The Finance Shared Service Centre (FSSC) of The Chatterjee Group (TCG) is based at Kolkata, caters to two petrochemical companies viz. Haldia Petrochemicals Ltd (HPL) and MCPI Private Ltd (MCPI), with a combined annual turnover of over Rs 17,000 Crores. Both entities are headquartered in Kolkata with production facilities located at the industrial hub of Haldia, West Bengal. Both are member companies of TCG, having investments and operations spanning several continents and industries. HPL and MCPI are flagship companies of the group in the petrochemical sector.

HPL is a state-of-the-art petrochemical complex, producing various types of polymers and olefins, marketed across India and globally. HPL has been a symbol of industrial resurgence in West Bengal. Through strategic market focus, innovative product application development and excellent customer support services, HPL has played the role of a catalyst in emergence of more than 500 downstream processing industries in West Bengal with a capacity to process more than 1 Mn TPA (Tons Per Annum) of polymers and generating more than 150 thousand employment opportunities in the process. MCPI is a front runner in the manufacture of Purified Terephthalic Acid (PTA) which is the basic raw material for the polyester industry. MCPI has established itself as a trusted supplier to the polyester industry in the country and a leading manufacturer of PTA.

Conceptualizing the FSSC

FSSC was conceptualized in 2017 to try out the shared service model on an experimental basis, starting with F&A. The intention was to make the support functions future-ready, to meet the growth aspirations of the group. For a pure manufacturing entity, this was a novel idea.

It created ripples in the mind of the accountants – their transactional processes soon to be restructured – leading to concerns as well as excitement. The key objectives envisaged for setting up of the FSSC were:

Implementation Road Map

In early 2018 the FSSC implementation process was kick started. One of the Big 4 consulting firm extended consulting support with outside-in analysis of all the transactional processes. Taxonomy of the Finance Function was built to assign responsibilities between the Shared Services and the retained organization.

To-be process designs were built to identify work-flows, digitization needs, internal control aspects and ERP enhancements. Go-live was done in April ‘19. This was preceded by months of hectic interaction and UAT by the FSSC Team, who had to balance their ongoing daily responsibilities along with the new ones. The whole project was managed by TCG Digital, the IT outfit of the group.

People and Change Management

Transition to the Shared Services setup was driven by common consensus across the divisions. FSSC manning was planned in advance at the initiation stage and many of the key members chosen were involved in the development of the project.

FSSC Structure, Vision and Responsibilities

Three service towers viz. Procure to Pay (PTP), Order to Cash (OTC) and Record to Report (RTR) provide services to both the customer companies. As the system matures, the plan is to extend the services to other companies within the group.

The FSSC organization reports to the Chief Financial Officer of HPL. However, it has been setup as an independent unit within the corporate office at Kolkata. The FSSC team has been built by reassigning and relocating resources from HPL and MCPI. Support function like HR, IT, Admin and Payroll which provides services to the retained organization also extends their services to the FSSC team. The unit has an individual identity with its own goals and mission statement. The mission of the FSSC organization is to achieve its key objectives (as stated above) through –

This also doubles up as the primary metrics of the FSSC Head.

Though largely the customers of FSSC are the retained organization like Marketing, Finance, Procurement and Payroll, it also caters to the needs of external parties, such as banks, external customers, vendors, and auditors. A stake in the ground has been established. The team strives to achieve the following high-level goals as a first step:

1Payment release within 4 days of receipt of a valid invoice

2LC negotiation within 4 days of sales billing

3Reconciliation of all banks within 4 days of month close

4Monthly accounts close and reporting within 10 days of month end

5Zero adverse audit observations on internal financial controls

Processes Shifted to FSSC

Business Outcomes

Implementation of Finance Shared Services has given significant benefits to the organization and has changed the outlook of how deliveries can be made seamlessly within defined timelines and accuracy.

Economies of scale and standardization of processes across the entity helps optimize cost of Finance support functions and improves working capital management.

The Covid-19 situation resulted in a complete lockdown of the country. The FSSC team operated digitally from home and this was the time when the organization could realize the benefits of FSSC more than ever before. Since the processes were standardized, digital workflows and digitized documents made it possible for work to be done flawlessly without any significant disruption. The new normal gave the platform for the team to perform and exceed management expectation.

1Timely and Accurate Vendor Payments

2Automating Sales Collection and Credit Control

3Digital Transformation

Lessons Learned

1Business process changes are slow and painful but essential for success.

2Change has to cut across departmental boundaries and cannot happen in silos.

3It is better to implement a change in one go. One cannot cross an abyss in two steps.

Way Forward

Currently the organization is right in the middle of its learning curve. The processes implemented under FSSC are expected to fully stabilize soon. Improvisation stage would start thereafter. In the days to come, the team would strive for better performance and be ready to cover other entities of the group.

Shared services is a continuous improvement journey. Robotics Process Automation (RPA) and Artificial Intelligence (AI) are areas to be explored for implementation, to improve efficiency and reduce human error rate. Setting up a Center of Excellence (CoE) to develop a global service delivery capability is also on the cards.

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