SSON Interview with Mark Preston
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SSON Interview with Mark Preston

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Mark Preston is speaking at the 14th Annual Australasian Shared Services & Outsourcing Week. For more information about the event, visit www.sharedservicesweek.com.au or call +61 2 9229 1000. Or......

Mark Preston is speaking at the 14th Annual Australasian Shared Services & Outsourcing Week. For more information about the event, visit www.sharedservicesweek.com.au or call +61 2 9229 1000. Or you can email enquire@iqpc.com.au


Arthur Chan of SSON spoke to Mark Preston, the Director of Financial Shared Services at the University of Sydney as he reveals what core advice he has for others on a similar journey. He also gives his KPIs of a successful shared service and details his goals for 2011.

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  • 1. Interview with Mark Preston, Director of Financial Services, University of SydneyOver 450 shared services and outsourcing professionals will cometogether under one roof to share ideas and best practices to help shapethe future of the industry in the ANZ region at the 14th AnnualAustralasian Shared Services and Outsourcing Week 2011.SSONCan you give us a little rundown of where the University of Sydney is on theshared services journey? Can you give us an idea of scales, functions, andmaturity, etc?Mark PrestonThe University of Sydney has been on the shared services journey forprobably between 3 and 4 years. We have probably the most matured sharedservices, in fact, in finance where we support all the finance transactionalactivities across procure-to-pay, billing-to-cash financial systems support andtraining and financial systems development. So, in terms of scale we haveabout 75 people in the organisation. Theres a total finance population for theuniversity of about 200 people, and were the only, I think, shared service partof the university who has service level agreements in place etc. Theuniversity has also embarked on shared services on the HR front mainly inpayroll processing and recruitment and also on the IT front in terms of desktopsupport and distance development and architecture. So, its still an evolvingjourney and it’s had a few ups and downs, but there’s genuine support ofshared services in the university as a way forward.SSONYou’ve had experience in several SSOs including Lend Lease,Commonwealth Bank, and Qantas. So if you could give one piece of coreadvice on change management which has helped transformation projectssucceed across industries, what would it be?Mark PrestonIt reminds me of some overseas services journeys I’ve been on. But I thinkthe people aspects are more challenging, engaging the people is morechallenging than the technical and financial aspects. So my big advice wouldbe to a to give a lot of attention to proper roles and responsibilities being 1
  • 2. defined properly, the organisation structure as being right, and mostimportantly as well as the technical aspects of each role, place a lot ofemphasis on the behavioural aspects. So shared services is all aboutproviding services to the customers. Without those internal joint venturecustomers, your role would not exist. So you need to put all emphasis on thepeople aspects, and make sure roles and responsibilities, and also thebehavioural competencies are very well defined. And also one other piece ofadvice is theres no such thing as too much communication!SSONSo how far does finance transformation differ between traditional corporationsand at institutions like universities?Mark PrestonWell I think the underlying principles, Arthur, are much the same. Its just theaudience is different. The thing about a university is, I suppose, compared toa corporate is theres no such thing in the university as a mandate. A lot ofcommittees make a lot of decisions, and theres probably lots moreconsultation and debate, and then basically just issue discussion required in auniversity. There’s no such thing as the managing director (or in our case ourvice chancellor) saying “this is our new policy and this is our new price andyou will all do it”. And in the case of university, you really have to win over thehearts and minds of your customer or audience. And there is not theconsequence management in the university that there might be in a corporateworld, should they not adhere to new policies and procedures.SSONIn terms of KPIs, can you tell us a bit about a recent achievement you areparticularly proud of and what the secret was to achieving it?Mark PrestonProbably one achievement in the last couple of years as a result of the GlobalFinancial Crisis was that up until a couple of years ago, the universitys cashflow was very solid. More money came in than went out and it came in on aregular basis. And there wasn’t a lot of focus on working capitalmanagement. So for example, it was a responsibility of various businessunits. Those that raised an invoice