Shared Services Transformation

605
-1

Published on

Published in: Business, Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
605
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
18
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Shared Services Transformation

  1. 1. Owens CorningShared Services Transformation IQPC/SSON Finance Transformation Pat Cassity, Shared Services Director September 22, 2011 THE PINK PANTHER™ & © 1964-2009 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. © 2009 Owens Corning.
  2. 2. Agenda• Overview of Owens Corning• History of Owens Corning Shared Services – Timeline – Process Areas – Captive Centers – Costs• Need for Change in Shared Services Strategy• Transition to offshore provider• What We Learned• Next Steps 2
  3. 3. Owens Corning At A Glance • Founded in 1938, an industry leader in glass fiber insulation, roofing and asphalt and glass fiber reinforcements • 2010 revenues: $5 billion • 15,000 employees in 28 countries • FORTUNE 500 company for 57 consecutive years Leading North American Global Market Positions Leader • Residential Insulation • Composites • Commercial & Industrial Insulation • Residential Shingles Veneer Manufactured Stone • Roofing Asphalts Residential Shingles • Roofing AsphaltsTHE PINK PANTHER™ © 1964-2009 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. 3The color PINK is a registered trademark of Owens Corning. © 2009 Owens Corning.
  4. 4. Owens Corning Global Shared Services Process Areas and Locations Over Time 2008 US • PO creation • Small capital • Started in 1993 Sourcing • Customer Service • Began with 27 FTE in Charleston, WV in 1993 • Adjustments • Telecomm Invoicing Moved to India • Steadily grew scope of services provided. • Europe AP 2006 US • Europe 2004 India 2003 India • Customer consignment • Analytics • AP program OCV • OCIL AP • Fixed Asset administration • Thimmapur 2000 Europe Accounting • More Freight Payroll1993 -1998 U.S. • Cash • Inter- Processing• AP disbursement Company processing • AP Acctg• Hourly processing • Bank and Payroll • T&E admin GL Recons• T&E admin• Payroll MUMBAI, INDIA (salary)• Freight pmt WARRINGTON, UK CHARLESTON, WV ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 4
  5. 5. Charleston, WV• Opened in 1993• 90 Employees as of September, 2009• Primarily Supported North American Operations• Tasks/Responsibilities – Accounts Payable • 560,000 Invoices Annually – Freight Processing • Over 500,000 Freight Invoices, Rate Maintenance – Payroll • Supporting U.S. and Canadian Operations (Approx 10,000 employees) – Hourly and Salaried – Master Data • Vendor Master, Material Master, Finished Goods Master – Mailroom, Scanning into Workflow – Customer Service • 15 positions transferred from Toledo late 2007 – Travel and Entertainment / Procurement Card • Processing and Administration – Other (Rebate Processing, HR Support) 5
  6. 6. Mumbai, India• 40 Employees as of September, 2009• Supported F & A Processes (moved Corporate Finance) – Intercompany Accounting – Fixed Assets Accounting – Bank and General Ledger reconciliations• Supported Indian Operations – Payroll – Accounts Receivable – Accounts Payable (also supported N America, Europe) • 17 people in total supported the three regions 6
  7. 7. Warrington, UK• 4 Temporary Employees as of September 2009 – Reduced from 10 employees in 2007, when AP processing moved to Mumbai• Supported OC “legacy” plants (prior to SG acquisition)• Travel and Entertainment Processing• Invoice Scanning / Supplier Support – All Invoice Processing moved to Mumbai in 2008• Payment Runs 7
  8. 8. Global Business Shared Services Organization Size Increased and Cost DecreasedFrom 1998 - 2008: $ in 000’s Budget & Headcount Over Time Head Count• Scope of work 8,000 Spend FTE 160 increased and cost 7,000 140 per FTE reduced 6,000 120 5,000 100• Shifted FTE mix to more low cost 4,000 80 country employees 3,000 60 2,000 40• Reduced average 1,000 20 cost per FTE by 25% vs. 1998 and - 0 98 99 00 01 02 03 04 05 06 07 08 33% vs. peak in Year ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 2002 $ / FTE 60 61 61 68 69 64 56 60 51 46 46 Low Cost Country 0% 0% 0% 0% 0% 20% 21% 25% 26% 29% 31% 8
  9. 9. Transformation of Owens Corning• Emerged from asbestos-related bankruptcy in 2006• Acquired $900M composites company from Saint-Gobain in November 2007• Divested two building materials businesses in 2008• Focused on regional growth – increased manufacturing capacity in Europe and Asia• Now operating as 2 major business units 1) Building Materials 2) Composites• Consolidated Global Information Technology and Global Shared Services organizations in 2009 NA Building Materials Global Manufacturer 9
