Lean Administration And Fast Closing

Resources Global Professionals

LEAN ADMINISTRATION & FAST CLOSINGHow Resources Global Professionals can help: Performance Improvement

March, 2011

Table of Contents

About Resources Global Professionals 2

Lean Administration & Fast Closing: the Concept 3

The Project Goal 4

The Project Benefits 5

The Strategy 6

Our Methodology: the Project Steps 7

The Project Steps 8 - 11

Why Resources Global Professionals 12 - 13

Annex

Annex 1 - Six Sigma Approach 14

Annex 2 - Project Examples 17

Our Contacts 23

1

About Resources Global Professionals

2

We are a publicly-traded, global professional services firm with a Big Four heritage.

Founded in 1996 as part of Deloitte;

Management buy-out (1999) and initial public offering (2000). NASDAQ: RECN;

Selectively acquired Big Four service lines in Europe and Asia/Pacific.

We partner with business leaders and their teams to plan and execute initiatives as well as support day-to-dayoperations.

Working collaboratively with our clients, we provide:

PROJECT CONSULTING Project scoping, approach, management and execution

PROJECT SUPPORT Subject matter or functional expertise for specific projects

OPERATIONAL SUPPORT Management level expertise for day-to-day operations

FORBES.COM 100 MOST TRUSTWORTHY COMPANIESResources was named one of the 100 Most Trustworthy Companies according to Forbes.com for 2009. The annual survey identifies the100 businesses on American exchanges with the most transparent and conservative accounting practices andmost prudent management.

Lean Administration & Fast Closing: the Concept

A “Lean Admin/Fast Closing” Project is a Re-engineering of the Financial Processes aiming at:

Enhancing the Efficiency of Financial Processes and the Effectiveness of Control Systems

Reducing the cycle time to “Close the Books” and to complete the “Financial Reporting”

Improving the Quality of Reported Financial Statements

1

2

3

3

Save time Improve Efficiency

Transactional Activities Manual Adjustments Correction of Errors Non-Value added Reconciliations

… From To …

Re-Focus Improve Quality

Forecasting Financial Analysis Risk Management Value added Analysis

Low Value TasksHigh ValueActivities

Work Harder Work Smarter

4

The Project Goal

The Project Benefits

Team Building … “Think out of the Box”EmpowermentOrganizational Assessment

Improve Availability of Financial Data

Enhance Quality of Reporting

Improve the Efficiency of the Back Room Activities

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2

3

Re-Energize the team 4

Faster … more Frequent Data to facilitate better Business decisionsShift Focus … less time to generate data … more time to analyze data

Monitoring & Analysis prior to submission

Save time spent in non value added tasksRe Focus priorities to Value generating activities

5

Re-focus Quality

L/T Planning Budgeting Forecasting

Key Business Cycles Purchase to Pay Order to Cash Gen Accounting

Interfaces to GL Accruals Manual Adjustments

Reclass Feed Reporting Variance Analysis

Efficiency Embed Controls Automate

“Buy time” … do earlier Process Focus Automate

Efficiency & Quality Review & Analysis

Risk & Opportunities

REPORTINGCLOSINGROUTINE

PROCESSESFORECASTING

FORECASTINGROUTINE

PROCESSESCLOSING

Variance Analysis

Pro

cess

Act

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REPORTING & ANALYSIS

6

The Strategy

Goals Goals Goals Goals

Define Project Scope & Timeline

Understand Key Business Drivers

Define Key Cycles

Rules Setting:

Project Sponsors & Team

Milestones & Deliverables agreed

Plan Approved

Communication Plan

Define Scope of each Cycle

Assess Cycle Drivers

Map Cycles:

Map as is Process

Surface Opportunities for Improvement

Define Metrics

Assess Improvement Opportunities for ea Cycle

Communicate Progress & Results

Validate Improvement Opportunities for each Cycle

Define Priorities:

High/low Impact

Easy/Difficult to Fix

Identify Roadblocks

Detect Key Constrains

Develop the Vision & How to get there

Get the Buy-in


Implement Changes

Monitor Progress

Develop Contingency Plan

Mitigate Disruptions/ Implement Corrective Actions

Identify L/T Opportunities


Our Methodology: the Project Steps

KNOWLEDGE TRANSFER

IMPLEMENTATIONDESIGN THE ROADMAP“AS IS” ANALYSISPROJECT INITIATION

7

Goals Major Tasks Tools & Techniques Deliverables

Define Project Scope & Timeline

Understand Key Business Drivers

Define Key Cycles

Rules Setting:

