Technology the "New Normal" enabling business


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Technology the "New Normal" enabling business

  1. 1. Inside: 6 Thought PapersBPO Future ForwardTechnology the “New Normal”- Enabling Businesses 1
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  3. 3. Index INDEX1. Social Networking in Customer Care Centers 7 - 112. The death of distance in Supply Chain 12 - 153. Designing an Optimal Technology Landscape – For 16 - 21 Accounts Payable Transformation4. Special Tools for Special Purposes – Addressing the 22 - 27 Sourcing & Procurement Challenges5. Winning the Red Queen’s Race – Redoing the math of 28 - 32 value creation for Communication Service Providers6. Dealing with the “New Normal” in Finance Operations 33 - 39 3
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  5. 5. F o r e w o r dDear Reader,Organizations around the globe are continuing to grapple with one of the mostchallenging business environments. The increasingly rapid pace of technologicalchange has made technology the business enabler providing us with opportunitiesto innovate, progress into newer markets and develop newer customer centric productsand services.Businesses need to connect use of technology to their business strategy to focus ontrimming excesses, to focus on their core strengths and get to know how technologycan enable and drive value to their businesses.It gives me immense pleasure to present to you the 4th edition of the Infosys BPOJournal which has Technology the “New Normal”- Enabling Businesses as its centraltheme, and brings views from a global strategic advisory firm and Infosys subjectmatter experts.This Journal articulates strategies and solutions to multiple industries by thoughtleaders. This includes areas such as emphasizing the importance of designing anoptimal technology landscape to transform the account payable function withinorganizations. It also focuses on implementing Special Tools which could addresssourcing & procurement challenges and how technology can trigger the death ofdistance in the supply chain. We also focus on redoing the math of value creation forCommunication Service Providers, and adopting Social Networking to facilitatecollaboration in customer service centers and transforming it into a training platformto increase its efficiency.I would like to thank The Hackett Group and all the authors for their contribution tothis edition of the Journal.I welcome your feedback on this edition at BPO_Marketing@infosys.comI wish you all a very happy and prosperous New Year.Best regards,Ritesh IdnaniHead of Worldwide Sales and Marketing 5
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  7. 7. Social Networking in Customer Care Centers Rajesh CheeyancheriSocial Networking can be adopted by a Customer Care Center to facilitatecollaboration. By capitalizing on Social Networking, the Customer Care Center canbe transformed into an informal learning platform that enables traditional trainingand informative sessions. Team members can benefit from knowledge sharing andcollaboration leading to increased levels of efficiency at the Customer Care Center. 7
  8. 8. Addressing Challenges of Customer Care standardized processes for their day-to-day operations. Centers In a Customer Care Center, human capital is a critical resource Companies are focusing on customer service to differentiate - agents/advisors, team leaders and floor walkers work themselves, ensure customer loyalty and retention, compete towards a common goal. Human capital can be empowered effectively and remain profitable. As products and services by applying the underlying concepts of Social Networking become more complex and sophisticated, providing customer such as forming teams or groups to share experiences. For support becomes challenging. For instance, resolving a example, when an advisor discusses with his/her peers how problem for IPTV service, a next generation television service they handled an irate customer, it offers options to manage offered by telecom companies, is far more complex than similar situations in the future. resolving an Internet service issue. Such a collaboration at an advisor level helps improve the Companies must innovate and launch new products or overall skill level of its staff and creates a more informed services faster to ensure consistent revenue and growth. As and empowered organization. In addition to the formal the shelf life of these products and services reduce, Customer training and awareness sessions, collaboration enables Care Centers have to re-train their staff more frequently to knowledge sharing obtained through hands-on experience, handle new services. Since these Customer Care Centers which will otherwise remain confined with the individual. are located in multiple geographies, the cost and logistics When collaboration gathers momentum and attains critical associated with training is daunting. mass, it can become a rich repository of data which can be analyzed to identify the areas of improvement or emerging In a majority of industries, a technology monopoly is trends. redundant. The gap between the market leader and the followers is slim because technologies/skills are easily For advisors, it provides an opportunity to transcend routine adopted. Consequently, companies have to find a distinctive case handling and encourages them to take ownership in value proposition to sell their products. Packaging extended their work. It offers a platform to showcase their work and warranties and selling premium after-sales services with a helps them build a repertoire of case handling skills that is product have now become a common practice. Customers, not always imparted in training. As clients and counterparts who buy these additional services, demand that their are located in different geographies and have different ways problems are resolved promptly and efficiently. Customer of talking and writing, a forum to view anecdotes of advisors Care Centers need to innovate to address these challenges. is useful to understand the nuances, conversational styles and cultural cues embedded in a conversation. Such skills cannot be imparted in classroom training or through Bridging Social Networking with the Customer documentation. Care Center Social Networking and Customer Care Center are very Integrating Social Networking into the different concepts. Customer Care Center Social Networking is becoming increasingly popular because A Customer Care Center works in a gated mode - advisors it is associated with individual lifestyles and caters to the have access only to a pre-defined set of resources (tools, individuals personal activities. It works in a relaxed people, applications, etc). The mode of operations is defined environment with no real deliverables or accountability. by factors such as the business model, data protection, In contrast, a Customer Care Center is a highly reactive and operational efficiency, etc. These factors must be taken into time-bound environment - the clock starts to tick as soon as consideration when introducing concepts of Social a customer calls and stops when the customer ends the Networking in a Customer Care Center. conversation. The efficiency of a Customer Care Center operation is constantly evaluated and enhanced using a System Generated User Modified Content (SGUMC) number of Key Performance Indicators (KPIs). To meet these A fault, case or ticket is the entity around which the whole goals, Customer Care Centers comply with pre-defined Customer Care Center operates. When a customer calls the8
