“The Value Proposition of an automated, centralized finance function” 3 rd October 2013
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“The Value Proposition of an automated, centralized finance function” 3 rd October 2013
description
“The Value Proposition of an automated, centralized finance function” 3 rd October 2013. Agenda. ReadSoft at a glance Finance automation and centralisation: 10 lessons learned The Sappi experience: Koosh Panday Q & A. ReadSoft at a glance. SAP Customers: 1,500 +. - PowerPoint PPT Presentation
Transcript of “The Value Proposition of an automated, centralized finance function” 3 rd October 2013
“The Value Proposition of an automated, centralized finance function”3rd October 2013
ReadSoft at a glance Finance automation and centralisation: 10 lessons learned The Sappi experience: Koosh Panday Q & A
Agenda
ReadSoft at a glance
SAP Customers:1,500 +
Oracle Customers:100 +
Shared Service Centres:100 +
Which are best processes to automate?
Already has identified process owner
Current process is heavily document driven
Has potential for continuous optimization over time
Process has many branches and routings
Has serial steps that could be made parallel
High penalty for errors or mistakes in processing
Geographically dispersed participants
Current subject to load variations and log jams
Restricted to one department
Not mission critical
Has potential for outsourcing
In your experience, which FOUR of the following factors would you say are thebest indicators that a BPM project would be successful?
0 %10 20 30 35 40 50
Business ProcessManagement Report
Ten Lessons
Experiences in automation and centralisation
Centralisation alone could mean resource duplication Technology can facilitate substantial efficiencies and more
effective processes to support a shared service business case Technology will support both back office and front office
functions – whether centralised, decentralised or (usually) a combination of the two.
Example 1: Large UK bus company, no access to ERP at depo’s so all functions performed by SSC. Technology supports real time data and data flow to support this.
Example 2: SA Provincial Government finance department: distributed document receipt, centralised capture, distributed AP processing
1.Automation is part of a centralisation business case
BPO or SSC – back office functions often provide the best business benefit for centralisation
Both back office and front office benefit from automation Often a decentralised front office/ centralised back office
approach: example:– SA Leader in power and automation technologies: Scan documents centrally,
process (capture) via an offshore BPO, finance processes managed internally: technology supports a seamless process
– SA Leading petrochemical company: 18 affiliates, central shared service centre, local management of documents and finance processes – technology driven processes end to end.
2. Automation bridges back office and front office functions
Electronic documents are a mix of formats and delivery methods
Example: Global law firm: 28 countries, centralised processing and systems, large range of input methods and formats : country/ vendor
specific
3. Sole solutions are rare, blended models are a reality
Business case is often built on operational benefits, but larger benefits are realised from increased efficiency and effectiveness.
Example:
4. Financial Benefits may start nebulous but eclipse operational savings
R 9 Bn annual spend
Spend that may provide early payment discount : 20% = R 1.8 Bn Average early payment discount : 2.5% = R 45.0 M Discount alreay taken = R 28.8 M Additional discount opportunity = R 16.2 M
Duplicate payment reduction
Lost discount, late payments
Resource saving
R1.350 M
R324 K
R 4.374 M
R 1.428 MAdditional early payment discount
Map current and future processes Identify bottlenecks or challenges in each Measure the cost of these challenges: What is it now, what
would you like it to be, and what is the value of the difference over time?
5. Start with the process
6. Break the process into components…
Avg. AP Salary: R 238,000 / year
Number of AP FTE‘s: 32
33%Invoice data entry
Current time %
% saving from automation
75%
Error correction
Invoice handling
Answering queries
Other AP activities
4% 25%
3% 75%
8% 20%
51% 10%
Increase discount opportunity
Increase visibility into AP process
Free-up resources to focus on value add activities
Objectives for AP automation1.2.
3.23%
% time to be automated
1.1%
0.8%
1.9%
5.2%
x =
x =
x =
x =
x =
32%AP activity to be automated
SARS and/or SOX compliance Visibility across all processes Control of all documentation Ability to measure and identify bottlenecks Continuous process improvement
7. Visibility, control and compliance: importance as outputs but can provide challenges in value measurement
8. Scale or expand process scope for continuous increasing returns
ArchiveWeb browser user interface
Workflow engine
User management
Process log (audit trail)
Purchase to Pay Master Data Order to Cash Finance
Interfaces
Archive services
Data versioning
Database persistence
SAP user interface
CAPTURE
Core services
RequisitionOrder ConfirmationDelivery NoteAccounts PayablePayment Approval
Customer OrderRemittance Advice
Vendor MasterCost CenterProfit CenterGL AccountAsset
Financial Posting
EDI
8. Scale or expand process scope for continuous increasing returns
ArchiveWeb browser user interface
Workflow engine
User management
Process log (audit trail)
Purchase to Pay Master Data Order to Cash Finance
Interfaces
Archive services
Data versioning
Database persistence
SAP user interface
CAPTURE
Core services
RequisitionOrder ConfirmationDelivery NoteAccounts PayablePayment Approval
Customer OrderRemittance Advice
Vendor MasterCost CenterProfit CenterGL AccountAsset
Financial Posting
EDI
8. Scale or expand process scope for continuous increasing returns
ArchiveWeb browser user interface
Workflow engine
User management
Process log (audit trail)
Purchase to Pay Master Data Order to Cash Finance
Interfaces
Archive services
Data versioning
Database persistence
SAP user interface
CAPTURE
Core services
RequisitionOrder ConfirmationDelivery NoteAccounts PayablePayment Approval
Customer OrderRemittance Advice
Vendor MasterCost CenterProfit CenterGL AccountAsset
Financial Posting
EDI
8. Scale or expand process scope for continuous increasing returns
Reduction of resource by over 50%
Volumes have doubled STP 80% and have touched
95% on some days Stock and non stock invoices
and expenses all processed through scanning
Expenses and debit notes now scanned
Next: Automated approvals process
Next: On line storage of documents
Objective: Early payment discounts on twice the number of transactions through dynamic discounting
Average monthly invoices 42,440 75,000Average monthly debit notes 390Average monthly expenses 400
HeadcountAP Manager 1.00 1.00Team Manager 2.00 1.00Key Users 1.00 0.00AP Clerk 16.80 7.00Scan Operator 0.00 1.0Total Headcount 20.80 10.00
Avg. Verify Non Touch Success Rate 0.00% 85.00%Avg. Cockpit Non Touch Success Rate (Stock) 0.00% 80.00%
Oct 07Original Sep 10
9. The importance of people in cross functional projects
Example: One of largest global infrastructure companies Initially, measurable costs and KPI’s were unknown,
transaction cost estimated Continuous process improvement became strategic objective
10. Start measuring : now, during and after
ReadSoft 2010
Benchmark against best practise
10. Start measuring : now, during and after
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Classification
Accounts Payable FTE perbillions of revenue
World-Class Median
Overall Peer Median
Sm Consolid Median
Lg Consolid Median
Sm Diverse Median
Lg Diverse Median
Customer input
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Classification
Average total cycle time accounts payable takes to process an invoice
World-Class Median
Overall Peer Median
Sm Consolid Median
Lg Consolid Median
Sm Diverse Median
Lg Diverse Median
Customer input
ReadSoft 2013
Sappi
Koosh Panday
