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Transcript of Ibm%20 fmi%20accelerating%20transformation%20using%20benchmarks%20final%2026092013
© 2013 IBM Corporation
This presentation was developed and delivered by IBM Canada for Financial Management
Institute Capital Chapter event “Transformation and Financial Challenges in 2013-2014”. No
part of this presentation may be circulated, quoted, or reproduced for distribution without prior
written approval from IBM
Transformation and Financial Challenges in 2013-2014
September 26, 2013
Accelerating Transformation using
Benchmarks
© 2013 IBM Corporation
Agenda
Benchmarking Public Sector Financial Management to Private Sector
Financial Management
Adopting Leading Practices in the Government
Transformation Case Studies & Lessons Learned
September 26, 2013 2
© 2013 IBM Corporation
Speakers
Svina Dhaliwal, CMA, PMP
– Managing Consultant, Strategy and
Transformation, IBM Global
Business Services
– 12 years of experience in the public
sector
– 8 years of consulting experience
– Expertise in: financial planning,
budgeting, reporting, costing, finance
Strategy, performance
measurement, contract
management, business case
development, project management
September 26, 2013 3
Kim Butler, CGA, PMP
– Associate Partner, Strategy and
Transformation, IBM Global Business
Services
– Practice Lead, Shared Services &
Finance Transformation, Public
Sector Canada
– Over 25 years of experience in the
public & private sectors
– 15 years of executive management
consulting expertise
– Expertise in: Program and project
management, shared services,
Finance strategy and transformation,
executive client management, and
organizational transformation
management
© 2013 IBM Corporation
Benchmarking Public Sector vs. Private Sector
Benchmarking allows organizations to:
– Establish a baseline – measure and compare with similar organizations
– Identify potential areas for improvement and best practices
– Assess appropriate targets and serve as a business case for change
Where does the data come from for IBM’s Benchmarking Program?
– Primary research, such as new global surveys conducted by IBM, combined with partner research
– Founded in APQC's Open Standards Benchmarking
– Data is continually being updated, validated and normalized
Where did the leading practices come from?
– Primarily from IBM projects and research as well as publicly available sources
– Intellectual capital generated from the Open Standards Benchmarking Collaborative
What type of metrics are used?
– Cost Metrics
– Efficiency (FTE-based) Metrics
– Cycle-time Metrics
What type of organizations are included in the Public vs. Private Sector benchmarking?
– Public Sector: includes all branches; Executive, Legislative, Support Orgs, etc. and all levels of
government and public sector entities
– Private Sector: all industries
4 September 26, 2013
- Median – midpoint value in the distribution; half of
respondents perform below and half perform above.
- Benchmark – 80th percentile in the distribution; 80% of the
respondents perform below and 20% perform above.
© 2013 IBM Corporation
An illustrative Finance & Accounting Business Component Model will help guide our discussion today on four focus areas
Dir
ec
t C
on
tro
l E
xe
cu
te
Accounting Close
and Consolidation
Close Coordination
and Scheduling
Financial
Reconciliation
Accounting
Guidelines
Pre-close Execution
Close &
Consolidation
Adjusting Entry Review
& Approval
Accounting
Policies
External Financial
Reporting
Financial Statements
Preparation
Regulatory Reporting &
Public Accounts
Production
Regulatory Inquiries
Handling
External Reporting –
Statutory Policy
Financial Disclosure
Requirements
Reporting Compliance
Monitoring
Detective Self-Audit
Financial Statements
Approval
Audit Support
External Reporting –
Non Statutory Policy
External Reporting
Guidelines
Funding &
Corporate
Finance
Revenue & Funding Policies
Cash Management
Revenue & Funds Processing
Revenue & Funding Guidelines
Funding Allocations
Revenue & Funds Requests
Source of Funds
TB Submissions
Input to ARLU
Input to Estimates
CPP and EI Recoveries