Project Sponsors & Team

Milestones & Deliverables agreed

Plan Approved

Communication Plan

Stakeholders Identification

Build the Team … Resources, Roles & Responsibilities

Collect inputs from key Players

Define CTQ’s

Establish The Tools

Identify critical processes

Establish performance metrics and goals

Address Logistic issues

Finalize Committees membership

Communicate … Communicate

Kick-off meetings

Workshop facilitation

Team building and bonding activities

Excel, Share point

Project Management

Informal Communication

Detailed project plan & timeline

Planning & Schedule

Data request list

Kickoff presentation

Scope document

The Project Steps (1/4)

KNOWLEDGE TRANSFER


8


Define Scope of ea Cycle

Assess Cycle Drivers

Map Cycles:

Map as is Process

Surface Opportunities for Improvement

Define Metrics

Assess Improvement Opportunities for ea Cycle


Team Building … Empowerment … Set Expectations

Map “As Is” processes for ea Cycle

Support ea Cycle Team

Facilitate Discussions

Deploy Analysis Tools … Measure “As Is”

Assess Weaknesses & Opportunities

Measure Progress

Communicate

Process documentation library (SharePoint)

Workshop Facilitation

Process maps

Recurring Meetings

Process Mapping

Set Communication Standards

Establish Project Routines

Publish Metrics

Project Progress

Cycle Status

Achievements & Improvements Ops

Communication

KNOWLEDGE TRANSFER


9



Validate Improvement Opportunities for ea Cycle

Define Priorities:

High/low Impact

Easy/Difficult to Fix

Identify Roadblocks

Detect Key Constrains

Develop the Vision & How to get there

Get the Buy-in


Team Building … Keep Momentum … Coach

Design the “To Be”

Detailed Implementation Plan … Steps, Actions, Ownership & Timing

Develop Solutions & Remove Road Blocks

Define KPI’s & related Metrics

Measure Progress

Communicate

SharePoint

Workshop

Meeting Facilitation

Training and team-building workshops

“To Be” Process Mapping

Project Tollgate Reviews

Publish Metrics

Project Progress

Cycle Status

Achievements & Improvements Ops

Communication

KNOWLEDGE TRANSFER


10



Implement Changes

Monitor Progress

Develop Contingency Plan

Mitigate Disruptions/ Implement Corrective Actions

Identify L/T Opportunities


Team Building … Transfer Knowledge

Implement Changes

Measure Improvements

Share Best Practices

Design communication materials for various audiences

Roll out training

Measure KPI’s Progress

Define Corrective Actions

SharePoint

Workshop

Meeting Facilitation

Training and team-building workshops

Project Tollgate Reviews

Publish Metrics

Project Progress

Cycle: Implementation Status

KPI’s

Communication

KNOWLEDGE TRANSFER

IMPLEMENTATIONDESIGN THE ROADMAP“AS IS” ANALYSIS PROJECT INITIATION

11


Why Resources Global Professionals

We understand that increasing efficiencies is a focus for companies today. Our clients around the world aretrying to do more with less and contain spend.The key is achieving these efforts as quickly as possible without interrupting critical business operations.

Experience, functional knowledge, strong project management and business analysis skills are necessary, inaddition to the ability to effectively manage the change to ensure it is sustainable for the long term. Every day,we are helping our clients with this effort, including enterprise-wide to functional area specific initiatives.Averaging over 18 years of experience, our Consultants have helped companies in every life cycle stagesuccessfully contain costs.

By leveraging our past experiences and current best practices, Resources can assist with various cost reductionand efficiency initiatives by focusing on project management, execution, and/or back-filling your team members.Resources provides a flexible resourcing model whereby projects can be staffed up or down according todeliverables and subject matter expertise requirements.

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As a professional services firm with expertise across key business disciplines, Resources is well positioned to

provide cross-functional consulting services built on global best practices. We provide access to the intellectual

capital needed to implement your strategic initiatives.

Our value proposition of highly experienced, deeply capable personnel, engaged under the client’s direction and

offered at competitive rates, yields a total cost-of-ownership solution that is unique in the professional services

landscape.

Because of our Consultants’ knowledge and experience, they can add value immediately, work more efficiently,

and transfer knowledge appropriately to your internal teams. As an added benefit, our Client Service Team

stands ready to offer support to the initiative at no additional charge.

