outsourced out of a job, or into a better one? · 2019-12-04 · outsourced out of a job, ... •...
TRANSCRIPT
Outsourced out of a job, or into a better one?
Or How I worked myself into retirement through automation and business process outsourcing
By Pam Russavage
1
What We’ll Cover …
• My Life Before P2P
• P2P Evolution
• What’s Next
• Wrap-up
2
My Life Before P2P
• Operations Finance Professional – Passion for Process – Affinity for Technology
• History – Keypunch Operator – Receptionist Billing Clerk – Assistant Bookkeeper – Deductions Analyst – Administrator Credit & Collections – Credit/Collections Manager – Manager Customer Financial Services – Manager Business Process Analysis
3
Back to the Future?
4
The Challenge- We Were All Over the Board
Multiple AP processing locations
Inconsistent volume & efficiency
information
Location specific processes
100% paper
Multiple AP remittance addresses
55% invoices entered
already past due
High % Locally Printed/Mailed
checks
Multiple Indirect Tactical Buyers
Low % of PO’s
Inconsistent use of Strategic Suppliers
Multiple or Non-existent purchasing software
Multiple AP systems
Multiple reporting processes
Multiple sets of controls and
audit processes
Multiple post process
document storage
Methods
Duplicative Administrative
functions
Limited ability to report accurate
“enterprise” metrics
Poor Supplier Relations
Manual Accrual calculations
Manual Wire Transfer Process
5
The Objective
• Improved visibility & financial controls
• Enhanced efficiency & effectiveness
• Improved on-time payments
• Reduced transactional process & audit cost
• Improved Cash Flow
• Increased Procurement effectiveness
6
“With a Little Help from My Friends” (the Beatles 1967)
• TAPN – The Accounts Payable Network
• IOMA – Institute of Management & Administration
• The Hackett Group – Process Benchmarking & Best
Practices
7
Stages of Organizational Maturity
Traditional
Learning
Advanced
Top Performer
• De-centralized invoice processing
• De-centralized purchasing
• Manual matching & approval
• Minimal automation • Imaging solution for
document retention • Limited metrics • No formal SLA’s
• Centralized invoice processing
• Business unit purchasing • Document imaging &
workflow • Systematic matching • Rules based approval • Moderate automation • Some purchase card
usage • Efficiency metrics • Limited SLA’s
• Centralized invoice processing
• Some centralized purchasing
• Imaging with OCR & rules based workflow
• Some assumed receipt, evaluated receipt and automated recurring payments
• EDI for large volume suppliers
• Basic Portal technology for supplier self-help
• Expanded purchase card program
• High level end to end efficiency & effectiveness metrics
• Formal SLA’s
• End to end accountability for P2P processes & reporting
• Formalized supplier payment strategy
• Aggressive use of assumed receipt & evaluated receipt
• Fully developed purchase card program
• Fully developed, detailed end to end efficiency & effectiveness metrics
• Closed loop EDI for strategic suppliers
• Complete supplier self-service portal
• Formal SLA’s
Reprinted with permission from the Hackett Group
8
You can not operate in this room unless you believe that you are Superman and whatever happens you are capable of solving the problem – Gene Kranz
9
Failure is not an option.