for revenue were accountable forcollecting that revenue as well. And to be honest, there was not the focus onthat because cash flow wasn’t as tight before the crisis.So basically we created a central collections area. And as a result, corporateindex has gone or debtor’s index has gone down from over 60 days to lessthan 40 days. So just for a bit of focus on, again, clearly defined roles andresponsibilities for the shared services organisation and the business unit,and the various escalation points in that process, has resulted in us having 20million bucks a day in the bank everyday better than what we had some timeago. So, thats one simple one. But probably others are that we have, at anypoint in time, huge balances of foreign currency. We’re now in effect self-hedge so we use those existing foreign currency balances to purchase goodsfrom outsourcers. The university, as you can imagine, purchases the best 2
  • 3. part of 80 million dollars worth of goods and services from overseas. So weuse our own foreign currency balances whereas in the past, we used to go outand buy them at retail rate with that money overseas. So thats just a coupleof examples.SSONNow that we are in 2011, what are your more specific goals for the coming 12months within Financial Transformation at the University?Mark PrestonI suppose one of the particular areas of the university environment is thatallocation of resources to process improvement is seen as a cost rather thanan investment, whereas in the corporate world you would do a detailedbusiness case and benefits and seek funding based on benefits realisationtargets. In the university to get funds allocated to process improvement isvery difficult. There are a lot of other competing priorities like new labs, newbuildings etc to attract highly talented researchers, and academics, andstudents. Seed funding is difficult to get and perceived as a cost for processimprovement. Our main focus is on continuous improvement. Anything bigbang is difficult to pull off in this environment, but by targeting certaincustomers and rolling out consistent, streamlined processes where we canmake a lot of efficiency. Its kind of chip away rather than big bang. Buthaving said that over the past few years we have reduced the operating costsof the shared services organisation in finance by about 30%; and despite thatwere processing 25% more volumes as the front end of the university isbooming and were doing it with 18% less resources. So thats a pretty goodstory, but again just by chipping away rather than by a big bang attack whichis really basically is very difficult; its not going to happen in this environment.There are other much more competitive priorities for funding.Mark Preston is the Director of Financial Shared Services at theUniversity of Sydney. Mark will be speaking at the 14th AnnualAustralasian Shared Services and Outsourcing Week. For moreinformation on that event, please visit www.sharedservicesweek.com.auor call us on 02-9229-1000.Alternatively, you can email us at enquire@iqpc.com.au and don’t forgetyou can also follow us on Twitter @SSONetwork for our latest news andupdates and interviews. 3
  • 4. SSONCan you please tell us a bit about yourself and your experience and yourrelationship to shared services.Mark PrestonOkay, I began with the shared services journey in the late 1990’s with LendLease and basically set up a shared services there for Asia PacificCorporations, across all the areas of finance, and HR, and corporateprocurement and also on facilities management. So, we had about 200people in that shared services organisation and that it was quite a big bangapproach - we did not do the staged approach like many organisers do. Weidentified all the functions that we thought would fit and then kicked them offall at once. Then a couple of years after Lend Lease sold a large chunk of itsbusiness in Australia and I moved to the Commonwealth Bank and set up ashared services organisation across finance; largely evolving around the rollout of a People Soft core financial system and turning off the 30 legacyfinance systems.A few years later, I joined Qantas when Qantas embarked on a segmentationproject to give focus to all its core business units rather than Qantas beinglooked at as one monster organisation. It divided itself into 10 operatingsegments and I assisted in the design and role out of the shared services ofwhat was called Qantas Business Services Organisation.For the past few years, I have been at the University of Sydney, for the past2-1/2 years assisting in the role of financial shared services here. I think onething about the universities, particularly this one is, its a very big business.Its nearly a 2-billion-dollar enterprise, 50,000 students, 67,000 employees.The education sector is quite a big one and quite diversified. You know theuniversity has 6 to 7 to 8 faculties and over 100 schools. In those subsets,its quite a complex and diverse business. So thats my background inshared services. 4