  9. 9. Customer Care Center to resolve a problem, it begins with Public Sharing Spacethe creation of a fault, a caseor a ticketby the CRM Every SGUMC created in the Customer Care Center will beapplication. In its lifetime, the fault is attended to by various stored in a Public Sharing Space. The SGUMCs created bypeople with a sole objective - close it at the earliest. Once a advisors are a good source of information for anyone involvedfault is closed, for all practical purposes, it just becomes a with the Customer Care Center. For example, new recruitsquantitative parameter in the different metrics generated can use it to get up to speed on their work. Similarly, trainingby the Customer Care Center. Invariably, the qualitative teams can use it to examine any area which requires attention.aspects are not captured anywhere.The System Generated User Modified Content (SGUMC) isan entity envisaged to capture the qualitative aspects when SGUMC in Actionan advisor at the Customer Care Center works on a case. Let us evaluate three potential SGUMCs and how theyThe SGUMC entity will have its origin in a system generated interact with different actors:fault, case or ticket that can be modified by advisors at theCustomer Care Center to record their observations, analysis, 1. DreamCasecomments and anecdotes. Once created, SGUMCs can be 2. NightmareCaseshared and exchanged among advisors. 3. Case2WatchAdvisors and Budadvisors DreamCaseAny agent or advisor at the Customer Care Center can Every advisor will have cases that worked perfectly. Theseparticipate in such a collaborative environment. Just as in cases can be self-motivating and provide a feel-good factorany social networking environment, advisors can form groups when one looks back at the work. If an advisor feels that theand communities. A budadvisor is an advisor who shares a case proceeded well, it may be worthwhile sharing it withspecial relationship with another advisor. For example, if buddies. The benefits are two-fold: 1- More people get toTed is a budadvisor of Pal, Ted can comment/update Pals see a case handling they probably can emulate and 2- ItSGUMC. Advisors select which advisor can become their validates the advisors case handling with his/her peers. Itbudadvisor. can also lead to bragging in Social Networking parlance. Step 1 Step 2 Cases Become Budadvisors Budadvisor Budadvisor Advisors Budadvisor at the Center Share it with User User Budadvisors, Exchange comments DreamCase NightMare Submit SGUMC to Access SGUMC from Public Sharing Space Public Sharing Space DreamCase NightMare SGUMC Public Sharing Space Step 1: Create SGUMC Step 2: Share SGUMC with the various Actors Figure 1: Creating and Sharing DreamCase and NightmareCase SGUMCs 9
  10. 10. An advisor can selectively build his/hers DreamCase SGUMC In fact, NightmareCases will attract more discussion and and share it with the advisor community. When a DreamCase comments than a DreamCase. is created, it can lead to different situations: • The advisor can share it with his/her existing Case2Watch budadvisor. The budadvisors can comment on the Today, services delivered to the end user are complex and cases or begin discussions around it. One interesting involve multiple organizations and applications. Typically, use of the DreamCase can be to use it in training or services have numerous components and a long supply chain team huddles where the participants can use it as a spanning different geographies linked together by business case study and discuss it. and service level agreements. • The DreamCase SGUMC can also be directed to a Public For an advisor who is one of the links in the supply chain, Sharing Space. Every registered user can access the the ability to know the status of the case after it had been Public Sharing Space and view the DreamCase. Based handed over to another organization can be helpful. It can on the DreamCases, advisors may want to become a be particularly useful for advisors who are closest to the budadvisor to the author of a particular DreamCase. end customer to ensure that the case is acted upon and not For example, if a Advisor-Z is handling a particular parked somewhere. In addition, it expands the horizon of customer and sees another Advisor-Y having a lot of the advisor to understand and appreciate the challenges of DreamCases around that customer, Advisor-Z can other organizations that are all part of the supply chain. become Advisor-Ys budadvisor. The above situation can be resolved by Case2Watch, the SGUMC created by an advisor which will be updated as NightmareCase the case progresses. Another advisor who is interested in On the one hand, advisors work on DreamCases, on the other, a particular case can subscribe to a Case2Watch for they have NightmareCases. While most people wish to forget updates or to participate in a discussion around that a nightmare experience, these cases provide important Case2Watch. lessons for the individual and the Customer Care Center. It is important to share these experiences with peers. They Social Networking in a Customer Care Center can facilitate may relate to behavioral skills in handling a particular collaboration in a highly reactive environment. For the customer or a complicated technical issue that made the Customer Care Center, it is an informal learning platform case very difficult. that enables traditional training and informative sessions. Step 1 Step 2 Cases Subscribe and Case2Watch get updates User about the User Case2Watch Update the SGUMC Case2Watch Case2Watch SGUMC Step 1: Create SGUMC Step 2: Share SGUMC with the various Actors Figure 2: Case2Watch10
  11. 11. The challenges presented by the nature of Social Networking • The SGUMC to be a good source of data that canand Customer Care Center must be considered before provide insights into a number of parameters from anbuilding an application to realize collaboration. For example, advisors perspective. Quality teams can use it forproductivity and handling times are some of the key KPIs of analysis related to productivity and efficiency.a Customer Care Center that are not relevant in the context • A platform for a new entrant at the Customer Careof Social Networking. Center to assimilate skills and get connected withSocial Networking in a Customer Care Center environment peersoffers several benefits, both in the short-term and long-term: In the long-term, social networking facilitates:In the short-term, social networking enables: • A collaborating and sharing environment to build a • Sharing problem solving or customer handling skills well-informed team and improve the competitiveness gained through hands-on experience to a wider and efficiency of the Customer Care Center audience within the Customer Care Center ABOUT THE AUTHOR Rajesh Cheeyancheri is a Senior Associate with Communication Media and Entertainment (CME) practice at Infosys Consulting. Rajesh has more than 17 years of experience in the telecommunication industry spanning technical and consulting roles at telecom equipment vendors and services companies. Currently he is focusing on the customer service in the CME industry. 11
  12. 12. The death of distance in Supply Chain Shyam.R.Rao Technology as an enabler of BPO operations has moved beyond process and productivity improvements to being an enabler of the clients business performance. Supply Chain BPO services offer the greatest potential in transforming the clients business operations by bridging the distance between front and back office supply chain processes. Supply Chain Visibility dashboards in particular have the ability to enhance collaboration between the client and BPO vendor to optimize the global supply chain in real time. We explore the potential benefits and impact the SCV dashboard can bring about in managing the supply chain in an outsourced environment.12