Accounting Operations / Transaction
Processing
Accounts Payable
Processing
Travel and Expense
Processing
Journal Entry Review
& Approval
Monitor Authority and
Limits Delegation
Account Reconciliation
Finance Policy
Monitoring (Including
Asset)
Loans & Accounts
Receivable
Processing
Journal Voucher
Processing
Interdepartmental
Settlement Processing
Financial Policies
(Including Asset)
Financial Guidelines
(Including Asset)
Acquisition Card
Payment Processing
Credit and Collections
Financial Procedures
& Business Rules
Asset Reconciliation
Tracking & Mgmt
Asset Accounting
Budgeting &
Forecasting
Budget and Forecast Policy
Strategic Planning & Target Setting
Budget Development
Operational Planning
Budget Policy Monitoring
Budget to Actual Variance Analysis
Forecast Preparation
Capital Planning
Budget Plan Approval
Forecast Analysis & Monitoring
Budget Guidelines
Financial
Management
Controls
Framework
Financial Risk
Monitoring
Financial Management
Control Framework
Financial Controls &
Compliance Reporting
Financial Controls &
Compliance Monitoring
Fraud Management
Financial Risk Scoring
and Evaluation
Financial Risk
Reporting
Financial Risk
Identification and
Ownership
Financial Risk
Framework
Establish Financial
Controls
& Authorities
Funding &
Corporate
Finance
Revenue (budget) &
Funding Policies
Cash Management
Revenue (budget) &
Funds Processing
Revenue (budget) &
Funding Guidelines
Funding Allocations
Revenue (budget) &
Funds Requests
Source of Funds
TB Submissions
Management
Input to ARLU
Input to
Supplementary
Estimates
Input to Main
Estimates, RPP &
DPR
TB Submissions
Budgeting &
Forecasting
Budget and Forecast
Policy
Strategic Planning &
Target Setting
Budget Development
Operational Planning
Budget Policy
Monitoring
Budget to Actual
Variance Analysis
Forecast Preparation
Capital Planning
Budget Plan Approval
Forecast Analysis &
Monitoring
Budget Guidelines
5
© 2013 IBM Corporation
Benchmarking Public Sector Financial Management to Private Sector Financial Management - Accounts Payable Processing
September 26, 2013 Not for Distribution 6
Accounts Payable
Processing
Metrics Median Benchmark Gov’t BM vs.
Private BM Gov’t Gov’t Private
Co
st
Total cost of the process "process accounts payable" per one thousand
Canadian Dollar revenue / budget for Government. $1.19 $0.74 $0.33 +126%
Personnel cost (including benefits) of the process "process accounts payable"
per one thousand Canadian Dollar revenue / budget for Government. $0.62 $0.48 $0.23 +114%
Systems cost of the process "process accounts payable" per one hundred
thousand Canadian Dollar revenue / budget for Government. $10.69 $7.27 $2.48 +193%
Eff
icie
ncy
Number of FTEs for the process "process accounts payable" per one billion
Canadian Dollar revenue / budget for Government. 11.59 5.97 4.75 +26%
Number of invoices processed per "process accounts payable" FTE. 5,194 11,281 18,219 -38%
Number of invoice line items processed per "process accounts payable" FTE. 13,279 47,500 72,833 -35%
Number of disbursements per "process accounts payable" FTE. 3,666 6,018 7,857 -23%
Cyc
le-
Tim
e
Cycle time in days from receipt of invoice until approved and scheduled for
payment. 11.00 7.00 5.00 +40%
Processing payments of operating expenses and other direct or indirect vendor charges.
Notes:
• Total cost includes personnel, systems, overhead, outsourced and other costs for the process. Typically, a lower cost is
considered “better,” all other variables (quality, productivity, cycle time, efficiency) being equal.
• The median represents the midpoint value in the distribution. This is the level at which half of respondents perform below and
half perform above.
© 2013 IBM Corporation
Adopting Leading Practices in the Government Accounts Payable Processing
High usage of Purchase orders for both goods and services (>80%)
Process small differences without escalation for resolution. Sampling is used to detect irregularities.
Use digital imaging technology for document processing and storage.
Receive invoices electronically from suppliers
Automate invoice routing through workflow automation.
