Finding Focus: How Non-Core Cctivities are Blurring Your Strategic Vision Webinar

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Finding Focus: How Non-Core Activities Are Blurring Your Strategic VisionDario Mazurek, VP Finance & Accounting Services, Integrated BPO SalesSimon Speirs, Solution Architect EMEA, Finance & Accounting Services

© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 2

Today’s Speakers

Simon is a member of the Association of Chartered Management Accountants (ACMA) with 18 years of experience in improving business and finance team performance. He has worked in a number of blue-chip companies including ABB, Accenture, PricewaterhouseCoopers and Hewlett Packard. Simon leads the design and implementation of back-office solutions across the European Region for Sutherland. He has a proven track record of designing and delivering shared service solutions and managing complex global projects. Simon’s experience spans across continuous improvement, finance and accounting, procurement, sourcing and IT management. The depth and breadth of his experience enables him to combine people, process and technology to design optimised and customised outsourcing solutions.Simon Speirs

Sutherland Global ServicesF&A Services

Dario leads our business development organisation for our Global Finance & Accounting Practice. Since joining Sutherland in 2009, he has held executive positions in our Business Transformation and within our Technology Vertical. He has over 20 years in the outsourcing industry in multiple management roles ranging from transition management and operations, account management, and a sales leader. He has held management and executive positions at such firms as IBM, AT&T, ACS (now Xerox Business Services), and Perot Systems. His leadership duties have had he and his team work with both large, global enterprises and increasingly more SMB clientele. His industry experience predominantly includes manufacturing, software and services, travel/hospitality/logistics, healthcare and Life Sciences. Dario Mazurek, VP

Sutherland Global ServicesF&A Services


Today’s Agenda

Who outsources and what are we outsourcing?

How does outsourcing work in the Finance Department?

How do I decide what to outsource? What is core and non-core?

What are the aims of the Finance Department?

What are the trends in Finance & Accounting Outsourcing?

What should I outsource and retain?

How do I get started and what should I do next?


Laying the Groundwork

Do any of you currently outsource?


Outsourcing Is More Common Than You Realise!

Oil changes for your car

Quick-serve food

Childminding services for your kids

Lawn and landscaping services

Contracted home improvements

Freelance contractors

Better use of your time Less complicated Better managed Access to best processes Access to better tools and

technologies Lower cost Time saving Allows you to focus on what you do

best without distractions

All of us outsource something everyday!We pay someone rather than doing it ourselves!

What We Outsource… …And Why We Outsource It


And Outsourcing Works in Finance & Accounting!

Outsourcing Finance & Accounting provides the following benefits:

• Process improvement and standardisation• Visibility into what is going on in your business• Clear, accurate cost visibility• Management of HR, technology, etc.• Best-in-class technology solutions

– Automation– Collections– Productivity

• Manage and accurately forecast costs in uncertain economic times• Access to top talent• Ability to focus on your core business and grow nationally and internationally

Is outsourcing a good option for you? Let’s find out...


So How Do You Decide What To Outsource?

Guidelines to consider when outsourcing Finance & Accounting:

• What activities are core and what am I best at?– Areas of competitive differentiation– High business, financial, operational risk– Difficult to migrate out of (and back into) the business

• What activities are non-core and distract me?– Important, but not distinctive to how you and your customers

define your brand, products and services– Tend to be more transactional in nature, with defined business

rules and procedures– Such functions or processes can be readily integrated with core operations

• How do I find the dividing line and balance an outsourcing solution?


Aims & Ambitions for the Finance Department

Financial Reporting

Transaction Processing

Fina

nce

Focu

s

Business Decision Support

From• Finance as a function

• Transaction processing requiring effort & attention

• Focus on ad-hoc operational solutions

Administrative

Strategic

Time SpentTransactional Decision Making

To

• Finance as a business partner

• Focus on performance management for core processes

• Finance operations very low cost & effective

Outsourcing provides CFOs with the opportunity to focus their retained organisation on what is important to the business, in addition to reducing costs of the Finance function.

Cost Reduction


8 Key Trends Driving Growth in F&A Outsourcing Market

Source: Bain experience; IDC deal database; Primary interviews; Press articles

EXAMPLES OF COMPANIES

Up the value chain: more complex processes being outsourced

• Shift from customised point solutions to integrated end to end solutions such as O2C and P2P

• New technologies (Software-as-a-Service, cloud, platform) based solutions are gaining influence

• Rising adoption of F&A outsourcing in mid-market companies

• Growth of F&A outsourcing in emerging and new verticals such as retail, healthcare and utility

• Rising bundled IT-BPO contracts for F&A outsourcing

• Globalisation of delivery locations - Brazil, China and Egypt are emerging destinations beyond India and Philippines

It is not all about costs - companies have leveraged sourcing footprint for activities (R&D, product development) that drive top line

KEY TRENDS

Publishing

1

2

3

4

5

6

7

8


Transaction Management

• Decision Making Authority

• Acceptance and Approval

• Risk Management• Proximity to Business• Vision• Strategy• Policy Setting

Retained Shared Services (internal / external)

Finding the Dividing Line

Typical• Routine & Process

Driven• Rules Based• Can’t Be Automated• Data Mining

Value Add• Research• Analytics• Knowledge Driven

Business Processes

Strategy

Finding the Balance of Risk and Strategic Importance


A Detailed Look at What to Outsource & What to Retain

Strategy(Co-develop)

Business Process Management

(Co-develop)

Financial Accounting• Close Coordination &

optimisation support• Reconciliations, Analysis

& Adjustments• Consolidations

Credit Management• Credit Analysis • Credit Monitoring• Bad Debt Recovery

Strategy Development• Support to strategic analysis and strategy development• Policy design and maintenance• Strategy and policy implementation

