Winning application for "Excellence inculture creation 2012" - SSOWEEK Australasia

SHARED SERVICES & OUTSOURCING NETWORK

Shared Services & Outsourcing

Excellence Awards 2012 “Excellence In Culture Creation 2012”

BlueScope Steel

The winning application for “Excellence In Culture Creation 2012”

http://ssonetwork.com/awards.aspx 1

General Information

Your Contact Details

Select the Industry which best describes your business:

(Please select one by double clicking on the grey box)

Fast Moving Consumer Goods

Retail Foods and Beverages Financial Services Public Sector (Government & Non Profit) Pharmaceuticals & Health Care Manufacturing Technology, Media & Telecommunications

Other, please specify:

Your Shared Services Organisation (SSO)

Head Office of SSO - City, Country

Port Kembla, NSW, Australia

Number of Staff (Full Time Equivalents)

20 (internal), 140+ (Outsourced)

Date Shared Services Operations Began (dd/mm/yy)

Internal Shared Services – 1/7/2010 Outsourced – 1/9/2002

Awards Previously Won for Shared Services & Related Awards

Nil – first application

Shared Service Centres - Geographic Location

This application represents Shared Service Centres (SSC) located in the following geographic area:

Asia/Pacific Europe Latin/South America Middle-East/Africa North America/Canada

Specific Country/Countries

Australia (Port Kembla, Melbourne, Adelaide) and China (Nanhai)

***Entries will be accepted for any regional award programme on the proviso the either your SSO and/or majority of recipients of your services are based in that region***

Company Name

BlueScope Steel Your Name

Coretta Bessi Your Title

Manager Shared Services Your E-mail Address

[email protected]

Telephone

+61 408 979 373

mailto:[email protected]



Customer Information - Scope of SSC/BPO For All the Business Units Served by the SSC Applying for this Award:

Number of Business Units Served

6 business units, covering 200+ sites

Number of Employees

8,000+

Number of Countries you are Servicing

2 (Australia, New Zealand and Pacific Islands) with limited services for the remainder of the world

What is the Strategic Growth or Transition Plan of your SSC for the Future? E.g. Expansion of Services to more locations/introduction of new services/outsourcing existing services etc

Currently incorporating all Australia and New Zealand strategic procurement into Shared Services, outsourcing further tactical activities and business processes, offshoring more transactional activities, future initiative is to become a global shared services corporate team (endorsed by CFO)

What Services Do You Provide In Your SSC Today?

1 - Centralised Service

Offering (Y)

2 - Is this process

Outsourced?

3 - Fully

Automated (F)

Accounts Payable Yes Yes

Accounts Receivable Yes Yes

Auditing

Benefits and Rewards Administration Yes Yes

Budgeting

Business Performance Analysis Yes Yes

Business Performance Reporting Yes In process

Call Centres: Employees, Suppliers, Customers

Call Centres: IT Help Desk Yes Yes

Collections Yes Yes

Cost Accounting In process In process

Credit Yes In process

Customer Billing Yes In process

Employee Data Management Yes Yes

External Reporting Yes Yes

Facilities & Real Estate In process

Fixed Assets Yes Yes

Forecasting Yes Yes

General Accounting (G/L, I/Co, Inventory) Yes Yes

Management Reporting Yes Yes

Payroll Yes Yes

Planning

Purchase Order Processing Yes Yes

Staffing Services Yes Yes

Supplier Services Yes Yes

Supplier Management Yes In process

Tax Services Yes Yes

Time & Attendance Yes Yes

Travel Expense Yes Yes

Treasury

Workforce Development Yes



Other:

Other:

Other:

Affidavit Do You Grant IQPC the Right to Publish Key Metrics and Promote Winners of Awards?

Yes, we grant IQPC the right to publish key metrics if we become finalists Yes, should we win, we grant IQPC the right to promote us as award winners No, we do not grant IQPC permission to publish key metrics

Do You Agree to Participate in a Presentation/Discussion Outlining Your SSO's Achievements Should You Win?