Integrate the accounts payable system with the procurement system to achieve automated electronic matching
(invoice / PO / Receipt documentation)
Fully integrated purchasing, payables, inventory management and General Ledger systems
Segregation of duties between supplier set up, invoice processing and payment processing
Effective and continuous reduction in invoice volumes through use of procurement cards, invoice consolidation, etc.
Require vendors to consolidate invoices as much as possible
Where vendors will not consolidate invoices, consolidate payment of multiple invoices into a single payment
Capability to remit funds and remittance advices electronically and/or via the web, as payment options such as e-
cash and web-based funds transfer emerge
Provide on demand access to financial information internally through self service capabilities and to suppliers
Centralized A/P organization. Shared services centre for transaction processing in a multi-location, multi-division
organization
Standardize A/P systems, policies and procedures.
7 September 26, 2013
© 2013 IBM Corporation
Metrics Median Benchmark Gov’t BM vs.
Private BM Gov’t Gov’t Private
Co
st
Total cost of the process "process expense reimbursements" per one thousand
Canadian Dollar revenue / budget for Government. $0.24 $0.12 $0.04 +239%
Personnel cost (including benefits) of the process "process expense
reimbursements" per one thousand Canadian Dollar revenue / budget for
Government.
$0.08 $0.05 $0.02 +136%
Systems cost of the process "process expense reimbursements" per one
hundred thousand Canadian Dollar revenue / budget for Government. $1.58 $0.54 $0.29 +88%
Eff
icie
ncy Number of FTEs for the process "process expense reimbursements" per one
billion Canadian Dollar revenue / budget for Government. 2.64 1.02 0.86 +18%
Number of T&E disbursements per "process expense reimbursements" FTE. 3,478 13,516 11,572 +17%
Cyc
le-
Tim
e
Cycle time in days to approve and schedule T&E reimbursements. 2.50 2.00 3.00 -33%
Benchmarking Public Sector Financial Management to Private Sector Financial Management - Travel & Expense Processing
September 26, 2013 Not for Distribution 8
Travel and Expense
Processing
Processing advancements and reimbursements for employee travel and expenses on
the organization’s behalf.
Notes:
• Total cost includes personnel, systems, overhead, outsourced and other costs for the process. Typically, a lower cost is
considered “better,” all other variables (quality, productivity, cycle time, efficiency) being equal.
• The median represents the midpoint value in the distribution. This is the level at which half of respondents perform below and
half perform above.
© 2013 IBM Corporation
Adopting Leading Practices in the Government Travel & Expense Processing
Reimburse T&E expenses through direct deposit (through payroll system)
Maximize use of common corporate credit card.
Use common, consolidated expense management software across the organization
Reimburse expenses with receipts valued above risk threshold, and without receipt below risk threshold (i.e. $75)
Do not provide travel advances
Track travel and expenses to the level of detail required for control and risk thresholds (i.e. air fare, meals, parking, taxi,
etc.)
Use digital receipt imaging.
Where the company is to pay the cost of travel directly, e.g. for a conference block booking, purchase orders are raised
through the procurement process.
Maximize automated data population for expense claim creation.
Process claims in centralized processing or shared services centers
Provide on demand access to policy and expense-tracking information
Train all employees on the expense reimbursement process, policies and system.
Employees should book all travel through the authorized travel agent, who ensures that the booking is with preferred
suppliers and in line with policy.
Implement policies/systems to process expense reports electronically
Maintain a clear, simple expenses policy with appropriate tolerances and levels of authorization.
Employee details maintained by Human Resources, but payment details held and maintained by AP to process payment
9 September 26, 2013
© 2013 IBM Corporation
Metrics Median Benchmark Gov’t BM vs.