Strategy Development• Strategic analysis• Vision/mission Development• Policy Setting and Approval• Investor Relations

Budget & Forecasts• Model Maintenance• Data Compilation,

Maintenance & Reporting

Transaction Management

Approval

Approval

Approval

Typically Retained Typically Outsourced

Decision MakingAuthority

Acceptance and Approval

Financial Planning & Analysis

Tax Planning & Income Tax Admin

Treasury (Hedging)

Investing & Financing

Management Reporting• Analysis & Commentaries• Ad-hoc ReportingDecision Making Authority

Acceptance & Approval

Management Reporting• Proforma reporting• Variance Analysis• Reconciliation vs Books• Ad hoc reporting

Transaction Processing• Accounts Payable• Accounts Receivable• Cash & Banking• Invoicing• Fixed Assets• Cost Accounting• Inventory Accounting• Inter-Company Accounting• General Ledger Processing

Administrative• Maintenance of procedure,

processes• Maintenance of chart of

accounts, cost centres, vendor & customer master data

• Document handling & archiving

Tax-Compliance• Payment/refund Processnig• Model Maintenance• Reporting

Cash Forecasting• Daily Cash Management• Forecasting & Reporting External Reporting

• Pro-forma Statutory reporting

• Production of technical notes Performance Reporting

Integration (e-enablement)

CENTRE SUPPORT ACTIVITIES: SLA REPORTING, KPI MONITORING, CONTINUOUS IMPROVEMENT,

SERVICE RELATIONSHIP MANAGEMENT, STAFF MANAGEMENT &DEVELOPMENT, MAINTENANCE OF PROCEDURES AND PROCESSES


A View on What is CORE to a Finance Department

95%

AccountsPayable

AccountsReceivable

80%

Payroll

100%

Cash& Banking

50%

95%

FixedAssets

70%

FinancialAccounting

ManagementReporting

50%30%20%

Credit Monitoring Physical collections Report finalisation

Books ownershipTax liaison

F&AOutsourced

F&ARetained

70%

30%

Cash ManagementBank Relations

Contract Financing

5% 5%

New Skills for the RetainedOrganisation

Risk Management

Process Change Management

HR Change Management

Service Level Management

Supplier Management


Outsourcing and Offshoring Are Widely Prevalent Across the Entire Spectrum of FAO Activities

Transaction Processing Treasury

External Reporting Decision Support

SOX Internal Audit Financial analysis, Project Mgmt

Control

M&A and Divest. Risk Mgmt

Actuarial Analysis/ Reserving

Expertise

Revenue/ Expense

Allocation

PerformanceMeasurement

Product line profitability

MIS/Management Reporting

Investment Planning

Budgeting & Fin Planning Forecast

Planning

Legal Entity Reporting Statutory Reporting

Regulatory Reporting Rating Agency Relations

Investor Relations

External reporting policy/mgmt

Treasury Mgmt

General Ledger

Accounting

Consoli-dations

Monthly/ Quarterly

Close

Financial Recon

Fixed Asset Accounting

Benefits Admin/

Accounting

Inquiry Handling

Record to Report

Source to Gross Calc

Gross to Net Calc

Payroll Process

Time & Attendance

Payroll

Management & Policy design

Procure to Pay

Requisition Materials Purchasing

Payment Approval Process

Accounts Payable

T&E Accting/ Reimbur-sement

Procurement Card

Admini-stration


Tax policy & theory Accounting management/policy

Billing

Order Entry

Cash App

Collection Bank Recon

Order to Cash

Credit


Tax

Tax admin & comp.

Tax strategy & policy

>50% offshoreable 20-50% offshoreable

<20% offshoreable

Strong outsource potential

Typically in house


Getting Started: Outsourcing Some Non-Core Areas

How best do I get started on my outsourcing journey?

• Pick one (of just a few) pain points that you can link to a defined, successful business outcome(s)

• Make sure you can measure the business outcome (failure or success)

• Construct the program in such a way you can find ways to fail faster and cheaper

• Find ways to measure success quickly, then scale smartly

• Consider third-party partners that understand your business

• Find out what it looks like for other mid-market companies…


Real Case Studies:Cash Applications and Credit & Collections

95% outsourced 40% outsourced

• Receive and process cheques

• Manage EFT/Chaps payments

• Clear down customer payments

• Manage unapplied / unidentified cash

• Manage reconciliations

• Troubleshooting support for payment exceptions

• Reconciliation sign-off

• Low value, high volume customers within early debt cycles

• Credit management – limits & legal management

• Strategic accounts – high value / sensitive accounts

• Dunning & very old debt collections

Cash Applications B2C / B2B Collections

Service Delivery Management


What Should I Do Next?

Use the checklist you’ll receive to determine what is core and non-core

Talk to an Accounting Expert who can partner to help you:• Lay out your organisational landscape• Review existing technology and technology gaps• Review specific volumetrics

Review a basic solution with an Accounting Expert to see:• What like-for-like delivery looks like• What the plan looks like to get you on your journey• What the quick wins are that will make your outsourcing partnership

successful

Look for our next webinar in March where we’ll talk about an outsourcing solution for every mid-market company!


Thank You

Dario Mazurek—Presenter Vice President, Integrated BPO SalesFinance & Accounting OutsourcingSutherland Global [email protected]

Simon Speirs—Presenter Senior Director, Solution Architect, EMEAFinance & Accounting OutsourcingSutherland Global [email protected]

mailto:[email protected]

mailto:[email protected]

Finding Focus: How Non-Core Cctivities are Blurring Your Strategic Vision Webinar

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