How are shared services organizations providing business intelligence?
Despite investments to capture data, long hours spent trying to understand their current environment, and an ongoing quest to hire and retain world-class analytical talent, most firms have struggled to make informed and responsive decisions. Typically, the missing component is a structured, predictive program of business intelligence and analytics.
A relationship-based approach realigns key responsibilities to better match the needs and capabilities of the business enterprise. It allows companies to fully utilize all of the ever-increasing structured and unstructured data, and apply their experience to gain better business insights. How an organization chooses to manage analytics can significantly impact a wide range of critical functions. To take your organization to the next level, you need to move your Analytics group out of silos and special projects to become embedded within your functional areas and with on-going analysis of your operations. SSON's Barbara Hodge recently spoke with Gary Walker from Molson Coors Brewing Company, Cindy Gallagher from AOL, and Anindo Dutta from HP to discuss their analytics journey.
Anindo, HP has been focused on developing its business analytics capability – can you introduce the concept to us?
Anindo Dutta: Gladly. Yes, HP BPO has been servicing clients like Molson Coors, AOL, P&G, and many other global firms for many years, performing a variety of critical activities for our customers. Recently, we acquired Autonomy, which focuses on unstructured data analytics. We also have Vertica, which focuses on structured data analytics. So from the services side, we've been focused on the next frontier -how to pull all the analytic elements together and bring to our existing relationships. We are working with some of our top clients like Molson and P&G, so they can understand the trending based on these analytics and make fact-based decisions faster and with better insight. That’s where we believe we can add value.
Cindy, AOL has been working with HP for seven years now. What kind of projects did you start on, and how has the partnership evolved? Give us an idea of what can be done in seven years.
Cindy Gallagher: We started, very simply, with procure-to-pay, accounts payables, transactions, T& E transactions, T&E auditing … very black box, very defined processes. Over time, that’s grown into adding order-to-cash and record-to-report to the current base of activities – i.e., more technical accounting, more judgment-based work. A few years back, I remember someone on my team telling the HP team at the time that "we’re going to have to shrink to get bigger," because we grew too quickly for our own good. So we had to shrink the account, realign what our needs were in the different domains, and then grow again. I think we started with about 90 FTEs, shrunk to around 50, and today we’re at 275. The folks who are there today support every aspect of the AOL business, not just within the shared services space. They’re actually doing various analytics assignments, like advertising analytics, supporting our business intelligence team. So they’re providing tactical operations work for our business. We’ve really stretched the confines of what we had originally engaged with HP for, and it’s helping the entire AOL business.
What are the information challenges that AOL is facing today? What kinds of skill sets are required?
CG: The skill sets that we are looking for are not just what we would call a data miner – i.e., someone who knows how to pull data – but someone who has the business acumen to understand what the data is saying, and how that relates to AOL’s business. So it’s a three-fold skill set: the analytics, the business acumen, and the ability to translate that into an AOL actionable item. HP has been able to cultivate that skill set for us.
I’m interested in this skill set because this is a problem that most organizations will be facing.
CG: Yes, I agree. HP is really an extension of our internal team. So, for anything that we do, I extend the same requests, trainings, and skill sets to our HP counterparts in India. The skill set definition has greatly evolved over the last seven years. At the start, it was more about being process-minded: Can you follow a step-by-step, black box type of document that we send across? Today, it’s grown into more of a judgment-based situation, involving business acumen: How can you interpret data and extrapolate that into actionable steps for AOL?
It’s about: how do you cultivate that data? Do you know where to get it? How do you translate it into actionable, AOL-specific items? And do you have the communication skills to share what you’re finding?
Gary, you’re not currently using HP’s Analytics services at Molson Coors, but you’ve been partnering with HP for some time now. What do you think about the potential of data analytics for your organization, based on what we’ve been discussing? How are you addressing the information challenge?
Gary Walker: We are doing a couple of things in this area. First, we’re moving towards common systems across all the business units within Molson Coors – primarily the big ones, in the UK, Canada and the US. We started this back in May 2011, when we completed the SAP implementation within the UK. The US is on the same instance of SAP as the UK, but within Canada we're on a separate instance. So the next step is to mirror the one instance of SAP. We're also starting a global supply chain implementation within the UK, which will expand to the other business units. That means we’ll be able to consolidate and standardize processes across all business units.