Private BM Gov’t Gov’t Private
Co
st
Total cost of the process "process accounts receivable" per customer receipt. $116.96 $9.95 $2.65 +275%
Total cost of the process "process accounts receivable" per invoice processed. $86.32 $11.48 $1.63 +604%
Total cost of the process "invoice customer" per invoice processed. $215.31 $77.03 $5.58 +1290%
Total cost of the process "invoice customer" per invoice line item processed. $84.21 $18.83 $0.99 +1802%
Eff
ic-
ien
cy
Number of invoices processed per "invoice customer" FTE. 6,229 40,500 102,941 -61%
Cyc
le-T
ime
Average days sales outstanding (measures timeliness between sale of goods or
services, and receipt of payment). 39.00 22.40 31.00 -28%
Cycle time in days from transmission of invoice to receipt of payment. 21.5 10.8 18.0 -40%
Benchmarking Public Sector Financial Management to Private Sector Financial Management - Loans & Accounts Receivable Processing
September 26, 2013 Not for Distribution 10
Loans & Accounts
Receivable
Processing
Processing loans and accounts receivable transactions including payments, defaults,
interest expense to ensure that balances reflect the actual amounts owing.
Notes:
• Total cost includes personnel, systems, overhead, outsourced and other costs for the process. Typically, a lower cost is
considered “better,” all other variables (quality, productivity, cycle time, efficiency) being equal.
• The median represents the midpoint value in the distribution. This is the level at which half of respondents perform below and
half perform above.
© 2013 IBM Corporation
Adopting Leading Practices in the Government Loans & Accounts Receivable Processing
Regular forecast of cash receipts available for treasury purposes
Employ cycle billing to reduce periodic surges in billing levels
Take advantage of automated links between systems to reduce process cycle time
Integrate system with billing, collection, AP and GL.
Electronic invoicing & collection – automated according to credit terms
Automated tools to assist in: overdue balance follow-up, exception invoices, etc.
Net out payables and receivables and only pay/collect the difference between them
Color-code remittance courtesy reply envelopes for accelerated processing.
Easily accessible summaries of debtor days, daily collection, aging
Automatic flagging and reporting of high risk accounts
– Aged debit balances should be reviewed by management on a regular basis and explanations sought as to why debts
have failed to be recovered.
Use of workflow software to monitor process and help resolve queries
– Image processing to facilitate online query handing
Online customer interface allowing suppliers/customers to update and amend set fields such as contact delivery details and
view a breakdown of their outstanding account details – one single interface for customers.
Shared services centre for transaction processing - Cross-functional teams for customer support, order entry and dispute
resolution
Clearly defined and communicated AR guidelines
– Materiality limits for automatic write-off tolerances
– Focus on error reduction activities
11
© 2013 IBM Corporation
Metrics Median Benchmark Gov’t BM vs.
Private BM Gov’t Gov’t Private
Eff
icie
ncy
Number of journal entry line items per "perform general accounting" FTE. 40,385 77,869 153,618 -49%
Percentage of journal entry line items that are corrective/adjusting. 3.00% 1.55% 0.66% +135%
Cyc
le-T
ime
Cycle time in days to perform monthly close at the business entity level. 10.00 7.00 6.00 +17%
Cycle time in days to produce period end management reports. 13.00 10.00 9.00 +11%
Benchmarking Public Sector Financial Management to Private Sector Financial Management - Close & Consolidation Processing
September 26, 2013 12
Reviewing preliminary trial balance and adjustments and performing final review of
P&L and balance sheet.
Combining two or more entities for reporting purposes. This includes the elimination
of inter-company transactions between consolidated entities.
Close &
Consolidation
Notes:
• Total cost includes personnel, systems, overhead, outsourced and other costs for the process. Typically, a lower cost is
considered “better,” all other variables (quality, productivity, cycle time, efficiency) being equal.
• The median represents the midpoint value in the distribution. This is the level at which half of respondents perform below and
half perform above.
© 2013 IBM Corporation
Adopting Leading Practices in the Government Close & Consolidation Processing
Simplify and standardize the chart of accounts
– Standardizing and streamlining an organization's charts of account can dramatically improve the
speed of the close process.
– By establishing a focused and consistent set of accounts across business sites, an organization can
effectively measure business performance in accordance with strategic objectives, as well as reduce
consolidation time during the close process.
