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

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Finding the right balance between outsourcing and retaining your finance & accounting activities.

Finding the right balance between outsourcing and retaining your finance & accounting activities.

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  • In this presentation we are hoping to
  • This slide builds—the graphic appears first, then the text appears on the next mouse click.Mr. CFO, today, your organization is administrative and transactional, leaving you little time to be strategic and focused on decision-making.We can take that transactional work, allowing you to gain time to focus on financial reporting and decision support.We can move you from a functional finance organization to a strategic finance organization with a strong business partner who supports you.
  • In terms of what is IN or OUT of scope for outsourcing, this is just a view. It will, of course, vary by organisation and situation. It can also start tactically and increase in scope as confidence improves.We have seen clients taking a very closed view on the extent of work, for example, can be done in an AP environment, i.e. just simple data input and very limited discretion for coding, so the scope has been much reduced to what is shown here. At the other extreme, we have organisations who have realised that they want a very lean organisation and retain just a financial controller with minimal retained support.What I would like to highlight and draw your attention to is that frequently we encounter is a lack of focus on the retained organisation. Surely, one of the goals and objectives of outsourcing should be to re-focus the retained organisation on PARTNERING with the business to provide insight and forward looking decision making information. Sometimes this transition is not always easy for some individuals as they have gained some level of comfort by dealing with the data from the past, rather than dealing with the potential ambiguity of the future. There is a need to work through this on a case by case basis and bridge gaps that are identified.In addition, the retained organisation will need to acquire news skills across a range of areas including the new dynamic of working with an organisation whose work will be clearly defined, who will have clear expectations of what it can and can’t do and also what it needs of the retained organisation to do its job. Let’s look at a more detailed example......
  • This client relationship started with the client’s cash application unitIn the client’s words “the staff were poor quality and there was a lack of process consistency or controls”. The client needed a tactical solution to provide a more stable department, but also improve performance in terms of reducing unidentified and unapplied cash positions, to then in turn improve the collections efforts. As a rules based process, this led to maximising the amount of tasks that were included in scope for outsourcing with nearly all the activities – except a small level of exceptions management that remained with the retained team.With this new relationship embedded, this customer then examined the potential for outsourcing to improve the DSO and high level of bad debt write-offs. The existing dunning process, although a low cost solution, simply was not working. By implementing a lower cost collections solution with Sutherland provided CRM systems and PCI compliant payment collection tools, the client was able to show many multiples of returns versus the new operational costs. Overall, however, the client retained all the strategic and larger accounts which, in its view, required an amount of delegation and discretion to be applied. In this case, only 40% of the eventual headcount has been outsourced and this, in fact, now reflects the incremental headcount provided by Sutherland. Let’s move on now to assume that the scope is defined – but what about the potential risks.......?