  13. 13. IntroductionAs the BPO industry has matured, it has developed more and more sophisticated tools and technologies to enable its processes.The move has been from simple inward looking tools like workflow and training tools that enabled the vendors functions toautomation tools which help boost productivity and improve clients back office functions. The next wave of technology inthis growth curve will be those that directly impact and enable a clients business functions. >>>>>>>>>>>>> Tool Complexity >>>>>>>>>> Tools impacting clients business operations Eg: Supply chain dashboards Tools impacting 3 vendor and client Eg: Automation tools Wave Vendor enabling tools 2 Eg: Workflow, training tools Wave 1 Wave >>>>>>>>>>>>>>>>>>>>>>>> Impact on client operations >>>>>>>>>>>> addressed the key concerns of an industry in its infancy - the enablement of operations in a stable and efficient manner. Workflow tools and technologies to enable knowledge capture Wave 1 technologies and transfer were, hence immediately put into practice to ensure that the operations at the vendors offshore locations were planned and routed through smoothly. The outcome was the successful transfer and performance of back office operations at the vendors premises. addresses issues such as improving the productivity of clients processes being performed by Wave 2 technologies the vendor. Automating tools like macros, OCR etc help to reduce effort involved and thus reduce costs and increase efficiency of processes for the client and vendor will go beyond the process and enable the business performance of the client. This will involve moving beyond the process and look at impacting the business metrics of the client. Thus Wave 3 technologies will enable BPO organizations to go beyond the incremental Wave 3 technologies benefits from initiatives like six sigma, kaizen etc and achieve exponential benefits from leveraging "tech as a multiplier" in its processes. This will be particularly effective in functions like supply chain wherein the use of technology can bring about increased visibility and the ability to pro-actively remedy and optimize the value chain in real time. 13
  14. 14. Enabling the Supply Chain 4. Track resolution - through reporting of status and impact of corrective actions identified above The supply chain provides a fertile ground for the implementation of Wave 3 technologies due to the An important feature of the dashboard is its ability to link challenges posed in this area, as well as the exponential varying systems together and enable the client to view the benefits available from implementing tech based solutions consolidated supply chain and collaborate with the BPO to these challenges. Supply chain managers are typically vendor of back office supply chain processes to influence confronted with several obstacles in their efforts to optimize and optimize it in real time. the value chain in real time: • The components of the global supply chain are disbursed across multi-location, multi system and Benefits of a dashboard in Supply Chain BPO across partners/customers with varying requirements services and demands with no common platform A major risk that organizations face in outsourcing back office • Organizations also tend to have multiple legacy processes of a supply chain is that of distance - distance systems that will not talk to each other seamlessly from supply chain partners, distance due to time zones and • Observation of "danger" signals cannot be done in distance due to varying systems that prevent visibility and real time and remedial actions taken in retrospect inhibit real time control and optimization of the supply chain. sometimes result in greater damage leading to By integrating supply chain visibility dashboards into the inefficient supply chains outsourced environment, this risk of distance can be • Out sourced back office components of the value chain effectively addressed and overcome. Some of the benefits further complicate the end-to-end visibility and control of this integration of dashboard technology and BPO services of the supply chain in the supply chain area are: Supply chain managers are hence increasingly looking at • The death of distance in the supply chain - thus visibility dashboards that link the various components/ enabling real time monitoring and control of back systems together and provide a consolidated view of the office supply chain processes performance of the supply chain through well defined KPIs. • Collaborate in real time with the back office BPO team These dashboards combined with analytical and to optimize the supply chain by cross/ upselling, collaboration tools will help monitor and influence the supply expedite/ substitute, prevent stock outs and increase chain to enable real time optimization. conversion ratios • Provide a productivity tool for the client to manage offshore operations by moving the needle from The Supply Chain Visibility Dashboard process metrics to business metrics1 A supply chain dashboard will typically involve 4 Thus by enabling supply chain visibility through SCV components: dashboards in an outsourced environment will de-risk 1. Configurable metrics - Specific KPIs which cover both offshore supply chain operations and ensure real time process (TAT, accuracy, productivity) and business operational control and optimization. This would of course metrics (inventory turns, perfect orders, DSO) which work best when client and service providers collaborate to can be customized by supply chain managers to ensure that all touch points in the process are optimized capture their business imperatives through the application of the technology. 2. Supply Chain Exception Management (SCEM) - by Alerts generated from pre-set values to above metrics. These alerts will be routed through role based user hierarchy 3. Analytical and Collaborative tools - which enable drill 1 down root cause analysis and collaborative problem Vijai Kumar Balachandra & Radhakrishnan Prashant, "Moving the needle in Order Management outsourcing: From Process metrics to solving of above exceptions Business metrics", BPO Journal II, 200814
  15. 15. Case Study A global provider of imaging technology products and services wanted visibility into its service and product performance which include products like digital cameras, printers, imaging accessories and equipment. It also needed the ability to track consumer concerns, calls, and problems with products, returns and replacements. The company partnered with a service provider to create a plug and play supply chain visibility and collaboration workbench based on Microsoft BI stack which consolidated information fragmented across the companys multi-tier, multi-system global supply chain. This customized workbench/dashboard provided the client with a platform to monitor and control its supply chain in real time by detecting signs of possible failures and resolving them proactively. This visibility into product defects and the agility in resolving them has enhanced call center/back office performance and reduced repair and return rates, driving up overall customer satisfaction.Conclusion ReferencesThe supply chain provides immense scope to enhance and 1. Vijai Kumar Balachandra & Radhakrishnan Prashant, "Moving the needle in Order Management outsourcing: From Processenable the collaboration and optimization of processes metrics to Business metrics", BPO Journal II, 2008between the client and his BPO partner through the 2. Arora et al, "Service Performance Workbench - a strategicimplementation of next generation tools and technologies. differentiator", Infosys Whitepaper, Jan 2009Supply Chain dashboards which bridge the distance between 3. Barret Jane, "Collaborative Inventory Practices yield Marketthe front and back office components of the supply chain Advantage" AMR Research, 2008and bring about visibility into the clients global value chain 4. Hostmann & Richardson, "Succeed with businessin particular will help BPO vendors to go beyond process intelligence by avoiding 9 fatal flaws", Gartner Research,improvements and truly impact the business performance Sept 2008of the clients operations. 5. Kard Khalid, "Real World Example: Eastman Kodak Security Metrics Dashboard" Forrester Research, Apr 2009 6. Orlow et al, "Making dashboards actionable" Forrester Research, Dec 2003 ABOUT THE AUTHOR Shyam.R.Rao is a Solution Anchor in the Order Management practice at Infosys BPO. He has 9 years of experience in the supply chain area in the Hi-tech and Discrete manufacturing space. He is an alumnus of the London School of Economics 15