Automate the financial close
The generation of consolidated reporting from a data warehouse is an automated process, driven by pre-
set consolidation rules.
At the point of transfer for consolidation purposes, information is automatically checked for errors of
omission and for incorrect periods.
The ability exists for consolidations to drill down to the original records in any entity.
For all consolidation items, transactions are recorded in the same account name and code in each legal
entity's general ledger to facilitate and simplify the consolidation process
Simplify departmental relationships as far as possible for consolidation purposes
Journal entries kept centrally at their source
13 September 26, 2013
© 2013 IBM Corporation
TRANSFORMATION CASE STUDIES & LESSONS LEARNED
14 Not for Distribution September 26, 2013
© 2013 IBM Corporation
Case Study: Province of Nova Scotia Background
Province of Nova Scotia entered into a 10 year contract with IBM for SAP Application Managed Services with an annual
commitment for SAP Capital Transformational Project work SAP Managed Services Scope includes Level 1 Service Desk, Break Fix, Technical System Maintenance, System
Monitoring, Minor Enhancements, Standard Operational Changes
Business need
Implement Common business processes to better facilitate management of all business/operational functions and decision making across the Gov Departments & Entities
Consolidate SAP instances across Functions and Departments
Leverage the IBM Managed Services Transition as the lever to consolidate remaining SAP Support teams into one Shared Services operated by IBM with one Government retained organization to support multiple broader Province of Nova Scotia Public Sector Clients and Environments
Economic Development to keep and build new jobs in
Nova Scotia to help provide a long term facility to grow talent to service their needs and other clients across North America and Globally
Solution approach
Solution consisted of three components: 1. 10 Year SAP AMS + Projects, cost neutral to PNS fixed
over the term Including IBM to offer comparable job offers with
sign on bonus to all impacted staff (unionized and non unionized)
2. Development of an IBM Services Centre to grow a pool of talented resources (500 over 6 years) to support the Province of Nova Scotia’s business and technology needs as well as other clients across North America and Globally
3. Partnership with 7 Post Secondary Institutions to develop curriculum, and provide Analytics software to support the development of skill graduates for local IBM jobs
Initial scope for consolidation and transition of the SAP
Support Centre as one Shared Services to support the Province of Nova Scotia, Department of Health, Nova Scotia Municipalities, Nova Scotia School Board, Nova Scotia Liquor corp, etc
With the long term cost stability of their operating budget, PNS is now working with IBM on transformational initiatives through Projects to help drive further business and cost benefit for the Province of Nova Scotia
Outcomes • Province has achieved one Shared Service and COE for SAP Service Management and have saved significant money
to date consolidating one support organization • Province of Nova Scotia, through efficiencies in the contract and IBM’s delivery to date, is actually spending less than
their initial budget and currently are using these savings to help fund transformational initiatives
© 2013 IBM Corporation 16
Case Study: Government of Alberta
Not for Distribution September 26, 2013
Background Government wide initiative incorporating 24 ministries, to reduce expenditures while maintaining public services
unchanged Lack of integration among existing applications made data consolidation and reporting difficult, resulting in significant
manual manipulation of outputs Employs more than 35,000 – many of which were directly impacted by transforming human resource application
delivery
Business need Primary objective was to increase availability and quality
of information to support decision making in a timely and cost effective manner
Solution approach Implementation of PeopleSoft HR including access to
employee information via an on-line 24/7 self-service portal
Manage operations of hardware infrastructure and provide application management services
Upgrade PeopleSoft HR to Version 9.0 incorporating bi-weekly payroll and self service time reporting
Outcomes Aligned to Government of Alberta strategic initiatives relating to creation of Shared Services and cost savings Completed upgrade/transformation in less than 18 months Significantly increased ability for most employees to have self-service access to their own employee information Received high levels of performance and standards against service level agreements including the award of a Gold
medal for Government transformation excellence.
