Gunther Smets 0:09
So let’s, let’s make this very interactive and very dynamic. So I’m just going to take the clicker, and then I’m going to come back down here. And then let’s see how that works. Okay?
Gunther Smets 0:25
So the intent of the presentation is really to go over and saying what’s been cargos journey on how we went from a very decentralised organisation to a centralised organisation. And the sales men reflection to it is in a transformation journey, you’re talking to a lot of people, because a lot of people are stuck in their ways on how they are doing things. They’ve been doing it for decades on a row. And then all of a sudden, you want to implement a shared service model, and you want to bring in new technology. And everybody said, Well, that’s not gonna work for me. So it’s moving that towards a more transformational journey and how we bring people along on that journey within the strategy itself. So that’s where the title came from. My too far with the clicker. Or is it switched? Alright, that’s better. Yeah. Are we good? So just brief introduction on Cargill, itself. So 150,000 employees worldwide, in 70, businesses, 67 countries, agriculture, agricultural, in business across a lot of different kinds of businesses in there as well. So the intent is, just to illustrate a bit on what is the journey that Cargill is on? How does the global process owner approach how does that really work? So what is that? And what does the global process owner do? And what is the change and transformational impact that we are doing right now. So, where we come from, so where we started as cargo, we had those over 60 Different kinds of organisational models that were all delivering on the different processes within the credit to cash base on itself. So that led to over 400, different kinds of process variation. So different ways of doing exactly the same thing. We were also not really customer focused. So a lot of our customers are shared across the different businesses. So you could have different interactions, different kinds of outcomes, depending on what business that you worked with. So that was really that state as well, we have over 50 Different ERP systems. So there is not one Oracle or one SAP. So it’s a wide range of 50 different versions. And we have 6500 people within finance, of which in my space, there is 1200 in the credit to cash. And the last component is which we are still very much struggling with as well is how do you create the monster data? How do you create clean data to start operating with as well because that’s the main challenging element. So that’s where we come from. Now, where we’re going towards and we’re about three years down on this journey is we want to have an end to end aligned organisational model. And I’ll go into more detail on what that means from a people aspect. Looking at one integrated Receivables Management solution, so on the technology side, and there is a presentation tomorrow on specifically on the technology side and what we are doing then one Cargill data platform. So we are which I’ll talk about as well. Tomorrow, we are creating one data lake within an hour dupe Vironment to where we are pulling all of the information into one size and then have a visibility layer that sits on top of it. So with our BI, that’s there, and then standardised processes. So our end to end focus, really an end to end process focus, focusing on people process data and technology. So from a global process owner perspective, within finance, focusing on credit to cash, where this is the quadrant that we have, and that we, that we work with on a day to day basis. So on the people side, we define where do we do what kind of work? So where do we legit leverage a shared service centre, but it’s not only a lift and shift towards a shared service centre model. It’s also looking at how can you leverage a more regional approach instead of a business approach. So how do we have a finance for North America finance for Latin America? back, and so on. We’re also looking at roles and responsibilities and capability. So how do you create a finance of the future with the capabilities that you need in the future? So how do you go from a more accounting driven background and a lot of those elements to more a technology driven background to data scientists towards more towards predictable financials as well.
