Global business services (GBS) has always been an effective way for global companies to reduce cost and increase process efficiency, but as technology improves and developing nations rapidly evolve, the GBS model has undergone some of its own shifts.
At its GBS facility in Queretaro, Mexico, global consumer foods company Kellogg has been leveraging an abundance of young, high-quality talent, some of whom have been transitioned into the main organization, showing that GBS can be a strong pipeline for career advancement.
Steve Rudderham, VP of Global Business Services at Kellogg Company, tells us how Queretaro is driving its share of the GBS organization, and how talent and technology is contributing to the company’s direction.
Nearshore Americas: Where does Mexico stand in your GBS profile, and how is Queretaro contributing to the organization’s goals?
Steve Rudderham: There have been some real success stories in our Queretaro facility, both with some permanent work and some temp work. There was some financial reporting that we required, with regard to lease accounting, which had to be done in a very short period of time. Ramping up in one of the centers was potentially problematic, but we didn’t want to go toward third party staffing, so instead set up some short-term hires to go through it, made up of 30 or so high energy millennials. These guys are extremely positive and proactive, feeding off each other and feeling like part of the Kellogg organization very quickly.
At first, I was hesitant of getting short-term workers in, especially for financial reporting, but after seeing them work together, they felt like long-term employees, and some were even hired permanently into Kellogg. Queretaro is seeing a lot of external investment, mainly because entry level talent like this is of top quality.
We’ve added a little bit of work within accounts payable in Queretaro, which now has around 320 people. They’ve proved through experience that they can get the work done, so people at the Michigan head office are now a lot more comfortable sending work offshore. People have realized the comforts that the usual Nearshore benefits bring, such as time zone, culture, and skills. The value of the peso right now also makes costs more competitive on the world stage.
Queretaro has taken the lead on training and development globally, with leadership development programs especially. There’s a full mentoring program from Kellogg leadership and certain individuals have been sponsored and sent through the organization. This has been an enticing career path for any short-term employees that we bring on.
Nearshore Americas: In terms of talent, how are you finding staffers who have both the required functional expertise and a strong focus on customer service?
Steve Rudderham: Customer service was driven at the back end of 2017 and is a key theme for us heading into the New Year. We brought in a customer experience director last year, and his role will be to understand how we measure customer experience to allow the process and delivery people to make different or better decisions.
Within GBS we have an internal customer base and an external one, so we deal with a lot of Kellogg’s order to cash customers, and also with suppliers on the P2P side. We want them to have a positive experience of Kellogg through GBS as well, so we’re starting to staff up and train people who are getting more intimate with the customer. If we can forecast things ahead of time by being closer to the customer, it can enhance their experience and provide better information for our internal customers too.
GBS, in many companies, is viewed as a separate organization, but it should be looked at as a talent incubator for the rest of the organization. Part of my role this year is getting people more visibility. If you take finance, for example, there’s a central finance function in Battle Creek, Michigan, then there’s regional centers, with CFOs in each region, and GBS has a lot of real top-talent finance folks who could go into the organizations. This helps attract more people into GBS, as they see it as a good training and development area.
Nearshore Americas: Last year, you were on the cusp of implementing new automation tech. How has the company now adopted automation into GBS, and what have been the benefits and challenges of doing so?
Steve Rudderham: Automation brings to us more accuracy. On a daily basis, we go through a huge amount of transactions, especially with things like order to cash and collections, so being able to automate some of the financial reporting processes has allowed us to focus on the rends and analytics around it, versus just spending our time ensuring transactions match. It’s taken that low value-add work away and allowed us to focus elsewhere. At the moment, we’re looking at where the best places are to drive this further.
A challenge for me has been educating the organization to understand that automation should be embraced to give people an easier life, not to replace them. Just the word “automation” makes people very fearful because they expect to lose their jobs to robots, so as a business we have had to educate people about what it actually means. To me, automation is an enabler for us to be better at our jobs and focus on the sexy stuff, like analytics and business insights, and not be focused on making sure excel spreadsheets match, for example.
Nearshore Americas: There are studies showing that digital tech and automation can actually negate the need for implementing a GBS structure. As head of the organization, how do you reconcile this?
Steve Rudderham: If you go back 3-4 years, GBS was set up as a platform for process standardization and centralization in order to build insights. Starting the journey again with 20/20 hindsight, you would probably look at where to set up automation within the business to take on the transactional roles as a means to process improvement, which is what GBS was originally intended for. Now, with automation, you can transform immediately.
I don’t think a GBS organization can be replaced, but it would certainly be set up differently and enabled by technology to be a lot faster than it was in the past. There’s still a need for that central function to help, particularly in a global organization.
The era of cost arbitrage for GBS is now in the past. A GBS organization already has centralized processes, so the next thing is standardizing them across the globe, which is the really the ideal behind the whole ethos. Once they are standardized, you can start to add the value-add on, such as agility and insights, providing information that supports metrics and analytics. That is the value that the business is looking for.
Nearshore Americas: What resistance or support have you received from upper management in terms of investing and believing in GBS?
Steve Rudderham: GBS is part of something called “Project K” that was kicked off in 2014 and has received absolute support from day one. If you look at change programs in any company around the globe, there is always going to be resistance to that change at some point. We’ve benefited greatly from having good executive sponsorship, but as you go down through the layers you have to do a lot more convincing.
For me, communication and transparency has been key. You show people what is going on, you collaborate as much as possible, and you’re seen, not as a separate organization, but an integral part of the whole company. Once people see that GBS is part of the solution, that resistance to change diminishes.
What are the advantages of fallbacks within your GBS organization? How do Nearshore locations weigh up against other regions in terms of talent? Let us know in the comments.