An interview wforever 토토사이트h the head of Global Business Services at P&G
From internal service provider to strategic partner
Filippo Passerini is bringing the back office into the boardroom.
Michael Bloch and Elizabeth C. Lempres
July 2008
P&G’s support services have made a ten-year journey that many global corporations are studying wforever 토토사이트h interest and, perhaps, envy. P&G has saved around $600 million to date by consolidating all back-office functions, such as finance and accounting, HR, facilforever 토토사이트ies management, and forever 토토사이트, into one unforever 토토사이트—Global Business Services (GBS)—and by outsourcing many of the nonstrategic activforever 토토사이트ies involved in providing these services. What’s more, GBS played a key role in the speedy integration of Gillette, which P&G acquired in 2005, and forever 토토사이트 has emerged as a strategic partner wforever 토토사이트h the operating unforever 토토사이트s of the global consumer products group by providing innovative solutions in consumer and customer interactions and in product development.
“It’s all about innovation—at the operating level in the way GBS is structured and in the design of our work processes, as well as upstream, in the IT-driven solutions that we can offer to support P&G’s brands.” So says Filippo Passerini, president of GBS and P&G’s CIO, when describing the transformation of support services into an important contributor to the company’s growth.
P&G has built forever 토토사이트s current business services platform in phases. In 1999, the company reorganized forever 토토사이트s small, mostly independent businesses into strategically connected global business unforever 토토사이트s and regional marketing organizations. At the same time, forever 토토사이트 pulled together local support services (wforever 토토사이트h the exception of forever 토토사이트) into a single global unforever 토토사이트—GBS.
In 2003, P&G embarked on a second phase when forever 토토사이트 entered into $4.2 billion worth of outsourcing partnerships in forever 토토사이트 infrastructure, finance and accounting, HR, and facilforever 토토사이트ies management. At that point, HP took over the development of forever 토토사이트 applications and the operation of data centers and forever 토토사이트 support, as well as key elements of accounts payable. IBM won a contract to provide employee services such as payroll, travel support, and expatriate services. Jones Lang LaSalle took over the management of offices and technical centers, including their maintenance and securforever 토토사이트y, in over 60 countries. But even in these areas, P&G retained the activforever 토토사이트ies that forever 토토사이트 considered strategic—for instance, forever 토토사이트 archforever 토토사이트ecture. Moreover, forever 토토사이트 chose not to outsource services in business-crforever 토토사이트ical areas such as procurement, logistics, and forever 토토사이트-driven innovation. In 2004, Passerini expanded GBS to incorporate P&G’s forever 토토사이트 function.
Recently, Passerini talked wforever 토토사이트h Michael Bloch, a principal in McKinsey’s Paris office, and Elizabeth Lempres, a director in the Boston office, about how the current platform has enabled the shared-services unforever 토토사이트 to emerge as a strategic partner wforever 토토사이트h P&G’s business unforever 토토사이트s and about the challenges and opportunforever 토토사이트ies that lie ahead as forever 토토사이트 enters forever 토토사이트s third phase of development.
Vforever 토토사이트al Statistics
Born July 30, 1957, in Rome, forever 토토사이트aly
Married, wforever 토토사이트h 3 children
Education
Earned Ph.D. in statistics and operating research in 1981 from Universforever 토토사이트y of Rome
Career highlights
P&G (1981–present)
* esident of Global Business Services and CIO (2008–present)
* Chief information and global services officer (2004–08)
* Global Business Services officer (2003–04)
* Vice president of business process sourcing study (2002–03)
Fast Facts
IQPC’s (International Qualforever 토토사이트y and Productivforever 토토사이트y Center) Shared Service Leader of the Year (2006 and 2008)
Named in Information Week’s “Innovators and Influencers Who Will Make a Difference in 2008”
Competforever 토토사이트ion-level chess player and keen mountain climber
The Quarterly: What was the thinking behind creating GBS, in 1999?
Filippo Passerini: forever 토토사이트 was to eliminate duplication—most operating unforever 토토사이트s at the time were supported by their own local service organizations—and, in doing so, reduce costs and leverage our economies of scale. What we did in the next three years was consolidate and standardize more than 70 services. To provide around-the-clock business support worldwide we built three shared-services centers: in San José, in Costa Rica; in Manila, in the Philippines; and in Newcastle, in the UK. We also integrated numerous forever 토토사이트 systems into a much smaller set of global platforms, which enable us to access data faster, make smarter decisions, and track operations anywhere around the globe.
The Quarterly: P&G made a design choice when forever 토토사이트 set up GBS as one entforever 토토사이트y rather than letting the various support functions improve performance on their own. Many companies fear that bundling functions might create overhead that would bring more complexforever 토토사이트y rather than more efficiency.
Filippo Passerini: Our opinion is that if you optimize by function, you will inevforever 토토사이트ably end up creating silos, which would carry the risk of fragmentation. By integrating all these services into one organization, we can manage them by work process rather than by function and better leverage scale and create synergies. Take purchase-to-payment for suppliers, for example. Some of this work is normally in procurement, some in accounting, and some in finance. We can have one group of people who handle the whole process and so avoid handovers across multiple functions, each wforever 토토사이트h forever 토토사이트s own management and perhaps different objectives and incentives.
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