Shifting Gears – Driving Efficiency

Mastering SAP Financials 2010

CIARAN MARA

PROCESS SOLUTIONS MANAGERORICA

Shifting Gears - Driving Efficiency: Using innovative automation technology and solutions for better

performance in your SSC


Overview

Global Trends

Value, Advantages & Opportunities of SSC’s

Where to begin, Enhancing your SSC with Partners

The challenge of Change Management

Questions


Introduction15 years in finance, focused on process improvement in SSC’s.

Implemented Reporting & Scanning systems in Australia, New Zealand, Singapore, Canada & USA for Shared Service Centres.

Project Managed, Trained, Conducted Change management, Communications and implementations of 5 Readsoft Scanning solutions Globally with Orica and one Back end scanning solution.

love my Rugby Union, Travel and experiencing Different cultures


SSCs becoming increasingly strategic…

Deloitte 2009 Global SSC Survey Results“Companies are continuing to expand their SSC operations – we see the pace of

activity and global deployment...at an unprecedented pace”“Largest increases in participation over 2007 were in Financial Services,

Transportation and Public Sector industries”

The Hackett Group“Shared services are becoming more strategic. “Link to strategy” is a driver for

shared services” and “76% of SSCs rate Finance as top function”“World-class finance organisations have reduced cost of finance from 1% to 0.59%

of revenue from 1998 to 2008” (2008 Finance Benchmark)

EquaTerra“Experience in both the private and public sector indicates

that shared services can deliver 20 to 70% savings”


High level Drivers for SSCs

Implement a consistent, harmonized set of best practice businessprocesses across a region

Standard business processes and transparent information allows for easier and faster integration of acquisitions

Improve process efficiency & effectiveness by leveraging scale


Competitive Advantages of a SSC


Automation is key to driving value in SSCs

Business process improvement platform

Common and scalable back-office processes

Governance and compliance

Efficiency and effectiveness

Predictable performance


Processes Going Paperless…

Requisitions

Master dataupdate/create requests

ACCOUNTSPAYABLE

FINANCE

PURCHASING

CONTROLLING

RECEIVING

DATA CAPTURE

Incominginvoices

Financial postingrequests

DATA CAPTURE

Delivery notes

Purchase to Pay

Master Data

Order to Cash

Finance

RequisitionOrder ConfirmationDelivery NoteIncoming InvoicePayment Approval

Customer OrderRemittance Advice

Vendor MasterCost CenterProfit Center

Financial PostingCorrections


Request & Paper driven processesSomething that most organizations have in common

They are full of business processes and those processes are often full of problems that cause additional expense or worse.

• Processes run manually and without any way to control them

• Incorrect changes in master data• People try to bypass established processes• Maverick procurement• People avoid using complicated systems• Quality of service is low or varies in quality

and cannot be guaranteed

• Processes run manually and without any way to control them

• Incorrect changes in master data• People try to bypass established processes• Maverick procurement• People avoid using complicated systems• Quality of service is low or varies in quality

and cannot be guaranteed • Slow processes• Expensive processes• No transparency• Wrong postings and excessive corrections• Low or no visibility into the process• Difficulty in maintaining compliance • Department’s reputation in the organization

is harmed

• Slow processes• Expensive processes• No transparency• Wrong postings and excessive corrections• Low or no visibility into the process• Difficulty in maintaining compliance • Department’s reputation in the organization

is harmed

• Phone based service• Email based service• Paper based service

• Phone based service• Email based service• Paper based service


Key benefits to transforming processesAutomate and control processes and master data

Lower costs in your core service areas

Improve productivity throughout the process chain

Improve service to the entire organization

Increase visibility – measure what was previously unseen

Ensure compliance both internally and externally

Maximize the investment in your ERP


Traditional AP Process is broken…

No controllable & measurable platform for improvementSupplier noise (Queries and Follow-Up)Invoices arriving after Due Date for paymentMissing and duplicate invoices (2%)Inability to take advantage of early payment discountsMoving from a “processing” to a “value-add” function


A reality check on cost reductions

Invoice elimination & consolidation strategies

Impact on pricing for poor DPO – P2P inefficiencies

Inability to leverage TWC improvement

Re-work for Buyers/Procurement

Cost of storage, photocopies, call and noise.

Inefficient use of Procurement/Buyer time administering

Inability to address true P2P inefficiencies


Mitigate risk by partnering with Experts

Importance of partnering with AP specialist/veteran

Leverage investment for continuous improvement & growth

Change Management

R&D (future-proof)


Process efficiencies & effectiveness…

Reduced processing costs within AP and the wider business

Standardise processes, improve AP efficiency and enhanced SLAs

Improved control and scalability of AP process to support continuous improvement initiatives

Reduction of costs through early payment discount schemes

Improved invoice visibility and cash management

Governance and compliance


AP Automation pays dividends…

Enabling Supply Chain Financing

Duplicate payment / Credit recovery capability

GST benefit of recognised invoices

Efficient P2P process enables price savings for consistent on time payments

Improved cash utilisation of improved forecasting – Funding and Cost of Debt improvement


It’s a Journey…

Traditional

Learning

Advanced

Top-Performer

SilosEfficiency-focusedMinimal metricsDecentralisedManual process3-way match / all approvalsLow technology enablementNo SLA with customers

End-to-End P2PPerformance Mgmt. & continue improvementCentralised / low-cost locationAutomated processOptimised transaction strategyHigh levels technology enablement

The migration to Top-Performer is a journey attainable through Strategy, Process Optimisation and Business Process Globalisation


AP is only the beginning for SSC automation

Transitioning from processing to a value-add partner

Supporting key strategic business initiatives

Redefining roles, expectations and targets

Change Management and committing to improvement


Key Points to take home

Business process automation is a journey

Value in creating a controllable, measurable platform for continuous improvement

SSCs have the opportunity to automate all paper and request driven processes

Challenge for SSCs is in driving/supporting change management for “customers”


Questions

0

Shifting Gears – Driving Efficiency

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