The move immediately cut down the number of people on NOL’s payroll by at least 200, and more are expected by the end of the year, when the last 20 percent of the countries the company operates in joins the outsourcing structure. Following its spin-off from HP, Agilent decided less than three years ago to set up an outsourcing facility in India. Called Agilent Technologies International (ATI), it was originally meant to support headquarters’ engineering services, R&D and IT systems. “We did think that finance could be one of [the functions ATI could support], knowing that India has a lot of accounting folks,” says Leung. Within a year, the company, which at that time had more than 40,000 employees, began to move certain functions to India, starting with those that are internal to the company such as expense reimbursements.
Next, Agilent eased in what it calls its key business flows: procurement to payment, quote to collection, and accounting to reporting. The first, says Leung, covers the procurement process, from doing a tender, to getting a quote, to placing an order, to paying suppliers. The second covers processing invoices, collections, and matching the remittances with the original invoices. The third involves “all accounting entries — to a point where we could close all the books [until we're ready to] report the financial statements both internally and externally,” says Leung, who is based in Hong Kong.
This meant moving most of the jobs to India from Colorado (until then the hub of Agilent’s transactions processes) and from smaller regional hubs such as Tokyo, Barcelona, and Singapore. ATI then became the company’s new global hub for finance. “We hired a team in India and gave them classroom-type and some hands-on training on our systems,” says Leung. Agilent also sent the new staff to Colorado for further training with staff there. Of course, the US and other workers eventually lost their jobs, but they got “a very competitive severance package,” says Leung.
Prior to outsourcing, Agilent had 1,800 employees directly related to the finance function. This, says Leung, was 210 percent more than the average world-class company as surveyed by Hackett. Leung declined to disclose how many finance employees were made redundant — overall, Agilent lost a third of its workforce to some 29,000 now — but ATI currently employs around 900 people, including both R&D and shared services. The regional offices, meanwhile, still hold about 50 people each.
A Stitch in Time
Leung calls the finance offices in the various regions “centers of expertise” that do higher-level finance work. Singapore, for example, is in charge of treasury and cash management. “As we went to a global hub structure, we still kept these places, doing work that is best done in a country outside of the hub for coordination; for proximity to a business or customer,” he says. This approach is similar to NOL’s, which also does cash management at the headquarters in Singapore, and keeps what Lim calls “centers of excellence” overseas.