Sourcing Superstar Series: SMEs a Growth Opportunity for Tom Dobis, HP Enterprise Services

SSON's Sourcing Superstar series continues with HP Enterprise Services' Tom Dobis, who talks about global BPO trends, the growing importance of the mid-market and this sector's desire for a "Mercedes experience at Chevy prices," as well as the fast-moving, fast-expanding practice for business analytics. He talks with Barbara Hodge[add your comments at the bottom of this page]Tom Dobis, Acting BPO Service Line and Portfolio Director for Hewlett Packard’s Enterprise Services divisionSSON: Tom, what is your role at HP Enterprise Services?TD: I currently have global responsibility for finance and accounting, HR payroll, and procurement outsourcing services, in addition to my role as O2C Service Line Leader. This team is an interesting cross-global team, but it cuts across all clients and all delivery centers, in Costa Rica, Poland, India, China, … we’ve got people all over the place. We are responsible for account management, transformation, IT, best practices, benchmarking, innovation, account planning, investments, etc. We are, effectively, the glue between the various delivery centers, and we interact closely with the actual accounts – the CFOs and senior finance individuals that are our customers, like P&G, Nestlê, Molson, etc.Mine is an interesting, consultative, kind of role. I have lots of stakeholders and customers, but I also have internal ops people that are looking for better tools to make their work more efficient across multiple clients. Our collaboration with them impacts the kinds of investments we make or the tools we buy, build, or develop.SSON: So you have global process ownership over services delivery?TD: Yes. We have global best practices and global solutions guides, but you always have to break the mould, because every client has things a little differently: a different type of SAP platform, for example. But from a global perspective, yes, we monitor all that.SSON: Once the pitch is done, how do you give customers the confidence that they’ll still have the A-team working on their account? It’s a complaint I hear a lot from practitioners. And what are customers asking of you beyond the contract’s specifications?TD: We tend to describe ourselves as the folks with – I hate to say it – all the grey hair and experience. We’ve gone through hundreds of transitions. In my case I have worked on 5 transitions and I have been in charge of a team of F&A SMEs and the solution design team for all of our implementations in the last 7 years.We have folks on the team with respective tower expertise: P2P, O2C, R2R. We look across clients for best practices, and figure out where we need new technologies, or where we standardize processes, so that we can streamline them. Our customers expect us to look horizontally across their work, whether globally, or whether across multiple platforms. They expect us to bring them transformation ideas, and they know they can rely on us because of our organizational structure.Customers’ expectations are changing. Irrespective of what is committed in the contract, they also want to know what we will do for them in year two, year three, and year five. Where it gets really interesting is when you move beyond that first transition, into the transformative years, where, for example, you’ve already committed, per contract, to absorbing the cost of living increases; but now a customer is looking for more. Or, if they’re doing mergers and acquisitions, or their volume drops – they are asking us to come up with fixes from an efficiency perspective. So they’re looking for somebody to work with, as they reconsider their operational transformations, their F&A policies, etc.Invariably you can’t do BPO without having some elements of ITO and applications outsourcing. There’s always an interface. A lot of our clients want to retain control of the system of record. However, there are still bolt-ons to SAP and Oracle, things that we’ve built to supplement those particular products so, no matter what you touch from a process perspective there still needs to be a technology component.One of the things we hear a lot from our CFO clients is that, even if they currently have an SAP or local platform, nextyear they’re going to do an upgrade … or they’re going to consolidate three different platforms into one … and so they need testers. They need people who have the bandwidth and experience to test the old and the new versions, and who can apply acceptance- and regression testing. A lot of the companies we speak with don’t necessarily have disposable resources for this kind of work, and you can’t go hire consultants at $400 an hour to do this stuff. So, increasingly, apart from core transactions volume on these ERPs, we’re getting tapped for test work. So that’s the core piece people are looking for these days.