Solvay’s Journey into the Future
Solvay Business Services (SBS) Delivers Global Shared Services to Belgian Chemical Manufacturer
Solvay Business Services (SBS) was officially founded in 2013 and I have managed its service organization since then. Its task and goal: to support Solvay’s growth and to support its business and functions as effectively and efficiently as possible. Our mission and vision is very simple: to shift Solvay’s Global Business Services (GBS) from traditional administrative activities to service activities, achieving a complete change of mindset to better support the various businesses that Solvay runs.
Before we look at this journey into GBS, some background on Solvay. Solvay was established more than 150 years ago and today is among the world leaders in multi-specialty chemicals strongly focused on metal-replacement materials and formulations.
Solvay has been accelerating its transformation ever since it acquired Rhodia in 2011 and made a step-change with the acquisition of Cytec in the United States in 2015, turning the Group into the world’s second largest maker of composite materials for the aerospace industry.
Solvay serves a range of industries, committed to developing chemistry that addresses key societal challenges and promoting sustainability. Its metal-replacement materials end up in multiple applications under the hood of cars and on planes, making them lighter, more fuel-efficient and thereby reducing CO2. These materials can also be found in smart devices or in healthcare applications. Solvay’s tailored formulations can be found in shampoos, detergents, mining as well as in shale gas extraction. Solvay revenues reached 10.9 billion euros in 2016, equally spread across Europe, North America and Asia Pacific, with about 27,000 employees in 53 countries.
SBS: Key Player for the Transformation Strategy
In order to support the agility of the Solvay group , SBS’s challenge is not only to integrate Solvay’s acquisitions into a consistent and efficient organization but also to simplify and harmonize all relevant business services for all Solvay businesses and functions. To achieve these ambitious goals, SBS was established immediately following the acquisition of Rhodia.
In the more than three years since it was founded, SBS has become a key player in the Solvay group.
As Solvay’s worldwide Global Business Services (GBS) organization it covers
- Information Services (Applications, Infrastructure, Digital IS),
- Order-to-Cash Process (Customer Service, Customs, Credit),
- Procure-to-Pay process (Provisioning, Accounts Payable, Travel & Expenses),
- Hire-to-Retire process (Payroll, Compensations & Benefits operations),
- Record-to-Report Process (Accounting)
SBS mission is to deliver these global shared services with the required quality and at the best cost.
The SBS structure: teams with diverse skills and high level of expertise split into four regional offices, over 100 local offices and 4 service centers. Millions of actions are processed on an annual basis.
SBS supports Solvay’s major administrative processes as well as information services: for human resources activities, SBS manages all operational activities over the course of each employee’s career; for our businesses and external customers, SBS handles all activities between a customer order and its payment; for our external suppliers, SBS manages goods and expenses from procurement to payment as well; for the group and its stakeholders SBS handles finance activities from accounting records to the production of financial reports. SBS also provides stakeholders with innovative and collaborative solutions in information services and supports them in their day-to-day digital technologies. SBS also provides high value activities.
SBS will continue to support the transformation strategy of the group and drive service excellence. As a growth and transformation engine, SBS strives to make Solvay stronger, better and faster.
Solvay was surely not one of the earliest adopters of a GBS organization, and other companies probably had much larger transformations into GBS. But we were very quick in our transformation into a global business service. And our scope is very large considering all the content and the global expanse of the geography. After three years SBS has already achieved the first two parts of the GBS evolution, the function-centric and the process-service-centric level. We are aiming to reach the top level of value-centric operation by 2018 (see graph page 00).
But the global business has not come out of nowhere. In the legacy Solvay group and in the legacy Rhodia group as well, IS was handled by shared services organizations. Relating to processes, legacy Solvay focused its effort more on the back office, while legacy Rhodia focused on the front end. After the acquisition of Rhodia by Solvay, SBS combined the IS of the two groups, the two shared services organizations plus the HR operations service organization and some activities of treasury from Solvay. The managers involved in these activities worked together for months to prepare for the integration and to design the new GBS structure. The final part of this history is the integration of Cytec in 2015, when Cytec brought its own shared service organization into the loop.
