22nd North American SSON – Shared Services & Outsourcing Week 22nd March 2018 Daniel Willoughby – Director, Strategic Initiatives

Transformation Journey End-2-End Optimisation

Daniel Willoughby (ACMA, CGMA)

1. Efficiency or Effectiveness - What is the key driver in Process Transformation?

2. What are the Key Success Factors & Challenges in aligning with the business to help you achieve success?

3. Lessons Learnt in process transformation to help your journey be more efficient and effective

Who are we?

Coca-Cola European Partners

““Coca-Cola” and Lippincot Ribbon is a registered trademark of the Coca-Cola Company”

We work in partnership with The Coca-Cola Company

B2B Customer focus

13 countries

25,000 employees

Bottling and distribution, customer marketing, market execution and innovation

130,600 employees

200 countries worldwide

Consumer focus

Brand ownership, product development and innovation; brand marketing and advertising

2

7

Why Transform?

8

Our Process Transformation Journey

2011/12

2007/9

2003/6

2011

2012/14

Finance Optimization Global service delivery model

set up, by migrating

processes to Tampa and Capgemini

New Finance Vision Post

transaction, to position the longer

term objectives of

Finance

Finance Realignment

Functionalizing for the post transaction

and post Tampa

environment OCM Focus

2015/16

Finance Transition

Set-up of a new Finance SSC in Sofia, Bulgaria -

focusing in-country finance teams away from transactional

responsibility PPM – Business

Partnering & RGM Focus and implementation of

BPC Cash focus – Project

Mint

PPM Transformation

PPM Transformation

utilizing CoE and enhancing

insight and business

partnering

SSC 2.0 SSC2.0-

leverage SSC to further

improve effectiveness and efficiency

2014/15

Tampa SSC creation Migrated our then

North American

BUs to a SSC

2016

2020

CCEP Integration – Part 1

Post merger changes to finance structure:

transferring US based Corporate activities to Europe; optimising the

SSC in Sofia for Corporate and Master

Data activities; centralising Germany

Business Centre activities to the Sofia SSC

CCE

US

Tran

sact

ion

CCEP

Mer

ger

Technical Finance & Governance

activities

High level of business proximity required

Low level of business proximity required

Business Performance

Reporting and Analytical Activities

Transactional & Compliance

activities

Local Planning & Performance Management

activities

Central & consolidation

Planning & Performance Management

activities

Centre of Expertise

Shared Services Centre

BU & Supply Chain

Group PPM

Global Finance

Functions

CCEP Finance Delivery Model

Finance was assessed against ‘world class’ and ‘peer group’ for both ‘efficiency’ and ‘effectiveness’ Finance has improved both its efficiency and effectiveness. Finance is operating at ‘world class’ levels of effectiveness, but is short of ‘world class’ in efficiency Opportunities still exist to:

Improve the efficiency of FPA (gap to ‘world class’ and ‘peer group’)

Improve & standardize the effectiveness of processes transferred to SSC as a ‘lift and shift’

We Continually Improve as a Finance Function - Better Never Stops!

Highly Confidential – Not For Distribution

Customer To Cash (CTC)

End-To-End Transformation

Four years of successful Sofia growth that we are proud of

GEOGRAPHY SCOPE

Core transactional processing Tax Compliance Centre of Expertise Procurement Treasury

Iceland

GB

France

Spain Portugal

Germany

Bulgaria

NL

LUX

BE

With the formation of CCEP & Sofia’s 5th anniversary, we need to ask ourselves what’s next?

OUR PURPOSE To delight customers and

consumers with great beverages and service, creating shared and

sustainable value

Listening and

caring xxxxxxxxxxxxxxxx

xxxxx

Passion for growth

Empowered to win

together

Execute with

speed and agility

Focus on customers

and frontline

What does this mean for the SSC?

