Does Change addiction drive Scope Creep..?

Welcome to all our new Subscribers, 1511 and climbing at the last count. Every Program Manager knows all about managing the dreaded Scope creep but have you ever considered what drives it? I was discussing the Shared Services Captive versus Outsourcing Options in a Training session on Thursday and I was asked which I recommend, so I told the following story to illustrate how Transformation can start logically enough with an ERP Upgrade and quickly morph into full blown Outsourcing. Scope creep indeed:

As I am sure you can all appreciate, Outsourcing safely and successfully, with no disruption to Service Delivery is anything but easy, requiring very careful planning, robust back out plans and adequate resourcing. Skimp on those 3 and do not come crying to me.

I should point out we are not proponents of 'lift and shift' in this Parish, considering it the greatest of all Shared Services sins. Indulge in such lazy thinking at your own peril.

As we commence our Finance Shared Services journey, assuming that's why your here, you will be bombarded with an alphabet soup of terminology. So let us try and pull away the veil of mystique and start you off on the right foot.

Finance, good old Finance, your Finance function be that single country, multinational, single site head office or multi site it does not matter. The starting point is to determine your Operating Model.

You will all be familiar with the Term Target Operating Model or TOM as its known, but there is a step before that. You must start with a thorough understanding of your COM, the Current Operating Model. This is in effect the Blueprint of Finance. What do you do, for whom, via which Process, staffed by which people, organised how, located where, underpinned by which Technology. This is what you must perform Due Diligence on before you start planning your TOM. Takes on average 10 weeks to do properly.

Fail to do this and I pretty much guarantee you, that you will fail. You will be late, over budget, both or out of a job. Take your pick. Do not EVER rely on the ERP Solution Provider to do this.

So let us say you are the CFO of a UK Business with 6 Sites at which Finance is represented at all of them to varying degrees. One in London and the rest in the Regions. In total you have 130 Finance FTE organised in 3 main Business Units and your Turnover is c.￡450M.

Your Finance team has never been transformed, doesn't know what a Shared Services Centre is and has never heard of a Finance Business Partner, much less knows how to describe one. You are due an ERP upgrade in 2025, many are, and you are concerned that your team is inefficient but of vastly greater concern are your Compliance gaps.

You actually don't know how good or otherwise your Team is, never been transformed, means it has never been objectively assessed. It gets by, Reports at some point in Week 2ish...and no one 'thinks' it has ever been defrauded. You are in good company as many who ask for a Feasibility Study would nod knowingly at most of the above.

But we digress, we came to talk about Operating Models. Lets say I do the Assessment and you will inevitably score 4 out of 5 (1 is best), argue with me night and day that some Amber rating should really be Green and mutter something along the lines of

"Its an ERP Project, it will solve everything, the Processes will be best in class" the software supplier said so. Even as the words leave your mouth you find yourself shaking your own head. Maybe not.

This is the point at which an ERP Upgrade (we had to do it!) becomes a Finance Transformation Program (we might as well do this at the same time!) morphed into a lets build an FSSC it will solve all our problems. You see how easy it was to become a Change addict, you acted like a heroin user at the mere suggestion of expanding your Scope. Calm down.

Now let me pause for a second to give you, the CFO, an ironclad Rule. Change the Organisation first never rely on the ERP system to deliver process improvement, the key to that sits in front of you in your SMT each Monday morning.

Your Finance team, understandably nervous at an ERP Upgrade need to be supported totally if you start suggesting we are going to build an FSSC. So we don't bandy these terms about lightly, in fact I don't let you use them at all apart from when we are in the Boardroom and the door is closed.

You ask me, so how do we measure up? I give it to you straight. You then reflect for a moment, challenge a bit here and a bit there (shadow boxing) before you ask...What are my Options.?

I start by saying after 20 odd years of building, running or fixing FSSC's you have a good case for one based on my examination of how your Processes operate. Your eyes light up, the Change junkie comes running to the fore.

"Ok sounds great do we go Captive, Outsource, Nearshore, Farshore, Virtual? What do we do??? I hear Virtual is great, all the rage since the Covid. Can we do that?" Questions, questions and more questions.

I think the fundamental, core, most critical question is Captive (you keep it) or Outsource (somebody else gets it)? This part, crucial as it is, actually never has anything to do with your current set up and always comes down to mindset. Are you in the 'space' to surrender Control and exercise it via a whole other set of acronyms called MSA, SLA and KPI?

UK based Business, your team evolution, size and scope as per above? Rule out Virtual. In my experience after that, in this ballpark, most will go Captive. after that we get into the specifics of what will work best for you as there is a Captive / BPO near shore flavour that may whet your appetite. You are now a Change addict after all..?

Want to learn more? Reach out if you are planning an ERP Upgrade in 2025 and want to go 'full tonto' and build an FSSC as well. I will even show you where to locate it, but that's another Article which I have an expert working on as we speak.

Best Regards,

Michael Ryan.

Finance Transformation - Transform Finance Faster