Birmingham & Midlands Shared Service Centre Forum

Benchmarking Maturity Survey2016

Benchmarking Maturity SurveyIntroduction to Midlands Shared Services 2016 Benchmarking Maturity Survey

Over the last 12 months, forum members have consistently expressed an interest in some sort of forum benchmarking, to facilitate comparison and improvement in their Shared Services area. With this in mind, the steering group have commissioned this short process maturity survey across each of the key SSC Finance areas.

This survey is easy to fill in, and once completed, thanks to the support provided by the Tarmac SSC team and Act Lean, our consulting advisers, members will be able to compare their performance in each of their SSC areas with other SSCs in the network, and use this as a basis for further investigation and improvement planning.

Please bear in mind that this benchmarking survey is not intended to replace more detailed process diagnostic reviews, or detailed quantitative benchmarking exercises. Instead, is meant to be a high-level review which can provide an initial view/confirmation of potential areas of focus, ahead of further potential improvement work, which may include more detailed benchmarking in target areas where this is felt to be worthwhile.

Finally, please note that all information provided by individual member companies will be held confidentially within this database, and not shared externally. Following the completion of this exercise, member organisations will be able to compare their results against the group and - where mutually agreed - make contact with other member organisations to assist with improvement plans.

An example of the typical output from this survey is shown below.

Sample of Typical Survey Output

Guidance for completion

The questionnaire dimensions in this survey follow a simple maturity scale from 0 to 10, where, generally speaking:

Scale of 0 : A very informal organisation without structure or planningScale of 1–3: A functional organisation where the main focus is on transaction processingScale of 4-6: A process-oriented organisation with a strong focus on risk management and controlScale of 7–10: organisation focused on integrated business management and improvement/optimisation.

These maturity levels are cumulative; in other words an organisation should score itself at a certain level only when the criteria set for the lower maturity levels have been fully met.

To complete this survey, only two data points need to be selected for each process:

(1) which statement most closely represents where you are now, for that functional area(2) which statement most closely represents where you want to get to, for that functional areaIn addition, you have the option of completing a target date to achieve (2) above, but that is not a mandatory field, should you wish to omit this from your survey response.

Completion of this should take little more than an hour in practice, though the consultation time within your teams may take slightly longer than this, and the form can be saved and returned to, where selections require longer discussion.

Should you require any further guidance on the completion of the form, please contact Act Lean at info@actlean.co.uk.

Index

Accounts Payable Section 1

Accounts Receivable Section 2

Intercompany Accounts Section 3

Tangible Fixed Assets Section 4

General Ledger & Closing Section 5

Reporting Section 6

Operational Planning Section 7

People Capability & Finance Planning Section 8

Performance Management Section 9

Continuous Improvement Section 10

Accounts Payable (1 of 10)

Where are you now?

Where do you want to be?

Score 0 - Informal AP organisation and policies: no formal policy and guidelines exists and invoice processing activities (registration, approval and payment) are carried out manually.

Score 1 - Formal AP policy (covering segregation, roles, T&Cs etc) is available, but not yet in place, and basic financial controls e.g. segregation/alternative controls are not in place. Activities are still manual.

Score 2 - AP Policy is generally deployed/followed, & invoices are manually recorded in a separate sub ledger. Some basic AP controls (e.g. segregation of duties) and work instructions are in place.

Score 3 - Purchases are supported by PO's/equivalent, authorised separately. BOM invoices are manually matched with PO/equivalent & receipt notes. For non-BOM items, 3- or 2- matching is in place. Automatic payments are generated on authorised invoices.

Score 4 - The AP sub ledger is integrated with the general ledger, reconciled automatically, and capable of delivering some cash management information.

Score 5 - Reporting on key AP business and process performance is in place (e.g. for DPO, % of first time AP invoices matching, outstanding queries, supplier info). Electronic payment to suppliers is through the ERP system is in place.

Score 6 - Automatic 3-way matching is available for BOM items (and 2- or 3-way for non-BOM items). High percentage of 1st pass on AP items.

Score 7 - EDI and/or self billing is in place & used for most suppliers (by value). Scanning used for all other invoices including electronic approval. P-cards used, if relevant.

Score 8 - Self-billing is implemented where appropriate. One screen now available per supplier with all relevant financial and non-financial information.

Score 9 - Self billing in place and EDI documents available for other purchases, Query Management System (QMS) in place. Paperless office now effectively in place.