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  • 1. Finding Focus: How Non-Core Activities Are Blurring Your Strategic Vision Dario Mazurek, VP Finance & Accounting Services, Integrated BPO Sales Simon Speirs, Solution Architect EMEA, Finance & Accounting Services Disclaimer This document is the proprietary and exclusive property of Sutherland Global Services except as otherwise indicated. No part of this document, in whole or in part, may be reproduced, stored, transmitted, or used for design purposes without the prior written permission of Sutherland Global Services. The information contained in this document is subject to change without notice. The information in this document is for information purposes only. Sutherland Global Services® disclaims all warranties, express or limited, including, but not limited, to the implied warranties of merchantability and fitness for a particular purpose, except as provided for in a separate software license agreement. All confidential or proprietary information contained in Sutherland’s response shall at all times be and remain the sole and exclusive property of Sutherland Global Services, Inc.©© 2010 Sutherland Global Services Inc., All All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 2013 Sutherland Global Services Inc., rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.com
  • 2. Today’s Speakers 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, Dario Mazurek, VP healthcare and Life Sciences.Sutherland Global Services F&A Services 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 Simon Speirs technology to design optimised and customised outsourcing solutions.Sutherland Global Services F&A Services www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 2 March 5, 2013
  • 3. 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? www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 3 March 5, 2013
  • 4. Laying the Groundwork Do any of you currently outsource? www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 4 March 5, 2013
  • 5. Outsourcing Is More Common Than You Realise! What We Outsource… …And Why We Outsource It  Oil changes for your car  Better use of your time  Less complicated  Quick-serve food  Better managed  Childminding services for your kids  Access to best processes  Access to better tools and  Lawn and landscaping services technologies  Lower cost  Contracted home improvements  Time saving  Freelance contractors  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! www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 5 March 5, 2013
  • 6. 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... www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 6 March 5, 2013
  • 7. 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? www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 7 March 5, 2013
  • 8. Aims & Ambitions for the Finance Department 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. Strategic Business Decision Support Finance Focus Financial Reporting Transaction Processing Administrative Transactional Time Spent Decision Making From To• Finance as a function • Finance as a business partner• Transaction processing requiring effort & attention • Focus on performance management for core processes• Focus on ad-hoc operational solutions • Finance operations very low cost & effective www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 8 March 5, 2013
  • 9. 8 Key Trends Driving Growth in F&A Outsourcing Market KEY TRENDS EXAMPLES OF COMPANIES 1 Up the value chain: more complex processes being outsourced • 2 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 3 gaining influence • 4 Rising adoption of F&A outsourcing in mid-market companies Publishing 5 • Growth of F&A outsourcing in emerging and new verticals such as retail, healthcare and utility • 6 Rising bundled IT-BPO contracts for F&A outsourcing • 7 Globalisation of delivery locations - Brazil, China and Egypt are emerging destinations beyond India and Philippines 8 It is not all about costs - companies have leveraged sourcing footprint for activities (R&D, product development) that drive top lineSource: Bain experience; IDC deal database; Primary interviews; Press articles www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 9 March 5, 2013
  • 10. Finding the Dividing Line Retained Shared Services (internal / external) • Decision Making Typical Authority • Routine & Process • Acceptance and Strategy Driven Approval • Rules Based • Risk Management • Can’t Be Automated Business • Proximity to Business • Data Mining Processes • Vision • Strategy Value Add • Policy Setting • Research Transaction • Analytics Management • Knowledge Driven Finding the Balance of Risk and Strategic Importance www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 10 March 5, 2013
  • 11. A Detailed Look at What to Outsource & What to Retain Typically Retained Typically Outsourced Strategy Development Strategy Development • Strategic analysis Approval • Support to strategic analysis and strategy development • Vision/mission Development • Policy design and maintenance • Policy Setting and Approval • Strategy and policy implementation • Investor Relations Strategy (Co-develop) Financial Planning & Analysis Credit Management Financial Accounting Management Reporting • Credit Analysis • Close Coordination & • Proforma reporting Tax Planning & Income Tax Admin Approval • Credit Monitoring optimisation support • Variance Analysis • Bad Debt Recovery • Reconciliations, Analysis • Reconciliation vs Books Treasury (Hedging) & Adjustments Cash Forecasting • Ad hoc reporting Investing & Financing • Consolidations • Daily Cash Management Business Process • Forecasting & Reporting External Reporting Tax-Compliance Management Reporting • Payment/refund Processnig Management • Pro-forma Statutory • Analysis & Commentaries Budget & Forecasts • Model Maintenance reporting • Ad-hoc Reporting (Co-develop) • Model Maintenance • Reporting • Production of technical Decision Making Authority • Data Compilation, notes Performance Reporting Maintenance & Reporting Acceptance & Approval Integration (e-enablement) Decision Making Transaction Processing Administrative Approval • Accounts Payable • Maintenance of procedure, Authority • Accounts Receivable processes • Cash & Banking • Maintenance of chart of Acceptance • Invoicing accounts, cost centres, vendor & and Transaction • Fixed Assets customer master data Approval Management • Cost Accounting • Document handling & archiving • Inventory Accounting • Inter-Company Accounting CENTRE SUPPORT ACTIVITIES: • General Ledger Processing SLA REPORTING, KPI MONITORING, CONTINUOUS IMPROVEMENT, SERVICE RELATIONSHIP MANAGEMENT, STAFF MANAGEMENT & DEVELOPMENT, MAINTENANCE OF PROCEDURES AND PROCESSES www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 11 March 5, 2013
  • 12. A View on What is CORE to a Finance Department Accounts Fixed Payable Payroll Assets Accounts Cash Receivable & Banking Financial Accounting F&A Management Reporting Outsourced 95% 95% 100% 80% 70% 70% 50% 5% 5% 20% F&A 30% 30% 50% Retained Credit Monitoring Physical collections Cash Management Report finalisation Bank Relations Books ownership Contract Financing Tax liaison Risk Management New Skills for Process Change Management the Retained HR Change Management Organisation Service Level Management Supplier Management www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 12 March 5, 2013
  • 13. Outsourcing and Offshoring Are Widely Prevalent Across the Entire Spectrum of FAO Activities Transaction Processing Treasury Tax Record to Report Order to Cash Procure to Pay Payroll General Monthly/ Consoli- Financial Requisition Source to Gross to Net Tax strategy Ledger Quarterly Credit Order Entry Purchasing dations Recon Materials Gross Calc Calc & policy Accounting Close Benefits Payment Fixed Asset Inquiry Accounts Payroll Time & Tax admin Admin/ Billing Cash App Approval Accounting Handling Payable Process Attendance Treasury & comp. Accounting Process Mgmt Accounting T&E Procuremen Management & Policy Tax policy & theory Accting/ t Card management/policy Collection Bank Recon design Reimbur- Admini- sement stration Management & Policy design Management & Policy design External Reporting Decision Support Control Expertise External reporting policy/mgmt Actuarial Financial analysis, M&A and SOX Internal Audit Risk Mgmt Analysis/ Project Mgmt Divest. Legal Entity Reporting Statutory Reporting Reserving MIS/Management Reporting Planning Regulatory Reporting Rating Agency Relations Revenue/ Performance Product line Investment Budgeting & Expense Forecast Measurement profitability Planning Fin Planning Investor Relations Allocation Strong outsource potential >50% offshoreable 20-50% offshoreable Typically in house <20% offshoreable www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 13 March 5, 2013
  • 14. 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… www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 14 March 5, 2013
  • 15. Real Case Studies: Cash Applications and Credit & Collections Cash Applications B2C / B2B Collections • Receive and process cheques • Low value, high volume customers • Manage EFT/Chaps payments within early debt cycles • Clear down customer payments • Manage unapplied / unidentified cash • Credit management – limits & legal • Manage reconciliations management • Strategic accounts – high value / • Troubleshooting support for payment sensitive accounts exceptions • Dunning & very old debt collections • Reconciliation sign-off Service Delivery Management 95% outsourced 40% outsourced www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 15 March 5, 2013
  • 16. 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! www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 16 March 5, 2013
  • 17. Thank You Dario Mazurek—Presenter Vice President, Integrated BPO Sales Finance & Accounting Outsourcing Sutherland Global Services dario.mazurek@sutherlandglobal.com Simon Speirs—Presenter Senior Director, Solution Architect, EMEA Finance & Accounting Outsourcing Sutherland Global Services simon.speirs@sutherlandglobal.com www.sutherlandglobal.com© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. 17 March 5, 2013