Yes, we will participate No, we will not participate



Excellence In Culture Creation Your Story

The Alignment of Cultures – the Story of the

BlueScope Steel / Capgemini Journey

Preamble BlueScope Steel Shared Services has a unique delivery model – a core internal team that manages integrated business

processes across the organisation in conjunction with our outsourced business process partner Capgemini to deliver

services and commercial benefit to BlueScope Steel. This new business operating model was launched in 2010, however

the alignment of cultures journey started prior to this, during contractual redesign in 2009.

Strategy Describe the background on why you wanted or needed to make this change or improvement in culture of your organisation or for creating a new culture

What culture did you start with? - Please describe what you were trying to change or create - what was your vision?

What was the business objective and/or the reason for changing or creating a culture?

Were you creating or changing culture within your Shared Services organisation or within the wider business or both?

Please specifically describe and quantify the benefit you were trying to achieve through this culture creation, whether cost savings, efficiency improvement, increase in Customer or Employee satisfaction etc?

(Maximum 400 Words – Actual 396 Words)

Historical Culture The BlueScope Steel/Capgemini relationship culture started as one of master–servant, a culture that was encouraged by

the open book model. When internal customers requested changes to services and/or scope, Capgemini abided by

seeking BlueScope approval to changes in FTE numbers and charged BlueScope Steel for it accordingly. There was no

authority provided to Capgemini to push back to stakeholders to challenge them on specialised requests, and no internal

process owners driving standardisation and change improvement. As a captive isolated SSO office, there was limited

global capability innovation offerings and when improvements were suggested the culture resisted change.

The relationship was founded on openness and strong governance, however more was required. We had to move from

this buyer-vendor culture and needed innovation and collaboration for real mutual financial benefit.



Business Objectives As a result of the steel industry downturn post the global financial crisis, BlueScope Steel was under significant financial

pressure and had a sense of urgency for major structural cost reductions ($500 million off the April 2009 baseline) and

flexibility to address changing business demand. The contract for BPO services was due to expire in 2010, and was

flagged for review. It was quickly identified that for transformational change we needed to change the commercial

arrangement and the culture by establishing a model of collaboration for mutual benefit.

BlueScope Steel and Capgemini commenced a joint project to review the commercial contract and relationship, and

combined each of our organisation’s business objectives to a combined vision of success (shown below).



Scope of Culture Change A new culture was created by developing a new internal Shared Services team within BlueScope Steel, appointing high

performing team members with strong change management skills to take ownership of the integrated business processes

and work with both the internal business and Capgemini to institutionalise the culture. Capgemini changed to being more

agile, focusing on continuous improvement and leveraging their global capabilities. The BlueScope wider business

stakeholders were held accountable for their obligations.

Aim of Change There were several aims of the cultural change, primarily focused on cost reduction and scalable growth as follows:

Centralising additional business support functions beyond the current footprint to further reduce operating costs;

Reduce end-to-end service delivery costs;

Improve quality; flexibility and customer focused service delivery (‘fit for purpose’); and

Position for longer term regional / global shared business services capability



Change Methodology (Tell us how you created the new culture)

o What were the specific steps that you took to create or change the culture? o How long did it take? - What was the timeframe and stages? o Who worked on the culture change - were consultants or specialists used? o Were Customers involved in changing or creating the new culture? - What was their role? o Did you use your own branding? - What was its impact? - What other tools did you use? o Please provide some examples of what you did to foster and build a sense of culture across your SS functions and within the wider business? (Maximum 1000 Words – Actual 997)



Creating a Catalyst The culture change started in early 2009 with the BlueScope Steel sponsor creating a sense of urgency around the need

for change; given the financial situation of the steel industry post the global financial crisis and the upcoming contract

expiry at the end of 2010.

BlueScope customers and stakeholders were engaged to provide their views as to what was positive and negative about

the current contractual arrangement and services provided. There was an overriding theme that there was a master-

servant relationship and we needed to challenge this for transformational change.