Lessons Learned 1.Service Provider SLA’s demonstrate better results when defined as outcome-based rather than flowing down the same
SLA’s that the Shared Services organization provides to their clients. 2.Greater focus should be on organizational change management
3.Strong commitment from senior executives within the Government imperative to drive transformation
© 2013 IBM Corporation
Case Study: IBM’s Finance Transformation
17
© 2013 IBM Corporation 18
• Single source of truth – one ledger; one
financial data warehouse; common
definitions
• Introduced global processes – owners
responsible for technology and data quality
• Created Centers of Excellence providing
financial skills and standardized support
What we did? Why?
• IBM Finance was highly decentralized – a
maze of systems
• 14K finance employees was 2 times
competition
• High percent of time spent on administrative
tasks
• Lack of integration and unique measurement
systems led to inconsistent data
• Finance viewed as low value add
Financial information strategy
Common
data
definitions
Common
transaction
applications
Common ledgerLedger
Acctg
Consol
Corporate
Whse
Fin'l
Planning
Geo
Whse
Employee
DisbursementsIntercompany
Accounts
PayableAssets
Accounts
Receivable
Common data definitions and processes
Corporate data standards-financial elements
Single worldwide chart of accounts
Finance lead client
Common worldwide
planning system
Single worldwide
financial information
warehouse (FIW)
Common
geographic mega-
centers
Single worldwide
consolidation
system
Business
Mgmt.
Info
Treasury
Mgmt.
Info
Common
information
IBM Financial systems built on commonality in support
of an integrated management system
Setting the stage for IBM’s Finance Transformation
Case Study: IBM Finance Transformation
Vision and leadership
Corporate-wide strategy
& architecture
Scale
economies
Control of
standards
Critical mass
of skills
Units control
priorities
BU's have
ownership
Responsive
Excessive cost
No standards
Reinvention of wheel
No synergy
or integration
Unresponsive
No BU ownership
No BU control
Centralized
Finance
Decentralized
Finance
Common Standards
Synergy
IBM's Finance Model
Transactions Decision Support
September 26, 2013
© 2013 IBM Corporation 19
Impact How we have evolved
• Focused on the basics (’94 – ’98)
– Standard / Common Process
– Automation
– Functional Best Practices
– Financial Reporting
• Integrated the Enterprise (’98 – ’02)
– Shared Services
– Web Enablement
– Core Competency
– Decision Support
• Moved to globalization (’02 – present)
– Process Outsourcing /Global COEs
– Technology Exploitation
– Rationalized ERP
– Information On Demand
• Optimized global capability
– Increased use of global support from
12% in ’05 to 50% in ’12
• Shift to higher value work
– Increased decision support work from
30% in ’94 to 70% in ’12
• Lowered expenses
– Lowered expense to revenue share
from 3% in ’94 to 1% in ’12
• Focused on employee development
– New career paths inside and outside
of Finance organization
The results of transformation on the Finance Function
Case Study: IBM Finance Transformation
September 26, 2013
© 2013 IBM Corporation
Becoming a Value Integrator
Predictive and forward-looking insights
Performance optimization
Automated production of key metrics
Analytics to enable self service
Business analysis and interpersonal skills to
communicate, convince and influence
Build technologies and tools to support
business analytics
Embed predictive capabilities into operational
systems and processes
Invest in analytical and “consultative” skills
development of employees – helping them
become “trusted business advisors”
IBM’s Finance Transformation continues to evolve
Case Study: IBM Finance Transformation
Skills
Str
ate
gic
Insig
ht
Quantitative Qualitative
Core Leadership
Consultative Analytical
Pulling Reports
Performing Ledger
entries
Accounting
Principles
Reconciling
Data
Project
Management
Building Trust
Data Modeling
Trend Analysis
Forecasting
Statistical
Techniques
Packaging &
Presenting
Negotiating
Problem
Solving
Listening
Business
Acumen
Partnership
Influencing Risk Management
Invoicing
Financial
Concepts
Insight Generation
Change
Management
Scenario
analysis
Business Ethics
Persuasive Communication
Value
Competence / Skill Level
Co
mp
eti
tiv
e A
dva
nta
ge
Analysis – Why is this happening?
Report – How many, how often, where?
