Perspective from a CEO Round Table

Our May CEO Round Table was a great success and provided new insights on current issues. Our Eastern Europe partner, Natalia Beketova, hosted the event via Zoom. The CEO Round Table included several CEOs across various industries providing perspective from Europe, Asia Pacific and North America. A special thank you for the global insights from SynFiny’s CEO, Jeff Wuest, and Managing Asia Partner, Webster Shao.

Topics that were discussed include current pandemic’s impact and the office reopening process. To discover new insights on the topics discussed and the perspectives shared, check out the conservation points below.

 

Perspective from the CEOS

Western Europe and China

  • Each country has its own pace and set of regulations for back-to-normal, making it difficult for international business to do planning. The countries that were less restrictive tend to go back quicker, while countries on full lock-down (Italy, Spain) are coming back slower. China is only back 50-70% after 2 months. Russia’ scenario seems like a slower one.
  • Second wave is very likely once the restrictions are lifted – China has seen some of that already.
  • People are afraid to go back to the offices – there is a need to build up confidence in employees that it is sufficiently safe. Training on new behaviours and habits is required.
  • Businesses are forced keep the office population down to the min level dividing office staff population into teams and/or shifts according to the need to work from the office. However, those, who are allowed to go into the office may choose to work from home.
  • To enable the split-teams work from the office a basic external and office infrastructure needs to be up and running in addition to public transport and schools/ kindergartens.
  • Increased staff safety requirements including frequent sanitisation of common areas, testing for the virus and provision of infection control supplies such as hand soap, sanitisers and face masks lead to extra costs for businesses. Those requirements are critical – in one case in China 1 employee infected over 200 colleagues. Failure to follow the safety rules affects business reputation.
  • The pace of external changes and new requirements is very high and hard to keep track of. Business needs to keep in touch with employees and overcommunicate.
  • E-business has stepped up – in Europe retail businesses are forced to embrace contactless payment systems such as ApplePay, including conservative Switzerland. In China Nike has grown online sales by over 30%.
  • Retail habits would need to change – e.g. in cosmetics the shoppers will no longer be able to try the product the way that used to. The stores and the beauty companies would need to figure out the new options.
  • The pandemic has driven local vs global focus and has affected globalization. It remains to be seen how much it will drive localization of supply chains.

 

Perspective from the CEOS

Businesses in Russia:

  • Overall: A two-three months period may not be enough to move back to the “new normal”. There is a general feeling that the situation will not dramatically improve for another 2-3 weeks. In the businesses that remained open there has been an increase in contamination rates. The most important objectives remain to protect people, secure the supply chain and provide sustainable cash flow.
  • Office re-opening: Some companies have already made decision to delay office opening beyond the official date of June 1 (provisionally mid-June or later). Base plan is gradual return, with ca 20% returning originally and working in shifts.
  • Safety/infrastructure: It is still not clear what is required to provide safe and secure office environment. New basic office infrastructure including food delivery needs to be developed.
  • Internal surveys have indicated ca. 60% of employees at this stage are unwilling to return to the office. Some are keen to remain working remotely in the future (more in IT, much less in Sales).
  • Employee engagement was high originally but has been going down in May. To keep it up some companies have restarted more frequent communication sessions and daily leadership meetings
  • Layoffs: many are still in denial, but layoffs cannot be avoided and there are plans in place already
  • BCP: it is crucial to consider back up for critical people, processes and systems. People with unique knowledge or in critical roles will need a trained back up.
Man writing on white board during a meeting

Webinar: To Lead and Efficiently Manage Change In A Crisis

On April 23rd, SynFiny Advisors Latin America sponsored their second webinar session (in Spanish) entitled, “Effectively Leading and Managing Change in Times of Crisis”. The webinar was held by Ilhiana Rojas, the CEO of BeLive Coaching, and Thomas Eckschmidt, the cofounder of Conscious Business Journey.

In the webinar, Eckshmidt explains the necessary actions and steps to lead a business through a crisis including the “7 C’s” of combatting a crisis. Rojas dives into how to manage change successfully. His advice includes how to establish a clear vision and how to develop a short and long-term plan. To learn more about the tips and tricks of crisis management, check out the webinar.

To translate the webinar recording to English, click on the video settings. Under closed captions, choose the Auto-Translate button.

