Previous articles of mine have talked about the numerous benefits of outsourcing and how to utilize their effect at higher level. However, the real value of every argument made comes to light if and only if it is put into practice. For that reason, this article gives brief overview of seven big outsourcing contracts in Sweden in the F&A field, the reasons behind their decision and the outcome of the collaboration with the service providers.
PostNord Group, the leading logistics company in the Nordic region, provides communication and logistics solutions to their clients. In 2005 they have encountered challenges with their payroll processes and decided to use the knowledge of service provider with experience in that area. PostNord is dedicated to developing the basis for tomorrow’s communication using modern technologies to streamline its business processes. They recognize the outsourcing contract with CGI as way to increase quality and flexibility.
“Flexibility, in particular, is vital, and the agreement will allow us to continue to focus on effectively managing variable costs.” – Finn Hansen, Chief HR Officer, PostNord.
Atlas Copco, the leader industrial group in construction and mining equipment, power tools and assembly systems has outsourced part of it financial processes to Infosys back in 2011. The company has already leveraged outsourcing benefits in other service areas such as logistics and IT. Following the same strategic development they decided to outsource their accounting to reporting and processing of supplier invoices. The collaboration with the global provider Infosys has improved the quality and efficiency of their processes, at a competitive cost.
The Scandinavian Airlines (SAS) have launched a strategy “Core SAS” expected to deliver annual savings through a streamlined and simplified operating model. For that reason they have decided to outsource their accounts payable, accounts receivable and accounting to reporting to Accenture under a seven-year business process outsourcing (BPO) agreement. They have chosen a global partner who would be able to provide the services to SAS in 14 countries across Western Europe; mainly in Sweden, Norway, Denmark and the United Kingdom.
“We selected Accenture because of their ability to provide a qualitative and cost effective solution “. – Sara Jinnerot, VP at SAS Accounting Services
SSAB, a major Swedish steel manufacturer, has signed a seven-year F&A outsourcing agreement with Accenture which encompass designing, building and operating SSAB’s accounts payable, accounts receivable, select customer care activities, operational procurement and sourcing and category management for selected categories. The outcome was improved company’s flexibility and agility to address changing market demands through a cost-effective service delivery model.
Sandvik, global high-technology and engineering group, has decided to migrate its global financial processing for accounts payable, accounts receivables and general accounting to Capgemini’s delivery centres in Brazil, Poland, China and India. Efficiency improvements, as well as the opportunity to tap into the accumulated knowledge of the Capgemini’s Global Delivery Network have been the two main drivers for such strategic decision.
Scania, the Swedish automotive industry manufacturer of commercial vehicles with global business processes, found it challenging to coordinate the decentralized payroll services for Spain and Portugal conducted by different local consultancy offices. For that reason they decided to transfer this burden to Sereco which in addition provided the employees with an employee’s portal, where they could consult the payroll receipt and manage all vacation requests.
“With Seresco’s payroll outsourcing service we have unburdened the HR department and we have achieved improvements in the relationship with our workers by means of the service that we offer them.” – Rafael Vara, Director of Human Resources at Scania for Spain and Portugal
Skanska, construction and development company based in Sweden, under the slogan “Enjoy your core business” decided to centralize its F&A services in OneSkanska Shared Service Centre (SSC). They used the domain and skillset of Infosys in accomplishing this transformation project through three steps: assessing the organization’s preparedness for change, creating a robust target operating model, and finally achieving it through joint execution. The final outcome was standardized and optimized processes which resulted in increased efficiency, reduced costs and higher quality.
The examples given, mainly highlights big outsourcing contracts between companies with global presence on both the vendor and provider side. According to the number of contracts globally and on the Nordic market, as well as the size of the contracts Accenture, Capgemini, Genpact and IBM have been recognized as leaders on the Nordic BPO market. In addition Accenture and Capgemini are the first two companies which come to mind to finance leaders (Deloitte, 2015).
But outsourcing is a sensitive decision and “one size fits all” approach does not work. According to Deloitte’s research (2015) NOT EVERYONE WANTS A LEADER. The survey participants, most of them financial leaders, argue that smaller outsourcing companies provide better service at lower cost. They have particularly vouched for service providers who are just now establishing on the Nordic market. For those BPO companies (entrants), the contract is of higher importance and the client receives a lot more attention at a lower price. Moreover, smaller BPO companies are more flexible and willing to move at the pace of the client.