Score 10 - Fully automated paperless AP process in place, including direct enquiry by suppliers into AP system including supplier master data maintenance (where appropriate).

Accounts Payable - Where you want to be target date(DD/MM/YYYY) _________________

Accounts Receivable (2 of 10)

Where are you now?

Where do you want to be?

Score 0 - Informal AR organisation and policies: no formal policy and guidelines exists and AR activities are carried out manually.

Score 1 - Local credit management policy in place, but overall company guidelines are not managed in an integrated way.

Score 2 - Local credit policy updated and implemented in accordance with company guidelines.

Score 3 - Outstanding invoices managed to some degree: sending dunning letters/statements and matching of payments is carried out manually, along with basic risk assessment techniques.

Score 4 - Automatic execution of: matching of payments, dunning letters, sending statements and order blocking (all according to defined AR management criteria).

Score 5 - Proactive process management is in place, & dunning letters/statements are generated automatically. Some informal/unstructured reporting on business/process KPI's is in place.

Score 6 - Some Order to Cash (O2C) process management is undertaken - e.g. queries are communicated to all relevant departments (such as sales order desk) and solved within an agreed period. The credit department and customer are kept informed.

Score 7 - Wider O2C management is underway - credit information is available to all along with non-financial information. External data is integrated directly into ERP systems, with a single source of customer information (logistics, sales and credit positions) available.

Score 8 - End to End O2C process management is in place, allied to predictive data management and problem solving by the AR and O2C teams.

Score 9 - Customers are integrated into the O2C process, including having access to their own financial status in client systems.

Score 10 - Paperless office is in place: 100% of transactions are performed automatically: (Invoices/shipping documents, queries and corrections, status reviews, and payments and collections).

Accounts Receivable - Where you want to be target date?(DD/MM/YYYY) _____________

Intercompany Accounts (3 of 10)

Where are you now?

Where do you want to be?

Score 0 - Informal intercompany organisation: guidelines and instructions may exist, but they are not fully/formally adhered to.

Score 1 - Inter-company invoice & debit/credit note transactions are supported by a PO/equivalent.

Score 2 - Invoicing of goods and services are processed following corporate guidelines. Intercompany EDI is available for exchange of electronic messages.

Score 3 - Intercompany remittance are sent to payees, and all payments are made in accordance with guidelines. Both parties update intercompany accounts based on this common data.

Score 4 - Interco statements are exchanged and reconciled monthly, with all differences investigated/resolved within a month. Query management & escalation/rectification procedures are in place.

Score 5 - Intercompany EDI messages are fully integrated with financial systems, & supported by efficient/effective processes.

Score 6 - Joint responsibility is taken for intercompany accounts between receiving/sending parties.

Score 7 - All EDI, invoicing, remittance-advices and statement handling can be handled by EDI.

Score 8 - All Interco transactions can be automatically processed into the relevant systems.

Score 9 - All Interco transactions are automatically integrated with other company systems

Score 10 - An integrated system is in place in which all intercompany transactions can be simultaneously processed by suppliers/customers providing a live view of the position of all group entities.

Intercompany Accounts - Where you want to be target date?(DD/MM/YYYY) ___________

Tangible Fixed Assets (4 of 10)

Where are you now?

Where do you want to be?

Score 0 - Basic manual records & some form of asset register exist. Duties/taxes are booked correctly.

Score 1 - Equipment is identifiable, including non-capitalised assets and leased assets, depreciated according to group life classes, and asset existence is verified regularly.

Score 2 - Compliance with capital investment procedures is in place including asset capture from budget stage onwards. Fuller procedures are in place e.g.; a register for assets under construction, additions/disposals procedures, registration of assets, & treatment of low value assets.

Score 3 - More end-to-end asset financial controls in place: project costing includes timely recording on the correct G/L account; ownership details are correctly administered; proper authorisation exists for asset disposal.

Score 4 - Better process integration of asset ordering/receipt/clearing with AP processes. Quotations and grants/incentives are reviewed prior to ordering. Compliance with tax regulations are complied with, and there is a basic understanding of wider asset management techniques.

Score 5 - Internal asset movements are controlled by cost centre management; progress payments are authorised by project management, & approved by purchasing.

Score 6 - Active asset management in place, e.g. reviewing potential over-valuation, write-offs, periodic valuation reviews of all assets carried out by a combined F&A and other stakeholders team.

Score 7 - Integrated asset management processes introduced, including post-disposal evaluations of cost-benefits. Capital/fixed asset related processes are integral to business practices, & periodic reviews are in place.

