From Increased Scope to Stabilisation
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From Increased Scope to Stabilisation

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BASF explore all aspects of their Shared Services Strategic Objectives from improving efficiency and reducing cost, supporting growth strategy to processing speed, quality and compliance with a main ...

BASF explore all aspects of their Shared Services Strategic Objectives from improving efficiency and reducing cost, supporting growth strategy to processing speed, quality and compliance with a main focus on core business and front office activities.

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From Increased Scope to Stabilisation From Increased Scope to Stabilisation Presentation Transcript

  • From Increased Scope to StabilisationA BASF Case Study21 September 2010KP LauManaging Director, BASF Asia-Pacific Service Centre
  • BASF – The Chemical Company“We create chemistry”04.11.2004 2
  • BASF – The Chemical CompanyAn introduction Chemistry is about every aspect of life. We are connected to deliver intelligent and sustainable solutions. Sales 2009: €50,693 mill. EBIT 2009: €3,677 mill. Employees (December 31, 2009): 104,779 About 1,300 new patents filed 6 Verbund ( integrated ) sites and about 380 production sites04.11.2004 3
  • BASF – The Chemical CompanyBASF today – a well-balanced portfolioTotal sales 2009: €50.7 billion Percentage of sales 2009 Chemicals Plastics* Performance Functional Agricultural Oil & Gas Products Solutions Solutions 15% 14% 18% 14% 7% 22% Inorganics Performance Dispersions & Catalysts Crop Exploration & Polymers Pigments Protection Production and Petrochemicals Polyurethanes Care Construction Natural Gas Chemicals Chemicals Trading Intermediates Paper Coatings Chemicals Performance Chemicals * Styrenics reported under ‘Other’04.11.2004 4
  • BASF – The Chemical CompanyBASF in Asia Pacific China Customers in 17 countries S. Korea Japan Approx.15,000 employees Pakistan Bangladesh Taiwan 105 companies, of which 43 JVs Thailand Hong Kong India Vietnam 124 production sites Sri Lanka Malaysia Philippines 13 R&D sites Singapore Indonesia Sales* in 2009: Approximately Regional headquarters €8.7 billion Verbund site Major chemical production site* Australia Asia Pacific service center R&D center* # Due to the close proximity of some production sites, a dot may represent more than one site. * By location of customer Data as of December 2009 New Zealand04.11.2004 5
  • BASF – The Chemical CompanyShared Services Strategic Objectives • Implementation of Shared Services facilitates process • Implementation of Shared Services facilitates process Efficiency & Efficiency & streamlining and leverages economies of scale improving streamlining and leverages economies of scale improving Cost Cost efficiency and reducing cost efficiency and reducing cost • Shared Service Centre supports the fast integration of • Shared Service Centre supports the fast integration of Growth Growth acquisitions into BASF’s business structure supporting our acquisitions into BASF’s business structure supporting our growth strategy growth strategy • Shared Service Centre leverages technology and • Shared Service Centre leverages technology and Quality Quality standardisation to drive continuous improvement of standardisation to drive continuous improvement of & Speed & Speed processing speed, quality and compliance processing speed, quality and compliance • Business Units and Local Companies are released from back • Business Units and Local Companies are released from back Business Business office administration tasks and focus on core business and office administration tasks and focus on core business and Value Value front office activities front office activities04.11.2004 6
  • BASF – The Chemical CompanyBASF’s Shared Service Centers Berlin Florham Pk Rockaway Ludwigshafen Kuala Lumpur Sao Paulo04.11.2004 7
  • BASF – The Chemical CompanyDecision in 2005 to setup centre for Asia Pacific HR Services IT/IS Services F&A Services BASF Asia Pacific Service Centre A single regional centre, based in Kuala Lumpur, providing shared Finance, IT/IS and HR services to BASF companies in Asia Pacific04.11.2004 8
  • BASF – The Chemical CompanyCurrent scope and coverage in Asia Pacific Finance & Accounting +5:00 +6:00 +7:00 +8:00 +9:00 +10:00 +11:00 +12:00 Accounts payable Accounts receivable Japan General accounting Financial reporting Korea Information Services China Application support & Taiwan development Infrastructure support Hong Kong India Human Resources Pakistan Vietnam Philippines Bangladesh Payroll Thailand HR data Countries: 17 Malaysia Sri Lanka Singapore Companies: 67 Indonesia Languages: 6 Finance Transactions: > 1.2 million p.a. SAP Users: 6,000 Australia Employees: 12,000 New Zealand04.11.2004 9
