Tough Talking: How to Commit to Operational Excellence (Part 2)

Some Mighty and Heartfelt Lessons from a Decade in the Saddle: "Things I Wish I’d Known 10 Years Ago" Part 2: Continuous Improvement What does Continuous Improvement mean for the Shared Services and Outsourcing industry today? We chose a couple of very special SSON friends to answer this question. Both began their SSC careers in the height of the boom in the late 1990s, and collectively they have racked up over 25 years of frontline leadership experience across international brands including Kellogg’s, AstraZeneca, Lockheed Martin, Turner Broadcasting, PA Consulting Group and Ricoh Europe. In this second of three articles, Ian Herbert, Deputy Director, Centre for Global Sourcing and Services at Loughborough University, puts the tough questions about how to introduce and drive Excellence to John Gregory, Global Finance Lead - Kellogg’s and Andrea Schaffell, VP EMEA Shared Services – Ricoh Europe. Ian: We keep hearing about driving Improvement...so what about Operational Excellence? How do you keep that moving forward? Andrea: Yes, operational excellence. I think a lot of us think about SLAs, KPIs, OLAs … different ways to measure, and I think it’s important that you find what works for your company, the measures that are important… But it’s what you do with that activity, and it’s how you bring along your staff, that counts; understanding what they drive. And operational excellence is also about looking at LEAN Six Sigma and how to do things better, more efficiently. Earlier, we talked about reducing costs. You talked about how, all of a sudden, you’ve got very few staff that are able to take on roles. And so I think that you have to be very cognisant of what your systems can do to support you, and how you then improve the utilisation of those systems, of your ERPs. For me, it’s about LEAN Six Sigma, and we’re really just embarking on this in a big way at Ricoh. Everything we’re doing, any change that we make, is all about looking at DMAIC (Define, Measure, Analyse, Improve and Control) and different types of Value Stream Mapping exercises. But it’s also about putting benefits realisation around everything we do. And it’s a sign-off all the way through. So, it’s great to have performance measures but you’ve also then got to turn around and show what your value is for, whatever it is, whatever the activities that you’re putting in place. We’ve now agreed that we will have no changes going through our IT organisation to support our needs unless all of my SSC leaders have agreed on what those steps will be, and have signed off on the expenditure. We want to be absolutely clear on the investment, and how we’re going to show that we benefit Ricoh for all of this capital that we’re using. That’s really been very important to us, and I highly recommend it for others, too. Ian: Great points, thanks very much. Anything to add, John? John: Yes, I guess, you know, we were searching for years for how to make continuous improvement stick in the organisation… And we stumbled across LEAN Six Sigma as well, and that’s really transformed our Shared Services organisations. We’ve built on top of that a balanced score card approach, so we focus on four or five different levers, you know: people, customer service, cost and process, and operations and control. And that’s served us well over the years. I think this came home to me when we were asked to implement SAP across Europe in nine months, across six plants and twelve marketing operations in our back office. We got some great development for people that year, in fact we chucked people in at the deep end and didn’t actually actively develop them – it just kind of happened. We got some great tools and processes but we got some pretty awful customer feedback, because we just didn’t engage with them for the whole year, given that we were operating elsewhere. So, it’s that balanced approach to all the key legs in your operation that I think is extremely important and supported by metrics. Ian: We are going to move on to Q&A now, so here is the first one: How do you sell a career in Shared Services to bright Millennials? Andrea: Yes, we are doing some interesting things, actually, in Barcelona. Our centre is outside of Barcelona, and so it makes it a slight challenge hiring some of these bright Millennials. But it’s the excitement of transformation and what we are doing in changing and supporting multiple countries that is attractive. So what we’re able to do is say, hey, we’re supporting France, Italy, Spain, we do some additional work for Switzerland, come and join us and see what we can do in changing how we’re working. We need your great ideas. We are a technology company – printers, copiers, production, print – but also an IT services company, so we have a lot of need for doing things differently – and smarter. We do have one ERP platform across Ricoh Europe and that means that whatever we put into place, we’re able to carry out through to the rest of our Shared Services, which for us at Ricoh has been a really big advantage. We have exciting programmes that we do with the teams, particularly in Barcelona, where we recognise all of the ideas that come up. So we are not prioritising, necessarily, ideas coming from the top, the ideas are coming from the grass roots. And it’s those grassroots individuals that have the relevant experience and ideas…that are helping us think differently. And it really makes a difference. It’s an exciting atmosphere when I go to Barcelona. I love going there, and the joy that people have in working together is really wonderful. We get that a lot from the Millennials, quite frankly. Ian: John, here’s one for you: What’s your plan for migration? What are you bringing into Shared Services next? John: Well, we’re in a two-year programme to bring in HR, IT, Finance and Supply chain into our global centres. We’ve had regional, functionally siloed centres for many years, but we’re moving towards a hybrid/outsource model at the moment. So that is a big shift. Now, the Finance transitions have already gone, we’re just at the end of those, so we’re now looking at the Finance transformation piece. We’re looking at how we can get even more activities into GBS and out of our commercial Finance business support and our Supply