Score 8 - Investment plans including asset ranking and risks ,and asset performance data/KPI’s is available, and shared with other functions (eg. central engineering). Review of life classes is carried out in close co-operation with wider management.

Score 9 - System links with manufacturing maintenance. KPI’s are benchmarked internally. Future asset performance reviewed against asset valuations.

Score 10 - Integration with wider business planning processes, enhancing complete asset control & external benchmarking within the industry. Continuous upgrading of business plans with asset performance and valuations, and cash forecasting for remaining life.

Tangible Fixed Assets - Where you want to be target date?(DD/MM/YYYY) _____________

General Ledger & Closing (5 of 10)

Where are you now?

Where do you want to be?

Score 0 - Informal organisation: GL setup is not based on the chart of accounts and/or accounting practices are not compliant with instructions. No structured approach towards monthly closing; no procedure/document defining the closing process and team training/capabilities are limited.

Score 1 - GL management is still informal, but is based on the chart of accounts and basic admin. instructions, with some evidence of a structured closing process; the process is documented, but some procedures are still missing.

Score 2 - The close process is well structured, processes are mapped and accounting procedures are up-to-date and implemented. Responsibilities are documented & the timetable for closing is kept to. Substantial amounts and/or number of transactions are booked to suspense accounts. Reporting is on time, and GL closing takes more than 5 working days, using considerable extra time/overtime.

Score 3 - Interfaces between various systems and the GL are in place, requiring limited manual reconciliation. Accruals are estimated at the end of the close process based on forecasts and trends. Closing is within 5 normal working days, but unplanned events can often delay close.

Score 4 - Unexpected events during closing is rare, and it completes within 5 working days. Accruals are still estimated, but derived from actual activities rather than forecast or trends. Balance sheet adjustments are still reviewed at month end.

Score 5 - An integrated ERP is partly in place, though some data is still obtained from other systems. Within the ERP, reconciliations are clean & straightforward, and transactional errors are reduced. End-of-month activities still exist but are semi-automated. F&A staff initiate corrective actions beyond their own department. ERP information is used to determine a number of accruals during the month.

Score 6 - Processes are focussed on automating/closing quickly, and minimising errors and rework. Teams actively strive to smooth month-end activities, remove bottlenecks for earlier closing, and optimise processing using the functionality to the ERP system. Closing normally completes within three normal working days.

Score 7 - The GL (& ERP) is the single source of financial data, relied on by finance and wider business management. Finance and key business users are able to interrogate the ERP for the majority of routine information requests. There is only limited (immaterial)and temporary use of suspense.

Score 8 - End of period GL adjustments are handled with ERP-based

routines, generating transactions using available data and tables. At month’s end, only a few transactions are required to complete the GL; the close process is consistently completed within two working days. GL finance team focus shifts to management analytics, and management reviews drives data improvements. Effectiveness is proven, with benchmarking to assess the quality, speed and cost-effectiveness of the close process..

Score 9 - GL and finance team close the month end quickly, with limited intervention, and focus the majority of their effort on working with the business to provide better information. External benchmarking gives valuable input to the quality and speed of the close process & its cost effectiveness.

Score 10 - GL and F&A team sought after by business leaders to understand results and manage business. GL function is reaching world class by being able to close at any required moment within hours.

General Ledger & Closing - Where you want to be target date? (DD/MM/YYYY) __________

Reporting (6 of 10)

Where are you now?

Where do you want to be?

Score 0 - Informal organisation: no evidence of a structured approach. Reporting is processed without any clear structure, roles, goals or defined close process

Score 1 - Some evidence of a structured approach: timetables are applied, tasks and responsibilities of F&A staff are defined. Some procedures/instructions are missing or outdated. Different formats exist, and errors and rework are common.

Score 2 - A structured approach to reporting is implemented. All procedures /instructions are in place and adhered to. The reporting structure is well documented, including deadline(s) to meet, reporting formats to use etc. There is no link however, to business goals, or a focus on improving reporting or team capability.

Score 3 - Some performance indicators are used to measure quality/timeliness of reporting. Multiple sources of data are used, spreadsheets and downloads translate data into the reporting formats. Reports include budget and forecast data. Reporting is mainly paper-based. Some initiatives on balanced scorecard (BBS) reporting.

