ArcelorMittal’s Shared Service Centre Europe: A Case Study

Guided by its philosophy of producing safe, sustainable steel, ArcelorMittal is the leading supplier globally of quality steel products in all major markets including automotive, construction, household appliances and packaging. 

To support the group’s operating units with the execution of transactional back-office activities, a worldwide shared service network has been set up. The shared service  centres (SSCs), located in Poland, India, the US, Brazil, South Africa, Ukraine and Kazakhstan provide a wide range of services including: accounts receivable (A/R), accounts payable (A/P), financial accounting, cost accounting, travel and expenses, payroll, tax compliance and payroll services. In addition most of the SSCs also handle the full accounting range for small and medium-sized enterprises (SMEs) and support the preparation of analytical/managerial reports.

ArcelorMittal’s overall objective in establishing a network of SSCs is to:

  • Enable the harmonisation of business practices and administrative processes across the group.
  • Act as a platform for improving the quality of service to our internal customers through better response times.
  • Deliver value by reducing costs and improving speed.
  • Improve business processes through continuous benchmarking and monitoring of service level agreements (SLAs) and key performance indicators.

Shared Service Centre Europe (SSCE) has been created to support ArcelorMittal’s European sites.

Shared Service Centre Europe

SSCE delivers back-office activities in multiple languages for 165 ArcelorMittal entities located in 10 European countries. 

The centre delivers services in eight different languages, in the areas of:

  • Financial accounting.
  • Cost accounting.
  • Travel and expenses (T&E).
  • A/P and A/R.
  • SME accounting.
  • Payroll.
  • Sarbanes-Oxley compliance/internal control.
  • Segment reporting.
  • Transfer pricing compliance.
  • Others, T-options (Management of Options), corporate legal database administration

SSCE was established in 2007 to support Eastern Europe with the delivery of accounting services. In 2010 SSCE grew significantly due to the transfer of Western European Countries SSC activities to SSCE/Poland. On 3 August, 2011 SSCE received (Swiss Accreditation Service’s (SAS) certificate ISO 9001:2008 for the Quality Management System implemented in the SSCE organisation.

ArcelorMittal SSCE aims to be the ‘best in class’ internal shared service provider (SSP), act as the training ground for future finance management within and outside the group, and to be able to compete with external shared service and business process outsource (BPO) organisations. To facilitate this, a long-term strategy and values have been put in place.

SSCE is located in the city of Dabrowa Gornicza, southern Poland, which is 20 km from Katowice and 70 km from Krakow. It works in partnership with Wipro Business Process Outsourcing, which has ArcelorMittal delivery centres in Pune, India and Timisoara, Romania.

Poland as Main SSCE Delivery Centre

The key factors in ArcelorMittal’s choice of Poland as its main delivery centre for back-office activities are:

  • An existing industrial presence. ArcelorMittal Poland is the country’s biggest steel producer, with over 10,000 employees.
  • Its proximity to Western Europe. SSCE is located near the airports of Katowice and Krakow and the mean European cities and ArcelorMittal sites (SSCE’s key clients) are reachable within a short timeframe.
  • The political stability of Poland.
  • Attractive incentives offered by the Polish government for foreign investors.
  • The presence of high-ranking universities in terms of quality and quantity.
  • Availability of highly-educated employees, many of whom can handle multiple languages such as English, German, French, Spanish, Russian, Czech, Dutch and Italian.
  • Favourable labour costs. Depending on the role, seniority and background of the individual, average labour costs are typically 45% to 50% lower than in Western Europe.

In addition the Polish people offer flexibility, creativity and talent and these were also key considerations when choosing Poland as the main delivery location for the SSCE.

Although based in Poland, I always explain to my customers that labour arbitrage is not the only driver for establishing a centre in Poland. It is all about the quality of the people, processes and systems and realising that managing an SSC means that you have to continuously ‘play the game’ of productivity.

Although there is a cost advantage in Poland compared with Western Europe, the quality, motivation and innovation of the people in Poland is at the same as or even better than levels than in Western Europe. So the bottom line is although cost is one aspect, do not forget the great quality of the people in Poland and their continuous initiatives to adapt, improve and innovate”

Well-Educated Society

To run an SSC effectively, the availability of well-educated people is essential. For the last 10 years highly-qualified employees and well-educated professionals have been readily available, reflecting the fact that Poland has almost 500 academic centres. University teaching staff account for around 100,000 teachers, half of whom hold a PhD degree.

Poland has almost two million academic students, which means that 50% of the population between 19 and 24 years of age is educated to a university level. This number has been rising steadily for over 20 years. As one of the biggest European countries Poland is at the top of the ranking when measuring the number of graduates in Central and Eastern Europe (CEE), which puts the country among the region’s leaders.

SSCE’s Development

Since its establishment in 2007, SSCE has continuously expanded its scope in terms of entity and process coverage. Initially, SSCE was only delivering accounting services for the ArcelorMittal Eastern European sites. Today, the centre covers services for all sites throughout Europe with a broad range of back office services. Going forward SSCE expects to grow further, both within and beyond its current scope but also outside its current scope. This is due to the continuous efficiency demands of the European sites related to non-core processes, and also the trust that both SSCE and its Polish workforce have instilled in its European client base.

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