Dentsu International’s global functions team – part of the marketing and advertising giant that operates across 145 global markets – had ambitious plans for 2020. After beginning to implement its new financial operating model in 2019, the next stage of the project was to realign the global functions finance teams and consolidate them onto the group platforms – D365, Workday, Concur, Bellin and Blackline – across the business.
Bringing together the company’s platform, process, onshore and offshore teams in Bangalore in February 2020, a total of 60 platform and process improvement plans were agreed to happen over the next year. However, as the pandemic hit in March 2020, geographies were suddenly separated by various lockdowns and restrictions, causing the complexity and timeline of the project to rapidly increase.
Here, Andy Leck, the company’s CFO of global functions – a part of Dentsu International that represents the centralised functional teams that support the wider organisation – outlines some of the impacts of the pandemic, as well as the decisions he made to lead his team through a challenging year.
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What were some of the key challenges global functions faced over the past 15 months?
When the pandemic first hit, we had an urgent call to arms to rebalance our cost base with an unpredictable revenue deterioration, resulting in additional workload for our finance team to coordinate and support. Whilst we experienced a 13 percent organic reduction by the end of 2020, we didn’t know how long-term this would realistically be.
This uncertainty was compounded by our finance transformation project already being mid-flight. Our goal to establish a scalable finance team that aligned with our finance operating model meant that we had to restructure the organisation and define and implement more focussed roles. As a result, all of the senior finance team were either new to the organisation or new to the role. This meant that not only were they joining at a time of significant change, but they had to get up to speed without the benefit of easily leveraging informal relationships to fast track. They also didn’t have detailed knowledge of their business areas or long-standing relationships with the business owners. Consequently, we had an expected period of reduced levels of service to our stakeholders.
Our migration from three general ledger systems to one (Microsoft D365) also gave us an opportunity to rationalise our reporting structure – for example, halving the number of cost centres – but it also meant we didn’t readily have available historic data to rely on, as the history was in multiple systems in inconsistent formats.
Added to this, we were dealing with the complexity of moving to integrated systems for the first time. Previously, we had been able to correct data at various stages of our reporting, but now that we had integrated systems, the impact of entering incorrect data was far greater. This took some adjusting to and we had to slow down elements such as the hiring process – where it was crucial to ensure correct employee data was entered – to ensure it was right the first time rather than correcting it later.
In addition to the business uncertainty, new teams, new platforms and new processes, we also had the challenge of no longer getting together in person to figure out how to triage the tasks. Instead, we had to leverage Teams and navigate some of those initial problems as people settled into a new way of working remotely.
What steps did you take to improve the situation?
One of our first steps was to support our stakeholders through short-term, pandemic-driven cost control measures. With immediate revenue decline and uncertainty about when or how it would recover, we had to work out how to reduce our costs on a short-term basis, which included the de-prioritisation of investment programmes. Some of the cost savings were ‘mechanical’, where the group directed us to preserve jobs and opt for short-term cost saving measures such as salary and bonus reductions, which we stopped by the end of last year. We then reviewed all discretionary spend – travel was an easy one – and reduced investments, which meant working with our various business partners to prioritise both within and across teams.
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It was too late to pause our team transformation and we also didn’t have an option to delay the cost reviews. We knew the forecasts wouldn’t have the level of due diligence and detail that we would usually expect and that we’d have to accept some puts and takes. This involved a lot of support as people transitioned into their new roles and responsibilities. Understandably, they wanted to do a great job, but they didn’t have the background knowledge, relationships or bandwidth to do everything perfectly and we had to accept “good enough” to quantify the savings impact in a limited time frame.
Once we had the cost savings plans in place, we had to re-focus on our transformation. Although we had identified the areas that needed improving, the individual teams struggled to develop consistent, trackable plans to effect the changes. We also had to deal with the day-to-day challenges caused by the current ways of working, and we brought in an experienced project manager to help the teams structure the plans and then drive through the execution.
At this point we encountered competing priorities across the various teams we needed support from. These teams had their own internal transformations to manage and additional investment was limited. We engaged the senior leadership from the platform and process teams so that they could help with the prioritisation of the improvement plans, as initial progress was slower than we had planned. Once we aligned on the prioritisation and had the required momentum, we moved to a more exception-based involvement model.
In some ways, the pandemic-enforced remote ways of working actually helped us; it took multiple locations out of the complexity, giving us space to really focus on delivering the outcomes of the various improvement plans. The cadence of weekly reviews helped balance the urgent with the important – we had a lot of urgent issues and could easily have let the important transformation activity slip.
What were some of the key reasons and strategies behind your decisions?
We had a number of key parts to our recent transformation. Firstly, we needed to reduce complexity. With multiple teams and systems, we needed to consolidate and simplify in order to move forward. We needed to rationalise our underlying reporting structure which allowed us to halve the number of cost centres in our GL as an example. We needed to adopt our finance operating model to improve our quality of service and provide a more scalable finance model.
Secondly, we needed to reduce ambiguity. All of our budgets now have clear owners and we structure our team to align closely with budget owners. Typically, we have challenges where we have grey areas in terms of accountability. This is because teams don’t have clarity of ownership and requirements, so now that we do, we’re making fantastic progress. It’s therefore important to invest time upfront to make sure the accountabilities and responsibilities are clear.
And thirdly, the transformation was a means to an end, not the end itself. The ultimate goal was to build a team that could support a broader agenda of functional optimisation across the group, which is now in progress.
Did you achieve your goals?
Our goal was always in two stages. Firstly, consolidate the various central finance teams supporting technology, transformation programmes, operational finance and HQ, adopting our financial operating model and migrating to our group platforms. We’ve made significant progress in this respect; our first re-forecast for 2021 was a significant improvement on what we had previously been able to deliver, both in terms of insights and understanding but also in terms of consistency of the underlying data. Our business processes are now aligned to our integrated systems, such as Workday for our pay review cycles, enabling a more systematic way of working. The teams are also increasingly self-sufficient, partnering directly with our stakeholders and continually improving our processes and service delivery.
Of equal importance, it is now allowing the team to support the second stage where we are looking to optimise our business functions by consistently applying the operating model, platforms and processes across all of our markets and regions, both in terms of offering financial and commercial support but also from practical experience for the finance function. With 70 percent of the team now offshore and operating in a consistent model, we can now efficiently scale our finance team to meet the demands of our ever-evolving business.
What are some of your key learnings? Is there anything you would have done differently?
I have a number of key learnings when I reflect on the past year. Firstly, I underestimated the impact that moving to more integrated systems would mean. It was a huge process and it actually exposed our historically poor processes in an unforgiving way. Combined with expecting our team to deal with their day-to-day jobs alongside new, integrated systems – that initially posed many issues that demanded time to identify and fix – was too much. Although we added some transformation support, it was limited against the scale of the changes we were making.
Secondly, be clear about the vision and direction and keep reminding everyone of it. It’s too easy to get lost in the details and forget where you are aiming otherwise. It also helps to remind everyone of where we came from and how much progress has been made. I can be guilty of focusing on what we need to do rather than what we have already achieved, and I think it’s important as a leader to reflect on the positives as well as what needs to be done. I’m glad we pushed as hard as we did, and I can now see the tremendous progress within the team this year.
Personally, as someone who commuted 1,000 miles a week pre-pandemic, I couldn’t have envisaged being able to achieve as much as we did last year whilst working remotely. It will be fascinating to see how a hybrid approach will work in the future – the potential to allow people to work when and where they feel most productive has huge opportunities, but I do think teams need a place to share and connect in person to realise that full potential in a sustainable, longer-term way.