Six Quick Working Capital Wins
At the Working Capital Management Forum 2008 in London, SSON convened a roundtable debate on the impact of the credit crunch, and ways organizations can limit that impact. This extract from the end of the debate includes one suggestion from each of the participants for quick wins – simple steps companies can take to protect themselves from the worst effects of the economic downturn.
Gavin Jones, Ahold Finance Group: Build a good, strong cash-flow forecasting culture and approach, so that you can identify early the periods when you need cash and have that dialogue with either your customer, your own supplier base, or your bankers, to get you through that period of cash-negativity.
Brian Shanahan, REL: Fix basic processes sustainably, so that even though you might be in trouble now and you might have to weather the storm for the next few months, you make sure that you’re in a state of financial health to take advantage when the market comes back up again – because it will, strongly.
Roundtable: Getting Your Strategy Right From the Start
Jamie Liddell, SSON’s online editor, sat down with a few practitioners at the recent Planning & Implementing Successful New Shared Services event in London to identify winning strategies from the get-go. Site selection, according to the consensus, is not key; rather, getting the process right from the start.
Participating were:
Peter Pan
Senior Executive
MSC Malaysia
Walter Jess
Shared Services Strategic Planning Manager
Caterpillar
Michael Radford
Process Improvement Manager
Serco
Jenny Coombs
Shared Services Director
Barnet Council
Gary Critchley
Head of Finance Shared Services
Marks & Spencer
Hindrik Jan (René) Zigterman
Business Development Shared Services
SAP Belgium
SSON: To start, tell us how you decided what to include in your shared services operations when you set up.
Jenny Coombs: We looked at the corporate services we were already delivering, the standard things: information services, finance, human resources, procurement, facilities management… all these things had been delivered disparately in the past. We also looked at the nature of these services and added specific services around collecting council tax and delivering housing benefits because they are transaction-based processes. The challenge was to discover how the processes would fit together.
Walter Jess: I think it is really about identifying what is not core to the business; what protects your brand name and your sales points in the market — quality, design, etc; Also: look at what does not support day-to-day decision making; so general accounting issues such as calculating, recording, etc. … as opposed to the activities that business unit managers use on a daily basis to decide on their business. It is also important to gain sufficient volume to manage the costs of the initial stage.
Q&a: Mike Colicchio, Celanese Hungary
SSON: In this current economic downturn it’s very important to keep robust lines of communication open throughout the business. Can you tell us a little about the steps you’ve taken at Celanese to enforce this?
Mike Colicchio: Of course. We’re carefully monitoring our overdues and looking for any signs of softness in our very structured collection process. I stay in close contact with our sales directors in the EU and we strategically determine proper collection protocol in these challenging times. Being a relatively new SSO our recent hires have received exceptional training and job-shadowing; however, being rookies they’re not as well-versed on the qualities of different types of customers. They also need to understand the histories of our customers, and even when the customer is also a vendor. This is sometimes a point of interest. I bring the sales directors to Budapest for a “learn the customer” day. To serve our customers we must understand their customers. This gives the sales organization leaders and the credit and collection staff an opportunity to set expectations and parameters, but most importantly it opens up even more the communication channels, which is tantamount to success today.