Efficiency in Managing
a Finance Shared Service Centre
at British American Tobacco Russia
Kirill Popadyuk

British American Tobacco Russia

Finance Service Centre (FSC)
Russian
Accounts Travel & Inter-
Statutory
Payable Expense company
Reporting
Russian
Accounts Fixed
Banking Tax
Receivable Assets
Reporting
IFRS
General Treasury
Payroll Trial
Ledger Dealing
Balance

Efficiency Growth, 2006-2007
17500
40
8700
invoice/month
invoice/AP per day
93 FTEs
88 FTEs
83 FTEs
12 76 FTEs
Jun 06 Jun 07 Dec 07
Dec 06

Efficiency: the Art of Trade-off

Efficiency Battlefield
external requirements internal requirements
professionalism
tax & law compliance
People
cost pressure fair remuneration
Systems
control environment segregation of duties
Processes
standardisation
agility

Efficiency Battlefield: Processes
external requirements internal requirements
professionalism
tax & law compliance
People
cost pressure fair remuneration
Systems
control environment segregation of duties
Processes
standardisation
agility

Processes: Unavoidable Trade-offs
agility vs. standardisation
demand for FSC services  mutual key performance
varies significantly over indicators for FSC and
the course of the year the Client
the Client anticipates  service level agreement
extra “free” services
 transparent issue
debate over the borders escalation mechanism
of responsibility emerges
 the Client Board

Processes: Unavoidable Trade-offs
tax & law compliance vs. standardisation
local specifics  fact-based Client
complicates global expectation
process unification management
local specifics slows  active risk management
standard processes
 the Client Board
down (“bureaucracy
premium”) and creates
new processes

Processes: Unavoidable Trade-offs
cost pressure vs. segregation of duties
correct segregation of  involving supervisory
duties may lead to an (vs. operational)
increase in headcount positions for certain
sensitive transactions
 less of a problem for
large shared service
centres

Efficiency Battlefield: Systems
external requirements internal requirements
professionalism
tax & law compliance
People
cost pressure fair remuneration
Systems
control environment segregation of duties
Processe
s
standardisation
agility

Systems: Unavoidable Trade-offs
agility vs. standardisation
Client’s innovative  fact-based Client
projects may require expectation
new specific services management
certain Client’s demands  the Client Board to
are exceptional and not authorise changes in the
supported by existing service level agreement
systems
 introduction of self-
service where feasible

Systems: Unavoidable Trade-offs
tax & law compliance vs. standardisation
local specifics  justification of any
complicates global departure from standard
system unification systems considering all
risks (e.g. tax-related)
additional systems and and opportunities
their integration is
required

Efficiency Battlefield: People
external requirements internal requirements
professionalism
tax & law compliance
People
cost pressure fair remuneration
Systems
control environment segregation of duties
Processe
s
standardisation
agility

People: Unavoidable Trade-offs
agility vs. standardisation
Client-centred work and  shift from managing an
posting invoices require accounting department
different skill sets to service management
certain Client’s demands  the Client Board to
are exceptional and not authorise changes in the
supported by existing service level agreement
skill set

People: Unavoidable Trade-offs
cost pressure vs. fair remuneration
demand for FSC services  flexible arrangements to
varies significantly over allow quick increase in
the course of the year temporary headcount
greater professionalism  organisational structure
requires higher allowing for routine
remuneration transaction processing
 relocation to cheaper
regions

Efficiency in Managing a Service Centre
Client expectations
management
clear mutual KPIs
service level
Client Board agreement
risk management service
management