Focus on customers and

frontline We do everything we can to help the front-line team serve our customers and grow

our business

• Support our commercial teams in the best way possible

• Satisfy our customers at every touch point

• Increased efficiency in our ways of working

To meet these needs and prepare for the next wave of growth, the SSC will transition from ‘process towers’ to ‘service lines’

Service line: A true end to end process that is organised in a way that reflects how we interact with our customers, vendors and employees.

What is Customer-to-Cash

Sales and Marketing

Finance

Customer Logistics

Sales Execution

Customer and Credit

Setup

Order Manage-

ment

Delivery to

Customer

AR and

Invoicing

Collections and

Disputes Reporting Customer

care Commercial

Strategy Market

Products CMA

The CTC service line will allow the SSC to further improve our already high level of performance

Enhance customer service

Better support our BU

commercial teams

Improve connections

with Business Units and

enable growth

CTC Director

Tamsin Hoborough

Service Management

CTC

Drives process harmonisation

and improvement across BUs

Collections

Disputes Pricing MDM

CMA

BPs

Capgemini

Route Settlement

Collections Disputes Pricing MDM

CMA

Capgemini

Customer MDM

Route Settlement

Collections Disputes Pricing MDM

Customer MDM

BPs

Capgemini

Route Settlement

CMA

Credit Management

Enterprise MD

Capgemini

Cross-BU-MD

Cash App. & Billing

Reporting

GB

Nordics

Germany

New Product Introduction Experts

France

Benelux

B2B2C

Cross-BU Services

Associate Director

GB Associate Director

France Associate Director

Germany Associate Director

Benelux Associate Director

Nordics Associate Director

New Product Introduction

Senior Manager

Collections

Disputes

Pricing MDM

CMA

BPs

Capgemini

Collections

R.S. & Disputes

Pricing MDM

CMA

BPs

Capgemini

OTC OTC OTC OTC OTC

Record-to- Report

Purchase-to-Pay

Customer Marketing

Agreements

Master Data Management Order-to-Cash

Finance Shared Service Centre

CRM & Program

BPs

What will CTC look like?

What does this mean in reality?

New organisational

structure Aligned

objectives with the BUs New ways of

working

WHAT WILL IT MEAN FOR THE BUSINESS UNITS?

WHAT WILL IT MEAN FOR THE SSC?

Dedicated BU teams in Sofia

One team to connect the dots

Feeling supported by the SSC

Joint objectives

Clear contact points

Improved ways of working and communication flow

Permission to upskill non Finance employees

Commercial training for CTC finance staff

Commitment to engagement sessions

One team attitude

CTC representation at BU leadership meetings

Joint objectives and commitment

HOW WILL THE SSC WORK TOGETHER?

Joint objectives

Improved ways of working and communication flow

One team to connect the dots

A seat at the table with BUs

More integral part of CCEP

Career opportunities

Pride in our services

21

Centre of Expertise (CoE)

End-2-End Transformation

Commercial Reporting & Analysis Centre of Expertise - Objectives

Reports&

Analysis

FPA TOM

Focus Activities I. Standardise and simplify reporting content and production methods II. Develop a framework of core and local KPIs, as well as the associated reporting

governance to support the reduction of MI reporting III. Implement new governance structures and changes to reporting

I. Develop design principles for the new service model along with activity splits between CoE and Business Finance

II. Develop end state options including location, organisation structure, process hand offs

III. Develop roadmap and high level implementation plan with detailed business case

Tech &

Data

I. Assess the current system and technology landscape, with comparison made against leading practices

II. Develop recommendations for optimising existing systems and indicate tools that can support the CoE service delivery

III. Develop a data governance framework and roadmap for aligning data and technology to the new operating model

““Coca-Cola” and Lippincot Ribbon is a registered trademark of the Coca-Cola Company”