  16. 16. Designing an Optimal Technology Landscape - For Accounts Payable Transformation Shubha Subramanian, Ved Vyas, Rajagopal NVS Companies that leverage technology to automate their Accounts Payable (AP) function can achieve sustainable, long-term benefits by aligning cost optimization objectives to their long-term vision and strategy.16
  17. 17. The current economic condition has caused companies to technology solutions to meet their needs andexperience severe revenue and cost pressure and an requirements, and more importantly, in translatinguncertain future. As a result companies are banking on their long-term vision into action. The sections belowtechnology to deliver benefits beyond just "cost savings" describe the approach to be followed for the initialand help create transformational benefits that assessment phase.can help them not just in turbulent times but in good timesas well.One area which is becoming an important agenda item for Technology Maturity Framework and Gapcompanies all over the world is the automation of AP Analysisfunction, because even today an overwhelming majority of Technology maturity refers to a companys ability to leverageinvoices in companies are paper based. With billions of technology to automate its manual, non-value added tasksdollars worth of invoices getting processed every month, and provide real-time information to enhance decisioninefficiencies in invoice processing and delayed payments making capabilities. The technology maturity framework isto suppliers can lead to increased costs and end user intended to help companies assess their current level ofdissatisfaction. Given that manual processing of supplier maturity vis-à-vis an evolution roadmap. There are 4 levelsinvoices costs anywhere between US $10 to US $20 per defined in the maturity model.invoice, and keying in information from paper invoices is themost time-consuming and the least value added task in AP Level 1departments, companies are increasingly looking attechnology to drive down costs and improve efficiencies in is primarily targeted at controlling paper workflowtheir AP processes. Companies that have successfully of the company.automated their AP function have managed to bring downcosts to less than $5 per invoice resulting in transformationalcost benefits and significant bottom-line improvement. Other Level 2benefits include faster ROI, minimized impact of process involves integrating the imaging and workflowfailures and delays, cash management and working capital solution with ERP and sets the foundation foroptimization, improved decision making, enhanced controls simplified invoice processing.and supplier satisfaction.Traditional approaches to technology involve understanding Level 3of immediate concern areas and gaps, and investing insoftware solutions to address those short-term concerns. involving integration between invoice processingThe sections below, however, advocate an approach where software and the ERP system also includes anthe "gap analysis" is done against a "Technology Maturity electronic workflow. This integration can empowerRoadmap" and the long-term strategic vision of the decision making process by providing real-timecompany. visibility of invoice status, informative dashboards, automated escalations and alerts.We believe that companies that embark on transformationthrough technology enablement should do a two wayassessment on before designing the optimal technology Level 4landscape for its AP function. The assessments involve adetailed review of the following: is primarily applicable to large organizations that operate in multiple geographies, languages and • existing processes and technology the company have large volumes of data. This level requires heavy currently has; up-front investment in supplier data management • profiling and segmentation of their supplier base and solutions, e-invoicing, Supplier portal, payment evaluation of suppliers capabilities and fitment into factory. the overall technology solution. BPO service providers play a major role in helping companies tailor 17
  18. 18. Level Level Level Level Level 0 1 2 3 4 Low complexity High complexity • Automatic uploads of • Implement vendor master invoice tracking system data requests • Implement • Implement into ERP system scanning approval via ERP • ERS • Implement system (OCR integrated • EDI / e-invoicing scanning integrated) system • Vendor portal • Manual • Implement ERP • Implement • Introduce system Processing integrated vendor query payment factory • Implement work flow • No workflow status tracking workflow • Implement ERP system integrated PO Automate through system e-Invoicing Real time environment Automated Data Flow No Paper Flow Manual Table 1: AP Technology Maturity Model The tools and technology solutions currently used and their service offerings. Technology acts as a key enabler that capabilities thereof will need to be mapped against the facilitates this collaboration with the extended enterprises. maturity framework. This will help a company in identifying Data analysis can help in identifying distinct supplier its current state of technology maturity and benchmark its segments and understanding the characteristics and capabilities against best-in-class (Level 4). This constraints that define each of the segments. The questions benchmarking exercise can help companies identify to be considered while identifying the supplier segments investments and capabilities required to transform its AP include: function. • Are the suppliers regular or one-time suppliers? As companies aspire to move up the maturity model, there • Do the suppliers supply goods or services? would be varying levels of investments required at each level. • Are the suppliers high-volume or low volume Any investment in technology should be planned in such a suppliers? way that it acts as a business efficiency enabler and provides • Are the transactions with the suppliers of high- value tangible business benefits. The high technology investment or low value? required to automate some of the manual, non-value added activities in the AP process is one of the major reasons for • Are the purchases from the suppliers against a PO or outsourcing the AP function to BPO service providers. are they non-PO supplies? • Are the transactions with the suppliers simple or complex in nature (attributes to be considered include Supplier Profiling and Segmentation language capabilities, invoice formats, geographies, tax related issues etc)? Another important evaluation involves a detailed study of the supplier database to understand the profiles of the More often than not, companies will have to deal with suppliers the company deals with and their historical suppliers with varying degrees of technology maturity. The behaviour pattern. Companies with insights and supplier profiling and segmentation exercise can provide understanding about their suppliers are better placed to pointers about the type of technology investment required collaborate with suppliers to innovate their products and to optimize ROI. The company should consider investing in18