Gunther Smets 5:25
So unclear roles or responsibilities, there was a lot of overlap between the different kinds of roles that you had, we were stepping on each other’s toes continuously, within everything that we did as well. Then, on the process side, is from the iterations that we had over 400 Different kinds of iterations that we had in there, how do you move that towards a business process framework? So how do you go to an end to end by standardising what you need to do, but still creating sufficient uniqueness, the differentiation between necessary and unnecessary uniqueness between the things that we do in Cargill as well, having process documentation, which wasn’t really the case, it’s something very simple, something very tangible. But a lot of the knowledge was legacy knowledge in people’s heads who were there already for 20 years, 30 years. And if you then had somebody else joining the company, they had to learn from scratch and the main, one of the main elements that we always had when we start migrating and saying, Yeah, but a shared service doesn’t know my business. And the main reason for that is because of that embedded knowledge that sits with so many people, because you don’t have a standardised process. Everything is based on an exception. And everything is in the minds of people, nothing is documented as such. So that’s a bit I’m sure that sounds familiar as well. So how do we start measuring? How do we have certain of the metrics as well? So how do we compare ourselves to what does good look like, before you start standardising to support something, you need to understand what is good? What am I aiming for? So we started defining different kinds of KPIs and different kinds of metrics, we use Hackett as well, as well to benchmark versus the market and see where we are. And then they find that top quartile journey. So how can you improve those metrics? As you continue? The data element, as I said, that’s a weak point. It really is, if you look at with all of the different systems that we have, with all of the different kinds of methodologies that we have, how do you then have a unique customer, for example, purely to say, because that customer exists in six different SAP solutions into 28 Different JD Edwards solutions with all different trends, references, so how do you create one golden customer account out of that is a bit of a challenging component as well. So that’s really what we’re focusing on what one of the key priorities is, as well with that with the technology. So we’re on the technology side, what we did wrong before, what we learned for is we started from technology. And then we went into process and thought that the technology is your silver bullet solution that’s going to fix everything for you, you implement SAP, and your love is going to be brilliant. It doesn’t work like that. If you don’t have the process standardisation first, or you don’t look at how your organisation from a people aspect is set up first, you will fail on the technology side. So we’re now looking at how do you have the right transformation from a people side? How do you have the right process standardisation? How do you make sure your data is ready, and then look at the capabilities that you need to be able to drive your technology going forwards as well. So why not have the technology drive the rest of the organisation. So from that aspect, we revamped finance all together. So it’s not only a view on saying it’s all about shared services, and we’re going to lift and shift our people towards a shared service organisation. So what we are doing is looking at the total finance organisation and put it in a few key components. So we’ve got that global process organisation as one puzzle piece that’s going to be a key enabler. But then we look at the global finance platform. So that is central finance SAP, which we’re implementing right now. Then we’ve got CBS finance. So that is our cargo business services. So how do we make sure that we’ve got that ready from an end to end perspective as well, and then our regional anfa organisation so whatever we had as retained activities within the region, we’re actually also reorganising it from an end to end, more specific domain. So we’re moving from a generalist towards an expert model. So instead of having an accountant who sits in the region who does a bit of everything, we now have different domains, but I’ll touch on those in a second.
Gunther Smets 10:00
So our shared service approach, where are we right now, we’re around 70% of all of the credit to cash activities who are in our shared services with an end state that we’re looking at, for around 85%, we’ve got six global shared service centres, of which the largest one is San Jose, Costa Rica, where there’s around 400, credit to cash, people located there. And they serve as North America, so the US and Canada, and they also serve as a part of the Latin America space, we’ve got Uber lonja. So in Brazil, servicing Brazil, itself, we have Rosario. So that’s more for the Southern Cone, based in Argentina. So Sofia covers all of Imia. So Europe, Middle East, Africa, we’re looking at it right now, to see do we need an additional centre within Africa, or we’re gonna also cover it out of Sofia. So they’re a little bit slower on that journey. Bangalore, in India is servicing everything from AIPAC, with the exception of what we do in China, Korea, Taiwan, and Singapore, which we do out of Nanjing. So that the end to end concept of what we have so is if you look at that rotation, or whatever you want to call it, you’ve got to CBS organisation, so the shared service organisation will mainly focus on all of the components that you would have in the execution of the process, but also a lot of data analytics, and starting to bring some value add activities as well. So it’s not only transactional, you’re looking at it. So it’s, it’s your engine, it’s your back office engine of what you drive. They are enterprise and geography agnostic. So some of the activities within credit to cash will have on a global basis within Bangalore, for example, on a global basis. But we still have a regional footprint as well. And they work for every single enterprise. So you can shift around activities as well. So if you would look, for example, at order holder release processes on how we work directly with our customers as well, we go with the sun. So that means if we’ve got one centre, that stops working, it’s automatically picked up by the next centre, and so on. So that means that you’ve got 24/7 service, which is the element to take it global, and not regional specific as well, you really leverage your scale in that way. The NF organisation ans stands for accounting and finance. frm stands for financial risk mitigation, or financial risk management that we have in there. And that is set up in each of our regions. So we have a regional approach where we’ve got the the, the financial risk management group for North America, and it’s split in three pieces where you’ve got the credit organisation where you’ve got foreign exchange, and you’ve got commodity risk. So in Cargill, were very much driven by the commodity risk within cargo. So they have three verticals within that organisation. They’re regional specific, so they only work for North America, or only worked for EMEA or only worked for North America. However, they are enterprise agnostic. So they were for whole all of our businesses within that region as well. So really, with the focus to be customer oriented, and not business, by business, by business by business. So that’s really the focus. And the third component just to tie it together, because we still have our enterprise view as well. Our go to market model is we’re looking at food ingredients, bio industrials, agricultural supply chain, protein services. So our different kinds of go to market model. For each of those, we have an enterprise credit lead, and that enterprise credit lead looks at the total risk portfolio for that enterprise. There are enterprise specific, but region agnostic, so they have a global role, but specifically on an enterprise. So which means is that we’ve got the CBS organisation who is both enterprise and geography agnostic. We have the from organisation who is enterprise agnostic, but region specific. And then we’ve got the enterprise credit lead, who is enterprise specific but region agnostic. So that’s, that gives us the three different lenses of what you need to have an end to end service model within there.