chain business support. I think that will be a lot trickier. We had one real stakeholder, as we did the transitions, but we’ve now got multiple stakeholders to deal with, to carve out that extra activity. As well as that, we’re transforming the retained organisation. We’re not just lifting and shifting or carving out activity, we’re looking at what Finance might look like ten years down the line, and how we get there. And equally, as we do the Supply chain pieces, we’ve got some very interesting programmes coming along, to look at the end-to-end audited cash, transformed organisation globally; and we’re not calling it PTP anymore, we’re calling it Source-to-Pay, and we’re covering from sourcing right through to the back office. So I think that’s going to keep us busy till the middle of next year. Once we’ve got those big four back office functions in, we’ve got to go after Sales, we’ve got to go after Marketing. Those are the big areas we haven’t touched and there’s so much opportunity. Ian: Let me put this question to Andrea: How far can the Shared Services model go in terms of, not only progressing up the value chain within functional siloes, but going out into the business and transforming the way it does things? Andrea: In terms of the world of Shared Services and what you can do … I mean, I’ve been doing it for a long time, and I think the sky is the limit. One thing we’re doing at Ricoh, just thinking about how we go into the business is really around marketing. I’ve got our web-marketing organisation for Ricoh Europe, based in my SSC down in South Africa, and it is getting our operating companies to look differently at what they can do. And all of a sudden our operating companies in the Nordic region are working together differently. They’re coming together and having a joined-up board across four countries; that never would have happened in the past. Now, they suddenly see that there is a benefit in coming together, in working together, on one ERP, and helping each other. I think that’s a huge thing for Shared Services. So I think there’s a tremendous amount that can be done. I also think, in our business at Ricoh, we have what we call a dealer or indirect business, so dealers in all these countries are selling our product on our behalf, and what we look at with the operating companies is, ‘what can we do to better support the dealers’? So we’re working with our operating companies, thinking, ‘can we provide our Shared Services to the dealers?’. We’ve got this fantastic ERP that we’ve customised and worked on, to make us be successful, and they have to have the same type of invoicing, the same type of order entry, the same processes. So I think by working through the operating companies, we can now start working with our third party dealers, too, and extending the benefits. Ian: So, the future’s bright, the future’s shared … Andrea: It is. Ian: What about a career in Shared Services? Would you recommend your sons or daughters to go into Shared Services as a career? John: Yes, absolutely. And I think it’s a much greater proposition now than it perhaps was 15 years ago. It’s not about transactional, rules-based stuff anymore. One caveat: I would understand the organisation that you’re moving into, and make sure that there are opportunities to develop broadly within SSCs, i.e. they’re moving to a GBS kind of operation, or there’s a way out into the retained organisation. But I think, you know, the sky’s the limit as we move through the next five to ten years. Andrea: Why not? I mean there’s nothing wrong with Shared Services, and what you learn in one shared service, you can port to other places. So while John has got his long career with Kellogg’s, what you can do in Shared Services in one company, is you can take that experience somewhere else, you can learn new things, and you continue to expand your tool set and grow. It’s definitely a good thing. Ian: OK, thank you both of you very much for that. I’ll quote from someone whose name I can’t remember, but those that don’t learn from history are destined to repeat it! I think we’ve heard some fantastic history and futurology there, which will help everyone. So thank you very much John and Andrea. [eventpdf] [Next week: Talent Management] Participants: John Gregory, Global Business Services - Global Finance Lead,Kellogg’s Having qualified as a Chartered Accountant, John has spent the majority of his working life with the Kellogg Company, holding a diversity of roles, including Recording and Reporting, Audit, Business Development, FP&A, Commercial Finance, and Tax. Latterly, John has become a professional in the Shared Services space. Having headed up the European Finance Shared Services Centre for a number of years, he is now the Global Finance Lead as the Company moved to a Global Business Services structure. John spends his time commuting between the US and the UK. Ian Herbert, Deputy Director, Centre for Global Sourcing and Services Programme Director & Senior Lecturer in Accounting and Financial Management,Loughborough University As Deputy Director for the Centre for Global sourcing and Services Ian is a regular contributor to international conferences and manages the CIMA-Loughborough Research Project on Shared Services. He has authored over 60 practitioner and academic articles. His main research interests are the evolving role of the finance function and the impact of Shared Services on the organisation design and information strategy of the multi-divisional company. Andrea Schaffell, VP EMEA Shared Services, Ricoh Andrea has 30 years’ work experience, with the last 18 years dedicated to Shared Services and Outsourcing. Andrea has implemented and run captive Shared Services organisations as single function (finance) as well as multi-function (including HR, Finance, Health & Safety, Facilities, and Corporate Secretary) all on a global basis. She joined Ricoh Europe in 2013 with responsibility for its Europe, Middle East and Africa Shared Services organisation (with multiple centres in Europe and South Africa). Prior to joining Ricoh, Andrea’s Shared Services experience included including AstraZeneca, Lockheed Martin, Turner Broadcasting and PA Consulting Group.

Tough Talking: How to Commit to Operational Excellence (Part 2)

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