We are one teamforumsinternational.co.uk/wp-content/uploads/2016/... · Best Practice development...
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Association of Credit for Central and Eastern Europe
Transforming the credit profession
The only organisation in CEE region dedicated to raising the professional profile of O2C
Professional Membership
Best Practice development and Accreditation
O2C process audit
Training and workshops
Benchmarks
Connecting business with service providers
Leading the Order to Cash community in CEE from students to directors - from Analysts to Z-scores
www.creditcee.eu We are one team
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The Shared Service Centre
Journey to Efficiency
Mark Harrison
BA (Hons) FCICM (grad)
Founder, CEO
Association of Credit for Central and Eastern Europe
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a) Administration / reporting/process
efficiency/improvement
b) Take over more work from other areas /
centralize function with the same resources
c) Reduce DSO’s and overdue
d) Most or all of the above
a) b) c) d)
20%
46%
26%
7%
What are your main departmental objectives ?
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What are your main roadblocks or obstacles to achieving objectives?
a) Budget restrictions
b) Lack of management leadership & support
c) Staff inexperience
d) Limited functional power to create central
policy/revised SLA
a) b) c) d)
45%
20%
11%
25%
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If you had unlimited budget and possibilities to influence the future ,
where would you invest??
a) Technology
b) Staff development
c) More centralized functions and responsibility
d) Management and leadership skills development
a) b) c) d)
37%
14%
10%
39%
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The journey to establish a sustainable
Shared Service Centre is a long and complex one
Move the SSC up the value curve whilst improving
efficiencies and making cost reductions
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20th century 21st century
Expanding Business Boundaries
Silos Networks
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COST
EFFICIENCY
ENTERPRISE-
WIDE
EMPHASIS
ENGAGED,
MOTIVATED
WORKFORCE
EFFECTIVE,
EFFICIENCY
EXECUTION
BETTER
LEVERAGE
TECHNOLOGY
OPTIMIZE
ASSETS AND
RESOURCES
COST EFFICIENCY SUPPORTS
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Right sourcing Definition IN HOUSE
THIRD PARTY
SERVICE
PROVIDER
IN-SOURCE OUT-SOURCE
Choosing the correct source
Which do you think is more cost-effective,
Outsourcing , Insourcing , Combination?
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An interesting approach to
implementation
Case study
Seagull and Swans
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The seagull has
landed
We’ll set up where
we‘ve got a factory there
Lets save a load of money & set up an SSC
Debtors - y’ know the single biggest asset !!
We’ll move all our AR functions from UK & Italy
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The migrating
seagull
New People
New System
New Location
New World Record
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Seagulls are not the most considerate!!
System not fully tested nor fully paralleled .
Few reports or controls
High volume and value unapplied cash
Little or no experience of UK/US work culture no benchmark
Location – over a factory , poor air con,
factory canteen, no shops, 10 km from city –
45 min journey each way – at least 2
connections
High turnover, deteriorating results,
blame culture
For 2 months new staff frequently left alone
poor practice ensued
Resentment of UK leavers and local HR dept.
Implementation team in UK had new projects
Credit Manager resigned replaced by interim
manager
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The seagull
calling
card…
Stalled Implementation
Lost of revenue – DSO/
Overdue increases = Bank
charges
Loss of confidence internal &
external
Extra subsistence in Italy
Paying Credit Insurance
premiums but couldn’t claim
Interim diverted – not developing
other teams & needs
Interim manager contract
extended
Extended leavers finish dates
Other projects were parked and
delayed
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COST
EFFICIENCY
ENTERPRISE-
WIDE
EMPHASIS
ENGAGED,
MOTIVATED
WORKFORCE
EFFECTIVE,
EFFICIENCY
EXECUTION
BETTER
LEVERAGE
TECHNOLOGY
OPTIMIZE
ASSETS AND
RESOURCES
COST EFFICIENCY SUPPORTS
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More than 12 months of repair work and extra cost
And only then slowly stabilized, expanded and prospered
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Swans to the rescue Language dependent teams
must be a min of 3
Management must be
committed, supportive &
experienced
Communication, training,
product knowledge, bring all
together
Timelines to be agreed in
advance by all stakeholders
Include standardization and
automation at planning stage SSC are for long term
Clear strategy 1 for 1 headcount is most likely
not necessary
Plan a career path /
development programme
Be generous with the training
and travel budget
Maximise Technology
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Technology
Process
Improvement
Operating Model
Operational Excellence
Organization
People
Communication
TRANSFORMATION
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Location
Technology
Process
Improvement
Masterclass
Organization
Education
Communication
People
Best Practice
Strategy
+ 600
SSC
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STOCK ACCOUNTING 64% CREDIT VETTING AND SCORING 63% EXTERNAL REPORTING 62% TAX FILING AND REPORTING 60% CUSTOMER BILING 55% PAYROLL 52% ORDER ENTRY 34%
% of companies that have implemented the process in their SSC
ACCOUNT PAYABLE 99% GENERAL ACCOUNTING 92% INTERCOMPANY SETLEMENT 90% ACCOUNT RECEIVABLE 88% TRAVEL AND EXPENSES 86% FIXED ASSENTS 84% DEBT COLLECTIONS 74% CASH MANAGEMENT 65%
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Global Business Services
Operational Excellence
Location Optimizing
Scope Extension
Operating Model TRANSFORMATION
Your centre can absorb more work, and without
increasing headcount enabling you to fulfill the
role of true business partner
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Credit Check Business
Administration
Credit Management
Credit Management
Credit Management
Order to Cash overview
Order Invoice dispatch Collecting Payment Reporting
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Credit Check
Order to Cash overview
Order
Do you measure the quality of your customers? Risk Management
How often do you revise the ratings and with what tools or methods ?
