Q&A: Simon Newton, Kimberly-Clark

(Following are excerpts from an interview SSON recently conducted with Simon Newton, Vice President North Atlantic Finance & Shared Services at Kimberly-Clark, on the firm's past, current and future services delivery strategies.)

SSON: Please briefly describe your initial services delivery strategy.

Simon Newton: From inception, our services delivery strategy was tightly tied to our business strategy. We launched our North American captive shared services center in Knoxville, Tennessee in the 1990s, and our European captive center in Brighton, UK in 2001. We also have smaller centers in Latin America and Asia Pacific, but as they don’t yet fully operate as true shared services centers, I won’t focus on them here.

Until early 2006, our North American and European centers both had a linked but not centrally-dictated ERP strategy, and both used SAP, but there were separate instances. Further, the North American shared services strategy was based on a functional center of excellence model, whereas our European strategy was highly process-oriented with a pan-European focus. At that time, they really operated supporting separate regional businesses.

In 2006, we realized a compelling business imperative to innovate more quickly, shorten our go-to-market cycles, and establish global branding by moving to a North Atlantic business organization. We collapsed our North American and European SSCs at the same time.

SSON: What is your current services delivery strategy?

SN: The establishment of a North Atlantic mega-region was one part of our global business strategy. At the same time, we embarked on outsourcing across a number of business support areas. This was intended to: 1) free up funds to support North Atlantic business innovation and marketing; and 2) enable us to focus our attention on driving new capabilities, harmonization, standardization and improvement within our retained captives. In early 2007, within a two-month period, we entered into outsourcing agreements with five different outsourcers for IT infrastructure, application development, procurement, payroll and other HR processes, and parts of finance.

Although each of our outsourcing contracts are managed by four different functional leads, we are increasingly working closer together to share best practices, resources and approaches among the outsourced processes and our internal captives. Cohesively, the new services delivery organization is named the Business Support Delivery Group. And we now have a network of four centers – Knoxville, Brighton, India and Romania – to support our service delivery needs.

SSON: What is your future services delivery strategy?

SN: The preponderance of jargon aside, the key word in services delivery is services. For example, in finance, we manage cash, provide information, keep our business compliant, and are responsible for administration. That said, our future is about accelerating the provision of relevant, timely, accurate and – most importantly – integrated business information.

SSON: What ‘words to the wise’ would you offer to other mature services delivery organizations?

SN: Beyond the essential ‘align your services strategy to your business strategy’, the watchword is innovation to meet your real business needs. Outsourcers don’t innovate. So you must build your future services delivery strategy around lack of innovation in a third-party environment. While the boundaries of what is captive and what is outsourced will shift, the shared services concept will always be a hybrid. Whether through collaboration or direct-line reporting, you must build and allow for much stronger internal collaboration among various support functions. That’s where Kimberly-Clark is heading.

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