Gunther Smets 14:28
if you then look at activity placement, so where do we do what and we will have this model now fully implemented by me 19. So that’s our fiscal years run like that is on the CBS side putting credit to cash. They have all credit management collections, Cash App dispute management, invoicing, and contract management is all done out of those centres, with the intent of going 85% of all of those activities being placed there, where they sit within the organisation elements is we started From a global process organisation who was really just a travelling salesman, going to convince, while we had a mandate, but sell the the basic principles as well, to every single region, every single business, we’re now combining that as well from a service delivery perspective. So as a global process manager within credit to cash and the both the process architects within that organisation, as I do the operational site within the different centres as well, which allows us to accelerate certain things, you don’t need to you’re not silo based, you can move from a strategic perspective directly into operationalizing, a lot of those components as well. So it gives us a lot of traction and a lot of speed on it. Same with the frm organisations who are financial risk management organisation, so we look at counterparty risk or credit risk is where we can have regional customer approach dedicated to them. So how we can move forward on a lot of those things we take affects. So we have foreign exchange risk within each of the regions right now, where we have, like an hedge desk that can work directly with Treasury as well. And we look at it not from a business to business because we were hedging just to a flat to a zero position, where now because you’re have more expertise, you can actually play the market a little bit more, because you have dedicated people to it. Before we didn’t, we didn’t have those expert roles. So you take very risk averse approach at the back of it. That’s That’s it, the commodity risk position is how do we we have a lot of our grain commodities that are also futures so that we handle both the future and the flat position at the back of it. So what we do within the frm organisation is make sure that our position reporting that we have on all of our inventories that it’s always up to date, and there’s a lot of regulatory compliancy, which is actually being increased significantly. So they’re really focused on all of the compliance risk within the commodity space. So that’s their focus. And then we’ve got the enterprise credit leads that are winning referred, referred to before. So that’s how, yeah,
Audience 17:11
sure, so you have a customer. Yes. So who approved CVS for that given customer?
Gunther Smets 17:22
It goes with a threshold. So what you’ve got is, initially you’ve got to CBS organisation, who will approve up to a certain threshold, and then it will go to the frm organisation as your second escalation level, and then it will go to your enterprise credit lead as a third. So it just flows through through web based on the threshold as well. But we’re building it at the if he would have a credit assessment or credit limit approval in the beginning, what you will have as well is that we’re looking at auto approvals. So it just flows through the system, without anybody approving. Another element that we’re looking at right now is saying, do you really need to approve a credit limit based on an amount threshold? In theory, what you want to do is approve a credit limit based on what the risk profile is of a customer? Do you really need to have 20 Different approvers to approve Nestle? You probably don’t but it’s where we spent the most time on to assessing it because it’s a high risk or high. Yeah, very high limit, it’s a very substantial amount. So we want to have it more risk event driven way where you’re looking at saying what’s the actual risk profile of a customer, and then have their the approval cycle tailored to that element. It’s just instead of a risk based risk amount based approach in that element. Yeah. So on the CBS organisation, or because the previous just going one step back, this is how we are running the operation side. So how we run the day to day activities that you need to do, but we still have a lot of that transformational journey that we still need to do. So how do you transform versus where you are right now, or where you were for the last 150 years towards something new as well. And you need to have an organisational concept that drives that because if you have your operational organisation drive your transformation, then basically it’s gonna disrupt them every time that they’re spending on transforming. They’re not working with your customers, they’re not collecting money, they’re not assessing credit. So we have a transformational side of the organisation as well, which is LinkedIn three pieces again. So what you’ve got is within the CBS service organisation, we’ve got a continuous improvement group, so a CI group. So mainly they’re like blackbelt, six segments that are focusing on a lot of those activities as well, where we are working with automation anywhere to do a lot of the RPA. So robotic process automation. We went live in the first year last year was our first year. We went live with 60 bots approximately and will accelerate that journey as well. We Don’t look at RPA as a as a target solution or as an end state solution, and just a tool in our toolbox. For something that you say, well, they’re on the roadmap for in two years time to go on SAP. That means that your RPA is going to have an earned back period within there. So you scale up and you scale down.
