They Have the World

By Stan Gibson  |  Posted 2006-03-19 Print this article Print

in Common"> Global partnership

One key factor that makes HP a good partner for P&G is that both companies have global operations.
P&G sells products within 300 global brands in 160 countries. In Bangalore, HP handles accounts payable work for P&G operations in 36 countries. HP centers in Costa Rica and China handle P&G accounts payable for 20 countries.
All told, 120,000 P&G accounts payable transactions are processed by HP in Bangalore each month out of a total of 300,000 that are processed monthly worldwide. HP has two BPO centers in Bangalore and one in Chennai (Madras), India. Other countries in which HP has BPO operations include Singapore, Romania, Poland and Mexico. "We can support a global customer with local support," said Sanjay Singh, HPs director of India business centers. Bill Martorelli, an analyst at Forrester Research, in Cambridge, Mass., said while some companies are working directly with offshore BPO providers in India and elsewhere, companies that have a global presence might do well, as P&G has done, to find a global partner. "The very biggest companies that are globally distributed may find the multinationals [like HP] are a better fit because they can serve them geographically," said Martorelli. Click here for the full story on outsourcing in India. By calling on worldwide resources, HP can expedite invoices that originate practically anywhere in the world . For example, a fragrance supplier in France might provide basic perfume ingredients for P&Gs Vidal Sassoon products and send the invoice to an HP facility in Wroclaw, Poland, where the invoice would be scanned and a digital copy created. HPs Bangalore BPO center would access the electronic copies via the Internet and then process them for payment using SAPs accounts payable software. P&Gs Newcastle, England, office would execute the payments, drawing them on a P&G bank account and sending them to the supplier in France. HP would archive the invoices in Poland for three months and then send them to P&Gs Newcastle facility to be permanently archived. Another archival facility is in Colorado Springs, Colo. A global presence is table stakes when it comes to keeping customers like P&G happy. HP must go beyond that to handle accounts payable like a factory running with razor-edge efficiency. "It runs like a shop floor," said Singh. "Its not just transaction processing, but business results." Key to any successful outsourcing relationship is meeting the requirements of the contracts SLA (service-level agreement). To make sure the SLA is met, HP raises the bar above the SLAs requirements by measuring its performance against Six Sigma guidelines, which set zero defects as the yardstick, according to Singh. In accounts payable, it is important to pay on time, of course, but some suppliers offer discounts if invoices are paid early, say, within 10 days of receipt. Thus, its critical to pay these discount-eligible invoices early to maximize the discounts available to P&G. A twice-daily production planning meeting separates accounts into "expedites," or those that must be handled within 24 hours, and "nonexpedites," which can be handled within 72 hours. This triage creates the workload for each team. To streamline operations, HP calls on industrial engineering experts to measure the speed of operations and to help cut defects. In the process, the experts create studies of the office layout to come up with recommendations for speeding processes, Srinivasan said. The approximately 140 HP workers are measured on productivity, with results displayed daily. Monthly performance is analyzed, with action plans for improvement drawn up where needed. Employee rewards are tied to meeting SLA requirements, said Srinivasan. Bridging cultural differences is the key to better business in India. Click here to read more. HP is not exempt from the pressures of the booming Bangalore economy, including an 18 percent worker turnover rate. Wage inflation, another local economic force, is running about 8 to 9 percent per year, Singh said. Meanwhile, like other Bangalore businesses, HP has to hire rapidly to fill its needs. According to Singh, HP brings aboard 100 to 150 workers each month. E-learning tools get new employees up to speed at a cost thats 30 percent less than that of conventional instruction, he said. But these challenges havent prevented HP from consistently meeting its SLA requirements, according to Singh. That is quality of service as it might be if the workers at HPs Bangalore facility were perched halfway around the world, in offices overlooking, say, the Ohio River. Check out eWEEK.coms for the latest news, reviews and analysis on IT management from

Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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