Report Standardisation Journey

Define RAPID Template

Customer Interviews

BU visits

Validation Workshops

Development

Testing (including process and

performance testing

Socialisation

Training

Go live in new operating model

Parallel Run

Template Design

Socialisation

Prioritise and capture user stories

Capture in report catalogue

Create data dictionary

Design Implement

Elimination of reports

Reporting Design Principles

Visualisations

Standardisation

Tech and data

Content

Focus on value drivers and controllable elements of performance explaining progress in delivering KPIs Reporting is forward looking: purpose of reports is to determine timely interventions to get performance back on track Reporting will aid analysis, enabled further through drill down capability to understand variances

Reporting is rich in graphs, trends and visualisations and is exceptions or issues based: Focus on the issues requiring action or intervention through impactful presentation

Visualisation allows end-users to answer own questions through data discovery tools

Maximise standardisation of reporting (content, look and feel) across CCE whilst observing needs for local BU/Country view (80:20 rule)

Increase consistency across BUs Reduce the level of ad-hoc queries

Minimise the use of Excel and Access databases Maximise automation: Minimise effort spent collating and manipulating data and producing reports through automation as far as possible

Provide a dynamic and flexible report to enable drill down to required views, granularity, periods etc. Use of data discovery tools to allow end-users to answer their own questions to some extent

Business partnering / Analysis

Reporting allows for follow up: reports are a key part of the operational reviews in the business and actions are assigned and progress reviewed at each meeting. Enables business partnering: Finance can better support operations and lead conversations around options

Reports are viewed as ‘single version of the truth’ Insightful commentary complements use of graphs and explains what is needed to get back on track, not just past performance

Governance Need for robust governance structure underpinning standard reports which will assess needs based on frequent ad-hoc

requests and review of change requests New report requests will be assessed against design principles and a cost-benefit analysis

Approach For Socialisation

Key System and Data Challenges

■ Multiple reporting systems held in different places, with different user interfaces, uses, and performance characteristics

■ Inability to easily join data which is held across multiple database platforms (e.g. Plan / Forecast versus Actuals)

■ Excel is often the tool of choice for report building despite the availability of enterprise standard tools

Data Maint. and ease of

use

■ Lack of consistency in data hierarchies, definitions and business rules across Enterprise and Business Units

■ Over reliance on Excel and Access solutions for addressing business demand for information

■ High risk of data quality and integrity issues arising out of uncontrolled data manipulation in Excel

Data Consistency

& Quality

■ Excessive cost incurred through over-licensing of expensive data access applications (mobile and BI platforms)

■ Huge volumes of data being regularly extracted for local manipulation causes performance issues elsewhere

■ No governance over the generation of new reports and use of definitions

Efficiency and

Governance

■ Proliferation of Excel for most reporting ■ Duplication of effort through locally stored data, e.g. the use of Access ■ The need to link into KAIP and other related projects to ensure alignment

Manual reporting

Advanced analytics portal – landing page

Weekly actuals – Standard Report – Current Week Volume, PTD, QTD & YTD

Daily Sales: Enhanced Report, Year to Date

Four Steps to Arrive at the TOM

STEP 1: We defined the design principles that underpin the target operating model

■ Business Unit Finance, including supply chain and manufacturing

■ CoE (scope & structure) ■ Group Finance ■ SSC

Centre of Expertise Shared Service Centre BU Finance Group Finance

■ Reiterate the mission and purpose of business finance (locally and at centre)

■ Agree criteria to apply for sizing and activities split

■ Distinguish between and compare/contrast single market BU’s and multi-market BU’s

■ Agree desired spans of control and sizing

… ensure clear focus of accountabilities and responsibility

... align to strategy

… commercially aligned for improved business support

… facilitate talent development

… with activity in the optimal location

… increase standardisation and enhance controls

STEP 2: We defined service delivery model STEP 3: Agree objective criteria to sizing and activities splits

STEP 4: Create organisation structure, apply sizing criteria, then grade roles*

Finance Activity Splits

Business Unit & Group Finance*

COE*

• General accounting • Fixed assets • Credit/ Collections • Customer billing • Cash management • Accounts receivable • Accounts payable • Travel expense