After a review of the market, it was determined that the best financial and business outcome would be to renegotiate a

commercial based model with Capgemini if there was capability to have dramatic cultural change both within BlueScope

and the relationship between BlueScope and Capgemini.

Building a Coalition A joint project team was established comprising operational and commercial leads in BlueScope and Capgemini fostering a

partnership approach. This group was tasked with reviewing and challenging the current contract model. The broader

coalition included change management advocates within both businesses to drive the cultural change. The sponsor was

an organisational development specialist executive with strong support from the CFO.

Creating the Vision for Change An initial workshop using an accelerated solutions environment was facilitated by Capgemini consultancy specialists.

Representatives included BlueScope subject matter experts, process owners and customers, who worked collaboratively

with Capgemini management, consulting and operations service delivery managers. The vision was focused around

cultural differences, and that tomorrow we must look different (both commercially and culturally). The scene setting is

shown below:

Facilitated sessions allowed all participants to understand the current state. These Capgemini consultant led workshops

allowed a joint understanding of both parties organisations and cultures, and had the realisation that we needed to

recognise collaboration as a critical enabler to deliver better, faster, smarter results at a lower cost.



There was additional service focused workshops led by Capgemini global capability representatives explaining

transformational change possibilities, including Rightshore ©. These breakout sessions allowed innovative thinking without

boundaries to determine all possibilities and focus on achievable wins.

Communicating the Change – Engaging Stakeholders and Customers Customers and stakeholders were engaged in the development and assessment of options, engaging them in the vision

and reinforcing the collaborative approach and role modelling of behaviours. These opportunity workshops allowed joint

development of the future state model able to then be negotiated from a commercial perspective.

At the time of the contractual negotiations, key stakeholders and users were actively engaged in formulating the scope,

quality and delivery of services. It was seen that to be successful, we needed to conduct this change with the business,

not to the business.

The newly formed internal Shared Services Team was established to be accountable for implementing the changes and

managing the integrated business processes strategically required within the organisation. They branded themselves with

a simple consistent logo (shown below) and delivered “road shows” across the business to launch Shared Services and

explain the new contract obligations. This branding differentiated the internal Shared Services team from the external BPO

provider whilst reinforcing we were both working closely together.



Reinforcing Beliefs and Removing Obstacles There was continuous reinforcement of collaboration through transition to new model, with joint communication sessions

held with the business. Business sign-off was embedded as part of transition to revised model ensuring total engagement

and buy-in of customers to the changes and continuous involvement in project development.

As a governance committee (which includes executives from both organisations and the managers of each of the service

towers), it was recognised we needed to move from the old culture to the new culture by aligning our values and

behaviours. These were jointly developed over a few professionally facilitated sessions, and are on every monthly agenda

for us to be held accountable to them.



Culture is made by beliefs, which is enforced by behaviours. Having the governance committee commit to these

behaviours was a critical point for the relationship to move forward in a combined culture.



Marketing and Celebrating Short Term Wins Regular business updates via email and communication sessions were used to market the initial achievements. All regular

business update and announcement communication from Shared Services and Capgemini was based on joint “letterhead”

branding, featuring company logos and sign off from both sides. The use of this banner showcasing our partnership has

been seen positively by our stakeholders who see this as working collaboratively.

The initial offshoring activities had very broad updates and were seen as “seamless” to the organisation. Customers were

engaged in sign-off processes and acceptance certificates to agree the level of service was met. Capgemini and

BlueScope regularly had meetings at each others sites working together for joint stakeholder engagement in order to

embed the culture.

Building on the Change – Institutionalising the Culture Capgemini have a bi-monthly newsletter for their internal employees. They have reserved a page for regular contributions

from BlueScope Steel. BlueScope newsletters retain an area to communicate Shared Services focus areas, co-branded

with Capgemini to reinforce the collaborative relationship. These publications build on the cultural change and the

transformational changes within the processes, and ensure alignment

of both organisations employees to the vision.