  • BASF – The Chemical Company Our growth over the past 6 years150 20,000140 Employees +40% * 18,000130120 16,000 F&A Transactions110 +40% * 14,000100 Sales +30% *90 12,00080 10,00070 Planned acquisition60 8,00050 6,0004030 4,00020 Original scope Today Original scope Today 2,00010 46 co’s 46 co’s 67 co’s 67 co’s 0 0 2005 2006 2007 2008 2009 2010 2011 * Estimated 04.11.2004 10
  • BASF – The Chemical CompanyGetting the fundamentals right is the key enablerto achieving sustainability Standardized business processes Transparent performance measurement on efficiency of Common ERP system operations Decide early on scope of services to Strong governance support be offered Collaboration with customer entities Minimize non-standard scope, allowing only for legal exceptions Set clear expectations on role and responsibilities, Service Level Agreements Clear rules of engagement, especially for problem resolutions & escalations Text Define the right chargeback principles, apply it consistently04.11.2004 11
  • BASF – The Chemical CompanyParadigm shift required to reap the full benefits Localised Services Shared Service Platform HR F&A Paradigm IT/IS Shift HR F&A HR F&A IT/IS IT/IS HR F&A IT/IS HR F&A Standardised, IT/IS Streamlined Business Reduce deviations from Processes Standardised and stable process standards processes Implement rules based Streamlined interfaces processing Continuous improvement Ensure master data is accurate and establishment of and up to date regional best practices04.11.2004 12
  • BASF – The Chemical CompanyDefine your operating modelServices Shared TransactionalCompany Local Country Specific Knowledge & Expertise Business PartneringRegionalFunction Governance04.11.2004 13
  • BASF – The Chemical CompanyHave a consistent service transition approach Go-Live Month 1 Month 2 Month 3 Month 4 Month 5 Services Confirmation Process Changes Design & Imp. Scope & Knowledge Transfer Process Business Simulation Technology ServiceDesk Implementation & People Facilities Matters Service Level Agreement Establishment Billing Mechanism Service Communication Manage- Technology Infrastructure & Physical Environment Implementation ment Organization Design Organizational Implementation Change Management & Communication04.11.2004 14
  • BASF – The Chemical CompanyEmbed quality, control & continuousimprovement Quality Management Infrastructure Quality Management Infrastructure Management Responsibility Service Realization Management Responsibility Resource Management Monitoring Resource Management ISO 9001: 2000 Process Measurement Management Review Process Improvement Compliance Audits Continuous Continuous Internal Control Internal Control Improvement Improvement Control Environment Control Environment Consistent methodology Information and Consistent methodology Process capability Six Information and Process capability FRC Communication Data/facts driven Sigma Communication Data/facts driven Control Activities improvements Process Controls Control Activities improvements Risk Assessment Risk Assessment Elimination of defects Best Practices Monitoring Elimination of defects Monitoring04.11.2004 15
  • BASF – The Chemical CompanyTransparent performance measurement04.11.2004 16
  • BASF – The Chemical CompanyDevelop a human resource management strategy Employee lifecycle management Strength of internal functions to support rapid growth Employee value proposition Acknowledge industry growth patterns Employee engagement and development Knowledge management Learning & development Employee retention Career path and succession management04.11.2004 17
  • BASF – The Chemical CompanyOur key learnings You can’t do it alone ! Change management journey does not end with service transition Strong governance support Collaboration with customer “What can go wrong will go wrong, entities usually at the worst possible time” – Change management Be Prepared, Be Pragmatic, – Commit to SLA’s Be Flexible, Keep Calm, Communicate. Do not underestimate the complexities of building up a SSC vis a vis internal capability to Recruit, retain employees. Ability to scale up operations efficiently04.11.2004 18
  • BASF – The Chemical CompanyPost-stabilization : Value creation of back-endprocesses Global / regional coverage allows Injection of new talent into group-wide organization Comparative analysis Improvement opportunities Development of in-depth functional expertise Process standardization Cost efficiency Key enabler for global / regional implementation of new or enhanced Capabilities Processes Systems04.11.2004 19
  • BASF – The Chemical CompanyOur journey so far and where we’re going NOW FUTURE Transited from a successful project BASF global framework into stable operations Competence centers Supporting BASF business growth & portfolio management Global systems & processes Consistently meeting service levels Knowledge integration Driving operational excellence Globally integrated service Best-in-class methodologies operations M&A integration Leverage on global cost synergies Large-scale project execution Complex systems integration’04.11.2004 20
  • Thank you !04.11.2004 21