[inlinead]SSON: How would you segment your services delivery work, and customer base?TD: I would say that 80% of our F&A work is accounts payable. Most transactional clients are very comfortable handing over AP. Less than 20% of our work is accounts receivable – most customers protect that relationship and don’t want providers getting in the middle of that. But suppliers are less of a sacred cow.The other work we are doing is in the record-to-report space: the close process, controllership, inter-company journal vouchers, audit, … the kind of higher end stuff. It’s true, many customers still retain that, but there’s still a lot of it that can, and usually does, get outsourced. The R2R functions typically don’t involve a lot of headcount – ten people here, 20 people there, compared to AP, where you’re talking about hundreds of people. So although we do a lot of R2R work, in terms of headcount and revenue, it’s a relatively small percentage of what we do. Most of our clients are global multinationals, either headquartered in the US or in Europe. We’re seeing more and more growth in Asia and Australia these days, the whole APAC region, as well as in Latin America.In these markets, companies, are demanding more "localized" service centers – they are less enthusiastic about going to far flung places like Manila or China, and are looking for regional contact centers. By comparison, in the US and Europe people are more trusting of moving work around the globe. Now, there are some clients in Europe, for example, that really want to keep the work in the EU or onshore, so we have a couple of centers in Poland to meet that requirement.SSON: Is that because of legislation?TD: It’s partially because of legislation, but also just about comfort level, and culture. Folks in France, Germany and Spain are more comfortable getting on a plane to Poland for the day, rather than traveling further afield, into Asia. Now, in Latin America it’s a little different. Not only is it cultural, but there are also some data privacy and other regulatory type issues. For example, most of the large companies in Latin America are headquartered in Mexico and Brazil, so that’s where the lion’s share of the work is. And they want to keep the work there – their legislative and regulatory requirements absolutely re-enforce this. I have a center in Costa Rica, and another in Argentina, but when you talk to companies in Mexico and Brazil they don’t want to move the work out of Mexico! They’re like: "Call me when you open a center in Mexico." Obviously it makes the business case a little more challenging, as you cannot factor in the labor arbitrage savings if you’re not moving further offshore.SSON: So what are the other arbitrage options you can offer for these locations?TD: There’s technology, of course, what we call "a better mousetrap" – better processes and so forth. But you don’t get the big obvious business cases as you do for a US-based, Canada-based or Europe-based corporation with a large shared services center.SSON: So what’s your strategy?TD: We have five-year operating plans for all of our centers and all of our regions. We’ve already got the geographic footprint figured out for most places, like in Latin America and APAC; we just don’t have the F&A customers there yet. That goes for Australia, too, where I’ve got centers in Melbourne and Sydney and Adelaide, but again, very minimal F&A. I think that over the next couple of years, as we announce some wins, you’ll start to see those centers growing alongside our traditional centers in Wroclaw and Lodz in Poland, and Costa Rica.SSON: Tell me about your center in Costa Rica.TD: Costa Rica is actually an acquisition from P&G, way back in the day. We’ve added numerous clients down there, Molson-Coors, etc. It’s a great center for us, but we’re getting to a point now where we’ve got 6,000-7,000 employees, and we are at a critical mass, beyond which we don’t really want to grow, so we’ve got to start looking for other sites.SSON: Like where?TD: We’ve got a great team in Guadalajara, Mexico, not so much focused on arbitrage but it’s a strong disaster recover site for us. In terms of expanding our scope, we’ll probably do more in Argentina and Panama over the next five years than we will in Costa Rica. But there’s space in Costa Rica, no question.SSON: Where is most of your business concentrated?TD: Looking at our main services – F&A, HR payroll and procurement – F&A is our most mature, representing about 90% of our revenues. On the HR payroll side we have about a dozen clients, all big and complex. Perhaps not coincidentally, a lot of them are also F&A clients. If we’re already working in their ERP, it’s relatively easy to link to payroll. So, a lot of our clients, like Nestle and Molson Coors, are both F&A and HR payroll clients.Procurement outsourcing is by far the smallest of the three, as we’ve only got a couple of clients that we provide services for. However, we have made a tremendous push in the last 12 months leveraging our internal global procurement group [HP’s]. They manage about $27 billion a year in spend, so we’ve been coming to market by talking to customers about procurement as a service, while offering and leveraging that particular capability. Typically, we’re talking about indirect procurement type services, where we have a global footprint, again leveraging the HP component. Frankly, I wish we’d done more of this four or five years ago – it’s an area that is showing growth potential, and we have, I believe, some pretty world class capability, so hopefully over the next couple of years we’ll see more wins in that space.SSON: Who is your natural counterpart on the client’s side?TD: Typically it’s the CFO. For HP it’s different, because HP is more focused on relationships with the CIO. The challenge for us, over the years, has been to translate HP’s strong IT relationships across the hall to the finance and the business executives, whether it’s the SVP of HR, Head of Shared Services, Head of Finance, whatever the case may be.SSON: What’s your biggest obstacle, in promoting Enterprise