Gunther Smets 20:19
They also do all of the Lean Six Sigma, so a lot of kaizen events that we do within that approach. So that’s what they handle the middle box, that’s myself. So we define what the strategy is, what are efficiency initiatives, so we’re looking at ending so for the moment credit to cash, both in the regions and in the CVS is around 1200, FTEs. By 2023, there will only be 800. And that’s not by outsourcing it, that’s purely by our automation standardisation journey that we are doing. So that means in general, for our total finance organisation from the start about three years ago, to the end, in five years and eight year time window, we will have on our efficiency targets around $160 million. So we already delivered on $80 million dollars, we’re going to deliver on $80 million over the next four years approximately. So then, and then within the region, because you want to have again, end to end as well, that we’ve got a process improvement domain, which is really looking and a lot of that transformational or change drivers that we would have within the business itself. So how do you drive a lot of your migrations, that’s still there. Because we’re now in the beginning to gain a lot of momentum and a lot of speed, there was lift and shift, strong mandate, just go to the business, you need to shift it. If we didn’t do it like that, it would never have happened. Because then you come into a consensus culture, and you start debating and discussing and it’s never gonna happen. So however now considering that we’re already close to 70%, we’re going more in transform and shift you have more complex activities as well, process improvement domain will help us with that. Plus, they will help us also with bringing that technology roadmap behind. So it’s really looking again, from that end to end perspective with the same principles. So how do you have operational excellence? And how do you transform towards your organisation as well. So this is a lot of detail on that slide. But we lifted and shifted a lot of that approach to our shared service centres purely based on how we how we lifted and shifted them. So if you had our cocoa business who said I’m moving 20 FTE, then you had like the small island of cocoa people that were shifting into the shared service centre. So in theory, you didn’t change that much. So what we did right now is simplifying that shared service model. So to really make it process oriented. So the concept behind it is that you have the different sub processes, regardless of what it is, which are different layers where you have your pyramid and saying, for every 60 span of control, I need the senior team manager, that team manager will do a one to 15 or one to 20, approximately, then you’ve got the team analyst who’s your subject matter experts who can work on project, but some high level activities in there. And then you’ve got your juniors and so on within that in the depth of your organisation, the the ones at the bottom, so the HR analyst and the systems and control is because you’re still interfacing with your businesses as well. So the analyst is the one who looks across everything global look across cash, application level, look, collections, and so on. Just to bring one narrative and one story to your business stakeholders from a commercial aspect as well and saying, This is how it looks like for your business. This is what we’re doing about it. This is how we’re driving it forwards as well as systems and controls. That’s really because we have such a big aggressive timeline, a lot of technologies that we want to have like a train the trainer, segregation of duties role set up config set up as a dedicated role within each centre, just to have that focused on it. So as well. So that’s how our overall shared service model is working. Now, a big thing and there’s even more on this slide than on the previous one is how do you keep governance going on because everybody’s got to say, and in Cargill, is a very people consensus driven culture? So how do you make sure that you have a decision element that you can really move forward as well. So what we did is we set up process councils with all of your different kinds of stakeholders. For us, this has been a great accelerator, purely because you bring the right people on the right topics together with clear artefacts clear goals with clear meeting elements onto it and saying so the main element the first one is our operating committee, where we’ve got the global process managers that architects the tower leads. So from an operational site we meet bi weekly, what we do we look at our productivity dashboard on what’s coming our way, what’s going well, what
Gunther Smets 25:05
