COCA-COLA HELLENIC: 3 STEPS FROM

TRANSACTIONAL TO COMMERCIAL
SERVICES
Coca-Cola Hellenic Bottling Company : from Business Case to
Implementation

© Chazey Partners 2014

Chazey Partners Case Study Series | 1
“
Chazey’s team all have a strong background as CFOs or Finance or HR leads in global
organizations, and understand the ins and outs of a Shared Services environment. They
are familiar with all phases, whether a new launch or a mature operation. That’s the kind
of knowledge that even a good consulting team cannot give you. It’s based on real-life
experience. In addition, Chazey has access to a wealth of benchmark data based on their
own experience across different industries. These best practices proved valuable when
analyzing processes to incorporate into our own model.”

Manolis Fafalios
Shared Services (Transition) Director
Coca-Cola Hellenic

“ Just four years ago the concept of Shared Services

was relatively unknown. Today, our team has
acquired sufficient skills and understanding, and
has gained the confidence of senior management,
to the extent that we are able to take on the more
sensitive processes directly facing the end-customer”

Chazey Partners Case Study Series | 2

 Services experience to speak of so the first priority
was to educate ourselves through networking,
at conferences, and via online resources.
It was important for us to benchmark with
practitioners who already had the experience of
implementations, and to learn from their mistakes.”
Coca-Cola Hellenic Bottling Company (CCHBC),
one of the world’s largest bottlers and vendors It was at one of the industry conferences that
of products of The Coca-Cola Company (and the Manolis met Phil Searle and David O’Sullivan,
largest in Europe), is the result of a 2000 merger founding partners of Chazey, who became
of Coca-Cola Beverages and Hellenic Bottling valued and trusted partners in this venture.
Company. Today, CCHBC covers 28 countries –
from Ireland in the west to the eastern tip of Russia
“Chazey’s team all have a strong background
– including mature markets as well as emerging as CFOs or Finance or HR leads in global
ones. organizations, and understand the ins and outs
of a Shared Services environment,” Manolis said.
10 years post merger: service integration “They’re familiar with all phases, whether a new
launch or a mature operation. That’s the kind
The Shared Services concept was first raised for of knowledge that even a good consulting team
consideration in 2007, but a business case study cannot give you. It’s based on real-life experience.
commissioned at the time was not compelling
enough for management and the idea rested “In addition, Chazey has access to a wealth
a few more years before being resurrected in of benchmark data based on their own
2010, following a 2008 initiative to shift to one experience across different industries. These
ERP platform. This marked the beginning of a best practices proved valuable when analyzing
transformation towards a Business Services processes to incorporate into our own model.
Organization (BSO) led by Manolis Fafalios,
the new Shared Services Transition Director, “Chazey was very effective as a sounding board
who took over responsibility for the project. for us, as well as lending the necessary credibility
to getting internal stakeholders on board.”
The new team faced a fairly steep learning curve,
as Manolis explained: “None of us had any Shared

Chazey Partners Case Study Series | 3

Two towers are better than one processes had to meet set standards of readiness
before being moved into the Business Services.
Realizing that the Shared Services implementation It was important, for the BSO leadership team
would face some resistance from in-country that all processes were standardized to one level
functional heads, Manolis was determined to take (exceptions were made only for legal & fiscal
a “slow and steady” approach to implementation, reasons) across the 22 countries being migrated
and only ramp up the services once the business in, so that the transfer would be seamless and not
had gained trust in the model. cause any service interruption, and assimilation
of countries would be made easier. To get to this
The initial processes that were transitioned into the stage, only processes already on SAP, i.e., on the
Business Services Organization included Accounts common ERP, were considered. In addition, each
Payable, Fixed Assets, General Ledger, and phase was characterized by “readiness criteria,”
Travel & Expense, within Finance – and Personal and a related set of Key Performance Indicators
Administration and Organization Management (KPIs). Only once these KPIs and the readiness
within HR. While many of the SSOs that launched criteria were met would the process migrate within
in the 1990s tended to start with a single service the transition period. This is where most of the
or function, the CCH team benefitted from being effort was focused, in the six months leading up to
relatively late to the party in terms of recognizing the transfer. Where a process was not meeting the
that a multifunctional center (in their case, Finance agreed criteria, an additional handover period was
& Accounting, and HR) would reap far greater agreed.
rewards across their operations.
While each phase covered different processes,
“We knew that including two towers from the start, starting with the most transactional and simple and
and bringing them under one director and onto one extending to the more complex, a strategic decision
system would provide better standardization and was made, from the start, not to include any
support across our business,” said Manolis. “The processes that touched the customer. This meant
Chazey team gave us a lot of confidence in making that billing, pricing, etc., were kept out of the plan in
this decision, as they had the numbers and real life the early stages, and would not be considered until
examples to back up this strategy.” Phase 3, which goes live in 2015, and will cover
commercial processes.
The multifunctional implementation was supported
and defined by a unified governance framework, “Although we believe in the merit of rolling
which included one business services director commercial processes into the Business Services,
who was responsible for managing both services we knew the business would be nervous about
towers, and set rules that managed the migrations. doing so from the outset, and we did not want to
cause any more concern than necessary,” said
Manolis. “Phase 2 went live in October 2013 and
Phased go-live allows for steady migration included AR/Credit Management, thus the concept
was proven and the countries now have faith in our
The transition plan consisted of a three-phase processes and capabilities.”
approach, each phase targeting select processes
for migration, while at the same time already
preparing the groundwork for the next stage.
“We allowed five to six months for each phase,”
said Manolis, “and where needed provided for an
additional three months with more of an ‘intensive
care’ aspect.”