HP played a major part in the UK SAP integration, as they managed the IT integration as well as the processes on the Finance side, which involved revising standard operating procedures to ensure we transitioned successfully.
In late 2011, we started a project called "Finance One Way," which is a multi- year transformation program through which we're establishing a single Finance platform for the future. It involves people, processes and technology, and will take us from good to great; we will first paint a detailed picture of what Finance will look like in the future while the second phase is to implement the chosen solutions.
Right now, we are running on completely different parts but we know we need to be agile and act as a single, streamlined enterprise, from an end-to-end process perspective. We can't do that without reference to all of the other functions. Our vision is to have real-time data analysis, forecasting and decision-making.
Our main focus as a company is all about brand building, innovation and cost reduction. Every dollar we make, we will invest back into the front end of the business to drive our core brands – Coors Light, Molson Canadian, Miller Lite and Carling. Investing in backend processes is not our first priority; however, we do understand that we need to do this in order to be more efficient & effective.
So, in terms of capturing, storing, analyzing and making intelligent business decisions … that’s a challenging proposition to take on. Anindo, what’s your comment?
AD: HP Global Analytics, the group that we have within HP doing analytics, has been servicing the parent company for a number of years. So there are specific elements around customer analytics, marketing analytics, financial analytics and procurement analytics where we’ve developed some real differentiating competencies. For example, we’ve done a lot of work with HP’s printer and PC groups, which helped us to understand customer preferences and changing behaviors, and buying patterns. So, having sharpened our own pencils within HP, we are now taking those kinds of services to our external clients. We are focused on five areas: F&A analytics, customer analytics, sales & marketing analytics, spend analytics for media/advertising/campaigns, procurement and supply chain analytics. These are the competencies that we are able to offer our clients.
Gary, how does that reflect your priorities inhouse?
GW: Yes those are all important areas, and certainly we’d like to look at them at some stage, but as I pointed out earlier our first priority is to invest in the front end of our business.
What I expect from a finance perspective, particularly where we are now with HP is for our internal analytics team to exhibit a lot of that analytical ability that Anindo was talking about.
Obviously, we understand that better and more efficient reporting will allow us to make substantial improvements in our analytics, and this can have a business benefit exceeding the cost of finance. It will also allow us to focus on the value-added work versus the non-value added work that we do today in generating manual spread sheets for analysis. We are often analyzing historical data rather than being forward looking and forecasting what actions we should take in the future, and how these actions could benefit the bottom line.
So in summary, getting to what Anindo just described will allow us to save time and dollars and to invest in our brands.
Gary, obviously the acquisition that you're in the midst of is a huge focus for you right now. But in terms of brand building, I would imagine that customer analytics would be a fairly important area. How are you going to take the first steps to understanding your customers and therefore being able to promote the brand to these customers?
GW: It will be our next step, once we stabilize the acquisition. It’s already on our agenda. The first step is to get the right people (skill set), in order to perform this type of analytics internally. That means we will need to invest in those kinds of people. That's why when I talked about people, process and systems earlier – the people aspect of Finance One Way is to make sure we’ve got the right people on board in order to perform the type of activities that we want them to perform in the future. For instance, we need people who are able to create simulation models with different scenarios, interpret the data and take appropriate action.
That is a good point, about the in house teams, because of course the point is to build up your strength in analytics with the assistance of partners like HP.
GW: Yes, we want to be lean internally but we also want to have the right people on board. We recognize the need for external help, that's why we outsource to HP. But we've got to have the right people internally, in order to supplement HP.
Cindy, how is HP involved in the decision-making process at AOL? I want to understand more about how this partnership is supporting "business intelligence" or actionable intelligence. Analytics is fundamental to making the kind of smart business decisions that a company needs to make.