FP&A • Standard Reporting: A v B v F • Historical / trend analytics • Investor relations • First pass analysis on E&Y q pack • Data consolidation • MMF consolidation and reporting • All FTE reporting & ABP presentations • OCM/ OPEX/ Telephony reports • First pass report analysis /commentary • Standard Field Sales reporting

FP&A • Business partnering with GM’s

including OCM/ OPEX • LRP / ABP creation • Preparation of LRP / ABP / MMF

and application of governance • Profitability analysis after first

pass analysis by CoE • Identify corrective actions • Gap closure • Month-end closing • Manage field sales costs / OPEX • Sensitivity analysis and scenario

planning

SSC*

Channels & Functions • Budget management, investment

monitoring and decision support • Value management of commercials that

drive CAPEX • Translating business events into forecasts • What-if analysis / scenario planning • Strategic initiatives support, ABP inputs • Gather forecast assumptions • Propose actions to close gaps • Support customer negotiation / plans • Support audit claims • KAIP & S&OP support • Support TME

Supply Chain: • LRP for site • SOX Compliance

(Champion) • Weekly forecast / MMF /

MBR / QBR (prepare / sign off)

• Investment appraisal • Responsible for local P&L

Scalable through consolidation and

remote/central processing

Supply chain reporting: • Cost OPEX/close reports • Maintenance and production

reporting • Yield Analytics • Labour analytics Marketing: • Forecast vs. budget

reporting • Reoccurring KO reporting • Brand profitability (80%) • Profitability by other

dimensions • Marketing credits • Reporting and analysis of

trade marketing

RGM: • Generation of assumptions • Commentary and actions • Strategic initiatives (customer

terms), Route to market / ENERGISE

• Price increase and mix decisions (brand pack price occasion (BPPO))

• Value chains • LRP & ABP creation Marketing: • Franchisor business partnering • Interacting with EUG business

partner • New product profitability analysis • New product development (NPD) • Decision making on investment in

marketing • Brand profitability • Commentary and action driven gap

analysis • Input into forecasting • KO system economics and insights Value management/Strategic projects: • Manage the consistency and rigour

of transformation projects in the BU • Finance Cross CCE projects,

interfacing with the BTO • BU specific projects, interfacing with

local PMO • Business case validation + KBI

reporting of actuals

Channels: • Actuals, volume reporting (daily

sales) • Performance reporting • Mix analysis and first pass

analysis • Channel / customer profitability • Historical data gathering, Trend

analytics RGM: • Pack / channel reporting,

profitability • Evaluation reports • RGM dashboard / mix

calculations

Analysis, challenge and insight to drive robust, practical commercial decision making close to the market

Standardised, timely, accurate management reporting and finance process governance in a cost efficient location

Transaction processing excellence in a cost efficient location

Source of competitive advantage:

Performance Evaluation Score Keeping Service Orientation

Business Partner / Team member

Demand Management & Governance

1

Customers of Finance, PPM teams, CFOs

Governance manager

FP&A Sales & Margin Supply Chain

PPM Steering Committee

- Quarterly

‘Client-facing agents’ OR report owner

2a 2b

Demand raised BU user identifies need for new information. Local PPM engage in dialogue with the relevant report owner (CoE analyst) OR client facing agent (CoE manager for the BU)

Request Client facing agent reviews and for: a. Minor requests: executed immediately after

review with governance & EIM managers (CoE leadership notified at management meeting)

b. Major requests referred to relevant governance forum after the CoE has fully assessed and discussed at CoE management meeting