  19. 19. ERS and EDI / e-Invoicing for high-value and high-volume Designing an Optimal Technology Landscapesuppliers. Though the company has to make upfront Evolution of technology is not a linear process and a singleinvestment in setting up the technology platform and process approach to technology should not be uniformly applied tofor reconciliation, long-term benefits (by way of improved companies. Rather a "One Size Fits All" approach toworking capital predictability, improved on time payment automation needs to be replaced by a strategy that iscapabilities and significant reduction in processing costs) customized to fit a companys overall strategic vision, needscan be quite significant. For the suppliers, the benefits would and expectations from technology solutions.include prompt payment, better cash forecasting, lower baddebts etc. On the other hand, for low-value, high-volume The optimal technology landscape should be finalized aftersuppliers, P-card implementation might be the optimal taking into consideration the following factors:- currentsolution. Similarly for suppliers who are in the mid-segment, technology capabilities, relationship maturity of the suppliera company may decide to implement image scanning segments, tangible and intangible benefits expected fromintegrated with workflow as it requires no investment from automation and strategic long-term vision of the company.suppliers but can yield significant benefits to the company. Identification of the desired state in maturity model will help in identifying gaps, prioritizing resources, focus areas andThe diagram below is an illustrative list of technology will, more importantly, aid in chalking out an action plan tosolutions that companies could consider for their supplier get to the desired state. It should also enable the companysegments: to cope with the immediate constraints and challenges whileTherefore a thorough understanding of the supplier segments making it agile enough to adapt to the changes that theand their characteristics can go a long way in engaging with business might undergo in future.the suppliers and designing the most appropriate technology Companies do not have to go through the various levels ofinterventions for each of the supplier segments that can technology maturity in sequence and can adopt a multi-prongedprovide win-win situations for suppliers and companies. approach to realize optimal benefits from the automation Solution Supplier Characteristics Benefits • Suppliers with established mutual • Supplier invoicing and invoice entry process eliminated trust relationship • No delays in payment, pay only for what you receive. • # of invoices and invoice value are ERS • Pre-determined invoice cycle time resulting in improved working large capital predictability • Manual goods receipts against POs • Processing cost per invoice will be in the range of $ 0.80 to $ 2.50 • No manual intervention required to process invoices • Non-ERS suppliers EDI or Electronic • Improved invoice cycle time and visibility through invoice life • # of invoices and invoice value are Invoicing cycle large • Reduced Processing cost per invoice • Manual goods receipts against POs • Improved ability to avail early payment discount P-Card / Self Service • Minimize the manual efforts through p-Card, Self Service Vendor • Low value purchases Vendor Portal portal, PO flip etc • Prepayment • Simplified process • Centralized sorting and OCR scanning resulting in improved • # of invoices and invoice value is process efficiency medium or Low Paper-Based Invoices • Workflow enabled with integration with ERP to reduce cycle time • Paper invoices for suppliers with and improved visibility through invoice life cycle no e-invoice capability • Approval workflow for non-PO to ensure compliance and visibility Table 2: Technology Solutions for Supplier Segments 19
  20. 20. process. There are tangible benefits to be reaped in each of the create a synergistic value to companies. Only then can the levels of the maturity model and based on priorities, pain areas benefits be truly enduring. BPO providers have the requisite and resource constraints, companies can, with the help of BPO capabilities to combine expertise in process outsourcing and providers, move up the evolution chart either in a fairly short technology in a synergistic way within the AP framework to time-frame or over a longer period of time. For example, provide integrated value benefits to companies. companies that are at Level 0 (of the technology maturity model) Proven technology and optimization expertise of BPO service can leverage outsourcing and technology expertise of their BPO providers can enable companies to scale up the automation partners to move to Level 3 in the short-run. However not all of of their AP functions at reduced cost and in a relatively short its suppliers would be ready or willing to invest in technology period of time. BPO providers will work with companies not for several reasons including ROI, strategic importance of the just in automating and harmonizing their internal AP supplier, value of business transacted between the company processes but also in analyzing and working with the various and the suppliers etc. It is, therefore, imperative to adapt to suppliers to design optimal technology solutions for each of other alternatives to accommodate suppliers unwilling to invest the supplier segments depending on their relationship and overhaul their existing processes. maturity levels (Refer Table 2). The benefits that BPO In the process of automating functions, it is important to companies provide are mentioned below: align process improvements with technology solutions and Offerings of the BPO Service Provider Benefits to Clients • Predictability of working capital requirements • Improved Discount Capture % Working Capital • Reports and analysis • High Visibility on Payables outstanding Efficiency • Unlock cash flows • Prevent late payments (& penalties) • Outsourcing • ~30% Cost savings, Labor arbitrage & shift in • Work Flow Tools focusing controls, Macro Management • Special Handling of discount • Productivity and Cost Reduction Cost Optimization eligible invoices • From Cost Center to Self serving model. • Help in converting Paper based invoicing Supplier to electronic • Reduction of Manual invoice processing and cost based (ERS, EDI or E-Invoicing) of the same • Workflow tools • Improved Paid on Time (PoT) capability • ERP Integration • Productivity Operational Efficiency • Automation - OCR • Escalation and tracking • Reports and analysis • Well informed policy decisions • Drive Standardization and • Consolidation - One process for all harmonization geography/entity Continuous • Improved Accuracy • Leveraging the best talent across industries Improvements • Innovation • Year on year reduction in TCO • Best Practices Sharing • Eliminate waste and non-value added activities • Minimal time spent on answering Invoice status and payment queries • Supplier Portal (Self Help tool for End User Satisfaction • High visibility of supplier queries and higher suppliers) supplier satisfaction on account of accurate and predictable payments • Automated Approval flow • Audit Trail • Electronic Audit Trails Controls & Compliance • Duplicate Processing control • Revenue leak avoidance • Better enforcement of business and SOx controls20
