Cover Story - Pressed Into Action

Cover Story - Pressed Into Action

The effort of staying afloat atop the increasingly stormy seas of intense competition is forcing many companies to consider measures that only recently would have been seen as both radical and risky. Realising costs of financial management can be horrifyingly high, some organisations are establishing shared service centres where some or all of the accounting functions of their large, decentralised bodies can be combined into single compatible systems.

For most organisations headed down this route, the focus has been on capturing savings in manpower and costs and achieving significantly improved management information. But John Fairfax Holdings Limited believes those savings can be ephemeral at best. Instead, the very real gains it's chalked up from its Web-enabled shared service centre have been achieved less through centralisation than through the establishment of a self-service culture.

"[For us] this is not about centralisation," financial services group manager Mike Lurie told delegates to CIOInformat 98. "Where we fundamentally differ from a number of other organisations is that shared services for us is less about centralisation and achieving benefits out of centralisation; it is much more about achieving benefits through the self-service culture. And that is what I want to dwell on because fundamentally I think the biggest savings are going to come through the Internet from this self-service culture rather than through centralisation."But as Lurie's presentation made clear, taking the self-service route means, in essence, challenging assumptions about what systems are designed to do. It also means keeping your mission focused less on reducing costs than on providing service to the business units.

Best practice

The John Fairfax Group is a $1.1 billion media company that produces a range of newspapers, including The Sydney Morning Herald, The Age, Australian Financial Review, The Sun Herald, Newcastle Herald and Illawarra Mercury and magazines including BRW, Australian National Geographic and Homes Pictorial. Other interests include multimedia companies, online information services and communications. Altogether the group employs more than 4500 people.

Some 18 months ago the CFO began an exercise designed to evaluate the pressures on finance and to consider a route into the next millennium. The evaluation revealed the business unit faced several overriding issues, including the need to reduce costs, the need to provide enhanced value and the imperative of finding the most appropriate infrastructure for service delivery.

The resulting business case found costs could be reduced via provision of centralised, focused expertise at the shared service centre; a transition from transaction processing to value-added analysis at the operating units; and by achieving improved decision making through faster access to better information.

And it supported providing employee self-service capabilities for finance, human resources and benefits.

As a result of that exercise, the Fairfax financial service vision has radically evolved. Now the vision calls on the unit to establish, over the next two years, a modern financial system for the Fairfax Group where transactions will occur in low-cost shared service centres, and finance staff in each business unit will concentrate on decision support and analysis to support the business. Finance will be recognised as a business partner and will achieve best practice benchmarks in all financial processes by embracing modern practices and techniques.

But Lurie says the aim was to extend the system "way beyond" standard finance and HR systems. "This is not about finance, it is not about HR. For us this ia about how our organisation is going to do business in the future," he said.

"This was never seen as putting in a good finance system. If I was putting in a good finance system I would not have had the heavy workflow, I would not have had the Web-enablement. I would not have had a lot of the work and effort that we put into it.

"But if you go down this path you have to fundamentally challenge your assumptions about what your systems are designed to do. For us, this was about saying to the user community that we are not going to come with you to transact those transactions that you want on the Web. We are going to make it intuitive for you."Nor was the initiative seen as being about centralisation so much as about empowering users, according to Lurie. "When we looked at it, we asked where the real effort was in the whole finance process. And we found the real effort is on the user side. Users want to be able to initiate the transaction, they want to be able to track the transaction. They don't want to have to go through some third-party transaction -- even though it's an internal organisation like the shared service centre -- to find out about requests they have initiated. They want to be able to do it then and there, online, right on their PC," he said.

As a result, establishing a common financial system, standardised business processes and a single logical view of integrated financial data will all play their part in achieving this vision. But at least as crucial will be the fact of having a shared service centre to handle transaction processing where key stakeholders (employees, customers, suppliers) can service their own information requirements.

To achieve this aim Fairfax turned to PeopleSoft. PeopleSoft 7 delivers self-service Web applets that allow employees, customers and vendors to inquire on and maintain current information via the Internet. Applets are carefully pared down and streamlined to accommodate casual users.

The Workflow Mandate

Now, having already implemented payroll and human resource modules, Lurie says workflow is proving fundamental to the whole self-service culture. "Without workflow it is very difficult to automate the processes and ensure that processes have integrity. You've got a user community out there that is large, and that doesn't understand how things should work. Workflow winds them down the path to ensuring that they achieve and follow the correct process," he said.

Along the way, the organisation has discovered that much of the enthusiasm from some quarters for push technology is misguided. "Push information really doesn't work," Lurie said. "You can send e-mail to people, but when someone is receiving 60 to 80 e-mails a day it becomes very much an issue of scanning through.

"What we have discovered is the best way is to put the information up onto our intranet and let people come in and pull the information up as and when they need it," he explained. "It is all about going into the Internet and pulling up a profile. And when you pull up a profile the system asks you a couple of things. 'Do you want to create a purchase order?' 'Do you want to get a report?' 'Do you want to find out some information?' 'Do you want to create a leave application?' And so on."Fairfax is also working on its extranet, which is reaching out to key stakeholders including banks, suppliers and customers. The ultimate aim is to provide stakeholders with the infrastructure that will enable them to also take advantage of the self-service environment. For example, suppliers will be able to update their own information on the system and track the progress of all payments.

