- Finance’s Shared Services division was spark for Group’s digital strategy.
- Vodafone Group CFO Margherita Della Valle is not “empire building”.
- Shared Services drives efficiency, but not immune from cuts.
The beginnings of Vodafone Group’s digital transformation can be traced back to the creation of a shared services organisation in finance more than ten years ago, according to Group Chief Financial Officer Margherita Della Valle. In the second part of an interview series with Deloitte, Della Valle explained how establishing shared services provided a springboard for the Group’s broader transformation efforts.
In the previous interview, she discussed how her department has stepped up to lead the Group’s current “digital first” strategy (Vodafonewatch, #195). In this next instalment, she offered further insight into the pivotal role of shared services in that programme.
She recalled that when she set up the shared services structure in finance, she did not know “how critical that model would be for our digital expansion”. At the time, the project caught the interest of the Human Resources director, who asked if it could be applied to other parts of the company. From there, the role of shared services started to grow as more activities were transferred in areas such as “technology” and “customer operations”, she said.
“ If you think about it, we are a collection of markets at Vodafone, all ultimately doing the same things: We connect customers, build networks, and manage services. The processes are by and large the same, except that in the past, each market was managed differently and separately. ”
— Della Valle.
Vodafone’s Shared Services division was rebranded to Vodafone Intelligent Services, or _VOIS, in January 2020, a bid to better promote the unit’s expanding role in Group efficiency efforts (Vodafonewatch, #182). The division sits within Group Finance and has operations in Egypt, Hungary, India, and Romania (Vodafonewatch, #181 and passim). Della Valle said that about “one in three of our over 90,000 employees worldwide work in shared services operations”.
A launch pad for digital
For Della Valle, “digital is a game of speed”. She explained that the shared services structure “provided a working platform to launch our new strategy based on digital transformation”.
“Since shared services spans the entire company, there are fewer siloes or barriers”, she said. “So, implementing the structure on such a wide scale has had a positive impact beyond efficiencies”.
Della Valle has previously said that the finance department has been on the “front lines” as an “early adopter” of robotic process automation and artificial intelligence (AI). She said her group has “established a robotics farm that allows us to run at scale the best of breed in AI and other technologies for our shared services organisation”.
The introduction of automation has enabled employees to do less repetitive tasks and more interesting work. She pointed to the example of invoice processing, which is now “entirely touchless”, opening up those running purchase‑to‑pay to “focus on other activities”.
Secret to Shared Services success
Della Valle said she was able to avoid resistance to the shared services programme and that it has been effective because it didn’t come from the “top down”. She said, “I didn’t have a personal agenda of empire building”.
Her way of rolling out the structure was to build it on “business cases and trust”, and with a focus on “customer satisfaction”. Regularly published net promoter scores for the division’s activities helped teams to “trust the system and see what was working and what was not”.
Della Valle is currently directing savings initiatives under a recently rejigged, €1bn+ efficiencies push focused on Vodafone’s Common Functions and operations in Europe. The drive focuses on the FY20–23 period. However, the Italian recently indicated a “acceleration” of the push could be in the offing as Vodafone seeks to expand use of digital technology to extract savings from its business (Vodafonewatch, #192 and passim).
In the six months to 30 September 2020 (H1 FY20-21), the Group referred to “full time employee efficiencies” of 1,100 staff in Shared Services, bringing the total employees cut from those operations to 4,600 over the course of the past two-and-a-half FYs (against a total of 20,000+ Shared Services employees Vodafone cited earlier in 2020). Some €400m in annual savings are said to have been delivered in Shared Services functions over that period — a not insignificant portion of the Group’s overall expense base, which came in at around €30bn in its last full FY. The operator has previously sought to highlight “robotics, artificial intelligence, and process optimisation” as key enablers of the Shared Services trim‑down.