Services?TD: When people think about HP they think about printers, they don’t think about BPO, so that’s usually the first hurdle you’ve got to get over. But we’ve [Enterprise Services] been in the business for 12 years, so we have a long client list to show these folks…SSON: Have you ever considered that there might be value in rebranding yourself?TD: Frankly, we have not gotten that far. Again, in terms of revenue we’re a highly profitable business unit. We’ve been around a long time. We don’t lose customers because, if you do a good job, and you add value, you get more work. But we don’t make $20 billion like the PC group. It’s only been with recent leadership changes, in the last two to three years, that we are seeing more commitment, more investment, more integrated value propositions or a dual approach. Now, with existing HP clients, we’re starting to have a discussion about what we can do on the BPO side – four or five years ago, HP corporate would never have entertained having that discussion, but now we are, which is positive for us. We’re starting to see growth from it.SSON: When you have your initial discussions with your CFO clients – or even with existing, ongoing clients … what do they want from your partnership?TD: First and foremost, they want more value-added services. Outsourcing is about people–process–technology – about transaction processing. Prices are predictable, the client gains flexibility … it’s all good. However, what the CFOs ask after the honeymoon period is over, is, well, "what have you done for me lately? Where is the value?"So, one of the things they continue to focus on is us bringing transformational and operational cost savings opportunities to them. So they’ll say: Yes, we hired you to do this for $1, but look, you’re a global outsourcer, you’re investing in all this stuff, you’re building centers all over the globe, you’re building relationships with SAP and Oracle and buying companies … so what more can you do for me? How can you help me with DPO, with DSO, with first cash yield? So even though contractually we’re meeting all the operational metrics, they want to know how we can do better, and now they’re all looking at gain sharing.The other aspect of this, which is very hot right now, is what we call Business Analytics. The CFOs are basically saying: tell me something I don’t already know. And, given that we’re talking to all their suppliers, and to their business units, the truth is we are well-placed to get new ideas on how to cut DSO, or reengineer some processes to free up finance staff to work on more M&A activity, etc. CFOs are constantly looking for us to challenge them with analytics and new ideas – of course, not in a consultative fashion. They’re saying: "Look, you do this for thousands and thousands of people – come on, you know the answers … right"? It’s a need to have – not a nice to have. So, analytics is getting very, very hot.SSON: What are you developing at your end to provide solutions for these CFOs?TD: One of the things we’ve rolled out in the last year is called FIT at HP. It stands for Finance, Innovation and Transformation. Every year we do an internal benchmark of all of our services, for all of our customers. We create not only a benchmark assessment of key metrics, but also a maturity assessment model, so we can assess where a particular client fits onto this. Based on this model, we create account plans, innovation plans and transformation plans that address those particular issues. For example, if a customer’s cost of invoice is twice what best practice is, well, why is that? Is it because the customer has 14 disparate systems? Is there some technology missing? Is there a flawed policy?These studies form thebasis of our client account plans, and we use them as part of our regular update meetings to track results and decide on how to move the goal posts – and how we can add more value. This analytics practice is supported by the expertise we’ve gained through acquisitions like Autonomy, Vertica [big data capability], plus of course our experience of SAP and Oracle.This Business Analytics practice is being built up as we speak. We’re taking the finance-specific element to our existing clients, but we’ll also use it as a draw for new clients. We believe it’s a market differentiator for us, as it takes us well beyond the AP and AR processing discussion.SSON: How are you defining Business Analytics?TD: Many people believe it’s about data warehouses, software licenses, or tools. What I mean is F&A, HR payroll, and Procurement-specific analytics. Since we have access to all this data – ERP and all the financials – we’re leveraging it for the customer’s benefit. We’ll analyze a data point and decide whether we want to act on it based on what it tells us about projected volumes – it works in our favor as well as the client’s, so analytics is key for us.SSON: Where is the Analytics team based and how many people are involved?TD: Basically, the team is split in half: 50% in region, as we believe this is very much a client-facing type of thing, and 50% in India, where they run the tools that crank the factory, as we put it. Right now it’s only about a dozen people. However, HP’s Global Analytics Group, which serves the company, has over 1,200 employees in India, so there is some back up if we need it. I fully expect our team will grow four to five times in this area.SSON: Which industries have you built your expertise in?TD: Historically our strength has