CG: Specifically, regarding data and analytics, HP supports us from a business intelligence and advertising analytics perspective. So, they’re trolling the Internet or they’re pulling data from third-party sources that we’ve given them access to, to find out how well an advertisement is doing, how successful our behavioral targeting is. I’m not sure how many people are familiar with that term, so I’ll explain. When you are doing a search online, or you’re reading something online, the ads that are shown to you are not there by chance. There’s some intelligence behind those advertisements, and there’s some intelligence behind understanding where a user may be going. Now we’re obviously not looking to be big brother or get into anyone’s personal information. This is publicly available information, which indicates customer behavior – ie, who would go to a certain website at a certain time of the day. Take, for example, parenting websites: If someone is reading a parenting article, they’re likely going to see a diaper commercial versus a Diet Coke commercial. So the team at HP is helping us to understand some of the consumer behaviors online. They’re also helping us to prepare our revenue streams and our billing, in terms of looking at third-party data to see how well a specific ad performs, how many impressions it had, so that we know how much to bill our customers and record as revenue.
And Gary, how are you currently using analytics to solve some of your business problems?
GW: Right now we just throw a lot of people at reporting and analytics, and it requires a lot of arms and legs to get it done. As I mentioned before, we need better systems and tools. The current solution is to gather the data, report and react, rather than have a strategy to socialize and change proactively. The vision is to design standard reporting that will allow us to be more proactive in analyzing and developing our brand P&Ls, regional balance sheets and all other reporting that will make a difference for us.
Anindo, what might future steps for Gary and his team be, once they're ready to embark on the journey towards actionable intelligence? How might they develop actionable insights, practically speaking?
AD: We have a multi-geography delivery approach to Molson Coors’s Business Center, which means we service them out of India, Costa Rica and other locations and have access to all of their transaction processing and finance data. In India, for example, we service them out of a couple of centers. Wouldn't it be great to have all of this data filtered through our analytics tools – Autonomy and Vertica – and have the experienced professionals to develop insights on trending beyond a simple metrics like days sales outstanding? For example: who are their key suppliers and what kind of spend do they have? Having their data filtered through our tools, processes and analyzed by our analytic experts would provide better outcomes for them. So it's really not rocket science, but it's about marrying the two pieces together. In the meantime, we're forging ahead with a few other companies in different industries so that we can bring that expertise back to Molson Coors when they're ready. It's essentially their data that we're helping them to develop insights and trending analytics to make better business decisions.
The advantage of this situation is obviously that you have an existing relationship, which HP is already providing services to Molson Coors, and therefore it's a natural next step. But Anindo, what about companies who you don’t already have relationships with? To what extent can you drop this template onto a brand new company?
AD: You're absolutely right. The relationship already being there makes it easy. When it comes to new companies that we are in conversation with, we need to establish the business objective and find out how we can help, and then bring in the whole analytics offering versus a big bang approach. So it’s about an assessment based approach, rather than a big bang approach.
We talk a lot about the verticalization of industries in BPO today. Anindo, when it comes to data analytics, to what extent will you be building up a repository of expertise across different industries?
AD: Ten years ago, BPO was more of a horizontal service, but it’s become verticalized over time. Today, all of my teams are verticalized. Analytics, however, given that it's just getting off the ground, is still a horizontal service. Right now, we're setting it up as a center of excellence that cuts across industries. This will probably evolve over time.
GW: I just want to comment on something Anindo said. We’ve talked with HP about analytics but to date we haven’t really explored it. This is something we would be attracted to in the long term, because it frees our people up to do more value added work, instead of pulling numbers out of a system, especially as HP already has access to this data. What interests me is the fact that HP can generate this data for us, give us insight as to what it means, and then we can carry the ball across the line. We need to re-engineer the work people are doing today and look at a different global service delivery model. But again, for now, our short term focus will be to integrate the StarBev acquisition in addition to driving our core brands: Coors Light, Molson Canadian, Miller Lite, Carling, as well as the StarBev core brands. However, I see this as a very attractive vision and as very beneficial going forward.
Cindy, HP is a crucial partner to the business at large. How do you manage that relationship? For example, if a new area of your business would like to benefit from partnering with HP, how would that happen?
