Implementing a Business Support Centre at AVIS Group

by Mark Kightley, Shared Services Director, AVIS Group

AVIS Group started its move towards shared services when it opened its call centres in 2000, one each in Manchester and Barcelona, with customers based in the UK and Germany primarily supported from Manchester and other European customers from Barcelona. These call centres managed customer rental reservations and other elements of customer service and proved highly successful. Consequently, we decided to extend our shared services by opening a Business Support Centre in Budapest to provide financial and administrative processes such as Accounts Payable, General Ledger, Intercompany activities, Customer Services and Database Management. The Business Support Centre was intended to cover our full complement of European markets: UK, Germany, France, Spain, Italy, Netherlands, Austria, Switzerland, Belgium and Portugal, so we needed to be mindful of local requirements as well as seeking to implement common, standardised processes across the business.

Currently, the Business Support Centre employs 250 people but as administrative processes are increasingly moved from the local businesses to the shared service centre, such as insurance, receivables etc. we expect this to increase to around 330. Having reviewed various possible locations, Budapest was selected as we could take advantage of wage arbitrage while still benefitting from appropriate language skills and good communications.

[[[PAGE]]]

Background to the shared service centre

Our initial reasons for setting up a shared service centre (SSC) were perhaps typical of many other companies. The trading environment was becoming increasingly challenging and margins were being eroded. Consequently, one of our objectives was to reduce the cost of back-office processing and increase our efficiency. Secondly, it was important for us to invest in our customers, by providing a consistent customer service model and providing transparency across all of our customer-related activities from both our call centres and the Business Support Centre. Finally, we were conscious that we were not taking advantage of some of the new technologies which were available, such as providing customers with access to their accounts through the internet. One benefit of improved telecommunications, for example, was the ability to merge our two call centres into a single centre in Barcelona.

Four years on, and after a great deal of hard work, we had made significant progress towards our objectives but the business environment in which we operate is continually changing and we needed to respond to those changes. For example, the wage arbitrage we originally experienced in Budapest was eroding so we needed to revisit our original objectives and seek new benefits, such as developing efficiencies through a common, standardised systems infrastructure. Our finance system was very outdated and no longer supported by the vendor, so we were really on our own. It worked well enough day-to-day but it was difficult to extract management information effectively. Furthermore, we couldn’t automate our business processes to the extent we wanted as we couldn’t interlink other systems and processes effectively. Consequently, we decided to replace this system with a view to harmonising our systems and processes.

SSC technology project objectives

Although we had been considering it for some time, the project to formalise our key objectives and seek a technology partner was officially launched in April/May 2007. We identified our objectives as follows:

i) To reduce processing costs, but also reduce errors. In order to convince the local businesses of the value of the shared service centre, we had to demonstrate a higher quality of service than had existed before;

ii) To meet local country requirements, such as statutory reporting, local depreciation etc. Inevitably, introducing a pan-European finance system to replace the existing in-country applications initially met with some resistance so we had to demonstrate clearly how we would accommodate local requirements as part of the evaluation process;

iii) To integrate seamlessly with local business systems. We did not intend to replace all our legacy systems from which financial information originated, so to ensure that we could automate our processes effectively, we needed to establish robust interfaces between the new system and our existing applications;

iv) To ensure that a new system was easy to use and allowed our processes to be standardised as far as possible so that users could work on activities across different countries;

v) To increase the efficiency of our business processes.

[[[PAGE]]]

Decision criteria

We had made the decision previously that we would not implement an ERP. Although we are a large company with diverse requirements, we believed that the cost and complexity of implementing an ERP would be excessive and we did not wish to over-engineer our operations. Consequently, we decided to seek an alternative financial software solution for which we established a number of key criteria:

i) We wanted a single instance of the application which would be based at our data centre at London Heathrow and accessed through a browser throughout the organisation;

ii) We needed a system which had been proven across different countries in order to gain buy-in from the local businesses;

iii) We sought up-to-date technology but it needed to be proven in similar environments to our own. In particular, we wanted to take advantage of browser technology and XML integration to standardise our operations.

System selection

We conducted an evaluation process of potential systems over the summer. We opted to implement the latest ‘Neon’ release of Coda, which included enhancements to the procurement process which we were seeking. The company had proven international capabilities with experience of rolling out software across different countries and the ability to support local operations where necessary. While it was not our intention to set up local support, there are times when local input can be valuable. A key factor for us was to find ways to improve our business processes and an advantage of the system was its process control tools. With the risk that in-country operations felt that they had lost control, we wanted to demonstrate the benefits of a shared services environment and deliver high quality services.

We had to demonstrate a higher quality of service than had existed before.

System rollout

We planned an aggressive rollout, initially including Financials, Procurement, Control and Expenses. In order to meet our timescales, we decided to refocus slightly and start by getting the basics in place first, particularly Financials, and then build the other areas in later. In October 2007, we went live in Germany and Portugal, followed in January 2008 by the UK and Benelux countries after a successful year end process in the pilot countries. We are on target to go live in March/April 2008 in Austria, Switzerland and France followed by Italy, Spain, our European Headquarters (comprising 40 entities) and intercompany activities in May 2008.

Initial benefits and next stages

It is still early days in terms of quantifying the benefits, but we were clear that we wanted to illustrate the benefits of a new system to the business units early on. One way of doing this was to accelerate our month-end close routine and provide better support to the businesses. Communication between the shared service centre and business units was very important, and the process control tools helped us with this. For example, we can now translate the month-end process into a series of tasks with responsibilities allocated to each task. Both the shared service centres and local finance managers have complete visibility over the workflow which gives clarity and a consistent view of information. This will contribute to reducing the time taken to conclude our month-end close process, and we see this improving even further as we introduce standard forms for processes such as reconciliation. Increasingly, we see the finance managers seeking automation for a wider range of processes, from holiday forms, for example, through to business planning.

Looking ahead, we are on target to complete our basic rollout by June 2008. We will then supplement this with Expenses and Control in Q3, 2008. Thereafter, we want to spend some time during Q3 and Q4, 2008 optimising our system setup. While it’s tempting simply to add increasing processes into the system, we know how important it is to make sure that we are using it in the best way possible.