always been in consumer retail – CPG companies – and technology companies, because that’s where HP grew up. So for us, client number one was HP and then we added customers from there. However, over the course of the last four or five years we have done more work in communications, media and entertainment.Really, what’s more appropriate is to talk in terms of market segments, instead of industry. Because where we’ve really cranked up operations is in the mid-market. Traditionally, most of our F&A work has been in the $6-10 billion revenue sector, companies with a big footprint that already have shared services, and are trying to get to the next step. However, the market’s matured tremendously in the last eight years and we are now seeing over half the opportunities in the middle market – companies under $5 billion in revenue. Another segment that is seeing a lot of action is big companies "out-tasking" – instead of outsourcing the whole thing, they’ll outsource a task, like AP for a certain business unit, or if they’ve made an acquisition, they’ll let us manage the integration.So, what’s happening is the total current value deal size is shrinking, but we’re seeing more and more companies that haven’t already gotten into BPO – maybe they thought they were too small – now starting to creep in.Now the problem is, they all want the Mercedes Benz that the big buyers are getting. They want all the tools, all the tailored service, all the knowledge transfer, all the ERP gizmos and price points – even though they don’t have the volume that some of the larger, more complex customers have. So it’s getting quite interesting. And when you sprinkle in the regional providers and the India pure plays, and consulting firms dabbling in here, the market gets really interesting really fast.The challenge for us is how to downsize our offering given the smaller deals, for example by making our tools more cost effective and efficient. What’s different about these deals is that the companies generally don’t have third party intermediaries helping them. In the past, there was always a consultant involved – TPI or Deloitte or McKinsey – and the deals were very well structured, with a baseline, service levels, and statements of work. These deals have none of that. Often, it’s just the procurement officer, and you get this six page statement of work copied from a website that says, "Can you please bid on this?" There’s often not a lot of information to go on … so it’s challenging, but we are adapting.SSON: For this mid-market, is F&A their first point of call?TD: Actually, no. HR payroll has been a key focus for this market for years. They were often struggling with HCM [SAP’s platform], or not sure how to handle Fusion or Workday. ADP and Ceridian have been making significant investments in that space, as well. It’s only been in the last 18-24 months that we’ve witnessed these companies feeling comfortable enough to give up some of the control in this area. You’ve got to understand, a lot of these CFOs have 15 to 20 people in their operation, so if they start outsourcing F&A, well, their empire is gone.I think, though, that some of the smarter CFOs are seeing that in many instances outsourcing offers a better model, access to better tools, and a business partner. So rather than losing 15 people, you’re gaining 15 and a partner.One of the areas we expect to develop over the next 12-24 months is a platform-as-a-service type offering specifically for the mid-market. Traditionally we’ve always done the big custom stuff; now we’re going after these new, smaller types of contracts, bringing them in cost effectively and going for volume.SSON: At SSON, we’ve recognized that the next big push is coming from the mid-market, so it’s interesting to hear your plans. Can you tell me about some of the new tools you are coming up?TD: This market has a lot of interesting demands. As I mentioned, they want the Mercedes but in reality they probably can only afford a Chevy when you look at their budget, headcount, processing, and what they want to do. So we need to find a way to build a Mercedes at Chevy prices, assuming we’re going to sell 5,000 Chevys. We’re downsizing our toolsets to meet this demand.For example, AutoFlow is our next generation accounts payable workflow platform. It’s significantly less expensive than our previous platform, it’s multi-client, integrated with ERP and email, and it uses Cloud-based technology. So we can put it up and scale it quicker, whereas before we had to buy a server every time we put up a client.AutoFlow represents a significant move into this mid-market, or out-tasking type work for larger companies. We’ll be expanding to other areas, too: order-to-cash, credit and collection, cash application, dispute management, auto credit check … all things that we do manually right now. A lot of these platforms on the AR side aren’t terribly efficient so we spend a lot of time building up partnerships and alliances, to spread that investment, technology and IP across multiple customers.Another area that’s underserviced in the mid-market is record-to-report. We have a relationship with a company called Trintech, which has a great tool, but it costs money to implement. For the smaller companies, the ability to get the closing tools, the auto-reconciliation tools that the likes of Trintech supply was heretofore nearly impossible. They just didn’t have the size. We’re working with Trintech now to develop tools more appropriate to