American Express sees data as fundamental to finance transformation

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Interview with Shawn Bryant, Director of Strategic Operations – Global Business Services, American Express

What kind of shared services model have you implemented at American Express?

Our group, F&A, owns global payroll, general ledger, sub ledger, accounts payables and all the card financial captures – basically, what happens when you swipe your card. There are a number of different processes running through our division that touch other parts of the Global Business Services organization and the enterprise, so we really reconsidered the end-to-end process, and how to optimize it. As a result, we've made significant investments in our systems by upgrading to Oracle, and globalizing our payroll systems on one platform, which is ADP.

How do you differentiate this new, global process approach from what came before?

Our journey began back in early 2010, when we started taking separate processes from within Finance, HR and other areas, and bolted them into an organization we call Global Business Services. GBS is now the central location for processes so we can really take an end-to-end view across the enterprise. This has resulted in a complete transformation. We're looking at other processes as well, where we can leverage our scale and bring them into the back office of the GBS organization.

To what extent is the GBS team itself helping with the re-definition, or re-engineering, of the processes as they move from the function into the GBS?

I’ll give you an example to illustrate this. At American Express, we have a group within Finance called the Controllership Group. This Controllership Group is where the general ledger was housed prior to 2010. But in 2010 the decision was made to pull the general ledger component from the Finance team and place it inside the GBS organization, so we're actually booking the entries. By contrast, the Controllership team is, for lack of a better term, running the analyses; so that's a segregation of duties.

Now, the question is: was GBS helpful in the transition? Absolutely! And it continues to be helpful today. For example, if we consider the accounting close, we are looking to reduce cycle time. This can only happen through a partnership between ourselves, ie GBS, and our Finance Controllership team. We need to understand who are the non-accountants doing accounting entries, and stop that from happening; we need to re-write our policies around when certain entries should be booked; etc. So it’s very much a partnership between us, in GBS, and the Finance/Controllership team outside GBS.

When you talk about end-to-end, does this encompass the Controllership aspect of the process, their part of the process?

Absolutely. We are partners to the process.

How are you making your sourcing decisions, ie whether inhouse or outsourced?

Let me answer that in two parts. Within our GBS organization we also have Global Real Estate and Facilities, as well as the Global Supply Chain Management team.

In 2010 we had decided to outsource much of our Global Real Estate to CB Richard Ellis, and in that process basically reduce costs internally, within the company, and streamline some work. About a year or so into the process, we discovered that model wasn't really working, and we decided to bring those outside resources back inhouse, to better manage them and to do some more analytical work around our processes.

Now what that experience did for us was it helped us constantly ask ourselves, "How do we become better than BPO?" And the answer is, through our analytics. This is the "sweet spot" that we'll talk about at the conference: How to take the "big data" that we own and that we have access to – since we see all the accounting entries, have all the payroll information, the sub ledger, the payables, etc…how do you take all that information and turn it on its head to provide analytical insights into the business processes, back to the business owners?

And that's the million-dollar question that everyone’s talking about right now, right?


I’d like to ask about your initial outsourcing initiative. You made the decision to undo that. What was not working? How did you make a judgment about the opportunity cost of outsourcing?

One of the main issues here is about the insights that you lose. Say, you outsource your general ledger to a provider in India; you lose the ability to do the analytics. At least our opinion is that we lose that ability. But in that outsourcing scenario, what happened was that the service levels declined, and that was important enough to bring it back inhouse.

We also talked to a number of other organizations about their experiences, and what we learned from Procter & Gamble – and we're actually applying it this year – is the importance of getting a feedback mechanism from our clients; asking them how satisfied they are they with our services, whether it’s supply chain, real estates, whatever. We're now having those interviews with our clients to get the feedback on a quarterly basis. We analyze it, and we action it.

Do you think your clients are savvy enough about the potential for analytics, to know what to ask for? Because a lot of shared services leaders I speak to seem to be pushing the data agenda to their customers, not the other way around. They're the ones saying to their clients, "look, we can do so much more for you." So if you're looking to your clients for feedback, can they really judge?

I don’t think so, because shared services organizations are still a relatively new concept, so I don’t think our customers do necessarily know. What we're doing is we're taking that value and giving them examples. We presented to our CEO back in March, for example, on some of the analytical things we're working through, and that spread by word of mouth. Take the back office support that we offer; there are a number of organizations within American Express that offer similar services internally, for business units. We’re having conversations with those groups to offer our services, instead. We're offering to give them the savings, which is the sell point, by re-engineering our side of the system. And we’re also offering the analytics, which they are not doing right now, as they don’t have the scope – but we do, and we have the scale, as well.

You mentioned that you felt analytics is the part that is lost in outsourcing. Generally, though, most providers now are specifically selling their analytic capability. They're selling the fact that they know your industry well, because they’re also servicing many of your competitors. Do you buy it?

I certainly believe that there is information and work that's being done outside of American Express. We don’t own the Holy Grail of all knowledge right now, so there's always something to learn. But the benefit we have in our conversations is that it's one thing to have the data, but it's another thing to have the relationships. Those are the valuable conversations, and relationships drive the change. So, to answer your question, someone from the outside may have some really great ideas, some really great strategic ideas, but tactically they may be very hard to operationalize. If you have that big data analytics capability internally though, you not only bring the same big, hairy ideas, but you also have the wherewithal to understand how to prioritize and what can be done from a tactical operational standpoint, because we live it every day.

So what part does outsourcing play in your model?

I think it's still very much to be determined. We talk with Hackett quite a bit, to get some benchmark information and to get some outside views of what's happening. We meet with leaders from Coca-Cola, Dell, Procter & Gamble, etc for high-level "think-days" around what's happening within shared services. So we're constantly out there, feeling around, trying to understand what's happening in the industry and how we can leverage that information.

Do you have any tips about what to focus on, in terms of presenting a shared services business case? Should you focus on short-term gains or longer-term gains for example?

Short-term gains, of course are the synergies that you create by combining disparate groups into an end-to-end process, and so you'll find the synergies that will create re-engineering savings, facility savings by consolidation, and so forth. I think that's a short-term win. The more long-term win – and the one that I think we're all trying to figure out – is about leveraging the big data that you now have access to, from an end-to-end perspective, and turn that into a value, and give it back to the business units. That is the real differentiator. And we’re all working on it.

Thank you Shawn, for taking the time to speak with me today.