Score 4 - One data source exists for all key reports, but spreadsheets still used to format data. Documented routines ensure reliable, timely and complete transfer from source systems. BBS is used as the cornerstone of reporting, and graphical analysis is used to focus on trends and deviations from plan. Non-standard reporting is minimal.

Score 5 - A fully integrated ERP system is partly implemented, ensuring some consistency between high level and detailed reporting. Some information requirements are handled through Data Warehousing (DW). Some weekly reports exists, but the cycle is mostly monthly. Company-reporting is done via standard upload techniques from ERP/DW.

Score 6 - The DW covers all relevant financial information requirements, fed from ERP and legacy systems as well as external sources, allowing user retrieval of drill down for information in the format required.

Score 7 - DW is fully integrated with the ERP and used as the core tool to deliver on line real time financial information.

Score 8 - Threshold-levels and traffic-light methods are used, allowing the user to focus on exceptions and trend breaks. BBS is fully implemented, including drill down.

Score 9 - Algorithms allow extrapolation of trends and what-if scenarios. Sensitivity analysis, opportunity/risk management is facilitated. Benchmarking information is reported.

Score 10 - DW and ERP infrastructure covers all info requirements. Steering towards World Class business performance is fully supported by the

reporting process.

Reporting - Where you want to be target date? (DD/MM/YYYY) ________________

Operational Planning (7 of 10)

Where are you now?

Where do you want to be?

Score 0 - No formal business forecasting process exists.

Score 1 - Some forecasting process in place, but only on an ad-hoc/isolated basis, and driven by quarterly rolling forecast made at the centre by Finance and communicated on a top-down basis.

Score 2 - Forecasting process is derived from company guidelines, but is done on an off-line, periodic basis only.

Score 3 - Forecasting is completed in an integrated, but still periodic and offline way, across the organisation involving key business management and finance. Internally the forecasts are aligned, clearly owned by local management and agreed with next higher level management.

Score 4 - A structured (partly automated) forecasting system ensures internal consistency and efficiency in the process. Integration with the business unit forecast is secured.

Score 5 - The forecast is reviewed and approved by higher-level management with the annual operating plan as a reference. The reliability of the forecast is measured, reported and periodically monitored within agreed bandwidth.

Score 6 - Targets and actions are jointly agreed upon and well communicated and documented in all levels of the organisation.

Score 7 - The forecasting process is tied in with targets and related actions for financial and non-financial key performance indicators reflected in the Business's Balanced Scorecard system.

Score 8 - Finance and business leaders work together regularly to update latest forecast external (anticipated) developments and adjust plans and actions to meet or exceed the key performance targets

Score 9 - The forecasting process is dynamic and has inbuilt checks to accommodate change and response to competitive threats and opportunities, including scenario planning.

Score 10 - Finance leads an ongoing planning and rolling forecasting process, with continuous monitoring and scenario planning. Finance and the business regularly assess the accuracy/effectiveness of the process and consider how to improve it.

Operational Planning - Where you want to be target date? (DD/MM/YYYY) ______________

People Capability & Finance Planning (8 of 10)

Where are you now?

Where do you want to be?

Score 0 - Finance is a transaction-oriented department isolated from the wider business and its processes. Organisation and job roles are static, not regularly updated, and may not be up to date.

Score 1 - The team development process is limited to annual appraisals, recorded on standard forms with little attention to explanations & task settings. There is no 360 review: job descriptions are available, but not actively review/updated. HR are only involved with finance only at key dates.

Score 2 - Leadership recognise the need to shift focus from scorekeeping/transaction processing towards a value-adding function. This is reflected in job requirements, succession planning and training programmes. There is no clear link between roles and process management.

Score 3 - Finance leaders and managers recognise the need for wider skills than technical accounting, and starts to document these in org models and roles for key areas.

Score 4 - A structured framework of competencies is used to assess and develop teams. as part of the appraisals and training programmes and for hiring and ongoing management.

Score 5 - Finance leadership start to have formal conversations with their business customers about their requirements and how to structure finance to meet this.

Score 6 - Management start to involve HR in the development of teams to ensure they are aligned with business strategies. 360 feedback is undertaken, and proper attention is given to individual career/personal development planning for the group as a whole.

Score 7 - Management start to involve HR in the development of teams to ensure they are aligned with business strategies. 360 feedback is undertaken, and proper attention is given to individual career/personal development planning for the group as a whole.

Score 8 - Finance capability is generally recognised in the business as developing and adding value, and the business starts to "pull" finance, rather than being "pushed" by them.