How many manual steps are involved in your Ordering process ?
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Business Administration
Order to Cash overview
Invoice dispatch
How many of your invoices are magically lost ?
Do you know the reasons why are they lost ? (Visibility of invoicing)
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Credit Management
Order to Cash overview
Collection
When do you start reviewing your accounts receivable ?
What visibility do you have about your account receivable ?
Who is responsible for collection and where is he located ?
How do you cover dispute management ?
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Credit Management
Order to Cash overview
Payment
Who is involved in the matching process ?
How fast is your matching process ?
How many invoices are matched automatically ?
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Credit Management
Reporting
Quality of Reporting
Understanding of the importance of communicating internally and externally
Effect on P&L
DSO Calculation
Order to Cash overview
Cost of Credit
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Credit Management
Credit comes at a cost It’s a profession not a process
Credit as a profit center
Process management and technology
Simplify and standardize Become truly lean
Rocket up The efficiency of your working capital and staff
Reduce Your costs
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Any questions?
Thank you Dublin
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Association of Credit for Central and Eastern Europe Transforming the credit profession
The only organisation in CEE region dedicated to raising the professional profile of O2C Professional Membership Best Practice development and Accreditation O2C process audit Training and workshops Benchmarks Connecting business with service providers Leading the Order to Cash community in CEE from students to directors - from Analysts to Z-scores
www.creditcee.eu We are one team
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Regional - Analytical
1. Accounting close 2. Settlement 3. Risk management 4. Budgeting 5. Business Case 6. Reporting 7. SOX 8. Internal audit 9. Pricing
Global - Transactional
1. Accounts payable 2. Travel and expense 3. Accounts receivable 4. Billing 5. Payroll 6. Fixed assets
Other
1. Rebates and inventory accounting 2. Competitive intelligence 3. Risk Management 4. Deal review 5. Mergers and acquisition 6. Workforce management 7. Tech pool management 8. Financial systems
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DECENTRALIZATION
HIGHER COSTS
VARIABLE STANDARDS
DIFERENT CONTROL ENVIRONMENTS
DUPLICATION OF EFFORTS
SHARED
BUSINESS UNITS RETAIN CONTROL
RECOGNITION OF LOCAL
PRIORITIES
LEAN, FLAT ORGANIZATION
INDEPENDENT OF BUSINESSES
IDENTIFICATION OF EFFICIENCIES
BETWEEN BUSINESS UNITS
COMMON SYSTEMS &
SUPPORT
EFFICIENT KNOWLEDGE TRANSFER STANDARDS
TOOLS
ECONOMICS OF SCALE
CENTRALIZED
UNRESPONSIVE
NEW BUSINESS UNIT CONTROL OF CENTRAL
OVERHEAD COST
INFLEXIBLE TO BUSINESS UNIT NEEDS
DISCONNECT FROM BUSINESS UNITS
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20 minute workshop
5 functions that could or should be insourced
What are the 5 key drivers
?
O2C Insourcing O2C
Outsourcing
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Improving efficiency and reducing costs
The ability to Integrate a range of services
Enhanced flexibility
Minimizing risk
Regaining control
Reducing cost and time spent managing contracts
Boosting local engagement and accountability
Greater staff motivation and improved service quality
Maintaining expertise and capacity
To reduce and control operating costs
To improve quality
To change company focus
To acquire external capabilities
To refocus scarce resources for alternative uses
To reduce cycle time
To obtain cash infusion
To reduce risks
To gain flexibility
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10 potential benefits in sharing services such as:
1. Continuity and resilience of service. 2. Quality of service 3. Improving the flexibility and agility of existing services. 4. Added-value/customer-facing activities. 5. Improving the scalability of systems. 6. Ensuring improved and more up-to-date systems. 7. Gaining competitive advantage. 8. Ability to offer otherwise unsustainable services. 9. Improved cooperation with other support services. 10.Addressing growing demand for collaborative learning & teaching, research and knowledge exchange.
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Main Elements of Efficiency
Resource Inputs Use of resources to produce goods
and services Outputs of goods and services
HUMAN FINANCIAL
EQUIPMENT MATERIAL FACILITIES
INFORMATION ENERGY
LAND
RIGHT QUANTITY RIGHT QUALITY
LOWER COST PRODUCTIVE WORK PROCESS
PRODUCTIVITY QUANTITY QUALITY
LEVEL OF SERVICE