Fairfax is also reaching out to the greater community of customers and suppliers via the Internet. The dream is to eventually create what it calls an Interprise -- an environment designed to provide a completely seamless access to the information from anywhere in the world. "What we are doing right now is putting in the fundamental cornerstones of infrastructure that will allow us to go further down that road in the future," Lurie said.

Painful Discoveries

Along the route, Lurie says he learned some important lessons and made some vital discoveries that will be used to maximise the chances of success of the initiative.

For one thing, he found the community of what might be considered power users is shrinking dramatically. His best guess is there are only about 40 power users on the entire system. At the same time, there has been a corresponding "huge growth" in the casual user community -- the people who only access the system to create a purchase order, authorise a transaction online or submit a leave application.

"Journalists, advertising people -- those on the creative side of the business -- you'll find that administration is a complete misnomer to them. They want nothing to do with it and the less time they spend on it the happier they are.

We've tried to create an environment for them where it is simply a matter of getting in, filling in an online form and submitting it. They don't have to worry about having it authorised or transmitted, or making sure the authorisation is received. It should be intuitive to them so they just get in there and use it."That means a well designed Web site with intuitive navigation, making it easy for users to move backwards and forwards and up and down screens and quickly get back to the home page. It also means clearly marked buttons and less complexity on the screen in the interest of maximum possible speed. Lurie says his team spent a lot of time bouncing ideas off users to determine the best interface.

Equally important is relevant content. Casual users want to get to the information they want as quickly as possible, without having to jump from screen to screen or wade through irrelevant content. The interface must be consistent, with all applications following the same navigation path and with a standard look and feel between applications.

"And the other thing is to make it look cool: and I guess cool just means fun.

People want to get in there and have something that looks intuitively friendly, that is not just a lot of text, not information overload. So why not break it down into smaller segments to provide less information and let them drill down to specific information that they need rather than overloading the screens with too much information?" he said.

And finally there is a need for integrated messaging. Casual users want to be able to submit a leave application and have that kick off the workflow process as soon as they hit the send button. So within the self-serve finance system, the act of hitting the send button activates an entire workflow process that routes any particular form through the organisation to the people that must authorise it or have access to that information.

"We've learned a couple of interesting lessons with that," Lurie said. "One is that in our existing process we had a lot of authorisation levels and a lot of those people were not there to authorise per se but more because they wanted the information. So we now have limited authorisation steps but we have a lot of information going to a lot of people."Work lists are created for those required to act on transactions, and each work list nominates a list of alternates. Every person required to authorise a transaction has to nominate at least one alternative. According to Lurie, this has proved vital to reducing the huge administration effort required to ensure workflow rules and routings are maintained.

"The reason for that is that in some cases people don't authorise or don't notify you. We've done a couple of things there. An item appears in the workflow. If it's not actioned in two days you get a first e-mail that says there are items in your work list, you have not accessed your work list for two days, please access your work list. Within four days if you haven't accessed your work list it actually routes the request to someone else automatically.

"And if you don't action your work list and you don't get in there and deal with it promptly you lose the right to authorise."Success FactorsBut one of the most critical success factors, Lurie says, has been provision of highly targeted functionality. Panels are stripped down to ensure users can get straight to the functions they want without having to wade through other choices. To that end, their log-in actual determines the functionality users see on screen.

"If you are a clerk you don't get the opportunity to go and pull up reports, it doesn't even come up as an option for you. We didn't want to give users all the functionality available and have it keep on coming up with 'Access Denied'. So very much dependent on your log-in, we've now restricted you to that level of functionality you need to achieve the work that you do."Equally important is an emphasis on reporting and analysis, to ensure people can readily get information out of the system. And an integrated development environment, Lurie says, is another critical success factor.

"One of the things we're grappling with in this brave new world is the dividing line between what we call production support and system administration. That dividing line is becoming blurred," he said. "On workflow it is probably best to keep that workflow development in the system administration group. However there is so much maintenance that needs to take place at that level that the closer you are to the user community in that particular environment the better off you are."Other critical success factors are strategic partnerships with suppliers and a robust infrastructure.

Fairfax has an MVS mainframe with a three-tier architecture between client and mainframe. An application server conducts much of the transaction processing so the database is shielded from a lot of transactions for improved performance.

One step back from that are the file servers for the remote sites where most of the background processing is done. There is also a reporting server and an imaging server.

Time Share

Fairfax is finding a major benefit is the vastly reduced cycle times now involved in processing transactions. It currently takes about three minutes to complete a full equipment order transaction, where it once would have taken hours or even days.

"That's where the benefits of self-service come in. You don't need your self-service centres to be centralised processing centres, but they need to maintain the system, they need to maintain the infrastructure. They need to ensure for the user community that there is an integrity in the system. And that is really what your shared service centre should be on about.

"For example, in our shared service centre, half the people are not actually processing people, but are involved in systems administration, training and systems design. Transaction processing is not what the shared service centre is about. It's about empowering the user community out there to be able to get the information they need, transact the transactions they need to online, and be able to track it through without any interference from the system," he said.

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