Deloitte and GE

In the last several years, outsourcing of financial services has really taken off. Not always successfully, though. Many see the lack of control as a major drawback. While some have slammed on the brakes, General Electric Inspection Technologies (GE IT) is full of praise for their outsourcing with Deloitte. For Global Controller Piet Mulleman, the greater flexibility and improved efficiency are real added value benefits.

Back office for new product line

Three years ago, General Electric obtained the exclusive, worldwide rights to the sale of Agfa industrial X-ray film. Excellent news, although Piet Mulleman recognised immediately how late it was. “You need a flying start for such operations. As of Day 1, you have to send out invoices and process payments. And for that you need a back office − which didn’t exist. So, as our company philosophy prescribes, we knocked on the door of the GE back office in Budapest.”

Outsourcing core activities

For a number of countries, problems quickly arise in such a situation. So General Electric decided to call on the Financial Resources team of Deloitte Belgium. The assignment: to take care of the accountancy for Belgium, France, Germany and the United Kingdom. “The collaboration with Deloitte ACS was only possible through a change of strategy at GE. Providing back office support was no longer a core activity. Only Italy is still internal. Everything went perfectly from the beginning ... and you don’t tinker with a smooth running engine!” Piet Mulleman winks.

Customer/supplier has benefits

Piet Mulleman agreed with the new strategy: “An internal back office doesn’t run flawlessly per se. We’re one big family at GE - so people are sometimes less quickly inclined to bang on the table when something goes wrong. That’s not the case in a customer/supplier relationship. At the slightest problem, Deloitte jumps into action. You also eliminate conflicting priorities with an external partner. In GE, each department has its own parameters, reporting lines, and objectives. Sometimes that can cause conflicts. When balancing accounts had the highest priority for me, the back office in Budapest sometimes gave priority to other jobs. That’s understandable - but problematic.”

External: larger fishpond

“When you opt for an internal solution, you have to take whoever is available,” Piet Mulleman continues. “With an external partner, you’re fishing in a much larger pond. And you avoid the rigmarole of the recruitment process.” Deloitte ACS often finds the appropriate personnel within a week. Sven Asselbergh, partner at Deloitte, joins in: “You have to understand: we’re not an interim office. We don’t have a database of thousands of CVs - but we do have a well-screened elite group of a hundred financial specialists. When we propose them to a company, we take the company’s culture into account. We don’t impose ourselves on anyone - the client has the final say.”

Challenging projects stimulate people

It’s not easy to find good people. When you do find them, you must take care of them and give them opportunities to develop. “So, our people are not parked here,” Sven Asselbergh puts it plainly. “We follow them up continuously and evaluate them twice a year. It’s a thorough evaluation: we ask the customers for feedback as well. Usually, these are international companies with a broad perspective on accounting. We find that our people enjoy doing their job. We also stimulate them by having them rotate - while maintaining continuity for the customer.”

Flexible and efficient

The contract between General Electric and Deloitte is for an indefinite period of time. It includes clauses through which the customer easily increases or reduces the number of personnel. This way, GE does not build up social liabilities - a significant cost benefit. The outsourcing partnership increases efficiency too. Piet Mulleman illustrates: “This case concerns five countries. In the past, I had to talk to five different managers, each with his own vision. That was time-consuming. Now I have one contact person, who’s familiar with GE’s practices and quality standards.”

Just as much control

Is outsourcing expensive? Piet Mulleman sees little or no difference. “Although it’s difficult to quantify, because how do you calculate the cost of control? The people from Deloitte sit close to my office − they’re not spread out like before. The language barriers are gone - which improves control.” Sven Asselbergh adds: “ Outsourcing has a lot of connotations. In the case of GE IT, I prefer to use the term co-sourcing. This implies a close and transparent partnership. This openness is essential, although it entails some risks for the customer: external partners receive access to sensitive business information. So, our people sign a code of ethics, which we monitor diligently. Strict procedures keep the risks to the absolute minimum.”

A lot more practical

Every year, a new ‘eldorado’ for outsourcing appears. Following Hungary and Poland, it seems that the Czech Republic is now the place to be. Which often makes it difficult for recruiters to work. “When a country becomes popular, the salaries go up and the right people become more difficult to find,” says Piet Mulleman. “After six months or a year, they’re gone, with a new reference on their CV. You can ask yourself: is it still worth the effort? Going abroad also often causes practical problems. Suppose: the VAT inspector pays a visit. How do you get all the documents here in a timely manner? Take it from me: that’s a challenge! But then again, outsourcing is a solution for that too.”

 “Our people can adapt themselves quite easily to other working environments” 

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