isn’t going well, we’ve got Power BI dashboards with all of the metrics. And we just look at what’s on the reds and the yellows, the Greens we don’t care about, they’re going well. So we’re looking at what’s not going well. And that’s what we discuss every two weeks, then the process Governance Committee, that’s looking at metrics, targets and operating model, it’s really the defining saying, Okay, we’re changing the way that we’re working. So how can we have better roles and responsibilities set up as well, within the different kind of aspects? So how do we make sure that everybody understands what what their role is? And the reason to exist this winning cargo? Where do you fit? How do you matter? That’s basically what the process Council does. The technology committee is to make sure that with all of our IT stakeholders, with our architects within that environment, that we continue driving by capability, and we don’t drive by customization, or buying the new toy in the shop, that we play with the toys that we already bought. That’s that’s the key concept that we have in there. And then every year, we have a strategy session and saying, what’s the market doing? What are we doing? What’s the delta between the two? And are we still moving forward in the right direction? So those are by having these consistently done, you also are able to just have one strategy and not 500 strategies going on at the same time. So that’s the main element to it. This is purely to go and saying how do you then continuously improve? So we’ve got an ideation we use SAP ideas to value as a pipeline to work? And that is, how do we then go into the different categories? So what is technology? What is automation, what is a Kaizen event, we evaluate within the process Council and prioritise what we’re going to do because you can’t do everything at the same time. And then we have a delivery, which goes into that transformational organisation to make sure that you have that delivery going well, and an ongoing monitoring as well through the health dashboards that we have for the different initiatives. So that would be there. What we’re bringing in here, that’s the last the final slide, by the way, that’s really focusing on the aspect of visualising it. So to have an operating system, where in here, we’re building that every single new employee can go on it, and they say, This is my job. This is what I need to do. And it will just bring you within and saying, Okay, this is what happens before you do your job. This is what happens after your job, and so on. So this is the visualisation tool of everything that was before. So that’s how it would work. And I got the time signature, but it was the last slide. So it was
Gunther Smets 27:57
Yeah. Why didn’t you select, like a partner. So instead of a BPO, that we did a Scargo? Well, for quite a few reasons that we did, because we did have historically BPOS as well. So for example, for we worked with XL and OPI, for some of our cash application activities, we saw that we can accelerate actually faster if we have it in a captive organisation. Plus what we also see, which is my personal opinion on what I want to do in credit to cash, if you look at it from a BPO perspective, you’re looking at at it from a cost centre Lens, I’m looking at it from a revenue lens. So what I’m saying as well, at one point in time, for a lot of our customers who were very small size to medium sized or large size, they’re actually looking or potentially could look at cargo that we could offer them services for them. So we already see that also within the IT space instead of it doing it for cargo, they are also doing digital nutrition or developing products for our customers. And you can actually become a revenue driver in some of those aspects as well. So for us, it’s also a future state investment and saying, How can we have an end to end solution for our customers, not purely on a on a product based element, but also on a surface based element, you’re gonna tie your customer to you for longer term as well. You own your own data, which is probably the one of the biggest important currencies that you have going forward as well, which is something that we want to continue is leveraging Cargill as well and saying, how do we leverage our data and look at it as a product, and not only as a critical thing that you need to assert to survive and to do all of your activities, but also to make sure that you actually have that as a currency on how you go to the market. And how do you work with your data, which is easier or better if you do that as a captain? Those were the main drivers. Sure,
Audience 29:58
it’s about the systems. Yes, sir. You mentioned the six shared service centres that you have around the world. Before then you say about a lot of systems, you have a shady area. We still do. Yeah, yeah. So how do you handle the from the shelter? We send the blessing Costa Rica, if they have support a in two different business units in the US where you have four different systems,
Gunther Smets 31:04
Yeah, we give them four different screens. In some cases, sometimes we really do. But well, and for the moment, it’s still very system driven, that you have people that you segment by the system that they need, don’t need to navigate from one system to another. But we are making all of our approach on receivables, we use SAP Receivables Management. Within there, we’re making it ERP agnostic. So we’re actually bringing Oracle data within our SAP environment. So we have gotten a tunity layer, so a translation layer that brings non SAP data in an SAP format, within your Receivables Management. And then we use the high radius accelerators to work on all of those processes as well. So we’re not in the cloud. We don’t use any of the cloud solutions. We still still use all of the accelerators in there, because that’s actually bringing us quicker towards the future capabilities than just putting in the cloud right now. So it allows us to go faster
