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Future-proofing BlueScope’s finance function

Hello Stephannie and Andrew – great to have you with us. Could you start by giving a brief history of BlueScope and your relationship with Capgemini?

Andrew Watson: Hello. Good to be here. BlueScope Steel was initially part of BHP Group Limited – an Anglo-Australian multinational mining, metals, and petroleum company. In 2002, BHP Steel divested from BHP and later became BlueScope. Being a very small steelmaker on a global scale, BlueScope focused heavily on value-added products for the building and construction markets.

BlueScope is now the largest steel maker and the only flat products producer in Australia and New Zealand. We’re also a very significant building products manufacturer in both countries. We have large manufacturing operations in Australia, New Zealand, China, South East Asia, and the USA. Globally, we’re the third largest producer of Zinc/Aluminium coated steel products and the third largest producer of painted steel products for the building and construction industry.

We partnered with Capgemini in 2002 just after our divestment from BHP, setting up a shared services center in Adelaide. Following a number of contract extensions and service models, our finance and accounting (F&A) services are now delivered from Capgemini’s Bangalore center.

Could you summarize the work you’ve done with Capgemini to transform your finance function?

Stephannie Jonovska: Yes, of course. BlueScope was struggling to bring efficiency into its F&A processing. As an example, we were operating on four different ERPs and had 73 different ways to pay an invoice within accounts payable (AP) processing. The inefficiency and complexity of our highly manual AP processes had resulted in a backlog of 24,000 invoices, as well as incorrect, duplicate, and delayed vendor payments.

Andrew Watson: Through collaborating with Capgemini, we’re on a journey of transforming our F&A operations, which is resulting in optimized operations and improved productivity at reduced cost. This is also enabling us to deliver benefits to our customers and suppliers. We now have greater control over and visibility into our F&A processes, which ultimately means we can see where the next opportunities are and we’re better prepared for the future.

How did you approach the transformation and what were some of the methodologies you used?

Stephannie Jonovska: Well to give you some background, Capgemini actually started our transformation journey. Partnering with Capgemini in the process of offshoring opened our eyes to what good looks like on a global scale through leveraging their experience with global clients, global capability, and technology partners. In fact, my role was co-created in the backseat of a taxi in Bangalore after my then CFO had just come out of a robotics demonstration by Capgemini saying: “Wow! We’re so behind the times. We need to invest in capability and capacity to do some of these things.”

So we leveraged Capgemini’s ESOAR methodology to look at how we can transform our operations through applying Eliminate, Standardize, Optimize, Automate, and Robotize steps to streamline our finance processes. This is not just to get to a stage where we can do all the cool stuff around robots, but it’s also to initiate a culture of challenging and pushing our systems in the essential – but low value-added tasks – such as journals and reconciliations.

Andrew Watson: At BlueScope, we talk about “Now. Near. Next.” With the Capgemini lens, the “Now” is optimizing the system we’ve got and have invested in, the “Near” is process automation (including robotic process automation), and the “Next” is things like machine learning and artificial intelligence (AI). Two years ago, we didn’t really know what AI was and how it could help us, but now we’ve implemented it across our AP function, using intelligent character recognition (ICR) to extract the core data from our invoices and machine learning to build up a library of patterns that it applies to future invoices. The results couldn’t be clearer – not only has it further streamlined our operations and added extra controls, but it’s really taken our manual, labor-intensive processes and transformed them into something that really adds value to the business.

Stephannie Jonovska: And the last part is people. The partnership with Capgemini is taking our people on a journey towards task elimination, rather than role elimination. For example, one of our team who’s been with the organization for 30 years recently watched our robotics video and said: “This is a beautiful thing.” The more we expose our people to technology, get them involved in the process and testing, the more it will set us up for future innovation in digital. So, we’re not quite there yet – but we’re getting there.

Andrew Watson: Our finance transformation story is really about our finance function catching up with the rest of the business. BlueScope is a very engineering focused organization, and we’ve done a lot of work around taking cost out, automating and streamlining processes to make them more efficient in the physical process space. In fact, we’ve had robots on our plants since the 1990s.