  10. 10. OC Shared Services Roadmap 2008 2009 – 2010 2011 + Previous State Actions Expansion of Capability Strategy Assessment Incremental Savings - Captive Centers BPO Selection Scalable, low cost Initial Transition modelNot Positioned to Scale Not Positioned to Scale Drive increased value to Drive increased value to A strategic service A strategic serviceand Reduce Cost: and Reduce Cost: OC: OC: delivery capability: delivery capability: Captive centers limit Captive centers limit Shared services strategy Shared services strategy Scalable delivery model Scalable delivery modelscalability and cost reduction scalability and cost reduction development developmentopportunities without opportunities without Global footprint Global footprintsignificant investment significant investment BPO partner selection BPO partner selection Minimize Cost to Deliver Minimize Cost to Deliver Sub-optimized work, focused Sub-optimized work, focused Transition to BPO Provider Transition to BPO Providerat task/activity and transaction at task/activity and transaction Leverage IT and Business Leverage IT and Businesslevel level Process standardization & Process standardization & process synergies process synergies optimization optimization Not leveraging IT and Shared Not leveraging IT and Shared Standardize Service Delivery Standardize Service DeliveryServices synergies Services synergies Evaluate new opportunities –– Evaluate new opportunities Europe, HR, A/R Europe, HR, A/R Enabled for M&A integration Enabled for M&A integration with speed with speed New org structure to New org structure to leverage new delivery model leverage new delivery model Continuous improvement 10 Continuous improvement
  11. 11. Transition to Offshore Provider Timeline - 2009• RFP developed: March• Strategic assessment: June• BPO provider selected and contract signed: September• Communication to employees: September• OC India employees begin working for offshore provider – 34 chose to take jobs with BPO • OC Mumbai employees to do same roles with BPO for 18 months• Due Diligence (scope) in US and UK: October• On site Knowledge Transfer begins: November• Off shore Knowledge Transfer begins: December 11
  12. 12. Transition to Offshore Provider Timeline - 2010• OC Mumbai employees move to BPO: February• Ramp down of Charleston employees began in March• UK office closed in April – Services provided by UK office done by offshore provider• Charleston, WV office closed in June – 87 jobs eliminated – 3 jobs were kept (operating out of home offices in WV) • Payroll Leader • Garnishments / Payroll Tax Expert • Accounts Payable Leader 12
  13. 13. People ImpactCharleston • My focus from announcement to closure (acting as Site Leader) • Very little attrition – Clear, transparent communication throughout – Retention Packages – State of WV Retraining programs • TAA – Trade Adjustment Assistance act • Approved by Department of Labor • Up to $20K in educational assistance • Extension of unemployment benefits while in school • Proactive discussions with other area firmsMumbai • 34 employees chose to take jobs with BPOWarrington, UK closed in April – retained P2P expert 13
  14. 14. 2010 Actions After Transition• Move from transition to operations focus - stabilization• Shared Services Organizational Structure• Governance – Assess and prioritize future opportunities – Cadence of meetings and reports• ERP Rationalization in Europe – throughout 2010 – Standard ERP platform- 2007 Saint Gobain plants – Change from decentralized processes to offshore provider• Roles Changed – In Shared Services – External to Shared Services Managing People Managing a Process 14
  15. 15. 2011+ Focus - Growth• Build on global, scalable model – China and Australia - 2011 – Korea, Japan – 2012 – Latin America – 2012• Business Platform for M & A activity – Acquisition in Q3 – Template for future – standardization = speed• Expansion of services – Plant procurement activities – Consolidation of travel management office – HRO – Build organizational structure to drive growth• Leverage IT and Shared Services 15
  16. 16. Project Outcomes• Delivered sustainable cost savings starting in 2010• Met or exceeded process level Service Level Agreements (SLAs) with proper controls• Enabled a global shared services platform to expand the back office work that can be done across OC regions• Fully informed organization through clear, simple communication 16
  17. 17. Lessons Learned• Focus, Prioritization and Perseverance• Even though the execution is offshore, we’re accountable for the process• People are the most important asset• Pick the right provider – culture, commitment, values• Involve stakeholders up front• Joint ownership • Partnership between Business Units, Finance, IT • Continue to validate and reinforce policies• Active management of offshore partner throughout • Succession planning, attrition, recognition 17
  18. 18. Questions? Learn more about our company from the www.Owens Corning.com Web site.THE PINK PANTHER™ & © 1964-2009 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. © 2009 Owens Corning.
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×