Score 9 - Finance team members are seen in the business as a key partner in driving business value and a rich source of talent and future business leaders.

Score 10 - Finance is a key partner in business decisions, "exporting" staff to the business as part of their development. The hiring community recognises the function as a leading edge employer & developer of business skills/talent.

People Capability & Finance Planning - Where you want to be target date?(DD/MM/YYYY) _______________

Performance Management (9 of 10)

Where are you now?

Where do you want to be?

Score 0 - No Performance Management (PM) framework in place. Finance goals and metrics are not linked to the overall business processes or goals.

Score 1 - Performance techniques are not used. Finance is not organised in a way that aligns with the business goals ,and staff are unaware of how their performance links to overall finance/business performance.

Score 2 - Finance goals make no reference to meeting customer needs. PM is handled through islands of separate data, with little integration or use of technology. There is no link to, or existence of, a formal continuous improvement process.

Score 3 - Basic performance setting in place with annual budget and goal setting. Finance teams occasionally consider how their outputs support the goals set. Staff performance goals are limited to their functional area.

Score 4 - Performance metrics are set at a high level for finance's main business processes. Finance goals have a basic understanding of meeting customer needs, are set at a department level, but not across finance or overall processes.

Score 5 - There is some limited integration of PM within finance, but not on an end-to-end basis, with some use of technology. Performance improvement is handled on an informal basis.

Score 6 - A clear PM framework is in place using balanced scorecard techniques. Metrics for performance assessment are linked to individual business processes. PM is managed within an overall consistent framework, with some integration of information sources.

Score 7 - Goal setting and performance review is done in conjunction with the overall business' goals. The performance framework is a core tool in the management of the finance team, and staff understand how their performance can be related to overall performance.

Score 8 - Finance goals explicitly include customer requirements, and team plans, activities and outputs are managed explicitly in the context of finance and process performance framework. Staff in finance are encouraged to improve performance in their function.

Score 9 - Performance review is embedded within ongoing review of results with the overall business goals. Finance goals are developed with explicit inclusion of customer needs, and their active involvement in goal setting. Staff understand how their performance links to overall results, and are actively involved in managing of performance and performance improvement initiatives.

Score 10 - A clear performance framework is in place and integrated into process management, staff and customer/supplier management and process improvement. Finance team plans/activities and outputs are

delivered within a clear, embedded process framework. Metrics for performance are linked to individual processes within finance, and end to end business processes.

Performance Management - Where you want to be target date? (DD/MM/YYYY) _________

Continuous Improvement (10 of 10)

Where Where do

are you now?

you want to be?

Score 0 - The finance function is focussed wholly on transaction processing, there is no formal review process for driving improvements in processes or performance, or roles/structures to allow this to happen

Score 1 - The finance development process is limited to one-off and isolated reactive changes, with no clarity of benefit achieved, or embedding of changes, resulting in possible future slippage to old errors in processes.

Score 2 - Finance leadership are cognisant of the need to make improvements, have initiated a process for doing this, but have not formalised this in terms of process, roles or performance review.

Score 3 - Finance leaders and managers recognise the need for wider skills than technical accounting, and starts to document these in organisation models and roles for key areas.

Score 4 - A structured framework for improvement has been defined by leadership, and communicated to the finance team, but rollout of this in practice has yet to be achieved.

Score 5 - Teams have improvement goals set as part of their objectives, have some awareness of improvement principles (Lean/Six Sigma/DMAIC etc), and are informally undertaking improvements

Score 6 - Finance management start to build CI into their general business planning and management processes. End-to-end process management is undertaken, including CI goals and targets, and team roles and goals link improvement targets to overall objectives.

Score 7 - The finance team has improvement as a core focus on adding value to the business and adding value. Finance teams have time allocated for delivering improvements, and take the initiative in driving this.

Score 8 - Finance teams have a structured approach to driving improvement in end-to-end processes, and work closely with other business functions to make this happen.

Score 9 - Optimising end-to-end business processes is a key focus of finance teams, who take the lead in making this happen in the business

Score 10 - Finance is a seen as the exemplar in the business in using CI techniques to optimise processes, improve customer and business value and reduce/minimise waste on an ongoing basis, embedding these approaches in day to day business activity.

Continuous Improvement - Where you want to be target date?(DD/MM/YYYY) __________

Contact Details

Thank you for completing the survey, to aid the development of a community that shares best practice we would like to collect your contact details.

Name ________________________________________

Email ________________________________________

Company ______________________________________