Today more than 2000 people operate everywhere in more than 30 countries, with a budget of about 350 million EUROs. Our main regional regional offices are in Sao Paolo, Princeton, Lyon-Paris-Brussels and Singapore. Our four service centers are located in Curitiba (in Brazil), Lisbon, Riga (in Latvia) and in Bangkok. We also have a number of Business Process Outsourcings (BPO) where we manage our payroll activities and IS/IT activities.
A Lot of Successes and Things we could do in a better way
Our SBS services are organized around processes within five pillars: Customer Relations Managers network with 20 people, responsible for business relations, communicating and marketing our services in the company; Service Delivery, where 1300 people make our worldwide services available; Processes, where a staff of 80 cover process performance, knowledge management, training, Six Sigma and data management; Information Services, where around 600 people are responsible for Applications, Infrastructure and the overall Information Services of the Solvay group; and Support Activities, where 70 staffers cover among others our HR, finance and risk & compliance activities.
Launched in 2013 and implemented in 2014, SBS has migrated systems and harmonized tools, all while a great deal of changes were taking place in the organizations. Nevertheless, during this fast-paced journey, we found it useful to slow down to build a more sustainable growth. It is the reason why, in 2015, SBS took the decision to pause and breathe in order to take time to redesign its whole organization. This new transformation was launched in 2016. Basically now we are changing the way one person out of three in our organization works, either in terms of geography, content or scope of activity. In 2017 we intend to continue optimizing our services and hopefully we will reach the goal of strategic business enablement in 2018, while continuing our transformation process. I have to stress how important it is to take a moment to breathe at all levels from time to time.
During our GBS journey we had a lot of successes and we had a lot of things that we would do differently today or that we would improve if we could do it again. Among the most important successes were the high quality of our transformation design and strong service continuity. We also created a lot of value in cost and with overdues reduction. We deployed and improved our sourcing model without problems; we left some partners and went to others; we industrialized the Merger & Acquisition process due to the goal of rapid integration and we exited businesses quickly as well. All of these went very smoothly.
What did not go so well during the past three years: Customer-centricity has been a challenge, since you cannot expect an organization focused on technical expertise to become a quality service organization from day one. We have tried to correct that but we are still not yet where we’d like to be. The importance of change management was initially underestimated – and even today we sometimes underestimate the impact it can have on our stakeholders. That is one of the reasons we now have a User Change Management team to ensure that all changes will be understood, accepted and efficiently used.
On our way to Global Business Services we were and are accompanied by The Hackett Group. The Hackett Group had supported both Rhodia and Cytec in areas like finance, strategic matters, evaluation and benchmarking. After their acquisition by the Solvay group, the cooperation is still ongoing: the support and exchanges with The Hackett Group are very inspiring. They are exposing us to best practices and to different business models. There are more basic things done as well: after the Rhodia acquisition The Hackett Group benchmarked our development and success in finance and in HR, and then supported us again after the Cytec acquisition. The consultants supported and continue to support our process efficiency, our location strategy and many internal processes. Regular contacts occur to exchange experiences between our GBS managers and The Hackett Group’s experts, and they support us in a very detailed and practical way.
We believe in continuous improvement as a philosophy-- in our kind of business, even when you are efficient 95 % of the time, you still want to achieve the missing five %.
So what will come next?
Where are our next points of focus? We are still too complex – simplification is a major goal. Talent management – we have to promote and develop our teams in a more active way. Change management is still a main area of focus to create more agility. To develop Customer Mindset requires a lot of training and effort. And last but not least the relation to our stakeholders has to improve continuously. Thus we always carry out measurements in two directions: not only for the performance of our services, so we can share the facts, but also to measure the perception of customer satisfaction, which we do quarterly.
And once again: I cannot insist enough on the value of cultural change: service mindset is the precondition for the efficient support of Solvay’s businesses on a worldwide basis.