There has been several joint site visits, across Australia, New Zealand, China and Malaysia where both Capgemini and

BlueScope have jointly visited and toured each others sites and offices. The below photo is of the Manager Shared

Services Coretta Bessi and the Capgemini Australia Centre Director Trevor Patti with the Nanhai Capgemini team servicing

BlueScope. The BlueScope CFO was later also hosted at the site.

There is regular centre wide communication and question/answer sessions led by Shared Services Team at Capgemini

offices to reinforce openness, transparency and process ownership. These allow timely information and business insights

to ensure a high level of alignment, accountability and agility in the business processes.

There were many people who contributed to this change in culture and transformation, all whom are proud of the legacy

they have left.



Complexity of Change (How complex was this culture change to make?)

o Was there resistance to change? - which area(s) did it come from and how did you overcome it? o How wide a change did you have to make? How many Employees, business units, countries etc were affected? o Did you have a change management plan? - Did the change prove more complex and difficult than you had thought? Describe how hard or easy it was to create the new culture - What have been the main leadership challenges for you and the team? (Maximum 400 Words – Actual 399 Words)

Resistance There was high resistance to change from within BlueScope as we had previously had a long standing relationship.

Internal customers used to a supplier that would customise their service was now faced with a challenge to standardise, or

pay extra costs.

This was met with frustration, animosity and blaming Capgemini as not providing the services requested or stating these

would be charged at a higher rate. Those resistant to the changes of a collaborative working relationship were

stakeholders who had not been engaged in the process previously. To overcome individual’s resistance, Shared Services

utilised the participants from the process who were vocal advocates for the culture change, and were able to influence

critics to become supporters.

The Shared Services team were a highly perseverant conduit to educating the customer base of the new contractual reality

including the obligations were of both parties, communicating the requirements and accountabilities of BlueScope and

marketing the dramatic cost reductions of the new contract. All costs were charged to the relevant businesses, with a

promotional pack marketing the overall costs were a step-down due to the new contract.

Broad Changes The cultural change impacted on:

BlueScope Shared Services Team (approximately 20) set up as a conduit between Capgemini and BlueScope Steel

BlueScope employees (approximately 8,000 across Australia, New Zealand and touching on the global footprint across

Asia and North America) now required to use employee self service for leave entitlements, standardised requirements and

offshore processing

Capgemini Adelaide (approximately 120) being restructured to allow offshoring of their tasks, undertaking China cultural

workshops to deal with their extended team and simultaneously having to deal with BlueScope and say no to many

requests

Capgemini China Nanhai (approximately 40) building a new team and new culture of dealing with an Australian

enterprise, with Australian flags at their desks and BlueScope posters on the walls and promotional merchandise on their

desks as visual signposts of being one team

Change Management Plan There was a change management plan for the new contract and the transition of activities to offshore. The programme

management was highly effective.



There was a stakeholder engagement plan which identified key people and groups / teams within the businesses that

required customised communications. The culture change within BlueScope proved harder than initially thought, mainly

due to several changes in leadership, although this was always backed with chief executive support for the vision.



Benefits Achieved/Hard Improvements (How successful has the culture creation been)

o What has been the hard improvement vs. the original objective or aim? Please quantify cost reductions, efficiency improvements etc with clear metrics. What is your measure of success? o What has been the Customer and Employee response to the cultural shift? Please demonstrate any changes in Customer or Employee Satisfaction or other measure of feedback including impact of change on the wider organisation. o Has the change had any unexpected benefits on other areas, Employees, processes? o What other benefits have arisen due to the new culture? (Maximum 400 Words – Actual 399)

Hard Quantifiable Benefits There has been a visible reduction in costs to BlueScope Steel of providing the business processes from Capgemini,

mainly due to offshoring processes, but also due to commercial arrangements, gain sharing initiatives and process

improvements. The below graph shows a continual decline, although over this time there has been additional outsourcing

and services provided under the contract.

