Q: John, let's start with a little background. How did you get to your current role?
A: My background is finance. I worked about eighteen years ago, and spent most of my career in the field of finance, management accounting, accounting, accounting, etc. - I moved a little. I sort of got into shared services, I think, about eight or nine years ago at Reuters, where I was asked to create a pilot for the field of financial common services, installed it and launched it for a couple of years, expanding its head office and the UK area. Then, as part of the common services management team, we built a global shared services model based on five regional service centers. I did some change management at the time, engaging ERP and PRP, and then decided to take up work that focuses on the transaction area. I have never done these aspects of work, and I wanted to get a full range of work with common services.
We created a common service center in the UK, and I launched a transaction exchange service center. The plan was to establish five regional service centers, and then move to a global model. So, while I managed the transactional party for two years, there were various discussions about where we should build the global service center; we have ever settled in bangalore. I was asked to lead a global designer team to build a model and design around the Bangalore SSC. So I went there a little bit, did some benchmarking, recruited a team of managers, and we reworked all the processes in the five general service areas. It was quite interesting; Although they were created only two or three years ago, they diversified so much (although we had a central core team that was supposed to support all the standard processes, every service center was diversified), and it was a case of returning to, understanding the gaps and building model, and then its implementation. We successfully implemented it in 2005. Then in early 2006, I joined Citi.
Question: Since then, you are partly responsible for the revolution in Citigroup procurement operations. Tell us about it - what has changed?
A: Of course, I played my part. I don't know which big part, because I was there only two and a half years. It actually began five, six years ago with the introduction of the ERP system all over the world; it was predominantly located in the United States, which is about two thirds of the residents in Citgroup, therefore there are more than two hundred thousand people there. It has been re-implemented in larger countries in the EMEA region. (One thing I would say, looking back, is that we actually changed Oracle quite dramatically, and this had an impact on the countries that we can implement solely on a cost basis, because now the maintenance and implementation is much more complicated. than if it were just a delivered system.)
So I entered two and a half years ago when Citi expanded the scope of PP — we actually call our Oracle PP system, as well as the process — and at first it was an extension of this, we had command systems for deploying it. Then it was a case of building purchases — transactional purchases — and payment services, and we began to do this by creating a regional technology center in Budapest.
Question: How big is this center?
A: Well, we started a year ago. We now have about 120 people, and we still move larger countries there; we expect to double this amount by the end of the year. In fact, we switched to transactional purchases, our payables, our expenses, and we also introduced some HR functions.
Question: How did you manage to release working capital?
A: I think we are just starting. The advantage of going to Budapest was that we could get really high-quality staff. Now we have entered the service center, we have passed the stage of labor arbitration, savings and so on. Therefore, I would say that now we are just starting the process of creating working capital. For example, we have a team of discounts with fast payment; they were there for about four or five months, and we are ahead of the game to realize our quick payment discounts. At the moment, this is just a pilot - we focus on the UK first, because it is the largest country in the EMEA region - we work very closely with our strategic department of sources who negotiate transactions, and then we have a team of experts based in Budapest that realize these quick payment discounts. I think these are the first days. I think that after four or five months we received discounts on fast payments along the purchase order route. We are trying to speed up payment along the route of the invoice, where we work with various suppliers or categories that do not fit into the PO profile. It works quite well.
Question: What about the integration of procurement and AR: how long does the process go on, is it still going on, and what is it related to?
A: It was quite interesting, because in Reuters I turned on the procurement and invoicing features when I set up shared services. When I went to Citi, although they were part of a very large common service organization, they were still independent. Only when we created the SSC, did we merge transactional purchases with the payables team. It was about a year ago, and it turned out to be really successful - so much so that they actually made this global model and about four months ago, which was globally deployed throughout America and Asian countries. So it was a huge success. This is of great importance: the team works better together, we are building up substantive experience. A real quick win is a solution to the problem: we solve problems very quickly together.
Q: What were the biggest obstacles you encountered when integrating procurement and A / P?
A: I think it sold it to the business. We tried to sell them the whole package; we implemented the model without payment PO-without payment, at the same time we left the service center, and at the same time we integrated purchases and A / P. The biggest obstacle in Citigroup is that we do not visit anything in Citigroup: we We discuss everything with our business customers, and the biggest obstacle was getting them to buy it. It took a lot of discussion.
Q: Why?
A: As for banks, when you go to them and say, “If you do this, you will save £ 100,000”, you are talking to investment bankers who deal with millions every day, and they don’t care! It also seems to me that they did not like the idea that there would be more self-service in the process - they would have to be demanded from the Oracle system. Previously, they just ran their suppliers with whom they wanted to deal. If you are an approver in business, there is a misconception that you can go and order on behalf of a business. This is not so: we had to work with them so that they understand that we want to control who they are dealing with. Once we did this, they needed to control how much they spend on their client.
Q: What about the importance of KPI?
A: KPI is extremely important. You must understand that they are also developing together with the project (we regard it as a project, even if we are out of the new phase now). As I said, it was very difficult, and you had to negotiate every step of the way; KPIs were vital because they reflected any changes we had on performance, cost, speed, and accuracy. In the long run, it was so important to show quick wins, and, as a rule, it is much easier to get agreement, to take the next step forward, if you proved your success in the previous step.
