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Crafting A Successful Change Initiative

Crafting a Successful Change Initiative
Andy Halford -CFO, Vodafone

I think the most successful initiative is one which is still in progress, so I probably am counting success a little bit early.

Given the background in our business of very autonomous operating companies, for many years our businesses grew strongly in their own right. Over the last few years with the top-line growth being somewhat slow, we have had, as has been the case with many other sectors, to be much more focused upon the efficiency of the businesses.

When I first came into the role in 2005, we started to look at the very disparate finance systems and finance processes we’ve had across the group. We decided to initiate an ERP program to basically standardize not just the finance systems, but the HR systems and the supply chain systems across all of our control businesses across the world.

One of the interesting things that we did up front was asked each of our businesses to free up one of their finance people, one of their supply chain people, and one of their HR team, and come over to do a three-day workshop with all of the other operating businesses. The workshop, which was externally facilitated, spent day one addressing the question of why Vodafone could never ever possibly move to one standardized solution that would fit everybody. Literally, at the end of the first day, the whole room was covered in every example of why this could never ever work. I think many people felt that they had then finished and we should get back to where we were before.

Day two was spent looking at some techniques for how some of those problems could be overcome, and day three was spent actually using those techniques to see how many of the impediments that had been identified on the first day could be addressed. And amazingly, by the end of the third day, for at least 98% of those impediments, there were ways around them and everybody actually signed up then to a common model going forward.

So I think that three-day workshop was a very pivotal part of the process we went through from that point onwards. People were basically signing up as architects of the solution and when we came to implementation, if we had issues, particularly if they related to the original design, they couldn’t exactly point the finger elsewhere.

The biggest benefits we’re getting are on the procurement side where we can now see, or will shortly be able to see, all of our global procurement in one place. We can see just how many suppliers we have been using for each type of purchase category and our ability now to put bigger volumes out, either to tender or online, and get better buying power, get better supply arrangements with our more major suppliers, has produced very significant cost savings. From an operational and probably from a financial point of view, that has been the biggest area.

Secondly, it has enabled us in terms of process efficiency to reduce elements of the head count and get some of the more standardized activities to be taking place in a more automated and a more efficient environment. So we also, in terms of the process side, have had benefits there.

And then thirdly, I think the general quality and timeliness of information is improving readily as we go through, so that looking at our working capital, we are now much more able to do that, with everything now going through one common system.

So if I was a CFO thinking about embarking on a change program like this, first of all, I would spend some quality time talking to other businesses that have already been through similar experiences to find out the three or four things that really are the must-haves and the three or four things that are the must-avoids.

Secondly, I would spend considerable time with one’s own management team because they must absolutely be brought into this and they must be evangelists of it. If they are not, if the rest of the organization detects that they’re not committed to it, the whole process will be much more difficult.

Thirdly, I would pull out the very best people to lead it. That sends a signal to the business that it is a top priority. Good people will recruit good people and you will get the highest outcome.

Finally, I think in terms of setting budget for these programs, be very careful. There are a lot of hidden costs in here and you need to be very realistic about where, ultimately, the costs might be and then stick rigidly to those overall budgets.