Market-leading provider of gas and electricity to one of the world’s largest markets
Business need addressed:
Demand for clarity in F&A roles and responsibilities, and for governance that can sustain a culture of continuous improvement in the wake of a major restructuring
- Reviewed Record to Report processes of every business
- Identified funnel of 300-plus integration and improvement projects
- Increased capability of Finance teams to do end-to-end assessments
- Set up and managed 120-plus Lean Six Sigma (LSS) training projects
- Reduced month-end “time to close” by 33%
- Improved reporting accuracy
- Made budgeting and forecasting more efficient
- Clarified Central Finance and Business Finance roles
- Enhanced visibility and tighter internal controls
- Saved US$5 million in Year 1 of improvement effort
With a founding history dating back to an era when whale oil still fueled street lamps, this 200-year-old utility possesses unrivaled expertise serving residential and commercial customers. Such expertise has helped the utility realize market-leading positions across what is one of the world’s largest countries.
Successful as the utility’s business efforts were through the 19th and 20th centuries, nearly a decade and a half into the 21st, the company’s senior management smartly recognized that the prospects for equal or better future performance would demand something more. What the future demanded was that the companies develop an enterprise-wide capacity to adapt to new technologies, embrace the latest best practices, and establish a culture with an insatiable appetite for continuous improvement.
Though the company began working toward those ends with the highest of hopes, by early 2011 the utility had concluded that realizing the culture change required without outside help would be difficult to impossible. Like so many utilities today, this one had been owned by the state, and the company’s current incarnation as a publicly traded enterprise was due to the wave of privatization that swept up various utilities in the mid-’80s. As the utility edged out from under the wing of government stewardship that had protected the company from competition for more than 40 years, the utility was redrawn into five business divisions, with three coming under common management.
What was brought together on paper with a simple pen stroke would not be so quickly joined in the real world, however. For better and for worse, the three jointly held divisions operated very much as standalone concerns. Where residential and commercial customers saw autonomous entities oriented to meet specific market needs, the company’s Central Finance managers saw only headaches in their task of creating a unified reporting picture from three very different operations, each with strong ideas about what should be standard operating procedure.
Ambiguity regarding Finance roles and responsibilities ultimately deprived the holding company of the vital visibility needed to determine, design, and implement a game-changing enterprise solution. In particular, company leadership was being challenged to solve for inconsistent approaches and redundant efforts between Central and Business Finance. Additionally, poor IS systems use, overly complex processes, and precision and accuracy problems in how numbers were run all conspired to undo initial efforts to reengineer how employees perceived and reacted to information.
In the final quarter of 2011, a team of process reengineering experts from Genpact was engaged to review the utility’s services and business financial activities. A month and a half later, the team submitted more than 50 recommendations along with a roadmap for instituting them within six months. The rapport established between Genpact and its new client during the first improvement initiative laid the groundwork for deeper and more systemic changes that needed to follow in 2012.
The start of 2012 saw Genpact invited to implement a key recommendation the experts had made for one of the three businesses. However, in the months that immediately followed, Central Finance leaders gradually recognized that the internal actors involved in this effort could neither understand the benefit of improving end-to-end processes nor bring it about by themselves. At best, the actors’ actions would provide a stopgap solution.
To allow for a more holistic understanding of how process problems affected all workflows, Genpact engaged the controllers of each division and asked them to do a reengineering review of their processes. Next, Finance employees were given the Lean Six Sigma (LSS) training essential for improving end-to-end processes, and to do so not just as a one-off but in a “reliably repeatable” fashion. Finally, those who used their training to complete an LSS improvement project were given an opportunity to present details of their work to Central Finance leaders.
All project team members subsequently earned LSS skill set “certifications” from their employer and Genpact. Team members have also been able to earn yellow, green, and black belts as they have grown more proficient in LSS. In time, these employees would become the first wave of internal champions for process improvement within their company, with their demonstration of strong performance and a positive attitude furthering the company’s cultural shift.
2013 brought a more complete accounting of the impact of these efforts. Period-end closing times shrank a third. F&A leaders, analysts, and managers gained greater control over reporting structures and processes. Access to fuller, higher-quality financial data (which can be sifted for home office and branch review) also creates more accurate, precise, and customer-focused reports. Finance employees can now access information sooner, and gather it in formats that are more intelligible and useful for individual needs. Ultimately, this resulted in a Year 1 impact of more than US$5 million.
Sizable as the $5 million figure is, the quality of the impact (as seen in a budding culture of continuous improvement) is far more substantial. Such a culture acts as a pilot light that can rekindle the gas company’s commitment to process excellence, no matter how dark the challenges.
For more information, contact: email@example.com and visit, genpact.com/what-we-do/business-services/finance-accounting