CG: The shared services team has a lot of great contacts at AOL, and we market ourselves pretty well, meaning, we tell people about all the great things that we’re doing to move the company forward. Almost every one of those conversations involves HP, somewhere, somehow. So, if other people are struggling with an aspect of their business, be it vendor related or employee related, they’ll call us to ask whether HP can help them. Then we’ll set up calls between our relationship manager, our relationship partners at HP and the business and HP takes it from there.
Could you define the HP relationship manager role for us? I think other people would love to hear about this.
CG: The gentleman’s name is Ned Worthington, and he’s worked for me for a number of years. In fact, he actually started the HP relationship seven years ago. So he has been with us and with the HP partnership for all of those seven years. One thing I’ve asked him to do recently is network and get out to talk to people within AOL about what HP can offer, and what his role is about. It’s really just about marketing and evangelizing that role and the value that it can bring.
Cindy, what about your plans for the future? How do you think you might leverage the HP partnership? Given your fairly mature position, it would be interesting to hear what a company like yours thinks about leveraging data analytics, and how you could spread the benefits across the business, not just within the traditional shared services arena.
CG: Hopefully the partnership will grow, as we grow. We are expecting to grow in the next three quarters, and as we do that, and as we have greater need for projects and for more people with deeper skill sets, HP will be able to provide that to us. I think the answer to that is, yes, there are areas that we would continue to evolve HP in, and as we come across new challenges, where we need another opinion, or other resources, we would certainly look to HP to provide that.
In terms of new technologies coming into the market, would you be bringing some of those in-house? Or do you look to your partner to introduce you to innovations through technology on their side?
CG: Actually, it’s a hybrid, a little of both. Of course the technology space changes so quickly that we do need to be – and as a technology company we are – very aware of what’s happening in that space. So, we do a number of things in-house, and we do look to HP to see what they’re doing. They have the "HP Discover" event coming up in June, I believe, that we’re going to be sending a few people to. Again, it’s down to the partnership relationship between AOL and HP.
Gary, Cindy – thanks to both of you for sharing your respective stories. We look forward to tracking your decisions. Hopefully, you’ll be able to share your continued journey with us in the future – whether online or at one of our conferences. And Anindo, thanks for providing the perspective from your end.
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About Gary Walker
Gary Walker is Senior Director of Finance – Global Shared Services at Molson Coors Brewing Company, reporting to the Global Vice President Controller. One of his primary functional responsibilities is to develop, direct, implement and coordinate relevant activities, processes and organization to manage the overall delivery of Global Finance Operations and Solutions shared services across the Molson Coors business. Gary has over 25 years experience as a financial executive with progressive multi-disciplined experience in public sector accounting. His expertise lies in accounting and finance functions, financial research and analysis, process review / design, evaluation of internal controls, financial systems implementation, GAAP and SEC regulation compliance and administration and facilities management.
About Cindy Gallagher
Cynthia Gallagher is Vice President and Deputy Controller at AOL, overseeing the Accounting Services Operations. One of the youngest employees to hold that top management position, Gallagher oversees a 215-member team between her office in Dulles, VA, and in Bangalore, India. She oversees the end to end Source-to-Pay, Order-to-Cash and Record-to-Report domains, and has served as an advisor and partner to various senior executives, helping to streamline processes, mange outsourcing engagements and control costs. AOL is a premier global media company whose subsidiaries include major on-line news publications such as The Huffington Post, Tech Crunch and Patch.com, as well as the number one on-line beauty and style site, Stylelist.com, and the number two mapping site, MapQuest.com. AOL operates one of the largest Internet subscription businesses in the U.S. and handles approximately 5 million consumer email accounts.
About Anindo Dutta
Anindo Dutta is the vice president – Americas Business Process Outsourcing (BPO), responsible for driving BPO growth in the United States, Canada, and Latin America across all sectors, including financial services, manufacturing, energy and life sciences, and healthcare. Anindo leads a team of global BPO sales and solution leaders and partners with delivery leaders in the Americas, EMEA, and APJ. In addition to his current role, Anindo has served as interim Vice President of AMS Sales, responsible for all portfolio segments of HP Enterprise Services. Anindo is a member of the HP Enterprise Services Leadership team, Americas Regional Leadership Team (RLT), and chairs the Regional Arrow Business Review Board.