This was always the frontier of our innovation work, and it was always a bit beyond us to look at improving the actual systems and functional processes in finance. However, shifting our service delivery to Bangalore opened our eyes to what Capgemini was doing with other clients, the possibilities for automation around better service delivery, and the improvement that comes with doing things accurately and on time, let alone reducing cost.

Now, our finance function is leading the way in terms of BlueScope’s corporate functions, because others in the business – for example in HR – are now saying: “What is this robotics? Why aren’t we doing this kind of stuff?”

Could you talk more about how BlueScope and Capgemini are building a collaborative work environment and cultural association?

Stephannie Jonovska: Yes, absolutely – this is a really important aspect. Capgemini runs cultural communications training between our teams in India and Australia to understand our cultural similarities and differences, and how to best communicate with each other. We also invest in visits, making sure we understand our people, understanding their drivers, identifying any pain points, and learning how we can make working for BlueScope a very attractive proposition for such great talent that exists in Bangalore.

Andrew Watson: Outsourcing doesn’t always have such a great reputation, where people have had bad experiences with Telco providers, banks, or other service-oriented industries. This naturally plays out in our own business, with people’s preconceptions, as well as with our customers and suppliers, and we’re constantly working hard to make sure that our people are aware of the many great results, so that when issues arise – it’s not their only reference point, they can actually put it in perspective. Part of this is cultural awareness, but mainly it’s about not allowing an us-and-them culture to develop – we are one team.

Stephannie Jonovska: This is something that comes with strong leadership. And when we say collaboration, it doesn’t mean we’re afraid to respectfully challenge or have frank conversations, as that is important to hold each other to account. But it all comes down to strong leadership and it’s an ongoing journey for a successful partnership.

You’ve talked about your “Now. Near. Next” mantra. What does the future hold for BlueScope’s finance transformation?

Stephannie Jonovska: Well, once we’re really comfortable with robotics, the next level is around the further application of AI, machine learning, and the high level of data analytics that comes with it. As the amount of data and information that will need to be analyzed increases, we basically need to keep doing more with the same number of people. To be competitive and remain ahead of the curve, we need to leverage our partnerships to do this on a much larger scale.

Again, it’s about the journey of our people and making sure that they are aware, upskilled, and keen to change their roles. We’re not waiting for the “Next” part of our digital transformation to do this – we’re starting this cultural shift now. For example, we’re giving people exposure by being part of a proof-of-concept in RPA and getting them to run projects around ESOAR. In doing this, we’re building our capability internally in terms of transformation both from a robotics perspective but also in building our data analytics capability.

Andrew Watson: But just to add to all this, one of the biggest challenges facing most businesses today is, how do you better use all the data you’ve got. Data collection is becoming easier and cheaper, systems and sensors capture and store more data, and there are many external sources of data that could greatly assist businesses if they were able to pull it all together and understand the signals. You can stick cameras on to so many things these days to interpret images and give feedback. For example, we recently set up a process where we’re using a camera and intelligent software to detect that steel coils are restrained properly on railway wagons and can’t come off during the journey.

So, businesses have to get a lot better at using the data at their disposal, and that doesn’t mean people having to trawl through reams and reams of information to create reports. It’s about having smart analytics and robotics to join the dots from disparate data sources, point out the trends, provide information, and gain intelligence through analysis.

Stephannie Jonovska: My vision for the future is that finance people don’t just do the month-end, but move towards doing coding and creating ideas. I’d like to get to a place where our people are using their time to really think – driving decisions, being creative, coming up with new ways to improve things. So, driving action – not just value add – will be a game changer instead of spending 5–10 days doing month-end, budgets, forecast, and reconciliations.

Andrew Watson heads up the procurement function for BlueScope Australia, and leads BlueScope’s global procurement category management and supply chain initiatives.

Stephannie Jonovska is helping to create BlueScope’s finance function of the future by leveraging data and technology, optimizing core business processes and systems, and developing the capability to ensure it meets the organization’s current and future needs.