All change: transforming corporate finance at the BBC

31 May 2013

After 15 years at the BBC and a career that has embraced and driven continuous reinvention, transformation and change, outgoing CFO Zarin Patel shares some of her career highlights with FDE’s Steve Dunkerley.

If you grew up in the 1970s and lived in the UK, then you'll remember when there were just three terrestrial TV channels: BBC One, BBC Two and ITV. Channel 4 was introduced in 1982, Sky started broadcasting in 1989 and the digital TV switchover began in 2008. Today, there are six main channel owners responsible for around 500 TV channels in the UK, not to mention the incredible volume of 'on-demand' content that can be streamed and downloaded directly onto mobile phones and tablets from the internet.

With all this competition and a rapidly changing marketplace, the BBC has had to continually reinvent itself to keep up with the demands of its licence fee-payers. The BBC's finance and business services organisation has also needed to stay sharp and efficient in order to contribute towards investment in its creative content.

Zarin Patel, the outgoing CFO leading the BBC's finance and business services organisation, has taken a hands-on approach in operations while being a key player in overall front-line strategy. In her time at the BBC, she has achieved much, such as overseeing the rationalisation of the BBC's enterprise resource-planning (ERP) estate, the centralisation and automation of data and processes, and the offshore outsourcing of transactional finance.

She also had CEO responsibility for the seven-year transformation of TV licensing, which included the implementation of CRM and data analytics that touched 28 million customers, and oversaw the transformation of the BBC's real estate, including the creation of a new production centre in Salford. Perhaps Patel's most notable achievement is the extent to which the cost of running the BBC has been reduced. In 1993, 24% of the money generated by licence fee income was spent on operating costs. Today, it is less than 10%.

Reinventing finance

Patel's career kicked off in 1998 when John Smith was the BBC CFO. He took her on board as his financial controller and, ironically, it was a lack of broadcasting experience that attracted Patel to the role and attracted the BBC to her.

"I was a change agent," she says. "They wanted someone from industry and my background was property, construction, leasing companies and audit. I knew nothing about media and that was the very thing that attracted me to the BBC."

The first thing she did was to overhaul the financial system, as it was not providing the required management information. "We knew the cost of lipstick for production but not the value of our programmes to the audience," she says.

The technology transformation that Patel oversaw was immense and included the consolidation of 26 different accounting systems and 140,000 different charts of accounts down to one, and 140,000 suppliers down to under 10,000 today. This ERP transformation was accompanied by a ten-year outsourcing contact for transactional finance and procurement. Outsourcing has been par for the course at the BBC since the 1990s.

"In our journey, we started outsourcing very early on in the mid-'90s with simple stuff such as facilities management - what I call 'bogs, boilers and central heating' - and then we steadily moved into outsourcing activities higher up the value chain, so we did finance next," she explains. "It was really important for us to get to one accounting system in a disciplined and expert way. The fear was, if we tried doing it ourselves, we would keep compromising - so bringing in an external partner was invaluable. While we started in finance, we then outsourced transmission, play-out, technology and HR - in effect, a quarter of the BBC's spend in long-term outsourced contracts."

"The key question for me when it came to outsourcing was how to marry long-term deals with the need to continually innovate."

Looking specifically at the evolution of the BBC's finance function, having initially outsourced the transactional elements in 1996, ten years later, Patel coined a new paradigm called 'Future Finance', which included the second-generation offshore outsourcing of transactional back-office pieces and the construction of a shared-service centre in Cardiff. This was to become a centre of excellence (CoE) for the retained accounting function, which provided high-value accounting services like management reporting. By putting as much management reporting as possible into the CoE, this enabled more senior finance leadership to free up their time to focus on being business partners.

Last year marked the start of the third phase: 'Finance Effectiveness', which demanded more insightful management information and improved cross collaboration, with the move toward a more integrated back office. Finance business partners would now be able to have even better information, tools and skills to be able to effectively challenge the business on what drives value. This new era also meant that outsourcing providers had to step up from a value perspective.

"The key question for me when it came to outsourcing was how to marry long-term deals with the need to continually innovate and incentivise your service partner to innovate as well," says Patel. "We've been trying various gain-sharing mechanisms such as our contact with Capita on TV licensing. If they sell more licences, they get more money and we get more money, and we share that upside. You need very few KPIs but it's like working with a joint venture partner - an outcome-based approach."

With all the outsourcing, change and transformation, Patel was keen to stress the importance of leadership, people management and entrepreneurialism in the CFO role: "I have a simple philosophy about leadership," she explains. "People follow you as a leader because you take them to places that are interesting. To do that, you need to paint a picture of the future for them; you have to encourage them, but you also have to push them. Passion is also important.

When I joined the BBC, I heard it had an amazing brand, and I fell in love with it. You have to enjoy the people, the product, and care about what you do and what the company does. However, my advice to aspiring CFOs is: don't just do finance. Get involved in change; get involved in running your own business, which has a proper bottom line and responsibility for customers."

Moving on

Despite all her accomplishments at the BBC over 15 years, Zarin Patel has decided to step down as CFO and look for more challenges elsewhere.

"I think, after 15 years, you can stop seeing what needs to be done," she says. "The thing I am proudest of is bringing in new people to the BBC, making them a success, and then watching them blossom and flourish, and leaving my successor with a strong leadership bench. For me, in the end, it is about talent management and great leadership."


Former BBC CFO Zarin Patel.