The migration was not based on “lift and shift,” as is

sometimes preferred in implementations. Instead,

Chazey Partners Case Study Series | 4

To outsource or not? – the burning question of what would impact the success of a center, and
provided us with comparative data on the risk,
The question of outsourcing caused a lot of heated cost, IT networks, graduates, etc., that we needed
debate from the start of the project. While some of to make a decision.”
the Executive board was in favor of gaining the cost
advantages that outsourcing offered, Chazey’s Bulgaria eventually won the day. The center was
input was instrumental in steering the project established in Sofia, where CCH already had offices
down a different path. Shifting to outsourcing from and the IT Shared Services was based, and brand
the start would have granted all the value resulting was therefore a positive factor.
from standardizing under a common model to
the outsourcer, with the company gaining only a While many SSOs tend to differentiate between
cost advantage. Instead, the BSO team fought to support provided to Central and Eastern Europe
maintain most of the services inhouse. (CEE) and Western Europe, the experience of
CCH in Sofia proves that any concerns about
This did mean standing up to the Board, however. excessive bureaucracy in CEE countries limiting
“The team from Chazey helped us to communicate service effectiveness is misplaced. And while tax
the importance of understanding the data and regulations do differ widely across the countries in
perfecting the process first – and incorporating scope, adding somewhat to the complexity of each
the value thus released – before even considering process, the center in Sofia has been able to deal
handing the process to an outsourced partner,” said with this quite easily, said Manolis.
Manolis. This was an important factor for the BSO
and one that Manolis believes will define the value
of the model for years to come. While the focus will
always be on cost, he concedes, it’s important to
look beyond initial savings, at the sustainable value
that the BSO will deliver in future. Much of that is
based around data and supporting the customer’s
operational targets, and keeping the BSO inhouse
means closer collaboration.

There was one exception however: Travel & Expense

was outsourced immediately, because almost
every country involved had a different process, and
these were all highly manual. In this one instance,
the CCH team believed it was easier to standardize
processes for all 28 countries through a business
services outsourcing agreement, even if it meant
releasing some of the inherent value.

Location

When the project was first launched, one of the

big decisions to be made was where to locate the
center, with options considered being limited to
territories covered by CCH’s operations. From
an initial list of 15 possible locations, Bulgaria
and Romania emerged as the two strongest
contenders. “We relied heavily on Chazey for the
location evaluation, as we simply would not have
had the resources to allocate to this job,” Manolis
explained. “They knew what to look for in terms
Series | |55
Chazey Partners Case Study Serties
Challenges required the team to do a good job promoting and
marketing itself to customers. The improvements
While the BSO has gained recognition and that have been gained as a result of this model can
admiration internally as well as externally for the be measured in cost, quality, standardization, and
cost advantage, quality of service, and value it has efficiencies, and include the following:
brought to CCH’s operations, it has also faced a
number of challenges, most significantly around • Achieved big improvements in P2P first time
convincing in-country leaders to adopt the new match rate: 76% match between Purchase
operating model. From the start, it was difficult Order, Invoice, and Good Receipt/Service
to persuade the functional heads that they would receip
not be losing power by transitioning processes to • Applied “No P.O. No PAY”
the BSO. After all, Manolis emphasized, they still • Hit 100% SPA levels – only exception is AP
owned the process – whether this related to the (84%)
balance sheet or recruitment. Communicating • BSO error rate is at 0.1% (vs. target 0.5%)
this positive message effectively and credibly, • Recruitment process now takes 36 days,
and differentiating the message across different much less than pre BSO.
stakeholder groups, was one of the most significant
drivers of the model’s eventual success. “One thing that I believe is important,” says Manolis,
“is that we decided not to go with a ‘Shared
BSO: the future Services’ name as this is too frequently interpreted
as only reducing FTEs. Instead, we wanted the
Now that the BSO has assimilated the lessons of focus shifted to what we could do to support the
the past four years, and chalked up experience in business, so we promoted Service Partnership
Shared Services methodology, it will be embarking Agreements (SPAs) instead of the generally used
on the Phase 3 rollout of the collections process on Service Level Agreements (SLAs), to emphasize our
its own. This in itself is a tremendous achievement, role as business enablers, working alongside our
Manolis explained: “Just four years ago the concept customers – not just ‘providing services’ to them.”
of Shared Services was relatively unknown.
Today, our team has acquired sufficient skills and Although slight, this change in definition has made
understanding, and has gained the confidence of a big impact, Manolis believes. The BSO logo and
senior management, to the extent that we are able tagline reflect its commitment to ‘standardization,
to take on the more sensitive processes directly quality, and efficiency’ and its unified leadership
facing the end-customer.” means that this commitment is driven throughout
the Finance and HR processes today, as it will
CCH was determined to drive maximum value through the commercial processes directly
out of the Business Services Organization, which touching the customer tomorrow.

Chazey Partners Case Study Series | 6

“One thing that I believe is important,” says Manolis, “is that we decided not to go
with a ‘Shared Services’ name as this is too frequently interpreted as only reducing
FTEs. Instead, we wanted the focus shifted to what we could do to support the
business, so we promoted Service Partnership Agreements (SPAs) instead of the
generally used Service Level Agreements (SLAs), to emphasize our role as business
enablers, working alongside our customers – not just ‘providing services’ to them.”
Manolis Fafalios
Shared Services (Transition) Director
Coca-Cola Hellenic
Chazey Partners Case Study Series | 7
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