CIMA knowledge fast forward is a knowledge sharing initiative which strives to improve the conceptual clarity of the business community with regard to a core management/financial accounting or business related knowledge area, describing the concept, and explaining how it applies in practice.
SSCs in Sri Lanka: next steps
Intellectual capital: optimising performance in SSCs, jointly organised by CIMA, SLASSCOM and Loughborough University, recently brought together key stakeholders in the shared services and BPO field to take a closer look at the developments, challenges and opportunities in Sri Lanka.
Critical issues that emerged from the discussions included the general investment on the part of companies that is lost due to attrition, as well as the loss of domain knowledge when experienced people move on, creating brain drain.
The lack of understanding of the impact of shared services in the long-term was also mentioned as a challenge to be overcome, with the need for communication of the benefits of using this model in the long run and the ability to match expectations of outcomes to the scope of a project.
Leadership in SSCs
Dushan Soza, Managing Director, WNS, in a comprehensive look at Sri Lankan shared service operations, took the attendees through all the stages of setting up a shared services project, discussing the skill sets required at each stage of the process. He explained that the motivation when going into shared services is the provision of improved customer service, both internal and external, as well as significant cost savings. He also talked of the efficiencies, role of technology and how the finance function will change over the years and the required skill sets for the finance professional of the future. He emphasised the importance of different types of leadership at the various stages of growth, with directive leaders required to drive growth at the initial stages, ‘affiliative’ leaders who use consultation and inclusiveness required later on, and visionary leaders at maturity. He also cited the need for the country’s graduates to develop an ability to lead larger teams, noting that most candidates have led only small teams, when the requirement is for those who can lead teams of over a hundred.
The big picture
Ghanshyam Das Khandelwal, Head of Service Delivery for one of the largest captive organisations in Sri Lanka, while stating that Sri Lanka has an attractive environment, mentioned challenges in the form of the lack of a peer market for employees which would give them prospects for growth, stating that a business ecosystem which would allow them to move up into other positions at other organisations would increase the attractiveness to potential employees as well as create more opportunities for partnership. He also addressed the need for more prospects to be educated of the potential offered by global roles, and the requirement for education systems that cope with the needs of such roles, citing the country’s comparative need of sophistication in financial markets, which leaves Sri Lankans at a disadvantage when compared with their global counterparts. Business partnership also necessitates the ability to influence strategic thinking at board level and avoid the inherent risk of losing sight of the big picture by immersing yourself in processes, he cautioned.
Dr. Arul Sivagananathan, Managing Director of Hayleys BPO & Shared Services elucidated the need for specific performance metrics based on transaction value, and presented a case study on Hayleys’ unique measures of performance. Discussing the importance of managing customers he mentioned that among the challenges of shared service centres as opposed to BPO operations, internal customers do not see the immediate cost benefits that external customers do, and it is necessary to balance rising operational through effective management of shared services in order to derive benefit for these customers. Change management must also be measured, he stated, underscoring the importance of managing people, rather than only the numbers and aligning them to strategy.
Other areas addressed in the discussions were the need for incubation of talent; Sri Lanka possesses the right ingredients but needs cognisant of weaknesses. There is currently a requirement for the importation of talent, as well as encouraging secondments, in order to facilitate the development of skills that need to be fostered.
In order to fulfil the potential for growth, taking business to tier II and III cities was discussed, with Hayleys’ site in Jaffna being one of the examples brought forward. While the talent pool available outside Colombo is good, it was mentioned that there is a need to inculcate the work ethic required for such an environment, and there is a greater need to monitor quality, and begin with low-end work before moving up the value chain. The needs of Gen Y were also taken up, with a recent study finding that many want to achieve CEO status at a young age, and require mobility and a variety of experience. Methods of maximising the potential and channelling their enthusiasm productively, such as having a clear succession plan and ensuring engagement, were among the factors discussed.
The session was facilitated by Ian Herbert, Deputy Director – Centre for Global Sourcing and Services, Loughborough University, who elaborated on findings from the recent CGMA report titled ‘Relevance regained? Performance management in shared service centres’. Ian is a regular contributor to international conferences and manages the CIMA-Loughborough Roundtable series on Shared Services and the role of the finance function. In his presentation, he highlighted the importance of balancing management of people with financial and other quantitative metrics, sharing the case of how Network Rail translated their strategy into ideas that could be assimilated and applied at all levels of the organisation via their ‘4Cs’ operating model. For more information on the report, please visit http://www.cgma.org/Resources/Reports.