Assess Major Requests a. Governance forum assess major requests

and CoE prioritises requests for execution. b. PPM SteerCo informed of any significant

changes to prioritisation / make decisions on contentious matters

CoE driven demand Leading practices for reporting shared across BUs by the CoE

Regular Dialogue

Minor Request

Major Request

Governance Forum - Monthly

CoE Management

Meeting - Weekly

EIM manager

5

3a

Assess Major Requests & Prioritise

BU Forum Leads & CoE Leadership

CoE Roadshows

- Quarterly

4

3b

Approve Prioritisation

Receive Demand & Log in Workflow

Head of PPM, BU CFOs, VP Strategic Initiatives, IT Leadership,

Head of CoE

Response

Reject – BU create report locally

Accept – Execution commences

Pending – SteerCo/Governance decision

1

2

3

4

5

6 Reporting Factory CoE Sofia

Reporting meetings - Bi-weekly

CCEP Reporting Requirement CCEP Reporting covered by the 3 CoEs with new requirements developed by CoE

6

CoE Germany

From Data to Insight Where does the Centre of Expertise sit?

Business issues

Outcome

Data Reporting Analytics Insights

Decision

Negative customer

engagement

Collection, storage and

integration of data related to market & CCE performance

Routine reporting of

market & CCE performance

via fixed set of business

critical metrics

Use of quant. techniques & technology to

solve pre-defined

commercial questions

Deep understanding of market / CCE

trends to generate

actionable growth reco’s

Market share loss

Pricing pressure

Commercial levers “pulled”

in order to impact CCE performance

Positive customer

engagement

Market share growth

Pricing realisation

Home Channel value,

volume sales (Nielsen)

Weekly sales and share

report

IRI promo ROI

Loss of promo ROI

during summer months

Restructure summer promo

mechanics

CCEP Business Intelligence

CoE SSC/IT BU Finance Business

35

Lessons Learned

Lessons learned

• Report automation is/can be hindered by manual processes to change source system data.

• To be successful, the team needs the ability to check data consistency & anomalies – understanding the data flows and underlying processes to generate the data (ie invoicing process).

• Data model needs to be planned upfront based on performance expectations and how the data will be used to generate the most efficient Tableau report.

• Correct business processes need to be in place to support the report output – Assumptions of having a new process going live at the same time as the report can be risky.

• Handover to the COE needs to be planned to get the COE team more involved prior to the soft launch of the reports. Soft launch should include checks against any as-is reports and also a real life test of the underlying business processes.

• Enhanced Tableau reporting capability can add value and insights which we don’t currently have. Reports should be designed with the tool in mind and should leverage the capabilities and considerations of the system.

• Socialised and agreed standard reports might not cover all needs of the existing reports (for example still requiring data extracts & analysis in a tabular format).

• In order to be able to develop and deliver fast Tableau reports, a lot of time and effort must go into having the right backend data structures and an efficiently built Tableau data source.

• There is a constant need for changes even as reports are being developed (e.g. Freestyle, Monster) so maintaining a mixture of agility/flexibility and also being able to deliver against agreed timelines is important.

Collaborative approach to

operating model design

Multi-functional working

Advisors – honest, trusted and part of

the team

Structured approach &

design principles

Deployment

methodology focusing on governance and well documented approach with strong Knowledge

capture

Key financial metrics delivered

Strong support from key stakeholders

within each business unit

Recruitment and seeding in BUs

What worked well

What we could improve

Improve co-ordination with

other CCE projects and challenges of

multiple parallel projects

Improve resource management for people involved in multiple projects

Link between reporting and

process

Importance of having current

documentation for all transactional roles within our

business

Focus on early recruitment for key resources

Challenge of developing numerous

complex, labour saving reports

What is the burning platform

Efficiency or Effectiveness

What’s In It for Me

Focus on the Customer

Break Down The Silos

End-2-End Engagement

Thank you!

““Coca-Cola” is a registered trademark of the Coca-Cola Company”

Daniel Willoughby, Director Strategic Initiatives danwilloughby@cokecce.com http://uk.linkedin.com/pub/daniel-willoughby-acma/3/605/85