  21. 21. ConclusionCompanies all over the world suffer from an over-reliance on manual processes. The inefficiencies of the manual processes areoften overlooked during times of high growth but become prime candidates of focus during times of recession. New tools,technology and platform solutions have evolved in the last few years that can automate the manual, non-value added tasksinherent to AP function and provide transformational benefits to companies. ABOUT THE AUTHORS Shubha Subramanian - heads the Finance Center of Excellence and handles domain competency and knowledge management initiatives of F&A practice at Infosys BPO. She has worked in the core finance and accounting functions for several companies and also has experience working as a trainer. Shubha is a Chartered and Cost Accountant and also holds MS and MBA degrees in Corporate Finance from University of Wisconsin, U.S.A. Ved Vyas is responsible for driving the products & alliance strategy and commercialization in the F&A practice at Infosys BPO. Ved brings around 14 years of experience in program management, customer relationship management, outsourcing transition and business development. Ved has led many cross- functional and multi-location teams to ensure delivery of ERP implementations and custom development. He has also worked as a Manager in Steel Authority of India (SAIL) for a couple of years where he was involved in production planning & control. He is a B.Tech graduate from IIT-Kanpur and an MBA from IIM Ahmadabad. Rajagopal NVS is the P2P Product Manager for F&A Products & Alliances team at Infosys BPO. He has rich experience in P2P domain - managing operations / designing products & developing reconciliation solutions. Raj has worked with global corporations - across industries like manufacturing, dot com, Capital and healthcare. He is a commerce graduate. 21
  22. 22. Special Tools for Special Purposes - Addressing the Sourcing & Procurement Challenges Bipin Wadhwa with Ravi Panchanadan Although a number of procurement technologies have entered mainstream adoption, there is significant continued innovation in procurement, as evidenced by new technologies, and ongoing refinements in current offerings and product offering restructuring. Several procurement technologies are becoming mainstream solutions, including strategic sourcing applications, spending analysis and e-procurement. These solutions are appealing to a wide audience because of their proven track record to enable and/or deliver significant cost reduction. * Hype Cycle for Procurement Applications, 2009; by Deborah R Wilson, Andrew White, et al.; 28 July 2009, Gartner, Inc.22
  23. 23. Enterprise resource planning systems have been, for some For example, from a CPOs perspective, the reduction of costtime, the key automation enablers of procurement function. & better cash flow can be achieved by sourcing better. ForThey have, perhaps in many cases, created discipline in this, summarized & detailed view of all spends must betransactional process execution and resultant data available through a decision support CPO DASHBOARD,management. However, the Chief Procurement Officers (CPO) preferably at the finger tips of the CPO and his team. It shouldchallenge to reduce procurement cost can be further enable the management, at various levels, to understandaddressed at various stages of sourcing and procurement the progress over key procurement performance metrics,cycle, through use of specific special purpose automated which area or category could potentially need deepertools (which may be decision support, process accelerators investigation for correction, or a relook at strategy.or collaboration tools). But then, this is easier said than done, for many a time, theSpecial purpose tools are generally used for a niche set of reporting flexibility in applications used may be limited - afteractivities such as spend reporting, spend analysis, all each one has his own approach to review the information.negotiation management, (master) data cleansing, cost policy Special purpose tools have been able, to a large extent,compliance and control. No doubt organizations can evaluate, address these by using feeds from different applicationimplement and deploy such solutions entirely through internal instances, and providing the dashboard, which can furnishefforts, but now with evolution of service offerings by the desired summary, and dig deeper to identify possibleBusiness Process Outsourcing organizations, using their area of variance. Similarly, organizations can take advantageservices can create additional advantages - of service of sourcing and procurement point solutions, which provideknowledge, expertise and cost. niche functionalities to address different challenges.The context - CPO Challenges The fundamental difference - ERP and SpecialThe economic recession has brought forth the need to reduce Purpose toolsand control costs. The Chief Procurement Officers role has Growth is an imperative strategy of all organizations. Asgained importance given the CPOs teams influence over organizations grow in revenue and size - people, capacity,managing spends. While proven technologies that enable volume, sites, products and services, the underlying operationstransactional activities exist, such platforms may not generally need to keep pace. Enterprise resource planning platformsalways support every facet of sourcing and procurement enabled implementation of collaboration between variousactivities that can help reduce or manage spends better. parts of the organization, through set of well defined and standard processes. In doing so, they enabled a resultant repository of data, or database, consisting of transactional CPO DASHBOARD Using MS SQL Servers, SharePoint & Performance point technology, a CPO Examples of processes that were primary Dashboard can provide an individual user focus of enterprise resource planning are defined dashboard layout, with instant alerts raising & approval of purchase requisitions, and mail messaging collaboration raising of approved purchase orders based on purchase requisitions, recording of goods receipt, recording of invoice and matching them with purchase orders and goods receipts, SPENDING SCORECARD Goal & recording of payments to vendors and Value Trend Status reporting of payables. For a very large % of Savings YOY 7.45% 11.22% organization, the sheer volume of these % Spend under Management 92.55% 89.05% transactions can be mind-boggling, and well Active Suppliers per Billion & Spend 204.65# 45.12# served by such applications systems % Spend from High Cost Countries 53.35% 52.00% 23
  24. 24. data generated through execution of processes. Many of these, found to fall short. They generally have ability to interface due to the nature of standardized and well defined processes, with, or use data from, varied end to end technology solutions. permitted themselves to be outsourced to captive or third party shared services organizations. Uses, deployment challenges of special purpose Special purpose tools, on the other hand, address a specific tools in sourcing & procurement functions activity or set of activities that may help in providing analytics to supporting decisions, or accelerators to executing However, this may be easier said than done, for either data processes, or collaborate with suppliers. required are available in different and variant systems The spend analysis solution tool is enabled by on line analytical processing or OLAP technology, which allow fast analysis of shared multi-dimensional information. Unlike traditional database management systems, which store data in many two dimensional or flat tables, OLAP technology allows data to be in a three dimensional table. It supports multiple hierarchies which allow data to be categorized and classified & viewed at various levels WHAT (dimensions, nesting and categories). CREATES It permits easy data manipulation - slicing (extracting values relating to a THE single value of a