Although setting up an internal Shared Services function was a new department within BlueScope, the total costs for

BlueScope have reduced by 22% against a do nothing approach (ie continuing a cost plus approach with labour

adjustments).

These cost reductions have occurred without deterioration to service level adherence with on average 96.3% meeting or

exceeding expectations – all within a year of turbulent change and closures of operations – as per the chart and sheet

below.



Responses to the Cultural Shift The Shared Services team completed a customer satisfaction survey post transition of activities offshore following the

implementation of the contract. Although expecting a high level of animosity and reaction to the changes, the aggregated

scores of all surveys were above stretch targets with customers overwhelming stating the changes had exceeded their

expectations.

Quotes from key people are:

“I have labelled the transition “seamless” – it was conducted professionally, was well planned and executed” – Stephannie

Jonovska – BlueScope Steel Manager Customer and Reporting

“We work together to achieve success and the benefits of any success are shared equally – we enjoy a true win-win culture

and environment” – Trevor Patti Capgemini BPO Centre Director

“Our successful partnership has enabled a strategic business transformation delivering both operational and financial

value. Our shared values and willingness to collaborate has produced further benefits through the execution of

standardisation, centralisation and outsourcing opportunities” – Peter Egan – BlueScope Steel Manager Supplier Services



A strong indicator that the combined culture demonstrates value is the current activities expanding the scope of Shared

Services, including an endorsement from the CFO to take the function and relationship global in the near future.

Other / Unexpected Benefits Other benefits that have been achieved not anticipated at the outset was agility in the recent closures and cash flow

activities required by BlueScope due to further financial pressures, by processing redundancies over 1,000 at the same

time as roster changes, all with streamlined processes allowing reduced effort by end customers.

Additional benefits in progress are more strategic value activities such as spend analytics, managed spend and

sustainability accounting.



Differentiators (Why do you consider this culture creation to be Excellent)

o What differentiates your achievement over other organisations? (Maximum 400 Words – Actual 396)

Champagne and Boxing Gloves – simultaneously successful To have a contractual agreement for business processes outsourced substantially to an external provider for longer than ten years with three major changes shows a level of maturity on behalf of both organisations, let alone that the arrangement extends out until 2016. The fact that the culture has evolved from being a buyer-vendor or master-servant relationship to being regarded as collaborative partners is excellent and is a key differentiator from culture change within other organisations and across other outsourced contractual arrangements. The combined culture created is truly collaborative – not just in words, but in every action and every behaviour. However the culture is not just based on people wanting to be amenable and be friendly with others to avoid conflict or confrontation. There is a true commercial tension that incentivises both parties to work together for mutual benefit. A real win-win culture.

The joint teams vehemently honour the governance committee behaviours, especially of being “Respectful” – we will always be candid and challenge each other respectfully. We all take great pride in our own organisations, are committed to ensuring optimal sustainable value for our own business and determined to make the right commercial decisions. However, we feel comfortable to be able to challenge each other respectfully. The contract is referred to on an ongoing basis, however it is always for intent and clarity of what direction we should move in. We are then empowered to determine the best actions for our joint organisations. But we also all honour the governance behaviour “Fun” – we will always reflect and celebrate our successes. And we

do. Often. And enjoy it! We work together collaboratively, have tough fact based negotiations, and celebrate our wins. This was publicly reinforced by the joint Capgemini and BlueScope Steel candid presentation about “Champagne and Boxing Gloves Relationship” by Trevor Patti and Coretta Bessi at SSON 2011



Having the right people in the leadership roles helps, but the culture is so institutionalised and ingrained after such as short period of time that changes in leadership will not materially impact the underlying aligned culture between the two organisations. The combined teams are now looking at not only the immediate expansion of services, but also checking the horizon to see what we will do together beyond this contract – being optimistic the relationship and the value delivered will demonstrate the right to continue.


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Winning application for "Excellence inculture creation 2012" - SSOWEEK Australasia

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Transcript of Winning application for "Excellence inculture creation 2012" - SSOWEEK Australasia