 

Round Table Business Meeting

Perspectives From a CEO Round Table

As a part of the virtual Grand Opening of SynFiny’s Eastern Europe region this month, the Eastern Europe partners, Natalia Vinagradova and Natalia Beketova, hosted a CEO Round Table via Zoom. The round table included 7 CEOs representing FMCG, retail, beauty, distribution and logistics, food, and technology industries. The guest speaker, Webster Shao, SynFiny partner of the Asia Pacific region, shared an interesting perspective that was very well received and appreciated by the participants. In addition to the Asia Pacific and Eastern Europe region being represented in the round table, our CEO and founder, Jeff Wuest, also added global and North American insight. We demonstrated our global perspective and expertise.

Topics that were discussed include current market perspectives and the economic situation we face, high-level issues, solutions that have succeeded, as well as current opportunities. To learn more about the details of the topics discussed and the perspectives shared, check out the conversation points below.

Economic Situation/Market Perspective

  • All segments are affected, with premium non-food retail suffering the most (ca-80%).
  • Weaker/less reliable players are driven out of business.
  • In case the lockdown will continue beyond June-July consumer purchasing power is likely to fall down dramatically.
  • Not clear what the post-crisis reality would look like.
  • Perspective from China – we should expect at least 2-3 months more of this and the recovery will not happen overnight.

High-Level Issues (Group)

  • Safety: ensuring that the organization is safe, in particular those engaged in production/delivery. Sourcing protective gears and safety equipment is a challenge. Over time the issue will likely become more severe as whole teams might get quarantined when 1 employee gets ill.
  • Organization: Many businesses have already sent people on unpaid leaves, reduced stuff and/or salaries. There will likely will be 2nd/3d waves of job reductions if lockdown continues part June. While working remotely and employee engagement have been so far ok for most, keeping it up will be more difficult longer term.
  • Cash issues: relevant for most, even the businesses that have are doing well have partners/supply chain that is affected.

What Has Helped/Worked

  • Daily emergency team meetings.
  • Focus on cash flow, activating BCP early on/careful planning of inventories and credit limits.
  • Learning from other regions, using tested and tried playbooks.
  • Supporting key long-term partners/supply chain.
  • Over communicating with their organizations, being open about the issues and choices.
  • Opportunities

M&A deals: are already taking off (either selling or buying) depending on the company

  • Government support: not clear how broad it will be and which segments it will cover. The government announced support for small/mid-size business in most affected areas (tourism, restaurant sector, non-food retail etc).
  • It is not clear whether the government will be able to do more given the falling oil prices. Business needs support and lobbying, joint effort will help.

Webinar: How to Manage Your Business Through the Covid-19 Crisis

On April 16th, SynFiny Advisors Latin America sponsored a webinar session in Spanish, held by Jose Alonso, one of our partners, and Wiston Uzcategui, CEO of Valor Humano, entitled “Crisis Management.” They discussed how to manage finance and operations during the COVID-19 crisis as well as how to come out stronger after the crisis is over.

More than 100 people tuned into this webinar to learn from these impressive business leaders. Specific topics they touched on were the new reality, managing cash flows, business continuity plan, business models, and communication amid a crisis. Additionally, the webinar touches on creating a proper mindset and managing emotions in the new business context we will face after the crisis.

To translate it to English, click on the video settings, closed captions, and then choose the Auto-Translate button.

Meet The Partner

Jose Alonso

Jose Alonso

Partner

An experienced Managing Director with a demonstrated history of working in the Consumer Goods Industry, Jose (Pepe) Alonso is now focused on providing Finance and General Management Consulting support specializing in Restructuring of Operations, Mergers and Acquisitions, Strategy, Governance, Source to Payment, Business Process Transformation, Sales and Marketing Operations and Supply Chain Management.

Pepe has 28 years with Procter and Gamble, finishing his career as Vice President – Finance for P&G Latin America. While playing a senior leadership role in driving the company’s rapid growth in the region, Pepe led the site selection and establishment of the P&G Panama offices as the Latin America headquarters for the company. Prior to this, Pepe was also Finance Director for Venezuela and the ANDEAN region and was on international assignment in Caracas, Venezuela. Pepe is an active leader of the P&G Puerto Rico Alumni Network since 2015 and is also currently a board member of the South Florida P&G Alumni Network.

Pepe plays a Mentor and Strategy Practice Leader role for the Guayacan Venture Accelerator program in San Juan, Puerto Rico since 2017. He also entered the restaurant business as co-owner of the La Mar and Tanta Peruvian restaurants in Panama from 2009 to 2015. Pepe studied Finance at Louisiana State University.

man working at desk writing in his book in front of his laptop

Webinar: Prevent, Manage, Recover – Key Strategies to Execute a Business Continuity Plan

On April 2nd, our partner, Larry Williams, presented a webinar entitled “Prevent, Manage, Recover: Key Strategies to Execute a Business Continuity Plan” as a part of Ardent Partners’s CPO Rising Virtual Series – “The Resiliency Imperative”.

Larry discussed the necessity of having a BCP (Business Continuity Plan), when to use it, and the steps to execute one. Despite already being amidst the pandemic crisis, Larry emphasizes that it is not too late to create a BCP. To find out more, watch the webinar here: https://register.gotowebinar.com/register/7356886583498207500 or view the presentation slides attached!

Special thanks to Ardent Partners for the opportunity to share SynFiny’s expertise in operational and organization improvement.

 

Webinar: How to Achieve Maximum Results Working Remotely

On March 31st, Natalia Beketova, SynFiny Partner, participated in a virtual panel and presentation, hosted by Kontakt InterSearch Russia. The webinar, entitled “HRD: How to Achieve Maximum Results Working Remotely” focused on how to navigate changing an organizational structure to be virtual, as well as how to transfer employees to remote work.

Natalia discussed how to support critical processes, keep a workable organization, maintain relationships, save non-critical processes and maximize resources virtually. More than 100 people tuned in to learn from Natalia and other Human Resource Development professionals. To listen in English, turn on closed captioning and then select “auto-translate” under the video settings.

Meet The Partner

Natalia Beketova

Natalia Beketova

Partner

An executive with over 25 years of experience in human resources management with broad experience in large multinational and Russian production companies with international presence. Natalia has worked with Boards of Directors, as well as having worked and lived in different regions of Russia, in Ukraine and Western Europe.

Natalia started as the assistant to the Human Resources Director, has been an executive coach for C-suite and mentor and coach to many professionals in different industries at the executive level. Natalia is an independent Director at Institute of Directors and a member of Independent Directors Foundation.

Natalia graduated with a diploma with honors from Tula State Pedagogical University.

woman's hand using laptop on a desk

Webinar: How to Transfer Financial Services to Remote Work

Last Tuesday, one of our partners, Natalia Beketova held a webinar discussing how to continue operating financial services remotely. They specifically talked about maintaining a workable organization during the COVID-19 crisis, critical supporting processes for doing so, as well as other current issues.

Our partners are busy sharing their expertise and knowledge from their careers to help other businesses during this challenging business environment. The webinar, which is in Russian, can be found here. To watch in English, turn on the auto-translated closed captioning under the video’s settings.

 

Meet The Partner

Natalia Beketova

Natalia Beketova

Partner

An executive with over 25 years of experience in human resources management with broad experience in large multinational and Russian production companies with international presence. Natalia has worked with Boards of Directors, as well as having worked and lived in different regions of Russia, in Ukraine and Western Europe.

Natalia started as the assistant to the Human Resources Director, has been an executive coach for C-suite and mentor and coach to many professionals in different industries at the executive level. Natalia is an independent Director at Institute of Directors and a member of Independent Directors Foundation. 

Natalia graduated with a diploma with honors from Tula State Pedagogical University.

skyscrapers

Building a Business Case for Source-to-Pay

Digital transformations are changing the ways that organizations do business. Strategic sourcing, order management, and payables have evolved from a functional exercise to a competitive advantage. And as organizations grow, so does the complexity of their supply chain, resulting in issues in the areas of decision making, compliance, and waste (monetary, time and potential materials). Leading Supply Management Organizations (SMO) are benefiting from improved innovation, faster speed to market, better cost optimization/value, more profit, increased productivity, improved cash flow, and better controls by implementing Source-to-Pay (S2P) strategies and technology-enabled automation into their procurement process.

Those new to S2P still face many challenges in the areas of supplier management, low-cost country sourcing, risk, compliance, etc. These organizations must maximize the benefits from the S2P model in the following ways:

  • Thoroughly understand the needs and spending forecast of the business
  • Extract the greatest possible value from regional and global supply markets
  • Build collaborative relationships with high-performing, strategic suppliers
  • Minimize supply risks
  • Obtain collaborative and corrective behaviors from the people who spend
  • Align strategy with business performance measures (e.g., cost of goods sold, working capital, cash flow, profit, shareholder value, market leadership and innovation)

Whether purchasing direct materials for manufacturing or indirect materials/services to support the finished product, a best-in-class SMO applies S2P strategies to all procurement decisions.

This translates to following key imperatives for S2P organizations:

Increasing Visibility: The most competitive S2P organizations are capable of connecting massive amounts of information and data from many sources, systems, locations, languages, and formats to create 360˚ visibility that supports a full range of strategic S2P activities (not just spend management).

Ensuring Compliance: Driving business performance means convincing employees to adopt preferred S2P processes, strategies, standards, and decisions. Compliance grows from a solution that combines aligned objectives, understanding risk, communication, collaboration, and consistent technology adoption.

Generating Savings: Minimizing costs/maximizing value can often feel at odds with other business objectives. S2P’s role is to make sure the results materialize in highly quantifiable ways. This could be hard savings to the bottom line or cost avoidance. This need had been poorly met from a S2P technology perspective, but the situation is improving rapidly.

What is Source to Pay (S2P)?

Chart of source to pay

S2P is comprised of two distinct parts of the procurement process: Source-to-Contract (S2C) and Procure-to-Pay (P2P). S2C includes steps of assessing business needs, industry/supplier capability, economic analysis, strategy creation, strategy execution, and strategy renewal. On the other side, P2P covers the transactional flow of an order including collecting master data (e.g., supplier, material, pricing, etc.), order management, product or services payment, and compliance. S2P automation refers to using technology to streamline all or part of the S2P process.

Requisitioning: The “need” is generated in 2 ways: by automatic inventory/demand replenishment or by users that wish to purchase goods or services. Automation allows the users to plan or complete the requisitions electronically, often selecting items from a catalog that they are permitted to order from.

Requisition Approval: An approval policy should be in place, which may include no approval below certain dollar limits or manual approval by budget/functional owners. Once a requisition is raised, it follows the approval release policy before being converted to a purchase order (PO) and sent to the supplier.  Manual approval processes have proven ineffective, as approvals are often not obtained or obtained after-the-fact due to time constraints. Automation allows for these requisitions to be routed electronically, following a decision (approval) authority matrix that ultimately reduces approval time. Most applications now allow approvals to be done from an email on a mobile device.

Issuance of Purchase Orders: Once a requisition is approved, a PO is issued to a supplier. Automation allows POs to be efficiently sent electronically with acknowledgments and proposed changes being returned electronically from the supplier.

Receiving Invoices: In traditional organizations, invoices are still mostly submitted by suppliers on paper via mail, then manually entered.  In automated AP departments, invoices can be received electronically via email in PDF form, via e-invoice, or via a third-party network.  Paper, PDF, and e-invoices can be swept up and scanned into the workflow using Intelligent Data Capture (IDC) and routed for goods receipt and or approval.

Matching Invoices: Once received, invoices should be matched to POs and receipts so that suppliers receive payments on time.

Issuing Payments: A combination of electronic payments, direct funds transfer, automatic bank account reconciliation, and Procurement cards (P-Card) are quickly increasing the volume of payments processed electronically. This steadily reduces the number of checks many organizations issue and reduces fraud risk and escheatment work.

Quantifying the Benefits of S2P

Hackett benchmarks  suggest that a world-class S2P strategy will increase business results for companies by:

  • Lowering PO process costs by nearly two-thirds
  • Reducing order-to-pay cycle times
  • Increasing payment-on-time to suppliers
  • Increasing user and supplier satisfaction
  • Doubling PO and Invoice management capacity for each FTE
  • Reducing FTEs required to manage each billion dollars of indirect spend by half
  • Increasing cash flow
  • Converting Accounts Payable into a profit center

Reviewing each of these benefits in detail highlights the impact an S2P strategy can have on a business.

1. Impact on compliance

Informational chart about source-to-pay

Best-in-class companies (91% + spend under management) with an implemented S2P solution show orders and spend are compliant with contracts, resulting in reduced maverick spending and minimized consequences from any maverick buying practices. Compliance policies drive users to the company’s purchasing channel of choice to ensure that the negotiated savings show up in the bottom line. For channel compliance and spend visibility, including assignment to the department or budget center where the spending resides is critical. Too often, senior executives want to insulate their organization from the need to comply and thus become the root cause behind why E-S2P, E-Invoice, and E-Pay policies do not work.

2. Impact on Transaction Processing

Manual PO processes are characterized by human errors, inaccuracies, and rework.  Automating approvals, escalations and triggering events ensures that POs are expedited quickly. Furthermore, finding goods and services is easier when supplier catalogs and product information are available online and responsive to searches. APQC performance benchmarks show that S2P automation has a significant impact on the total cost resulting from procurement cycle time.

total cost of procurement cycle

3. Impact on Transactional Processing Cost

Automation lowers transaction costs for PO and invoice processing, reducing the administrative overhead of the S2P organization. According to APQC and IOFM studies, organizations that implement e-invoicing and significant automation can realize a potential savings of 80% in processing cost per invoice.

Chart of Cost Per Invoice

4. Impact of S2P Automation on early payment discounts

While the use of e-payments is on the rise, companies are only capturing 19% of discounts offered to them by suppliers in return for early payment. Ardent Partners suggests that companies in the top quartile of performance, which adopt early payment discounts, realize discounting participation rates nearly four times as high as bottom quartile performers.

5. Impact on FTE

APQC says that a top-performing organization with implemented S2P solutions can operate with a headcount of 16 and 36 Finance/Accounts Payable FTEs per billion dollar spend respectively.

Source to pay procurement cycle chart

chart of finance function FTE per $1 billion revenueCreating a New Savings Wave – Linking

An S2P system may provide the monitoring and compliance checking capabilities without involving a spend analytics solution. However, spend analytics tools integrated with contract management and S2P systems can generally do much more sophisticated types of analysis, monitoring, and compliance checking. This increases efficiency, improves cash management, reduces inventory requirements, and slashes maverick spending. This often represents a process and prevented overpayment savings of 2-5% in many organizations, but the largest contribution of a properly implemented S2P system is a centralized, clean, data store that provides a solid foundation for spend analysis, which offers savings opportunities in the 5-15% range while enforcing the negotiated savings.

Conclusion

As companies across the globe are increasingly counting on Source-to-Pay strategies to deliver on savings, it’s imperative to not only develop a strategic outlook towards its supplier management initiatives but also to back its strategies by ensuring its savings initiatives are realized. By automating all or most of the components of the S2P process, organizations will increase visibility into its procurement process resulting in increased compliance and direct impact on the targeted savings.

About the Author

Larry Williams

Larry Williams

Partner & Source to Pay Leader

Larry Williams has been a partner of SynFiny Advisors, a business consulting company, for the last 2 years. Larry brings 40 years of Supply Chain experience in Engineering, Project Management, Production Management, Purchasing/Procurement/Accounts Payable/Shared Services, and Acquisition & Divestitures. For 12 years he had global ownership for the P&G Accounts Payable Solutions managing +$50Bn of Payables across 176 countries. He also led the innovation and deployment project portfolio and provided operational support to four regional S2P Service Centers. Larry spent the last 3 years with P&G leading the Procure-to-Pay area for large, global acquisitions and divestitures. Larry holds a degree in Mechanical Engineering and is certified as a Lean Six Sigma Black Belt.

tall buildings

Building Blocks to Creating a Successful Shared Services Organization

Most larger companies today have put in place some kind of Shared Services organization, be it a small, local group or a large, global structure. However, just creating a Shared Services organization is not enough in and of itself. This paper will address the key building blocks to help ensure that a Global Shared Services group is as successful as originally envisioned when the commitment was made to implement such a change.

Shared Services are defined as “consolidating non-core (back office) support services, and delivering these from centralized locations to provide lower costs, higher quality/reliability, standardization and harmonization of processes, and a flexible services delivery platform from which to leverage growth or manage business’ constriction” (from the Shared Services & Outsourcing Network Organization).

Many large companies have implemented a Shared Services organization in an effort to achieve the benefits mentioned above. However, not all of those implementations have gone smoothly, particularly global implementations. There are some key fundamental building blocks a company needs to have in place before implementing a Global Shared Services structure to ensure it delivers on its promise.

Foundation of Successful Shared Services

We believe there are 5 key design elements that build upon each other and are necessary to create a successful Global Shared Services organization. They are:

  1. Common Chart of Accounts/Definitions
  2. Standard Policy
  3. Common Work Processes
  4. Solutions and/or systems
  5. Separate Shared Services Organization

1. Common Chart of Accounts/Definitions

The first step is to standardize the Chart of Accounts and any Defini tions related to the internal work processes that will be moved to the Shares Services structure. More specifically:

  • Standard Chart of Accounts means one set of common cost elements used in all internal financial reporting, and the definitions and the application of those definitions is also consistent throughout the company.
  • Standard Definitions applies to activities in areas like HR, Real Estate and IT. For example, a standard definition for travel expense versus relocation expense, or how floor space is attributed to Business Units (BU’s) throughout the company.

calculator and pen laying on financial documents

The organization that is responsible for Corporate Policies should also be responsible for creating and maintaining the Standard Chart of Accounts or Standard Definitions. For each function, that will likely be a group in their global or corporate organization. So if there is a Corporate HR group, then they should own driving the common definitions for all of the appropriate HR terms, as well as all of the global HR policies. If everyone isn’t using the same definition for certain activities, then it’s going to be extremely challenging to create standard policy and common work processes.

2. Standard Policy

Once a standard Chart of Accounts and Common Definitions have been created, then the same global or corporate functional group should lead creating standard global policies for each of the internal processes that are part of the Global Shared Services transformation. However, they should also involve the BU’s and the Global Shared Services organization to ensure the policies allow for work processes that are implementable, efficient and effective.

Also, if the policies are not being followed consistently, it will be important for the functional head of that process to provide their visible support to ensure compliance. If people aren’t following the policies, the Shared Services transformation will not achieve its breakthrough improvements.

3. Common Work Processes

Once the Common Chart of Accounts and Definitions, and the Standard Policies are in place, the next step is the development and implementation of well thought out end-to- end work processes. The documentation of the current and future state work processes is critical. It needs to be laid out in a clear and concise manner, so the transition to the Global Shared Services structure is delivered in the most effective and efficient way possible. It also needs to clearly identify the key deliverables, as well as ownership and accountability of key inputs and outputs. Ideally, the key deliverables will be documented via Service Level Agreements (SLAs) that are agreed to with the customers during the design phase, when trade offs between quality, cost, speed and compliance are evaluated.

We recommend having one group centrally, led by the Process Owner, but with representation from the Policy team, the Shared Services Centers, IT, and the BU’s, develop work processes that are consistent with the policies, while also assessing efficiency and effectiveness. The starting point should be the current work processes. However, the Process Owner should look across all the BU’s to identify best practices for each work process, so when the work is moved to the Service Center, it’s using the current best approach (best here meaning the appropriate balance between quality, cost, speed and stewardship).

two women in an office writing on a white board

Unfortunately, most companies jump straight to replacing costly systems when implementing a Shared Service structure. However, before making any system changes, it is important to align on the optimum Process. Once that has been determined, then one can began to look at making system changes that enable the implementation and automation of the agreed to best practices. Putting systems in place before Policy and Processes have been finalized is like putting the cart in front of the horse……it will only lead to rework later on.

4. Solutions and/or Systems

The first step in developing the appropriate systems and solutions is to identify the current work process and system for each service that is going to be part of the Shared Services transformation. As mentioned previously, this often requires involving the people doing the work today. Once the baseline process and system are established, then work should commence with the team to identify the best overall approach and what additional improvements could be made, including opportunities to remove any redundancies, eliminate non-valued work, and minimize the number of times humans have to enter any data.

Also, one should utilize the work process and the systems experts to identify any watchouts associated with any changes. It will be especially important to have the IT experts participate, because sometimes the system itself may have limitations that need to be taken into account. Or conversely, the standard solution that comes with an “off the shelf ” system may be the simplest solution to execute and the easiest to maintain going forward.

5. Separate Shared Services Organization

In order to have a successful Global Shared Services organization, it is important that it be separate from the other organizations. That’s because:

  1. It is going to have different goals and measures then the rest of the organizations in the company.
  2. It is a services organization with a focus on internal customers, so its mindset will probably need to be a bit different than the rest of the company.
  3. It needs to be objective about what is best for the company overall, versus having any potential bias if it remains within one of the other organizations.

If the Global Shared Services group is going to be large, then we recommend that the head of this group report directly to the CEO, again to have the ability to make decisions that are best for the company overall, and not be biased by other groups within the company. If the Global Shared Services group is going to be small, then the services could report up through Corporate or the Functional Head that offers the most services within the Shared Services organization. However, if a company is trying to drive value from having a Shared Services structure, then we would suggest going with a larger Global Shared Services group reporting directly to the CEO.

Summary

Many companies have created Shared Services organizations over the past few decades, some more successfully than others. In this paper, we have discussed what we believe are 5 key building blocks for implementing a strong Global Shared Services organization, which in turn will allow the organization to deliver the desired savings, quality, speed and stewardship benefits. Note also that each of these 5 elements builds upon the others. So if you skip one of the building blocks, it will negatively impact any downstream elements, ie. if you don’t have common work processes, then it will be difficult to achieve any significant productivity improvements within the Global Shared Services organization. The 5 building blocks all fit together. As such, it’s important to execute them in the right order and involve the right people/organizations in order to have a successful implementation.).

About SynFiny Advisors

We value experience. Our advisors leverage decades of Fortune 50 experience in financial planning & analysis and shared services design and operations to deliver breakthrough solutions for our clients. This collective experience has been distilled into a proprietary consulting methodology that enables our advisors to quickly apply their experience to the specific objectives of our clients, leading to faster and longer lasting value creation.

For more information please visit synfiny.com.

Our Shared Services Practice

Christian Lee

Partner and Shared Services Leader

Christian has 30+ years of industry experiences, including 27 years of experiences in engineering, manufacturing operations and procurement. He has over 10 years of experience in procurement shared services from strategy, design, execution to operations. He has also spent many years in leading small to breakthrough process transformation projects. In the past 7 years, Christian has been leading consulting engagements with clients such as Johnson & Johnson, Coty Inc., Mars, and Wendy’s on procurement shared services design, execution and process improvements. Christian is also a Lean Blackbelt Certification candidate. Christian has BSEE degree from Michigan Technological University, and MBA from Boston University. If you have any questions, please contact Christian Lee, Managing Partner and Shared Services Practice Leader at SynFiny Advisors at cclee@synfiny.com.

SynFiny FP&A

Building the Business Case for Finance Transformation

We’ve heard it said that Chief Financial Officers usually come in two flavors: the accountant or the banker. The accountant keeps the books clean, ensures reporting is accurate, and helps the firm take full advantage of the tax code. The banker, on the other hand, keeps the cash flowing, ensures plenty of financial might, and focuses on deal making. 

What’s often missing is an operational emphasis: The ability to use financial data and methods to understand and improve firm results and decisions. To get more operational, the key to success is the firm’s financial and planning and analysis processes, or FP&A. 

Transforming FP&A is essential for Chief Financial Officers (CFO) looking to deliver improved forecast accuracy and faster, decision grade data to their organizations.

  • Critical value creation processes, which require a deep understanding of finance, modeling, data systems and processes, and accounting, all married to deep business knowledge. 
  • Typically combines financial and non-financial data as required to create strategic and operational financial plans. 
  • When done well, these processes are a clear competitive advantage and thus are viewed as critical by a firm’s owners and senior leaders. 

Start with a Vision

As a CFO, when you can combine FP&A with a vision, strategy and action plan, you can more easily gain leadership support and approval to begin the transformation journey. Let us guide you through the process.

A vision statement sets out the future operating model of transformed FP&A and should be an aggressive view of the future of finance in your organization. A vision statement should inspire readers to support it, so you’ll want to use clear and concise wording.

Your vision statement has two primary readers:

  • The C-Suite: The vision statement should read as business-friendly so that leadership will support the FP&A transformation plans.
  • The broader organization: The vision statement should inspire employees and create excitement about the future.

While a vision statement should challenge the organization to achieve more in the future, be sure you outline goals that are attainable. It’s important that your employees understand the long-term goals and can fully envision what’s ahead. To do this, you or your finance leaders may need to share more information than you typically would. This allows the internal organization to see the plan and commit to its success.

Calculator and pen on top of financial papers

Building Blocks of Strategy

With a strong vision statement in hand, the next step is to determine what building blocks you will need to achieve the vision.

A significant hurdle in this stage is determining which aspects of FP&A need to be substantially upgraded from their current state. Consider the various FP&A tasks within a company: 

  • Strategy development
  • New business modeling
  • Forecasting
  • Budgeting
  • Management reporting
  • Analysis
  • Working capital
  • Cash forecasting
  • Capital spending

It can be difficult to determine which of these tasks should change, how they should change, and when they require intervention. Most leaders will want to touch everything, but prioritization is critical. Choosing which tasks to focus on first leads to much more success than trying to change all of the tasks at the same time.

Successful strategies can – and will – change over time as the FP&A transformation areas of focus and timelines change progressively.

The challenge for any CFO is determining the right sequence and depth of change to support the FP&A vision. Look to the company’s vision statement or strategic priorities first to guide your FP&A priorities. Is the company priority product line expansion, then analysis and working capital might be the key FP&A interventions. Perhaps new facilities or equipment are on tap, therefore capital spending and forecasting become the focus.

The key is that your FP&A vision and strategies should be consistent with the company’s overall long-term plans.

Hand holding pen running over business papers

 

Turning Vision and Strategy into Action

With strategies in place to support the FP&A vision, you can now create detailed action steps to support the strategy and turn the vision into reality. Without actionable steps, strategies fall short and visions fall flat.

Before determining specific actions, ensure you have sufficient resources, funding and time to complete the FP&A transformation from beginning to end. If you miss one of these components in planning or need more, you’ll need to either request additional support or return to leadership to reassess the FP&A vision and strategies.

Potential action steps to transform FP&A might look like:

  • Develop pricing analysis tools to increase deal capture and sales growth.
  • Develop budget tools to decrease overall marketing spend.
  • Expand effective unit developed tools or processes to other parts of the business.
  • Document and roll out your best-in-class tools and work processes.
  • Create clear accountability and ownership for tools and processes.
  • Develop simple-to-read, easy-to-access, and anxiously anticipated reports.
  • Create training materials to build overall capability in the organization.
  • Create and leverage multi-function networks inside the firm.
  • Use the network to share or reapply best practices.

When you’ve defined the action steps that support the strategy to implement the vision, review all components with C-level leadership for approval. Leadership support is essential, so continue to refine the approach until you receive full backing.

With a clear vision and actionable strategy, you’ll want to address any company-specific cultural adjustments you may need to make prior to launching the FP&A project.

Two professional women having a discussion

 

Document and Approve the Business Case

Once you have an FP&A vision and strategy, and detailed action plan, along with leadership buy-in, you can now document the business case summary. The business case summary should provide the rationale and benefits of the FP&A transformation process you’ve outlined.

A sound business case summary includes the following:

  • Business rationale for the change: What is driving the FP&A transformation? What business issue does the transformation fix? 
  • Scope of the full project: What is being transformed? Is it focused on one area of FP&A or multiple areas?
  • Benefits realized: What will the transformation project achieve? Will it deliver cost savings, higher sales or improved productivity? Will it improve analysis, transform data into insight, enable better internal controls, or something else? The benefits should be clear and measurable.
  • Company culture impact: Which aspects of the company culture need to support or will be improved by effectively implementing the FP&A vision? Clearly explain the behavior changes that need to or should occur as the FP&A work comes to life. 
  • Required investments or resources: How much is the investment? Which resources do you need? Are they internal or external resources? Are they staff, services or software and tools? Provide an estimated range of spending and resources required and an expected ROI.
  • Intersecting projects: Are there other company projects or initiatives that impact the FP&A project? This could be a new ERP implementation or bookkeeping tools, new tracking or accountability software, etc. Whatever they may be, it is critical to document how the FP&A work intersects with, supports and enhances these allied efforts.
  • High-level timeline: How long will the transformation take? What are the risks and impact of delays? Most projects face challenges and FP&A transformation projects are no different. So being clear about contingencies helps ensure you have C-level leadership support when you hit the inevitable bumps in the road.

When you have created a summary that addresses each of these areas, have C-level leadership review and approve.

Man discussing business ideas

The Path Forward 

With a fully documented and agreed to FP&A transformation vision, action plan and business case summary, you’re ready for next steps. These are typically: 

  1. Assigning a total project lead or owner. 
  2. Establishing a multi-function data and project team. 
  3. Develop the detailed project plans and cascading objectives to individual’s work plans. 
  4. Setting regular action plan updates with C-level leadership. 

These steps structure the transformation process and enable it to run smoothly. 

Because FP&A processes are some of the most critical business functions in any company, it’s essential to keep C-level leadership updated on progress. Also, you’ll need to enlist their support when trying to overcome roadblocks or obstacles during the transformation process. 

Organizational change is difficult. Organizations tend to revert to known, previous ways of doing things. Process transformation faces inertia. But broad involvement and regular communication and feedback from the organization to the project team to C-level leadership will help prevent falling back into old habits. 

Ultimately, with a clear vision, strategy and action plan, you can more easily build support to embark on an FP&A transformation journey within your organization. The benefits are worth the effort: Better data, smarter decisions, improved results, greater impact! You can do this! For more information please visit us online at SynFiny.com.

Successful Team Meeting

Meet the Author

Jeff Wuest

CEO & President of SynFiny Advisors

Jeff Wuest is a business strategist and visionary, and he helps companies to achieve extraordinary growth.

Today’s environment demands the right blend of innovation, strategy, and risk-taking to define new opportunities, be first to market and lead the industry. Jeff works with leaders to push the boundary of what they think is possible, make big strategy bets without risking it all, and create an environment where they can achieve 10x growth.

Jeff’s expertise includes strategic planning, rapid market expansion and operational scaleup. He’s an entrepreneur with experience mentoring startups and emerging companies, as well as a strategic advisor to multi-billion-dollar corporations. Jeff has over 30 years of experience developing game-changing strategies across different industries, categories, products and services. His focus is helping forward-thinking leaders succeed with breakthrough strategy, execution and operations.

Currently, Jeff is the CEO of SynFiny Advisors, a global business consultancy firm, which was recognized by Inc Magazine’s, Inc. 5000, and ranked in the top 500 of the nation’s fastest-growing private companies.

Expertise

Leadership, Strategy, Operations, Business Development, Startups, Business transformation, Scaleups, Entrepreneurship, Innovation, Finance & Accounting, FP&A, Real Estate