Elsevier is a global information analytics business specializing in science and health, serving institutions and individuals around the world. Elsevier has partnered with scholars for over 140 years to curate knowledge, originally operating bookstores and publishing companies and expanded to publishing journals in the 1940s. Its products include important scientific journals such as The Lancet and Cell, reference works such as Gray’s Anatomy and data analytic tools and services such as Scopus, SciVal and Clinical Key.
As of summer 2019, Elsevier publishes more than 470,000 articles annually across 2,500 journals. In recent years, Elsevier has expanded into the area of information analytics and has amassed significant databases that serve the needs of professionals in science and medicine.
When asked about transforming its finance organization, Stuart Whayman, Elsevier’s CFO, describes a continuous journey. “It’s not one where you can say, right, I’ve done finance transformation—done,” says Stuart. “There is a continuing need to drive efficiency for shareholders, and with technology that is constantly changing and evolving, the horizon continues to move away.”
When Stuart first joined Elsevier five years ago, the company was partway through a significant finance transformation process. While he recognized that there were still improvements to be made, he was cautious of launching a new improvement program in the same areas, noting that “if the whole organization is constantly in a state of flux and strain and stress, everyone is just going to burn out and break and disappear.”
Stuart decided to begin with a benchmarking project to identify what processes would yield the greatest returns and—equally important—where not to focus. He knew that there were opportunities for improvement in several areas, but he stressed that the benchmarking exercise helped quantify the benefits, prioritize the opportunities and gain wider buy-in. His teams then focused on the target processes in sequence, leveraging what was learned in benchmarking about the processes most in need of transformation.
Stuart outlined a strategy for continual finance transformation that rotates around the different finance functions:
“Maybe there’s a four-year cycle, with 12 to 18 months of disruption in a particular area. And then we give the team two-and-a-half years of being able to sit and stay, and feel human again, get the benefits. And then the cycle begins again, you identify new things that you can apply to that area and move it to the next level.”
Stuart stressed that while cost reduction is certainly an important reason for transformation, increasing effectiveness and business insights in each area must also be prioritized. Elsevier has managed to reduce cost significantly throughout the finance department, while dramatically improving the quality of service it provides to the company.
Stuart explains that this combination of benefits stems from multiple factors: “It’s about changing organization structures. It’s about location, offshoring, but it’s also involved working to improve culture and behaviors.”
In credit risk and receivables (CR&R), for example, along with reducing cost, a major program refocused the team on metrics and teamwork. Investments were made in existing team members and they were provided new tools, including new ways of working, to make their jobs easier. Stuart explains that employees “could see” that there was a positive aspect of the transformation on a personal level, which I think is really important.
And how do you measure effectiveness? “I would like to make it more quantitative and more measurable,” says Stuart.
“But reviews of finance are consistently positive. All involved agree that finance at Elsevier is delivering at a level significantly higher than seen five years ago. Also, over the past 18 months, there has been a big improvement in employee satisfaction within the finance department.”
Stuart believes that this is the result of Elsevier’s philosophy of driving change in a thoughtful way that engages those involved. It proves the case that it is possible to take out cost and improve, not reduce, effectiveness.
The role of finance in the business might be slightly different in Elsevier to many companies. “We are a data analytics business,” says Stuart, “so there’s lots of people in the business who are very, very data savvy—very okay with best tools, with machine learning, data science and all its facets.”
Other organizations have built data analytics capability in finance that then flows out to the rest of the organization. “We don’t have to do that, but we do want the business to focus on the customer.”
Elsevier has built a data and analytics group that focuses on back-office data, with its own identity, independent of finance, but reporting to the CFO. But the role of finance is crucial. “Essentially, every business decision is a finance decision. You can augment the finance team with people who come from other backgrounds and other skills, but at its heart you need a finance team that has the financial competencies.”
Over the next five years, Stuart anticipates an increase in automation in Elsevier’s finance function. While Elsevier is early in its adoption of robotic process automation (RPA) today, Stuart believes that over time more and more processes will be automated, freeing up time for finance professionals to take on additional roles in the business. And, of course, attention will shift to the next set of areas prioritized in the benchmarking process. Elsevier’s culture of continuous improvement will continue to move forward.
This profile is part of PwC’s 2019 Finance Effectiveness Benchmarking reporting. PwC would like to thank Stuart Whayman, Elsevier’s CFO for his insights.
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