Redeploying your Shared Services Talent

SSON News and Analysis
Posted: 07/09/2012


Interview with:
Nadia Chughtai
SENIOR HR GENERALIST
Citi Operations & Technology EMEA HRr

Gyorgy Pasztor
SENIOR HR PARTNER
Citi Shared Service Center Budapest

Peter Szanto
Head of Citi Shared Service Center Budapest
Citi Business Services

Cti’s shared services center in Budapest is still relatively young.mLaunched just two years ago, it now employs 180 staff and provides classic Finance & Accounting and HR services, across 52 countries of the EMEA region for all of Citi’s business units— consumer banking, corporate banking and private banking.

"CHEAPER" IS NO LONGER ENOUGH

Citi’s objectives in building its shared services three years ago were not unlike those of many others: to gain wage arbitrage and financial benefits as a result of a low cost location. Today, in light of the financial crisis, these objectives have changed. Being cheaper is no longer enough. Citi’s Business Services group is being asked to shift up a gear. Innovation and process improvement are now the order of the day. And Budapest is taking up the challenge.

Having already reaped the rewards of "low hanging fruit," Business Services is now being challenged to generate greater efficiencies from its operations. This translates mainly into increasing the speed of transition for those businesses not yet having migrated into shared services and continuous process improvement on the existing processes, as Peter Szanto, Head of Citi’s Shared Service Center in Budapest, explains: "Our key focus now is to reduce the transition cycle for transferring work into our center, thereby increasing efficiency for the organization as a whole. Specifically, Citi’s businesses still operate on a number of different legacy systems, which slow down transition. Our end goal is to get them all onto one "personalized" Oracle P2P system. Of the 52 countries we cover from Budapest, 15 are already on this new system, and of these, 10 are already transferred into the end-to-end process. This means that five countries still need to transition. This is what we are focusing on right now—bringing the still outstanding countries into our center as soon as possible. And as we have built up our scale, senior management expects us to bring these countries in much faster than before. On the other hand we have to make sure we are reviewing our existing processes and continuously improving them with further automation or reengineering in
order to be more efficient."

REDEFINING VALUE

It’s all about value in today’s market. Says Szanto: "Our first priority now is to move up the value chain. This means: transitioning the highly transactional activities to our existing global processing center in Manila, thereby gaining further cost advantages, and stepping up the analytical expertise within our Budapest operation which means greater benefit to the organization overall. So as transactional jobs are transferred out, we plan to transfer in more complex processes—the kind of processes that might not have been considered two years ago."

"This strategy of re-allocating processes will make Budapest a value added shared service center—a kind of "staging post" prior to migrating to a global utility. Services supplied will be language- or time zone dependent, highly complex, and will require special knowledge; or the processes might be ‘broken’ and need greater expertise. The learnings that emerge will increase the shared services team’s value to the organization." A key enabler of this new model will be the skill set of the shared services team. Citi’s Business Services has set itself high standards. But raising the bar and aiming for higher efficiencies impacts the employee engagement strategy.

"Our retention strategy is focused on building the skill set the Shared Service Centre needs for future growth" explains Gyorgy Pasztor, Senior HR Partner at the Budapest center. We need to continue to support our staff in growing to meet the challenges of the future and in correctly placing staff in roles that maximize their potential and meet their career aspirations" Engagement and morale is crucial to Citi’s shared services team, especially during the transition. Leadership is placing emphasis on close, frequent, and honest communication, as Pasztor explains: "We have been honest with staff about the future plans for the shared services centre, including where the impact may be moving processes away from Hungary and also where we need our staff to step up. We have found that a key part of building our staff engagement with the strategy for the shared services centre is to articulate the career development opportunities arising from the more complex and customer facing processes coming our way"

CONNECTING MESSAGES

Leadership plays a crucial role, not just in managing expectations, but also in communication. In today’s world, your staff is able to pick up on even the smallest piece of news that hits the street. And most of this creates uncertainty. Citi’s leaders are fully aware that they cannot ignore this information source, and are actively working with it, as Nadia Chughtai, Senior HR Generalist, Citi Operations & Technology EMEA HR, explains: "One of the things we are more conscious of now is that our staff read negative news from the external press. So we do a lot more to address this, particularly around putting these messages in context and providing a balanced view." Part of Business Services’ communications strategy has always been town hall meetings run by senior business heads that explain the ‘state of the nation.’ Now leaders make a more conscious effort not only to meet more frequently, but also to reference what is being heard in the external market. "We are making a conscious effort to connect the high level message with what people hear on the ground," explains Chughtai. "So, for example, Peter will be responsible not just for getting his staff to take part in town hall meetings, but for proactively leading discussions on what they hear there and helping staff identify how they can make an individual contribution to the challenges we face."

CAREER OPPORTUNITIES

Business Services leadership is actively preparing for the more complex processes coming its way, and building training into employee development plans. "We keep competency matrices for all staff, and are using these matrices for employee development," explains Pasztor. "We take performance management and employee feedback very seriously." Pasztor points out the Business Services group’s unique approach to staff development. Many shared service centres offer training as part of an inclusive employee development package, but Citi aims to differentiate itself by offering employees all-round training opportunities which enhance their skill set and aid their career development. There is a full suite of internal courses available on personal and business skills development and on a selective basis, external training is also funded. For example, as a way to build joint accountability for career development between the employee and the shared service centre, the shared services centre has taken the approach of funding 50% of the cost of external language training. This approach has proved extremely popular with staff with nearly 80 employees embarking on language training courses in 2008."

Another unusual aspect of Citi’s Business Services’ strategy is the extent to which leadership encourages staff movement from the services team into business units, and vice versa. Of the 40-plus shared services organizations currently operating in Hungary, says Szanto, he does not know of any that deploy this strategy to the extent that Citi does: "We offer the same benefits for career development in both directions. Many SSOs keep their operating businesses and their shared services staff quite separate. This is another advantage as we see it, for keeping our staff engaged in the business." Pasztor echoes this: "We constantly assess market data to ensure our compensation package is competitive and we believe that we do offer better training and lifetime career opportunities in Citi, be it in other business lines in Hungary, Poland, the UK, or elsewhere being Citi a global financial institute which operates in more than 100 countries. This is a unique approach, which differentiates us. It is one of the most important, if not the single most important, retention tools for our staff."

Accordingly, twenty-eight percent of the current Business Services team transitioned in from Citi’s banking operations, and about 10% of staff has moved from Business Services to continue their careers on the banking side,over the past two years. Nadia Chughtai reinforces the opportunity provided for shared services staff. With the current heavy focus on managing costs, she explains, shared services has the opportunity to really shine. The challenge is to leverage the existing footprint. "Within Citi, we are definitely seen as part of the solution," she says. "Our group is now taking up work which in the past might not have come our way."

And customers are becoming more demanding under pressure. Business Services is adding monthly customer calls to its quarterly surveys. "We need to be much closer to our customer, to understand what issues they are dealing with and adjust our services to these issues," explains Chughtai. Part of this means adjusting service level agreements to play off cycle times against cost. In the same vein, Business Services has recently moved its charging methodology from a Full Time Equivalent to a transactional basis. This allows customers to adjust their service levels on the basis of "process," rather than a time based FTE.

Szanto summarizes Citi’s forward strategy as "play to win," a message communicated by top leadership. Broken down, it implies a three-fold approach. First, think with your head—consider what are the drivers; second, act with your heart—develop a passion; and third, lead by example—be the one to create the solution. It’s about creating a lean and effective organization. And it’s about staying ahead of the competition. Citi’s Business Services intends to do both.

 

SSON News and Analysis
Posted: 07/09/2012

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