dimension), dicing (extracting a sub cube of original), rotating ADVANTAGE? (changing the dimension orientation or swapping a row/column with a off- Illustrated with spreadsheet dimension). example of how Data from different systems, with different file & data formats, can be ported typical spend (loaded) into the solution tool. One can define a standard format and for analysis solution each source data type, rules to load and convert into standard need to be works. defined and re-used. Similarly, for creating analytical reports, rules based reporting templates can be created. Any ad-hoc reporting template, can also be created using certain commands. An important aspect of the point solution tool is that all hierarchies and rules set can be modified with limited efforts. For example, with the set of data available through the (enterprise resource planning or legacy applications), or data repository generated from enterprise resource planning may not be adequate, or capability to conduct the analysis systems the procurement leaders would need an analysis of may be limited. Then again, the humungous information may their spend for a period. Special purpose tools can help first require DATA CLEANSING, issues arising from the facilitate the tasks to collate, organize, classify, analyze & summarize spends for each category or commodity, by various dimensions. The base data will be obtained from the enterprise DATA CLEANSING resource planning databases, processes & analyzed in the Special data integration tools can facilitate special tools. Generally, you may find the special purpose tools review of the data from various systems, a better option to use, because of their concentrated focus, analyze issues, and clean data based on the tools have built in niche functionalities to address varied defined data quality rules issues involved (tactical or transactional). They are often resorted to in areas where general end to end solutions are24
  25. 25. existing junk or duplicate data or availability of data in These indeed have led to cost savings, by the sheer visibilitydifferent formats. So, there will be efforts required to carry of, and increased competitiveness amongst suppliers. Andout data rationalization, data enrichment and organizing to it creates transparency in purchasing and supply process!a standard data schema - perhaps both at transactional and But, does all procurement take place as per contract terms/ or master data level. Special purpose tools can serve as and conditions? Is there any chance of cost leakages due toprocess accelerators here. say, incorrect prices being levied or in appropriate implementation of the terms? Such conditions could exist in SPEND ANALYSIS many organizations, and many times trying to keep track of Based on OLAP technology, these tools can all of these can be quite challenging. Two such instances port spend data sets from different systems, are keeping track of use of software licenses (SOFTWARE permit classification at different levels of ASSEST MANAGER) and managing telecom spends data, defined analytical reporting templates (TELECOM EXPENSE MANAGER). Suffice to say, each have and generate multi-dimensional spend reports. own set of challenges. There are tools to accelerate the Standard and ad-hoc reports can be thus process of compliance and control for such special cases. generated in a speedy manner, with spend It usually is in the interest of procurement to ensure that the patterns made visible with high and detailed organization pays only for the software licenses actually level views available used, and to identify license reallocation opportunities. One needs to evaluate compliance of software license terms. But again, the use of licenses may be decentralized, withThe cleaned data can be analyzed by various dimensions, many points of use. Tools can be deployed on servers, tousing the SPEND ANALYSIS tools, a combination of process gather the license usage data from various systems, whichaccelerators and decision support. The resultant output can then be analyzed for deployment patterns, and identifyenables visibility of spend patterns. One may even need to areas for rationalization and changes. Surely, preventing overenrich the existing spend data set by adding external values utilization, in many cases, means preventing penalties.such as data or supplier codes, from external sources, to Under-utilized licenses can perhaps be discontinued. Butpermit better classification and analysis. For sourcing, the deploying this tool needs some specialist understanding andspend view can provide an enhanced understanding of the then, there is manual effort in conducting the compliancespend requirement and its patterns. The enhanced spend review once the inventory is reports, amongst others, can thus be used for reviewingor developing and deciding on spend strategies. SOFTWARE ASSET MANAGERAs we go downstream in the process, there are other e-SOURCING tools that well serve collaboration with suppliers, Such tools can generally easily be ported onwhich we find useful. During the sourcing strategy execution, to organizations servers, under secureone may need to invite request for proposals (RFPs) or conditions, and can inventories the usage ofinformation or quotations (RFIs/RFQs), to allow various specified high costing software licenses. Thesuppliers to bid and compete. This may be a time consuming software license can be monitoredprocess, if we leave it as manual paper based or simply emailbased enabled. Collaborative tools for such request can beused. These tools permit online contact, submission of In the second case, telecom expense is generally a large chunkrequirements and terms, with response from suppliers and of the spend portfolio given the ever increasing dependencecreating comparatives. These special tools or applications of electronic means of communication. Each region may havecan create reduced cycle times and processing efficiencies. its own set of service carriers, who are contracted with, andMoreover, sourcing tools have also been found to be useful need to be managed. The new connection requests, old attires,to negotiate, with short listed suppliers invited for on-line requests, call reports and invoices all of them arguably deservereverse auctions. Such on-line auction tool can be used well, scrutiny, as the sum of errors may prove to be a large hole inwith variance of what data we want the suppliers to know. the pocket. The solution, as do others, needs combined set of 25
  26. 26. tool and services, that can establish a cost effective and There may be little doubt regarding the advantages that such scalable network, improve transactional service efficiency and tools offer. But there can be implementation challenges and reduce cost of operation. extensive manual efforts. Given the challenges related to systems and data, there are enormous manual activities involved in this processes, generally because large TELECOM EXPENSE MANAGEMENT companies require handling huge volumes. Such tool can automate telecom related inventory, order tracking, call detail reporting, Business process outsourcing / off shoring units are in a auditing. The tools can link to various known position to specialize in providing the comprehensive applications systems. solutions to complex spend data harnessing and analyzing issues. It can combine service with special purpose tools, to provide the overall solution, based on the clients strategy. These are some examples of special purpose tools, which Firms can take advantage of these since: can add value to the sourcing and procurement processes. • Clients can gain not just on labor arbitrage, but also In some cases, ERP vendors may include them as part of from the expertise gained through