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Why Resources Global Professionals

Annex 1Six Sigma Approach

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Six Sigma Approach to a Fast Closing Project

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Control

IMPROVEANALYSEMEASUREDEFINE

Quick Assessment

Define Business

Drivers and KPI’s

Research and classification of criticalities

Fast Value Stream Mapping Change implementation

High level mapping: processes, roles and systems

Plans of improvement projects already ongoing

Define client’sbusiness drivers

Define the KPI’s

Define OPI’s Measure volumes,

critical issues and causes

Define added-value activities

Evaluation of criticalities Quantification of savings

and benefits

Design of change plan Define indicators of

change Define control indicators Implementation of

improvement plan Training and education Communication

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Six Sigma Approach – Example: Reporting Cycle

IMPROVEANALYSEMEASUREDEFINE

Quick Assessment

Define Business

Drivers and KPI’s

Research and classification of criticalities

Fast Value Stream Mapping

Change implementation

VOC Compliance to

accounting requirements

Timeline Compliance to

Group rules .....

Process Map Sub-Systems CoGe Riclassification Reporting System .....

Ongoing projects HQ projects .....

Define client’sbusiness drivers

Data quality Information

completenessPunctualityOperational

efficiency and effectiveness

Define the KPI’sEntry accuracy Submission within

timelines

Define OPI’sReconciliationAdjustments activities Measure manual journal

entries vs. total bookingDelay indicators

Measure volumes, critical issues and causes

Estimate errorsLow level of know-howLack of communication

Define added-value activities

Master File continuous update (VA)

Accounts reconciliation (QVA)

Rework (NVA) ......

Evaluation of criticalitiesManual adjustementsDelays .....

Quantification of savings and benefits

Decrease of time for Closing activities

Cost containment Improved data analysis

capability

Proposal of short/medium period improvement plan

Define indicators of change

Decrease of time for Closing activities

Timely data reconcilation

.....

Define control indicators

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Annex 2Project Examples

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Project Examples (1/4)

Client: Billion Dollar Global Private Engineering Company

Challenge: Reduce close cycle to meet IPO requirements

How We Helped: A Resources Consultant acted as the project management office and went through each project to identify scope, sponsor and projectlead at the beginning of the project. The Consultant held weekly status meetings to monitor timelines, issues and resource constraints.The client’s close cycle was reduced from 20 work days to 10 work days. All of the close tasks were tracked and then mapped by workday. Critical path was identified as well as the related processes which then became projects. The projects identified were:

Simplify the allocation process Improve Intercompany Accounting Improve the Consolidation Process (Resources Consultant as Project Manager) Selectively Simplify and Improve the COA Matrix Reporting Implementation Simplify and Standardize JV Accounting Improve the Close Calendar and Measure Compliance Bring Discipline and Increase Frequency of Account Reconciliations Address Materiality Thresholds Improve Revenue Recognition(Resources Consultant as Project Manager) SOX Compliance F&A Website Development

Significant changes to revenue recognition were accomplished by establishing a global policy followed by a revenue recognitionhandbook consisting of more than 70 pages, along with new technology (Optimal) and tools (workbenches and workbooks).For the consolidation process, annual top‐side entries were researched and loaded into the ERP system. A streamlined consolidationprocess was established with validation and analytical tools. The process was implemented first for the Americas and then was rolledout to the 2 other global service centers.The company continues to pursue and evaluate the critical path with the goal of increasing reporting and analytics within a 10 day closecycle.

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Client: A Major Manufacturing Subsidiary for an International Multi-Billion Dollar Company, with Three Manufacturing Facilities

Challenge: The month-end financial close was consistently delayed and the financials habitually reflected inadequate analysis and recurringsurprises. The Finance Department suffered from low credibility with corporate management.

How We Helped: Our Consultants implemented a revised closing schedule and balance sheet reconciliation process, developed a critical path analysis byreviewing the current closing steps, discussed and reached agreement on changing or eliminating processes which were delayed or notproviding value add to the closing report.

We created key control practices, including closing check lists, recurring and standard journal entries, management review and sign offs,etc. In addition, we proposed and received agreement from local management to begin an earlier closing process that included atransaction cut-off two days before month-end, and worked with the IT Department to modify the ERP system to the new closing dates.Our Consultants established a complete balance sheet review process as an integral part of the closing process, requiring that allbalance sheet accounts were reconciled at least five days after month-end. Certain critical accounts, such as inventory andintercompany accounts were reconciled before the financials were reported to corporate.Finally, we implemented a reconciliation process between the financial information from the subsidiary’s general ledger systems to thefinancials uploaded and reported to corporate through Hyperion to ensure accuracy of reported information.

Client: Multinational, document management and printers Leader

Challenge: Reporting package optimization process , aimed to be aligned to new timelines due to an acquisition.