the mid-market. We’re also taking some of our tailored tools like E-Close, and Cloud-enabling them for smaller customers, so that’s a significant value-add. It means a CFO or finance head can launch an App on an iPad to check the close process, click on the one that’s flashing yellow, to find out who hasn’t reported what financials, make a couple of calls, etc. etc. The access to mobility Apps mean that things that heretofore were only for billion dollar customers are now available for much smaller customers, who never thought they’d be able to access them. We’re putting our investment dollars into these tools because that’s where we see the real growth potential.SSON: Do you still encounter resistance to Cloud?TD: The fact is I can turn Cloud-based applications on in a quarter of the time it takes with traditional hardware. I don’t have to buy servers, I can scale it up, scale it down, add more processors, add more disk space, create a virtually private network. It’s not based on a flat fee but on how many transactions you pump through, so it’s truly scalable.The problem finance people seem to be having is one of data privacy confidence. I can’t tell you how many finance or audit or controller folks have said to me, "Tom, if my R2R work is out there, God forbid somebody grabs it … they can produce my entire financials" – and that scares the pants off of these people. No matter that our Cloud offering passes a Department of Defense certification, as you would on nuclear sites. F&A people are a little more risk averse, and I see their point…For transactional services, I’m seeing more and more people saying, "Yes, okay, fine, let’s do that in a Cloud-based model," but when it comes to the other R2R stuff, the analytics, the close process, the master data management, the general ledger stuff … they’re nervous about it. I think those concerns will give way, as we demonstrate strong disaster recovery business continuity. For example, at HP we have Cloud centers all over the United States and Europe, so if a Cloud was to go down you wouldn’t even know it – it’s just swapped to the next Cloud.SSON: Which regions are interesting for you right now?TD: Good question. Our work has traditionally been in the US, Canada, Europe, and Latin America a bit. We’ve just announced a deal there that is not necessarily huge in size, but it’s strategically very important to us. We’re seeing a lot of growth in Asia, so as businesses are maturing in Japan, China, Korea, Hong Kong, Singapore, etc, we’re seeing real demand for BPO services from good-sized companies. Obviously, their priority is access to Asian languages.A lot of these companies just don’t want to go down the route of building their own shared services center. I have four clients, for example, that had shared services centers in Thailand that were absolutely decimated by floods, last year. They’d much rather outsource that risk to someone who’s already made the investment.We are also seeing a lot of activity in specific industries, airlines, for example, and financial services have popped up again, recently. They seem to have money to invest in upgrading platforms and systems, and they’re looking for providers who can deliver F&A BPO services specific to banking.A final point I should make is that the war for talent is impacting companies in the US and Canada. They’re faced with a workforce that’s aging, that’s retiring, so staffing up and retraining are challenges they’d more often like to leave to someone else.SSON: Is there something about the way Asian companies are run that differentiates them from other multinationals? What are CFO’s expectations?TD: It’s definitely a different business case, no question. A lot of these Asian companies are not as risk averse as traditional US and European companies. They’re experiencing substantial growth, and they’re willing to take risks. They’ll want things done in half the time frame it usually takes. They don’t really have time, they’ve got acquisitions in their sights, they’ve got money to make … so the transformations need to happen quickly.It’s definitely a different breed that we’re dealing with. They’re also younger, they’re entrepreneurial, they’re very, very smart and, more importantly, they’re very attuned to what the businesses are doing, where they’re going, where they’re growing, what they want to do with cash, mergers and acquisitions, etc. They’re key partners at the table, whereas in more established companies, sometimes finance is the last team to know what’s going on! It’s an interesting dynamic. It’s fun.SSON: Thanks for your time, Tom.[add your comments at the bottom of this page] About Tom Dobis: Tom Dobis is the acting BPO Service Line and Portfolio Director for Hewlett Packard’s Enterprise Services division. In this role, his responsibilities include developing the BPO go-to-market strategy for services and offerings as well partnerships while leading sales and pursuits efforts demonstrating the BPO value proposition with prospects and current clients associated with providing a global end-to-end BPO Outsourcing service. He is an experienced International Finance Manager with broad experience with companies of varying sizes and across various industries. Tom has managed operations in the US, Emerging Markets, Western Europe and Asia. His areas of expertise include corporate finance, outsourcing, financial process reengineering and extensive consulting experience for large companies across the globe.[inlinead]

