportunities. We just kicked off a project to collect our non-trade receivables in the same manner and fashion that we collect our trade receivables. This is a working-capital-enhancement opportunity that developed from discussions in the shared service center. Stretch mentality is a big part of the Celanese DNA, and when you can leverage global relationships, clear responsibilities and a pool of talented, motivated, centrally located employees, nothing is beyond the realm of possibility. For me the shared service model is a winner in any economic time, but never as much so as when times are troubled.