Change Management Before Business Process Outsourcing

As Finance Leaders, we continuously look for ways to innovate and enhance the value of skills and services we promise to our customers, internally and externally. One frequent route we travel is to undertake a Business Process Outsourcing (BPO) initiative. We move routine accounting processes to process solutions experts. This allows us to focus on developing our Finance Teams into broader Business Partners, Analysts and Performance Managers. The Order-to-Cash (OTC) and Procurement to Pay (PTP)routines are not less value added in the overall accounting arena but they add less value to the Business Partnership objectives of the evolving Finance &Performance Management role. Today’s Business Partnering objectives must ensure financial experts collaborate across multiple disciplines to deliver maximum value and retain a definitive voice in the strategic and operational running of the business.

Let’s focus on how best to achieve a significant change like the outsourcing of locally managed OTC and PTP processes. First, this requires clear expectation setting and Change Management discipline in the process. Second the economic justification, timing and business optics must be sound and the buy-in from key stakeholders must be unanimous.

As a divisional CFO in various global businesses, currently with a world leader in sales and manufacturing of building products, I’ve participated in numerous initiatives requiring extensive Change Management. Following an extensive multi-year project to align all business units across forty countries onto a single ERP/MRP/CRM platform, it was apparent that the routine OTC and PTP tasks across the globe could and should be centralized in one or a few locations. The work effort and internal controls were similar regardless of location and our unified ERP system allowed for a singular method of data management. The centralization of like tasks would allow for the routine transactional accounting to be expertly managed, more efficiently, by others with requisite core competencies.

 To understand the complex business outsourcing effort, its costs and benefits, we explored multiple alternatives, reviewed what and how others had accomplished these goals, evaluated various solutions partners and considered geographical/cultural considerations. Most importantly, we focused on gaining early and unambiguous executive support for the tough decisions that would result in shifting from internal company resources to third party resources for these traditional accounting transactions processing. Initially, we encountered some stakeholder resistance to a dependency on a third party, off-shoring in general, and the handling of confidential data outside of our own sphere of control. Ultimately, through well documented process flows, trust in the global solutions provider’s controls, and evidence of the seamless transition with minimal to no customer or vendor impact, executive stakeholders bought in and agreed that the long-term gain outweighed the short-term pain.

As to the implementation, the BPO solutions partner was considered a department of our own finance global business services team. The timeframe for the transition was realistically set. Project Plans were well documented, communicated and all involved were clear on expectations. A comprehensive transition team was formed with dedicated local country resources and solutions partner team members. This became a multicultural experience for all as both teams traveled to the other’s home country for intensive Knowledge Transfer.

For the employees whose positions would be eliminated, we engaged with the individuals early and offered fair separation packages. Importantly, we offered generous stay-on bonuses to individuals who agreed to be key contributors to the Knowledge Transfer process. For the most part, all stayed committed to the transition and while it was painful to say good bye to valued and tenured colleagues, in other ways it was rewarding as several team members had the opportunity to collaborate with new people and travel to new worlds during the Knowledge Transfer effort. Many great stories can be told…another day.

This BPO initiative is now five years ‘in the books,’ and the process flow efficiencies, continuous improvement and enhanced automation in data management are resounding. We are virtually paperless in our document flow management. Customers, vendors, and internal business constituents have all benefited from an elevated level of service from members on our Finance Team who have moved from clerical roles to greater value adding analytical and problem-solving roles. Collection Results are world class and vendor payables problems have nearly vanished…well, o.k., they have improved multifold. In summary, while the traditional receivables and payables accounting processes and paper chase has been eliminated, the value enhancement of Finance Front Office customer and vendor liaisons has been, in a word…AWESOME!