Vodafone is the largest telecoms company in Europe with 191 million customers and a presence in 26 countries worldwide. It is an extraordinary success story. Vodafone has gone through very rapid expansion for the last two decades ― the £112 billion hostile takeover of Mannesmann in 2000 being just one example of its commitment to becoming a global leader ― to deliver against a strategy of accelerated customer growth and geographic expansion. The next phase, to embark on the continuous development of new services and products, brings with it a new set of challenges that demand innovation, insight and operational excellence.
In 2005, the Chief Financial Officer set out to develop a global finance vision and strategy for Vodafone. The objective was clear: to align its 18 disparate and largely autonomous operating companies and transform the organization by embracing pragmatic and innovative working practices.
With a four month timeframe KPMG in the UK was tasked with producing a set of deliverables that addressed six core areas:
- a gap analysis of the present finance team structure and operational effectiveness compared with global best practice
- a gap analysis of the present finance structure and operational effectiveness compared with the current and potential needs of Vodafone's new organizational structure
- a gap analysis of the present finance, supply chain management and human resources systems environment compared with global best practice and the emerging needs of the business
- a vision and strategy for finance
- a roadmap of pragmatic options for achieving the vision
- a business case to justify the investment required to implement the recommended strategy.
Vodafone and KPMG worked together as a team to ascertain the current position of Vodafone’s global finance function, to benchmark it against best practice and to identify an agreed view of how the organization could develop with an effective and pragmatic high level plan. The first delivery phase involved the formulation of a global vision and strategy together with a roadmap for implementation and a business case to underpin the plan.
Using a proven methodology we analyzed the finance function by focusing on four dimensions:
- finance organization
- decision support
- transaction processing
- finance systems.
Critical to our proven approach is a highly structured workshop to build a common finance vision that draws on a solid understanding of the finance function today and its potential for the future.
Key stakeholders were engaged and consulted, including finance’s internal customers and the wider finance community, to understand the gaps in the current global finance function. Site visits to leading finance organizations were undertaken to help identify and share global best practice, uncover key strategies and the return on investment from finance transformation.
The findings from the gap analysis enabled the team to produce a pragmatic and innovative roadmap supported by a strong business case. In particular, the roadmap articulated how finance could better support their key stakeholders to adapt and exploit the changing business landscape and emerging commercial opportunities.
Following a review of Vodafone’s global finance function, their finance leadership team and the global finance organization is now completely aligned with a single vision and strategy. This vision was cascaded to the top 200 finance managers and enthusiastically received.
There is now an overall consensus within the team that the focus is on proactively supporting the business agenda. Based upon KPMG’s recommendations and phased implementation plan, Vodafone now has a set of prioritized actions and defined agenda for change. A transformation program has been established with four key priorities:
- aiming at world class transaction processing
- simplified business planning
- insightful management information
- great people in finance.
Significant benefits have been identified and these can be implemented without affecting service levels. Indeed some benefits have already been realized today. Furthermore, the ‘customer’ has now been put center stage of Vodafone’s financial strategy.
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- better support for the business
- improved quality of management information
- unified finance team
- simplified processes
- reduced costs
- improved talent pool.