How We Helped: Resources led a project of full re-design of financial processes, aimed to make the month end close reporting activities to HQ moreeffective, this need being due to an acquisition that also involved a downsizing.The project included a wide range of functions: procurement, sales, payroll, accounts payable and receivable, intercompany accouting.Resources partnered with the client’s staff in mapping the processes as-is, in order to identify and implement improving solutions,delivering coaching and training courses to employees. We also led the optimization process required to outsourcing IT provider.

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Client: A Global Financial service company

Challenge: The client has experienced significant challenges with their financial reporting requirements (US GAAP, Regulatory and Management)since their 2001 integration with a leading bank. The company recognized that a new business architecture (processes and systems) isrequired and decided to implement a new Enterprise Performance Management solution and launch a Process Improvement initiativewithin finance.

How We Helped: Resources provided with subject matter experts on business process improvement and process reengineering, methodologies and toolsto lead this critical initiative. Resources is currently leading the finance process improvement initiative, allowing internal staff to focuson other bank priorities.

Client: Financial Services Company

Challenge: Streamline financial statements and processes.

How We Helped: Resources streamlined financial statements, researched accounting disclosures and discussed the accounting impact of specific fundstructures. Further, our professionals re‐engineered the fund administrator equity calculation processes, ensuring consistent applicationand reducing quarterly cycle time from 100 to 75 days, while materially improving the quality of the analysis and producing real‐timeestimated net asset values.

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Client: A $14.1 billion regional US health insurance company

Challenge 1: Beginning in September of 2005, the client sought to update and streamline business processes related to membership, casemanagement, back office services (finance and accounting, human resources, and information technology) and regulatory changesrelated to the Medicare Modernization Act (“MMA”).

Challenge 2: The client sought to effectively build a process improvement mentality into the corporate culture through the effective implementationof key process improvement initiatives, in support of their aggressive growth targets.

How We Helped: Resources deployed a team of Process Analysts (who were also Six Sigma Black Belt Certified Consultants) to work with the client. Wehave had anywhere from 5 to 15 consultants assisting this client across various improvement initiatives over the course of the pastthree years, working in sites across the client’s four state region. Our scope has been focused on executing particular initiatives andsupporting the managers and directors of the Center for Process Excellence whereby we provide the tactical skill sets to support theinternal group.The Challenge 1 MMA project began in Sept of 2005 (4 Consultants) and we still have 2 consultants working on various aspects ofit. Overall we have had a continuous presence supporting the Center for Process Excellence from 9/05 through today. Our teamseamlessly integrated with the internal team to develop current/future state process maps, develop business cases, identify metrics andmeasurements, and analyze future state improvements. We created a customized program and business process reengineering (“BPR”)methodology, tailored to meet the client’s need for a cross-functional, end-to-end view of each business function. Working with theclient’s management, using documented findings, issues, and recommendations, and performing appropriate qualitative andquantitative analysis, we developed processes that partially or completely reengineered processes in month-end financial statementpreparation, enterprise system life cycle, performance management, managed health care delivery, strategic sourcing and contracting,training delivery, and IT procurement. Resources worked with the client toward satisfying over-arching legal, financial, and regulatoryrequirements, while building toward organizational strategic goals.

To be continued on the following page

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Client: A $14.1 billion regional US health insurance company

How We Helped: The Challenge 2 process improvement project had our team of Consultants working with the client’s teams on business casedevelopment, current state/future state process mapping, metric identification and measurement, and future state improvementanalysis.We worked on initiatives that spanned many different functional areas, including finance and accounting, where we mappedthe month-end close process and a 1099 Tax process. Additionally, we mapped claims underwriting processes.

In both projects, the process documentation workflow varied depending on the project, and included multi-person facilitated processsessions whereby our Consultants lead groups of 10 process “owners” through process modelling and improvement idea workshops, tomore one-on-one modelling efforts. More frequently, the task involved meeting with designated client process owners to model thecurrent state in Visio (some were completed in IBM WBI (Workflow Modeller)). Once the models were constructed, they were sentback to process owners for validation.

Relevance of Example Process mapping, process improvement, and BPR methodologies. Use of Six Sigma qualified Consultants.

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Our contacts

Resources Global Professionals (Italy) S.r.l.Foro Buonaparte, 5920121 Milano Tel: +39 02 89097121www.resourcesglobal.com

Gabriele GiacomaManaging [email protected]

Ottorino Capparelli Client Service [email protected]

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Lean Administration And Fast Closing

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