• Establish a Shared Service Center
• Develop & Implement a Corporate Payment Policy
• Implement a single ERP system
• Enhance ERP capabilities with complimentary applications
• Leverage technology
• Utilize strategic partners for transactional outsourcing
10
Multi Year, Multi-Faceted, Enterprise-Wide Approach
• Consolidate processes under one leader
– Accounts Payable
– Freight Payable
– Credit Card
– Sales & Use Tax
– Indirect Supplier Order Management
• Convert plant processing to Omaha
– 2 for 1 FTE Reduction
11
Establish P2P Shared Service Center
• Partner with Finance, Treasury, Internal Audit & Procurement
• Incorporate with Purchasing Contract Policy
• Standardize & reduce payment terms
• Standardize payment process/days
12
Implement Corporate Payment Policy
• Implement a new ERP system
• Integrate efficiency software
• Standardize business processes
• Develop metrics & reporting
13
Build the Foundation to Automation
• Integrate PO approval workflow
• Implement front end invoice workflow & imaging
• Integrate P-Card functionality for small dollar purchases
• Automate payment processing runs
• Implement ACH payment functionality
• Implement EDI with top volume suppliers
• Utilize evaluated receipt and invoice plan functionality
• Implement email invoice image capture
• Establish Supplier Self Service Portal
• Implement OCR/IDR
14
Leverage technology
ERP & Bolt On Applications
Master Data Create/Change
Sales & Use Tax
Data Image & Workflow
P-Card Processing
ERP Purchase
Order, Invoice Entry & Payment Processing
T & E
Trans Mgmt
1099 Reporting
15
• Print/mail checks to Bank partner
• One-time Visa card payments to Bank Partner
• 1099 process outsourced to 3rd party
• Utility, telecom & facilities lease invoices to 3rd parties
• Duplicate payment audit to 3rd party
• Cloud hosted supplier portal with outsourced support
• Lift & shift mature business processes to 3rd party
16
Utilize Strategic Partners for Transactional Outsourcing
17
Timeline ERP Rollout Centralize Accounts
Payable
Standardize Payment
Methods & Cycles
1099 3rd party
process
3rd Party Electronic
Invoice Submission
Supplier Self-Service Portal
E-mail invoice image capture
3rd Party Duplicate
Payment Audit
Visa Bankcard Payments
Expanded P-Card Program
Centralize SG&A Supplier Order Management
E-Catalog
2006 to 2009
2010
2011
2012 to 2013
Procure to Pay Taxonomy
Closed Loop EDI
Non-invoice Settlement
MRO B2B User Interface w/PO
Flip OCR/IDR
Outsource Transactional processing for AP and Indirect Supplier Order
Management
2014 to 2016
18
19
Improved Visibility
20
Invoice Processing C
ost p
er invo
ice do
wn
69
%
17
23
29
37 38
39
42
37.5
23
18
13
10 10
8 8
12
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
IPH FTE
21
Payment Processing
0
20
40
60
80
100
120
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
On Time Payment
On Time Payment
26%
1% 2% 5%
66%
35% 37%
3% 1%
23%
0%
10%
20%
30%
40%
50%
60%
70%
ACH Domestic Wire Foreign Wire Local Check OutsourceCheck
2009 % of Transactions 2009 % of Dollars
46%
1% 1% 2%
41%
9%
73%
7% 3% 1%
15%
1%
ACH DomesticWire
Foreign Wire Local Check OutsourcedCheck
Visa CardPayment
2016 % of Transactions 2016 % of Dollars
22
Vendor Inquiry/Self-Service Portal
52% 40%
8%
Vendor Inquiries
Self Service Portal Direct Email Unresolved
35%
29%
17%
19%
Vendor Inquiries by Category
Pymt Status AP Review Billing Error Process Assistance
23
Indirect Purchasing
Establish Indirect Strategic
Supplier Base
Convert Indirect purchases to PO
Centralize
SG & A Indirect PO’s
Establish E-Catalog for MRO
Suppliers
Convert MRO to B2B Cloud based
solution
• Human Resources • Administrative • Information Technology • Financial Services • Marketing • Temporary Labor
Co
st p
er
PO
do
wn
60
%
• Define scope of work • Build transition plan • Complete process mapping • Identify/mitigate risk • Confirm resource requirements • Establish SLA’s & KPI’s • Develop communication plan • Complete/confirm technical solution • Complete knowledge transfer • Pilot • Go-live • Stabilize
24
Outsource Transition Plan
25
Outsource Transactional Processing
104 Discrete Activities performed by AP & SOM
28 Activities reallocated to alternate teams
50 activities outsourced to
strategic partner
24 activities remain with
GBS
• Document Imaging • Invoice Processing • Credit Card Processing • Indirect Purchasing • Discrepancy Resolution • Metrics & Analytics
• Mail Room • HR Scanning • Sales & Use Tax
• Service Level Agreement – Invoice entry cycle time – Inquiry response time – Discrepancy resolution time – PO conversion cycle time – Invoice block resolution time
• Key Performance Indicators – Cost per invoice – Cost per purchase order – First pass match – Days Payable Outstanding
26
Outsource Partner Management
• Stabilize, monitor & maintain outsourced back office processes
• Review/analyze plant purchasing for potential BPO
expansion • Increase use of B2B interface tool for SG&A
purchases
27
What’s next for the business?
28
Wrap Up