Gather Data – What happened?
Administrative
Trusted Advisor What‘s the best that can happen?
Predictive – What will happen next?
What’s next? How will we get there?
20
© 2013 IBM Corporation
WW Process
Ownership
Common data
Common ledger
Common systems
Centralization
Shared Services
1994
Primary focus on
Efficiency
Value-driven Efficiency and
Volume focus
*Note: Prior years re-stated for mission transfers
Transformation to date has shown steady saving from efficiency improvement, with future saving from value-driven efficiencies
21 September 26, 2013
IBM Transformations to Date Benefits Realization
2005* 2006* 2007* 2008* 2009* 2010 2011 2012
Est
2013
Est
2014
Est
2015
Est
Sp
en
din
g
Sa
vin
gs
© 2013 IBM Corporation 22
Through these case studies and others alike, key Lessons Learned have emerged on Finance Transformation
Rumors and myths will develop - Be sure to communicate clearly and often
Implementation can be step wise, but early scope must be wide enough to deliver clear
value
Delivering hard cost savings often means significant workforce impacts
The benefits are significant and are achievable
It takes more time and is more difficult to implement
Go faster than you think you will be able
Finance transformation is an effective road to cultural change
Sustained leadership trumps good project management
Neglect the people issues at your peril
Get governance right, but don’t hesitate to evolve governance as finance transformation
matures
Political commitment comes with strategic alignment
Working horizontally does not come naturally in government – foster trust and collaboration
September 26, 2013
© 2013 IBM Corporation Finance Operating Model Optimization | February 2009 23
Drive efficiency and effectiveness through common systems and scale economies
Gain insights through incorporating risk into performance management and centers of competency
Low
Med
High
Matu
rity
Timeline
Providing
and owning
the single
source of
the truth
Transformation Journey through Stages of Maturity
Transformation Journey
Integrate Finance through standards, enabled by global process ownership
Source: IBM Global Business Services
© 2013 IBM Corporation <<
Clie
nt
24
Transformation is achieved through rigorous and thoughtful attention to the core building blocks
The Journey to an Integrated Organization
Low
Medium
High
Timeline
Legend - Actions
Establish global
standards
Simplify
Converge performance
and risk management
Strictly adhere to common data definitions enterprise-wide
Implement a standard chart of accounts / standard information architecture enterprise-wide
Use standardized common processes enterprise-wide
Strictly adhere to global process ownership enterprise-wide
Mandate and enforce global standards for all business units
Use shared services for transactional activities
Reduce the number of Finance applications & black book tools
Establish Centers of Excellence for Core and Specialized Services
Reduce the number of ERP instances
Use centers of excellence for decision support
Use outsourcing (for non-core activities)
Conduct formalized risk identification that is institutionalized within the organization’s responsibilities
Fully embed access / process controls in risk systems
Use predictive analytics / modeling for measuring and monitoring risk
Utilize risk as an economic evaluation tool
Use risk adjusted forecast and plan
Formally incorporate risk indicators into performance monitoring
Use historical comparison of key risk and performance indicators
Conduct routine management monitoring & reporting that includes risk factors
Through
considerable
manual effort
Through greater
efficiency and
effectiveness
Through the use of
headlights (forward
leaning insights)
versus tail lights
(historical)
Providing
and owning
the single
source of
the truth
© 2013 IBM Corporation
Successful Transformations are a Journey with Common Key Elements
Transformation has been, and is, an
Evolutionary process…
Standardizing Data and Systems
Reengineering Common Global
Processes
Consolidating Core Functions into
Shared Services
Globalizing / Nationalizing Centers of
Excellence
Implementing and Promoting Self-
Service
Exploiting Business Analytics
25 September 26, 2013
Transformation requires…
Strong executive support
Clear Vision, targets and
measurable objectives
Continuous effort – need to
dedicate resources to get results
To look at Data, Processes and
Tools and balance across all three
with a focus on the cost of delivery
Communicate, communicate,
communicate…
© 2013 IBM Corporation
Thank You
September 26, 2013 26