Can consultants achieve the same results 'at home' as they do for clients? That was the question put to executives at Logica and CMG after the merger. They needed to streamline and standardise finance and accounting operations within their newly merged organisation. Most finance transactions were processed by a team of 40 LogicaCMG employees in central London. Operating costs were high, systems were poorly integrated and staff worked in transactional silos.
The Project Abacus team of six considered both onshore and offshore options, visiting locations worldwide and assessing the feasibility of outsourcing and sharing services. The organisation had an office in Bangalore that provided IT-based services, but the technology could be extended to support a finance services centre.
The Abacus team recommended that low-level transactional processing activities (accounts payable, accounts receivable, project ledger maintenance etc) be transferred to Bangalore. The centre's working hours could be aligned with the UK to ensure that staff could handle queries from clients and suppliers.
Functions like document management and the banking of cheques could be given to a small office in Bridgend in south Wales, while the team in London would be slimmed down to a small strategic finance unit of seven employees.
The business case was drafted and signed off in August 2004, and within just eight months the project team had recruited skilled staff in Bangalore, transferred knowledge from the UK to India and installed accounting and logging software, including Agresso and Remedy.
The finance function now supports 7,000 staff in the UK, processing 60,000 supplier invoices, 36,000 client invoices and 500,000 accounting entries a year. So far, Abacus has achieved a 35% reduction in annual operating costs and 99% of customer invoices are now actioned within two days. The average time for registering supplier invoices has been slashed from seven to three days, and monthly management accounts are delivered 20% faster.
By outsourcing its main finance functions to Bangalore, LogicaCMG achieved a 35% saving in operating costs, optimising processes with no loss of financial control or service quality.
- Seek out quick wins, keeping some of the same processes but streamlining them.
- Reassure managers and staff of the long-term benefits of offshore outsourcing.
- Use workshadowing to transfer knowledge and minimise disruption.
Consultancy: Consultancy and Interim Management Support
Client: Office of Government Commerce.