For Eric Cheung FCCA, CEO of Publicis Groupe’s shared service centre in China, the future of SSOs in Asia has never looked brighter – but there are still challenges ahead
Q: You have made the leap from CFO to CEO during your career. What attributes does one need in order to make the transition from the finance department into a corporate leadership role?
A: When I first joined Publicis Groupe my title was managing director and I was promoted to CEO in May 2012. When I worked at JCDecaux, an advertising company, I already managed the IT and HR departments as China CFO.
I think one must have a good understanding of the business, excellent leadership and communication skills to take up the CEO role. One should know how to manage and motivate direct reports and the whole organisation. Also, one must be able to learn fast as there are new areas like procurement and legal services in shared service organisations (SSOs).
I found the transition challenging, but with hard work and the support from my boss and my team members, I was able to adapt to the role quickly and delivered the objectives.
Q: What are the challenges you face?
A: My role is to manage a team of about 200 people who provide various ‘back-office’ services to 20-plus agencies in China and Hong Kong. I have to ensure that all the back-office work follows the policies of Publicis Groupe.
The challenges I face are managing and motivating the team and working with the newly acquired agencies. The acquisitions we made were local Chinese companies and we usually keep the sellers as MD. There are cultural differences and sometimes they do not understand the Groupe policies and the way multinational corporations (MNCs) operate.
Q: What work does the shared service centre in China perform and how vital is it?
A: We perform accounting, reporting, payroll, IT, procurement and legal services to our agencies. It is very important to the Groupe because it depends on us to ensure that all Groupe policies and government regulations are followed, and the business results are reported accurately.
Q: SSO has become increasingly important to improving efficiency, particularly accounting and finance. What has been your experience of this, and how do you view its growth in China and worldwide?
A: When I joined Procter & Gamble in 1995, the company had already started to build an SSC in Manila. Having an SSC is very common now in MNCs and local Chinese companies. Studies have proved that cost savings can be achieved by centralising back-office work in one location. I think more SSCs will be set up in China, particularly in tier-two cities, due to the high operating costs and staff turnover in tier-one cities. India and Malaysia are also popular locations for SSCs.
Q: How is your company and industry unique, particularly in terms of the challenges and opportunities it faces in a digital age?
A: This industry is unique as there is fierce competition between the big three advertising groups: WPP, Omnicom and Publicis Groupe. The pace is fast and the business environment is changing all the time. The digital age gives us opportunities to help clients in new areas like developing an e-commerce site and using social media to promote their products and services. The challenge is to keep up with the pace since there are always new innovations.
Q: According to chairman and CEO Maurice Lévy, 2012 was a difficult year for Publicis Groupe in Europe, yet it had a record year in terms of revenue due in part to digital and emerging market strategies. How did China fare and what are the expectations for 2013?
A: In China our 2012 revenue has grown 40% against 2011, due to both organic growth and acquisitions. In 2011 Lévy said that we wanted to double China’s revenue in three years and we are on track. We expect we will have a good year in 2013 and revenue and profit will continue to grow.
Q: What are your goals as CEO in both the short and long term?
A: My short-term goals are to deliver the profit target, continue to improve efficiency of the work process and transition newly acquired agencies within a short period of time. My long-term goals are to help agencies to deliver business incomes like negative trade working capital, low percentage of overdue receivables and to develop my successor.
Eric Cheung was interviewed by Colette Steckel, Asia editor, Accounting and Business magazine