Q&A: Julianne Hately, Molson Coors
Julianne Hately is Global Finance Manager (Record to Report) at brewing giant Molson Coors. Ahead of her appearance at the forthcoming Shared Services Exchange 2011, to be held September 26-28 at the Sheraton Frankfurt Airport Hotel, Frankfurt, Germany, we spoke with Julianne about some of the challenges facing her organisation, and others, when considering implementing a transformation programme – specifically looking at the key question: “To outsource or insource?”
Outsource: Julianne, can you begin by telling our readers a little about yourself and your current role at Molson Coors?
Julianne Hately: Well, my background is in Internal Audit, working in both the public and private sectors over the course of my career. Having been an outsourced provider of Audit Services, I find it easier to see shared services from both sides of the fence. Currently I am the Global Finance Manager (Record to Report) at Molson Coors covering the UK, US and Canadian business units. For me, the brewing industry is a wonderful place to be: sociability, innovation and a passion for our brands runs through the backbone of our business.
O: You’re going to be speaking at the forthcoming Shared Services Exchange on “To outsource or insource: key considerations”. This is obviously one of the biggest – if not the biggest – questions for any organisation looking at transformation: can you give us an insight into some of those considerations and why you think they’re so important?
JH: In all honesty, there is no absolute right answer to this dilemma. It really does depend on what is important to each individual organisation. It may sound like a cliché, but I’m afraid it’s true!
For us at Molson Coors, we took a hard and honest look at the improvements that we could realistically achieve with respect to cost, time and the probability, (or certainty of benefit) within the business through the creation of a captive shared service centre. In the end, we were able to label the key areas and relate them back to our business. Key to this was determining why we were considering changing our approach to many of our financial processes. Broadly, these fell into the following categories:
- Cost & Time: examine the track record for making changes
- Certainty of benefits
- Getting to benefit run rate
- Culture: consider which scenario is the best fit for your company’s culture
- Will senior management invest in reengineering a back-office process?
- Is there a burning platform for outsourcing?
- Is there companywide support?
- Feasibility: Will it work if we lift and shift (in our case, not for HR)
O: How have you dealt with those considerations within your own organisation: can you give us some insight into how you’ve made things work at Molson Coors, and why you chose those options?
Each route has its own benefits and pitfalls. There are two main considerations to take on board: does the organisation have the skill set to create and manage a shared service centre as a captive? Secondly, does it have the drive and ambition to achieve the goal?
The business may wish to concentrate on its core purpose. For us, this is “making great beer”, allowing specialists to fulfil back office functions on behalf of the organisation.
In today’s economic climate, efficiency savings are key for any business and when you operate across multiple time-zones with differing processes from country to country, shared services can really come into their own. One of the biggest areas in which efficiencies can be created is in the standardisation of processes. Once this is achieved, then that is when you are able to really start driving value.
Usually, outsourcing providers are also able to bring technology with them too. By doing so, they allow the organisation to implement platforms that can streamline processes without needing the capital investment that would be required to do this internally. The overheads always have to be taken into consideration when weighing one option against the other.
Some people look at outsourcing as labour arbitrage and it’s true that there is an element of that involved. This should not be the only consideration however. Some other considerations are:
- Technology and process efficiency
- Centralisation that will drive and continue to improve process standardisation and efficiency
- Skill set for change, we did not have this to implement internal SSC, and an outsourced partner could drive change more forcefully and effectively than we could
- To be able to build a platform for future mergers and acquisitions
- Outsourcing acts as a catalyst for change, forces processes to grow up, and forced down into the road of best practices, and standardise.
- Controls delegated authority
- The time to stabilise. For us this has taken far longer that envisaged at the beginning, especially as we undertook a lift-and-shift approach which made it more complicated for the service provider, as we at the time had different platforms in each of the territories we operated in.
O: Can any organisation be sure that the sourcing choices it makes now will still be appropriate in the future? And how can one go about maintaining flexibility if one is uncertain about future requirements?
JH: Any outsourced relationship must be adaptable to change. For me, the key is to have a proactive partnership. Both organisations must have the ability to be adaptable – to flex and change. Most outsourced contracts at their foundations will be unable to accurately determine the direction that a business will take in three or four years’ time.
Ultimately, there is always an over-arching contract that everything else must relate back to, but including a sleek change request process and a good business understanding on both sides should allow processes and resources to adapt in a way that suits both sides of the contract. It’s a fine balance to achieve, but it is definitely doable if there is the right will on both sides.
O: Looking at industry in general rather than just your organisation, do you feel that sourcing strategies are becoming more sophisticated – for example, with the increased take-up of hybrid delivery solutions and multi-sourcing – and if so what’s driving this increased sophistication?
JH: In my opinion, the underlying issues themselves have remained fundamentally constant over the years. The developments in both technology and business thinking have enabled the way in which these issues are tackled to evolve. In many ways I’d say they are perhaps more streamlined and more accessible than sophisticated as such.
O: How do you see cloud technologies impacting upon your own sourcing strategy over the next few years?
JH: As an organisation, I think it will be a while before we are ready to fully embrace cloud technology. Primarily, this is not only because we have a fairly robust (and scaleable) infrastructure in place, but also because cloud technology is still in its early stages. That’s not to say we’re not keeping an eye on this for the future though!
O: How can buy-side organisations taking the outsourcing route ensure that they get the degree of innovation from their providers that they would normally ensure they delivered themselves in-house?
JH: The key factor is to carefully select a provider that matches the organisation’s own core values and is passionate about producing the best processes for your organisation, rather than forcing you into their way of doing things. It’s also important that both parties benefit from the partnership. With the right provider, it is possible to share savings between both organisations. This is a key motivator for any provider!
O: Finally, what’s your secret to the perfect outsourcing relationship?
JH: For me personally the secret of a perfect outsourcing relationship is that of mutual respect and honesty with a bit of fun thrown in. The outsourcing partner must be seen as an extension of the organisation by those within it, so if things go wrong as they often will there is more of a “how do we fix this together?” rather than a blame culture which can easily permeate through an organisation as it is easier to blame someone who is not there.
For more information on the Shared Services Exchange 2011, see the event website.