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.

1. Interview with Mark Preston, Director of
Financial Services, University of Sydney
Over 450 shared services and outsourcing professionals will come
together under one roof to share ideas and best practices to help shape
the future of the industry in the ANZ region at the 14th Annual
Australasian Shared Services and Outsourcing Week 2011.
SSON
Can you give us a little rundown of where the University of Sydney is on the
shared services journey? Can you give us an idea of scales, functions, and
maturity, etc?
Mark Preston
The University of Sydney has been on the shared services journey for
probably between 3 and 4 years. We have probably the most matured shared
services, in fact, in finance where we support all the finance transactional
activities across procure-to-pay, billing-to-cash financial systems support and
training and financial systems development. So, in terms of scale we have
about 75 people in the organisation. There's a total finance population for the
university of about 200 people, and we're the only, I think, shared service part
of the university who has service level agreements in place etc. The
university has also embarked on shared services on the HR front mainly in
payroll processing and recruitment and also on the IT front in terms of desktop
support and distance development and architecture. So, it's still an evolving
journey and it’s had a few ups and downs, but there’s genuine support of
shared services in the university as a way forward.
SSON
You’ve had experience in several SSOs including Lend Lease,
Commonwealth Bank, and Qantas. So if you could give one piece of core
advice on change management which has helped transformation projects
succeed across industries, what would it be?
Mark Preston
It reminds me of some overseas services journeys I’ve been on. But I think
the people aspects are more challenging, engaging the people is more
challenging than the technical and financial aspects. So my big advice would
be to a to give a lot of attention to proper roles and responsibilities being
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2. defined properly, the organisation structure as being right, and most
importantly as well as the technical aspects of each role, place a lot of
emphasis on the behavioural aspects. So shared services is all about
providing services to the customers. Without those internal joint venture
customers, your role would not exist. So you need to put all emphasis on the
people aspects, and make sure roles and responsibilities, and also the
behavioural competencies are very well defined. And also one other piece of
advice is there's no such thing as too much communication!
SSON
So how far does finance transformation differ between traditional corporations
and at institutions like universities?
Mark Preston
Well I think the underlying principles, Arthur, are much the same. It's just the
audience is different. The thing about a university is, I suppose, compared to
a corporate is there's no such thing in the university as a mandate. A lot of
committees make a lot of decisions, and there's probably lots more
consultation and debate, and then basically just issue discussion required in a
university. There’s no such thing as the managing director (or in our case our
vice chancellor) saying “this is our new policy and this is our new price and
you will all do it”. And in the case of university, you really have to win over the
hearts and minds of your customer or audience. And there is not the
consequence management in the university that there might be in a corporate
world, should they not adhere to new policies and procedures.
SSON
In terms of KPIs, can you tell us a bit about a recent achievement you are
particularly proud of and what the secret was to achieving it?
Mark Preston
Probably one achievement in the last couple of years as a result of the Global
Financial Crisis was that up until a couple of years ago, the university's cash
flow was very solid. More money came in than went out and it came in on a
regular basis. And there wasn’t a lot of focus on working capital
management. So for example, it was a responsibility of various business
units. Those that raised an invoice for revenue were accountable for
collecting that revenue as well. And to be honest, there was not the focus on
that because cash flow wasn’t as tight before the crisis.
So basically we created a central collections area. And as a result, corporate
index has gone or debtor’s index has gone down from over 60 days to less
than 40 days. So just for a bit of focus on, again, clearly defined roles and
responsibilities for the shared services organisation and the business unit,
and the various escalation points in that process, has resulted in us having 20
million bucks a day in the bank everyday better than what we had some time
ago. So, that's one simple one. But probably others are that we have, at any
point in time, huge balances of foreign currency. We’re now in effect self-
hedge so we use those existing foreign currency balances to purchase goods
from outsourcers. The university, as you can imagine, purchases the best
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3. part of 80 million dollars worth of goods and services from overseas. So we
use our own foreign currency balances whereas in the past, we used to go out
and buy them at retail rate with that money overseas. So that's just a couple
of examples.
SSON
Now that we are in 2011, what are your more specific goals for the coming 12
months within Financial Transformation at the University?
Mark Preston
I suppose one of the particular areas of the university environment is that
allocation of resources to process improvement is seen as a cost rather than
an investment, whereas in the corporate world you would do a detailed
business case and benefits and seek funding based on benefits realisation
targets. In the university to get funds allocated to process improvement is
very difficult. There are a lot of other competing priorities like new labs, new
buildings etc to attract highly talented researchers, and academics, and
students. Seed funding is difficult to get and perceived as a cost for process
improvement. Our main focus is on continuous improvement. Anything big
bang is difficult to pull off in this environment, but by targeting certain
customers and rolling out consistent, streamlined processes where we can
make a lot of efficiency. It's kind of chip away rather than big bang. But
having said that over the past few years we have reduced the operating costs
of the shared services organisation in finance by about 30%; and despite that
we're processing 25% more volumes as the front end of the university is
booming and we're doing it with 18% less resources. So that's a pretty good
story, but again just by chipping away rather than by a big bang attack which
is really basically is very difficult; it's 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 the
University of Sydney. Mark will be speaking at the 14th Annual
Australasian Shared Services and Outsourcing Week. For more
information on that event, please visit www.sharedservicesweek.com.au
or call us on 02-9229-1000.
Alternatively, you can email us at enquire@iqpc.com.au and don’t forget
you can also follow us on Twitter @SSONetwork for our latest news and
updates and interviews.
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4. SSON
Can you please tell us a bit about yourself and your experience and your
relationship to shared services.
Mark Preston
Okay, I began with the shared services journey in the late 1990’s with Lend
Lease and basically set up a shared services there for Asia Pacific
Corporations, across all the areas of finance, and HR, and corporate
procurement and also on facilities management. So, we had about 200
people in that shared services organisation and that it was quite a big bang
approach - we did not do the staged approach like many organisers do. We
identified all the functions that we thought would fit and then kicked them off
all at once. Then a couple of years after Lend Lease sold a large chunk of its
business in Australia and I moved to the Commonwealth Bank and set up a
shared services organisation across finance; largely evolving around the roll
out of a People Soft core financial system and turning off the 30 legacy
finance systems.
A few years later, I joined Qantas when Qantas embarked on a segmentation
project to give focus to all its core business units rather than Qantas being
looked at as one monster organisation. It divided itself into 10 operating
segments and I assisted in the design and role out of the shared services of
what was called Qantas Business Services Organisation.
For the past few years, I have been at the University of Sydney, for the past
2-1/2 years assisting in the role of financial shared services here. I think one
thing about the universities, particularly this one is, it's a very big business.
It's 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 the
university has 6 to 7 to 8 faculties and over 100 schools. In those subsets,
it's quite a complex and diverse business. So that's my background in
shared services.
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