We tried to hold meetings where possible - if not, we will issue dashboards or email updates, and not wanting to bombard our clients, we constantly tried to show that we did it before, or it was better controlled, and that it was cheaper, KPI made a huge difference when we walked, since we could prove that we were successful at different stages.
Yes, we had problems: you always had problems, moving to the organization of common services and placing people through a standard routine with payment of purchases and payables. But KPIs were hard facts; you are complaining about people, or they can be word of mouth, where one person was not happy, and everyone would start moaning. KPI is the way you could prove in black and white that we improve the cycle time, we increase accuracy, and we saved money for the company.
Question: Who made the KPI?
Answer: I worked very closely with the guy who heads the transition to purchase: we both worked at Reuters before, and we joined Citi together. We had a fair idea of the KPI we wanted; we sat down with the project team, and we developed them within a few months. KPIs change as the project progresses: first, these are just the basics - how much and how accurate - and then you change them.
Question: How important is the entrance fee to the management?
A: Very important. People usually do not want you to do such things: you talk about common services, you talk about centralization, and you take away people. They love to order what they want, when they want to order it; every time a problem arises, people jump on it - and they will highlight problems, mistakes - therefore, from an internal point of view, leadership is especially important for people - both the project team and the operational group - to concentrate. It is also important to go out and influence these people, your customers; you need to have someone to listen to, just have a vision and move forward. I need, many times, senior sponsorship.
Question: What would you do differently next time?
Answer: I mentioned ERP: I would make changes. In addition, I think that one thing that always attracts us is what remains in the country, and not what you moved. Everyone concentrates on the fact that they want to move to the common services zone or to the zone for receiving payments, and they do not look at what remains in the country. They do not take so much time; which is always a problem. I also think that there are always exceptions that cause problems. You can sit there and record the flow of processes and procedures until your hands hurt, but there are always ten percent of any process that will be the exception. He understands the exceptions that are important, because this is what you are going to disable after that.
Q: How far can Citi be a marker for other companies, particularly small institutions?
A: Great question. I do not think that there are any obstacles for any company making changes. Well, Citi is a huge company - we have 52 countries in the EMEA region, and before we get funding, etc., let's go to the regional service center. But you do not need to move the region: you can do it within the country. You do not need to buy huge Oracle or SAP systems; There are many ERP systems that you can use. I think that this is almost all the basics: even restructuring your department is quite easy. It does not have to be on a huge scale to save considerable money. You know, Citi is huge with 370,000 people, and Reuters with 14,000 people is small, but they both achieved the same goal: I think small companies can do it. National companies can do this - they are not just international companies.
Q: Finally, what is the most important piece of advice that you give to someone at the beginning of their sharing?
A: They have no order, so I’ll just have waffles ...
Always understand what the ultimate goal is; even if the project has changed, you need to follow the ultimate goal. For example, at Reuters we knew that the ultimate goal would be the creation of regional service centers and their transfer to a global service center. In Citi, the ultimate goal is to create a regional service center, and we hope to add value; therefore, if you like, different results, but we know what they are. Always keep this in mind, because you can very easily get a waylaid.
Set goals along the way, short term. Once you can prove that you have achieved your previous goal and were successful in this, it is much easier to get support support to move on to the next bit. Do not look at him like a huge project: put it in small pieces.
Keep the system as vanilla as possible, easy to deploy, and much easier to maintain. I think it is massive.
You need to have strong support from senior management, otherwise you will negotiate forever. At Reuters, we had a small platform; it was very easy with MD and FD on board, and it took a lot longer in Citigroup. We are not struggling financially, but this is a difficult time for banking; all of a sudden it gets a lot easier because top management says “come on.”
Create a strong project team. What I like to do is to create a team that is divided between those who have experience in the field of design and those who know the business. For example, at Reuters, we used consultants when we first built ERP and created regional common services, but used fully internal people for global reorganization because they survived the pain. You must have this team that knows the business. You do not need only engineering people, you also need to know the business.
Only transfer standard processes and systems: this does not mean that you need to configure them before transferring, but not to accept different systems and different processes. What you usually find is that you have really proven that you can succeed in certain things, you get a lot of clients saying that they want to move this and that. Make sure you move links with your strategy. Be prepared to say no to the system or process if it does not fit your strategy / plan.
You must ensure that roles and responsibilities are defined from the very beginning, wherever you go. Too often, sending parties simply “reset and launch”, especially if the conclusion is that they leave the organization. This is due to SLA: honestly, when I started many years ago, I thought it was just a piece of paper that needed to be passed. However, I taught that they are vital because, especially when you start, they can help protect new SSC employees. As soon as you signed them, you will get some leeway. You will be wrong, but they help you with customer complaints. They also help remind others of their responsibilities. They are really important.
I think, finally, as part of the process, make sure you go through all the endless details: go through the process flows. We have conference pilots when we translate work, and we try to exclude as much as possible because, as I said, these are the ones that catch you.
