Improving finance efficiency at one of the world’s leading communications providers became a top priority following a benchmarking analysis of its operations.
The solution devised by one of Novo Altum’s directors took the retained finance function to a new level, creating scale-based ‘Centres of Excellence’ for mid-office finance and accounting functions.
Significant cost savings were achieved by consolidating activity and implementing standardised processes, and cost efficiency dramatically improved. This success ultimately led to the project moving to a second, more radical phase of rationalisation by moving high value functions offshore.
With significant numbers of retained finance staff across multiple locations, to the Novo Altum director advising on the project, the problem was clear: the disparate structure of the client’s finance and accounting management teams was the main barrier to efficiency.
He saw that there was significant scope to rationalise its mid office finance and accounting operations to improve service delivery and cut costs. The key to success would be to design a solution which was capable of operating on a large scale, centralising the myriad of financial management teams into just a few locations, based on core functional activities, such as reporting, planning and analysis, regulatory reporting, subsidiary accounting, product profitability, capital and internal charging.
His strategy was to create “Centres of Excellence”, where discrete teams of experts would consolidate their core activities, share best practice and develop standardised processes. These would be scale-based, rather than purely competency-based, unlike most other models, in order to boost efficiency and minimise costs.
Novo Altum’s director supported the client in managing this process from start to finish, resulting in downsizing its operations and standardising its processes across the board. As an example, the reporting, planning and analysis centre of excellence reduced headcount from 850 to 450.
This project helped lift the clients cost efficiency from the bottom of the third quartile in its benchmarking, to the second quartile. Significant cost savings were achieved as a result of redesigning the Finance Target Operating Model, allowing the standardisation and harmonisation of finance and accounting processes within the organisation, facilitating a reduction in retained finance headcount of over 47%.
The success of the programme led to a further phase of streamlining and consolidation by moving a large part of these high value mid-office functions offshore for the first time, as part of the next stage of the project.