Services Delivery Model to suit your Global Operations
BP seeks the benefit of scale and efficiency for transactional activities, whether captive or outsourced, but chooses regional Business Services Centers to remain close to the customer where it matters.
Interview with: Kevin James, Vice President of Business Services Transformation, BP Refining & Marketing Segment and Philip Whelan, Head of BP’s European Business Service Center in Hungary.
SSON: Kevin, what is BP’s strategy for consolidating Business Service Centers across the globe?
Kevin James: Today, BP’s Refining and Marketing Segment customer service, finance and procurement activities are dispersed across multiple locations using multiple systems and processes. In the future we expect to maintain a mix of business co-located, captive near-shore and outsourced activities, with the latter two categories focused in a small number of centers around the world.
Our sourcing approach keeps co-located with the businesses those roles that absolutely need to be close to business operations for advice and counsel. For other, more standardized, roles we seek to achieve the benefits of scale and process efficiency through service centers—either in a captive near-shore or an outsourced center.
In Finance, over the past several years, we have outsourced to third party providers —often in Asian offshore locations—the most standardized, transactional activities. To supplement this we are now creating a network of regional captive centers to handle those process-oriented activities—in Finance as well as customer service and procurement—that require language, cultural and geographic proximity to our businesses and customers.
We believe that we can better serve our customers and businesses by consolidating those activities requiring proximity to businesses and customers into a small number of captive regional Business Service Centers. We already operate in existing centers in Australia—under the Elite brand—and in South Africa. In the USA (Chicago) we plan to consolidate into one center, building off an existing customer service unit (again under the Elite brand) and a Finance "Center of Expertise." In Malaysia (Kuala Lumpur) we are building out an existing Finance "Center of Expertise" into a multi-function Business Service Center.
Finally, in Europe we plan to consolidate finance, customer service and operational procurement services into one European BSC in Budapest. The decision to select Budapest was as a result of a detailed location analysis conducted across a number of European cities. Selection criteria included suitable labor availability (population size and growth, skills and language availability), costs (labor and real estate) and risks (economic, political and social factors). Budapest offers a highly skilled and diverse workforce, with the broad language skills and the technical and customer facing skill sets we are seeking. Furthermore, it has an established and proven service industry track record recognized across Europe.
BP has operated in Hungary since 1990—we currently market lubricants and aviation fuels. The prospect of growing our Hungarian presence and the opportunities that Budapest presents as a location for our new Center are exciting.
SSON: How are you managing the transition of activities into the European BSC?
Kevin James: We are still in the very early stages of set-up: our European Business Service Center in Budapest is expected to begin operations by the end of September 2009. Recruitment has already started and we envision the BSC will grow to about 1,000 employees in the next three to four years. Activities supporting our UK businesses will be the first to move into the BSC. This will enable us to test the BSC model and capture early benefits. Decisions regarding the transition of activities supporting our businesses in other countries across Europe will be based on a strong business case and in line with the appropriate employee consultation processes, including engagement of our staff and works councils in understanding and managing risks.
SSON: What were some of the internal hurdles to overcome?
Kevin James: We are only at the beginning of a long journey in creating a European BSC, with the first activities transferring from the UK during 3Q this year. Therefore, securing internal alignment and support for this major program was and remains a key imperative.
We are investing a lot of time in helping our business leaders and their teams understand the strategic rationale and benefits of this program. This includes regular meetings and dialogue as well as bringing them from their offices to Budapest to see how other service centers operate, the quality of staff and their language skills, and the benefits of consolidating activities under one roof.
In addition to following the consultation processes applicable in each country, we have invested time and effort in the development of programs that support our current staff. Helping team leaders and staff through the transition is an essential part of our change program. In the UK, we have created a network of change coaches to help staff navigate through this, providing them with tools and support mechanisms to help them understand what is happening, and identify a future career path once the BSC is implemented.
Launching a European Business Services Center
SSON: Philip, as head of the new BSC, what are some key challenges to address as the European center ramps up?
Philip Whelan: The strategic rationale for BP is compelling. It is crucial that we improve our performance and the creation of a single European BSC will play an important part in reducing the cost and complexity of how we meet our customer and business needs. Despite this, there are a number of strategic and tactical questions and concerns and it is fair to say that stakeholders within BP, as well as our key partners, share a mix of excitement and reservation about our plans. Concerns focus on questions such as: can the model attract and retain top talent on a sustained basis? Can we manage organizational change and control risks? Can we ensure strong adoption across different business areas/units? Can we ensure no impact to customers and service?
On the tactical side, people are considering questions such as: can the model handle so many languages and processes? Can it cope with system and process fragmentation? Can knowledge transfer be achieved together with the transfer of contextual knowledge?
We are answering a firm "yes" to all those questions. But it’s certainly not easy and it doesn’t happen overnight. Change management processes and, first of all, people, are key to this success.
SSON: What has been your experience of the Hungarian marketplace?
Philip Whelan: To date, we have not experienced any significant issues and have been pleased with our initial recruitment efforts and specifically the caliber of people we have met. Contrary to some historic perceptions of Eastern Europe bureaucracy, we have found most agencies and business partners to be very responsive, service orientated and cost efficient. I can only say our experience so far has been positive and in line with what we have seen during our due diligence process.
We believe our staff is unique in terms of their energy, their capabilities and their interpersonal skills. What is most critical to us is to have a team that believe in themselves and are passionate about change and process improvement. We have no doubt about language and technical skills as we are very confident in Budapest as a location. So the key for us is to create an energy environment which encourages innovation and motivates staff to go that extra mile to deliver value beyond expectations.
We are building on our strong global brand and have put together a comprehensive value proposition, to help us attract and retain the right kind of talent in the Budapest market. We have also established a thorough assessment process, which BP’s business leaders are taking part in.
SSON: Are you networking with other SSOs in the region?
Philip Whelan: Although we are in the very early stages of set up, we are already looking for lessons learnt by other established BSCs and outsourcing partners based in Budapest. We are in the process of engaging with established bodies such as the Hungarian’s Shared Services forum and are already active members of various business forums including BCCH.
About the Interviewees
In January 2008, Kevin James was appointed Vice President, Business Services Transformation for BP’s Refining & Marketing Segment. In this role he is accountable for restructuring BP’s back office customer service, accounting and transactional procurement operations globally. From September, 2006 through December 2007, Kevin was Vice President, Planning for BP’s Refining & Marketing Segment. Prior to that assignment, he was Chief Executive of the BP Marine Business Unit, which sells bunker fuels and marine lubricants to the global shipping industry, and lubricants to the offshore oil & gas industry.
Philip Whelan is the Head of BP’s European Business Service Center in Budapest, Hungary where he leads the preparation, set-up, building-to-scale and running of the European BSC to operate Finance, Customer Service and Operational Procurement activities of BP’s Refining and Marketing across Europe.
Philip joined BP in February 2009 from Genpact where he was Senior Vice President and Managing Director, Romania and Poland Operations, and successfully led operational delivery across Genpact’s European footprint as well as managing the European F&A Solutions teams. Philip is a Certified Six-Sigma Black Belt.