16th Annual Outsourcing Excellence Award Winner 2012—Best New Process/Application: Rio Tinto and Infosys
Rio Tinto is a leading international mining group, and at almost 200,000 invoices a month, is one of the largest global accounts payable operations around. Until 2009, these payables were handled in house, by separate regional onshore teams in five different countries, each employing their own processes and approach to getting the job done.
Clearly, outsourcing made sense. But with the volume of work Rio Tinto produced, it needed more than a lift-and-shift solution. Company leadership wanted something better: a unified, centralized, streamlined global operation with one process and one focus.
A great strategy but only with the right partner.
"We wanted to find a BPO partner that was the best fit for what we wanted to do. We were new to BPO, so we knew we weren't going to get it right the first time. We, like our partner, had to be flexible, realistic and willing to recognize—and change—what wasn't working until we got it right," Rio Tinto Transition Manager, Joel Campbell said.
The vision was a shared services model in which accounts payable transitioned from five regional hubs to Infosys offshore teams in Pune, India and Lodz, Poland. Invoices are sent to scanning partners at regional hub locations and then sent to the SAP cockpit where they go through an optical character recognition system, go back to SAP for further processing, then are "fetched" to the Infosys BPO provider. Two hundred and fifty global outsourcing staff members support the accounts payable function alone.
Approaching Outsourcing with "Realistic Optimism"
With new processes, technology and cultural shifts involved, things did not go perfectly from day one. The first regional transition was bumpy, with time delays, missteps and less-than perfect outcomes.
Mod Prakash, Infosys engagement manager on the Rio Tinto account, joined the company at a time when things were not going as well as they could.
"I remember having a meeting with the Transition Manager, Joel, where we were both frustrated. We sat in the room and came out with a solution that worked," Prakash said. "We left the room, implemented the solution and never looked back."
Instead of separate Infosys and Rio Tinto project teams, the companies started the "one team" concept where everyone 'owned' the problem, worked together to solve it and celebrated success together— whether it was something that happened in Salt Lake City or Pune, India.
"We turned the environment into a true partner model," Campbell said. "I don't think it's possible to do transitions any better than we do them now."
Is he frustrated that it took two years to make everything right? Not even close.
"For me, you have to approach outsourcing with 'realistic optimism.' The challenge in the outsourcing industry is offering services against competing providers who tell prospects that they make outsourcing pain free. The fact is, every company is different and change requires adjusting to a new way of doing things. You're moving part of your business to another company and that always requires getting used to doing something a little different. It's important to clearly understand that and set the appropriate expectations internally," Campbell said. "You have to find a way to set clear, optimistic expectations about change that also reflect reality."
Keeping Involved with the Project—and the People Doing the Work
Another ingredient in this partnership's secret sauce? Rio Tinto stays involved.
"At Infosys, we want our clients to visit our sites, to spend time with our people as much as possible," Prakash said. "If you go to Pune and look at the visitor book, Rio Tinto visits the BPO location often. These visits help to develop a strong working relationship that can be leveraged to find solutions to issues we face."
"The thing that you cannot outsource is context. You cannot document context; the person at the service desk can't have the context on what life is like in a mining site. It's the responsibility of the client to provide that context," Campbell said. "If you outsource without involvement and just transfer your problems to a vendor, you will fail."
Ultimately, it all comes down to approaching outsourcing as a long-term commitment.
"BPO is like a wedding in India. Weddings there are like multiple-day festivals, with people coming in by plane, train, automobile and on foot for the occasion. There's chaos and confusion, but eventually, it culminates in a relationship; the marriage happens," Campbell said. "BPO is a lot like that. It's chaotic, it's frustrating at times, but if you're partnered with the right people, you eventually make it work for the long term."