Sourcing Superstar Series: SMEs a Growth Opportunity for Tom Dobis, HP Enterprise Services

To continue reading this story get free access

Upcoming Events

Germany’s 1 January 2027 E-Invoicing Deadline: Timely Guidance for Time-Crunched Leaders

Accelerating O2C Transformation: How AI Is Reshaping the Cash Conversion Cycle

WorkX

Shared Services and BPO Week Philippines 2026

Why AI in BFSI Stalls After the Pilot — and What Leading Institutions Should Consider Doing Differently

The AP Automation Reality Check: What True Intelligent Automation Looks Like Inside D365

Follow Us

Latest Webinars

The Future of Workplace Experience: What Employees Really Want in 2026

Beyond Invoice Capture: A Practical Path to Autonomous AP

Your Journals Know Where the Close Is Broken

Recommended

Egypt: The Next Country North American Shared Services Should Consider IT and Bu...

How Do Sourcing Objectives and Criteria Determine the Sourcing Approach ?

The Outsourcing “Conundrum”: Securing the Benefits You Expect

EP17 The critical link between digital transformation and GBS (Global Business S...

BPO = Business Process Outcomes [not Business Process Outsourcing]

5 Ways Your Business Process Management System Could Be Failing Your Back Office

"Parts Is Parts" - The Key to Differentiating Yourself

Tech Demo: Accelerating Invoicing to Overcome Workload, Speed and Regulatory Cha...

What Will Save BPOs?

Shifting to SaaS may not eliminate the “Technical Debt”

Offshore Engineering R&D Centers Will Continue to Flourish in Current Crisis

Play Nice, Outsourcing Providers. There will be life after COVID-19

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY

Sourcing Superstar Series: SMEs a Growth Opportunity for Tom Dobis, HP Enterprise Services

To continue reading this story get free access

Upcoming Events

Follow Us

Subscribe to our Free Newsletter

Latest Webinars

Recommended

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY