A number of years in the past, Unilever Europe launched into one of many largest outsourcing offers in European enterprise historical past, as a part of the transformative One Unilever programme. We spoke with Christian Kaufmann, MD Finance Business Services, concerning the impression this transformation has had on his organisation – and his suggestions for maximising the advantages of outsourcing.
Q: Christian, Unilever’s been on a protracted and important transformation course of over the previous couple of years. Can you inform us just a little about this?
Christian Kaufmann: We have been on an unbelievable journey since round 2005, after we internally introduced the One Unilever programme aimed toward streamlining our enterprise to be extra aggressive. And one of many key components of this has been to implement monetary shared providers with an outsourcing supplier. We are actually on the stage the place we are able to say “let’s get the benefits out of that” – the place we have now now harmonised processes to an excellent extent throughout Europe.
Q: That outsourcing deal is likely one of the greatest in Europe’s historical past, is not it?
CK: It is, I imagine – so I’m all the time informed! It impacts varied processes in Finance to an excellent extent – purchase-to-pay, journey bills, record-to-report, bill-to-cash – and it impacts round 800 individuals.
Q: And you’ve got mentioned that this has resulted in nice effectivity good points – are you able to inform us precisely what you’ve got gained from this transformation?
CK: To put it merely: alongside the implementation of a single-instance ERP system, which occurred on the similar time, we have now now managed to get new harmonised instruments in place which we have now labored with our service supplier. We imagine we now have entry to the most effective know-how which we would not, fairly frankly, have had entry to earlier than. So that is one component. The second component is solely that you simply get a greater method in service supply; you’ll be able to beef up the qualities of your supply on a extra harmonised stage, whereas it was fairly frankly of very various high quality earlier than. And then clearly we have moved to a decrease cost-base.
Q: To give readers some concept of the size of the transformation, what number of regional workplaces have been absorbed into the One Unilever programme?
CK: Within the One Unilever programme itself… it has been round 25 nations, and inside every nation we had at the very least three items, so for example 80 items. We had three totally different divisions of enterprise; every of them was fairly proud to have its personal ERP system, and – guess what – roughly every nation managed to have its personal customised model, so on the finish we imagine we had 18 totally different ERP methods. And we managed to have so many variants of the processes that they numbered within the a whole lot.
So we had a really, very numerous scenario which we confronted in the beginning of 2005. And that has now really modified dramatically, as a result of now we have now solely, for example, one course of for every of these I discussed earlier – like purchase-to-pay, the best way we do basic ledger, reporting, how we do journey and bills, mounted belongings, and likewise bill-to-cash. I feel for a fast-moving client firm resembling ours that is an excellent achievement and we’re very pleased with it.
Q: You just lately spoke on the significance of clear and strong governance, and of excellent communication with an outsource supplier. Let’s have a look at the governance challenge first: why is that so necessary?
CK: I imagine governance is necessary as a result of, as I all the time say, it has to work on good and unhealthy days. So once you discuss to your supplier you must have as strong a relationship as potential which is able to take you thru the ups and downs – particularly the downs, clearly! Because there can be points, and you must handle these points, as you must handle them internally as properly on a day-to-day foundation. Operational points are hitting you left, proper and centre in some unspecified time in the future; at different instances it is extra quiet.
We had – on the time after we selected our outsourcing supplier, IBM – determined to go for a cooperative model. We spent a while, intentionally, on what sort of relationship we needed to construct, and we mentioned that, properly, we did not need to have a shared P&L on the finish of the day, however we needed to get very shut in the best way that we might collectively resolve points, and that we might collectively take possession of points even when they’d hit one social gathering more durable than the opposite one. So I feel we learnt from different areas the place we had additionally outsourced, inside our personal organisation, and from listening to quite a lot of different firms as properly, that that is fairly basic. So we have now moved away – I feel efficiently – from regular customer-client behaviour in the direction of a partnership.
Q: You’ve mentioned “keep regular meetings going even during the good times when it might seem there’s nothing to meet about”; how necessary are these conferences, and conserving the connection going even when issues are going properly?
CK: I feel it is actually essential. There’s all the time an inclination – particularly now in instances of financial disaster – to see all the pieces else as extra necessary than your fundamental processes; however if you cannot discover the 5 minutes, ten minutes, half an hour, no matter it takes, to hyperlink up together with your service supplier – who’s really managing fairly massive components of your processes – and simply ask “how’s it going?”, when you’re not cautious, points will creep up and they won’t be resolved, as a result of individuals will see them as not being pressing sufficient and so forth.
You must work constantly on the problems in addition to on the partnership; I imagine you’ll be able to have pretty PowerPoint slides telling you all about governance however on the finish of the day it comes again to the individuals who must take care of issues, and they should discuss to one another. I strongly imagine you’ll be able to’t substitute this by means of electronic mail or different means; you HAVE to speak to one another. And you must do it on the lowest potential stage; you’ll be able to’t all the time do it on the prime stage as a result of you must get the groups who really must do the job speaking to one another.
Q: You talked about the monetary disaster there, so let’s end on that matter. Obviously instances are getting harder for firms world wide; typically firms that do not have Unilever’s scale and assets are struggling significantly. What fast wins may you advocate for practitioners going into troubled instances with out a lot gentle on the finish of the tunnel?
CK: There’s no easy recipe as such and I am unable to communicate for different companies; however I feel individuals want to take a look at their processes and discover out the place the leakages are. Some of them might have inefficient processes and the price of the transaction could also be just too excessive, in order that they must suppose how they’ll resolve that. There are choices there. They do not essentially must undergo an outsourcing supplier, as we have now chosen; you could discover a totally different answer in-house. It relies upon actually on the kind of enterprise, on the tradition, and on the present set-up of the infrastructure.
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