varied experiences. their offerings, or organizations may need to source it from And from comparative speed of implementation when other vendors. Having said that, in certain cases, one may handled by such experts develop it! But all in all, such special purpose tools have • With extensive experience, one tends to have a well been found useful for decision support or as accelerators to developed methodology to handle such complex issues the processes or as collaborative tools. • The methodology, coupled with the solution tool, provides a unique opportunity for clients to outsource Advantages of engaging a business process such strategy and procurement support and focus on outsourcing partner sourcing strategies for high end products and services • Furthermore, any existing tie ups by the BPO for the Traditions change. And so has what a good business process solution tool can reduce the effort on tool selection outsourcing partner can do for you. and training process In deployment • Creating the initial set ups, indexing, mappings, templates and rules for data porting or analytical models etc., in various tools (CPO Dashboard, of solutions Data Cleansing, Spend Analytics, Software Asset Management) with special purpose tools, a • Data profiling, rationalization, enhancement, enrichment, and business process maintenance (CPO Dashboard, Data Cleansing, Spend Analytics) outsourcing unit • Capturing data not available in the systems, from various manual & non- can provide manual sources (CPO Dashboard, Data Cleansing, Spend Analytics, services, in the eSourcing, Software Asset Management) areas of • Order provisioning, inventory management, invoice reconciliation & (examples of dispute management, usage management (Telecom Expense solutions Management) discussed above, • Setting up requests for information/quotations/proposals, bids and where these reverse auctions based on defined criteria ( eSourcing) may be relevant • Conducting compliance reviews and audits, based on defined criteria are given in (Software Asset Management, Telecom Expense Management) brackets): • Generation of related analysis and reports (perhaps all above)26
  27. 27. ConclusionTraditional data BPO services were enabled by end to end platforms, owned and managed by clients and used by the outsourcer.The current trend is moving to BPOs investing in development of specific point solutions, which combine service and niche orspecial purpose tools. It creates advantages for clients in terms of improvements in cost and effort investment -comparativelyreduced implementation time, benefits arising from not just labor arbitrage, but from ready expertise and centralized focusservices, and possible available tie ups for such tools. ABOUT THE AUTHORS Ravi Panchanadan - Heads the Global Sourcing & Procurement Practice at Infosys BPO. Ravi has over 18 years of rich experience in Global Sourcing with Intel Corp and in overall Supply Chain Mgmt with Unilever. He has been instrumental in setting up International Purchasing Office for Intel in India. Ravi has a Post Graduate Diploma in Management from Xaviers Institute of Management. Bipin Wadhwa is part of Global Sourcing & Procurement Outsourcing practice at Infosys BPO. He has 14 years of diversified experience in the area of Operational Process Consulting & Risk. Bipin has been instrumental in setting up Center of Excellence for Sourcing and Procurement at Infosys BPO. He has conducted process consulting & discovery assignments involving solutions design and feasibility assessments, including centralization of processes in a Shared Service Center Model. He is a Chartered Accountant, Cost Accountant, and certified MBA from Indian Institute of Management, Bangalore with specialization in Supply Chain Management. 27
  28. 28. Winning the Red Queen’s Race – Redoing the math of value creation for Communication Service Providers Gopal Devanahalli, Harry Jose, Vinay Peshwa "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!" Red Queen to Alice, Through the Looking Glass by Lewis Carroll28
  29. 29. The Red Queen might as well as have been talking about CSPs are still struggling to addressing leakages inthe Communications Service Provider (CSP) marketplace revenue for their newer products such as IPTV.of today. Entry of nontraditional entities like Cable and If done right Business Process Outsourcing can enable CSPsUtility companies and resultant competition, dwindling of overcome these operational challenges.customer base and obsolescence of business models (e.g.wire line voice) are making CSPs strive twice as hard tomaintain their ARPUs (average revenue per user), let alonegrow it. Getting ahead in this Red Queens race is possible Unlocking the value gained from Businessonly if CSPs are able continuously exceed the expectations Process Outsourcing - the concept of Valueof their customers through the launch of new products and Multipliersservices- even if it comes at the cost of Capex intensive The initial business process outsourcing value propositionnetwork/technology upgrades such as 3G,4G,FTTX rollouts, was one of cost arbitrage. Over time BPO firms have builtfemtocells etc. CSPs have responded to these changed upon this value proposition and enhanced the value theyrealities in the market place by chalking out detailed provide to CSPs by undertaking process improvementsproduct portfolio expansion plans in both wireline and through reengineering and six sigma techniques. However,wireless space and have committed significant investments today a combination of two contrasting factors is compellingrunning in to billions of dollars. CSP firms to reconsider their engagement models and the value they derive from their outsourcing partnerships. • changed market conditions and challenges faced onChallenges in keeping Customers satisfied the operational front by CSPs - cost reductionWhile launching new products and services will enable perspectiveCSPs to meet customer expectations, ensuring that they • the competency demonstrated by pioneering BPOremain satisfied is possible only if operational process firms in moving beyond the traditional SG& A focusmetrics (fulfillment, assurance and billing metrics) are and developing solutions addressing the Cost ofaligned to the customer experience drivers (ease of Service & Sales portion and Operating Revenues ininstallation, quick and painless complaint resolution, single P&L - value creation perspectivebill for multiple services etc.). This is an area where most The question CSPs are now posing to their BPO partners isCSPs are facing challenges. The fact that most CSPs have whether, by leveraging on their CSP operations expertiseretained their legacy systems and process frameworks for gained over the last few years, they can move beyondthe fulfillment, assurance and billing of newer products process level improvements and create value at an end-to-and services have not helped their cause, either. end value chain level.Operational inefficiencies are resulting in revenue and costleakages as well. Consequently most CSPs today are The implication is that the BPO firm needs to be able tograppling with a number of challenges in their existing deliver not only on the CSP operations metrics but also onoperations framework. For eg the CSP business metrics as well. This calls for a deep Product failures - incomplete analysis of supply chain at business driver level understanding of the CSPs line of the time of product launch have caused product business, understanding of how the operational metrics failures due to supplier lead times being longer than affects these business drivers as well the expertise to committed installation SLAs. positively impact the identified business drivers by eliminating systemic inefficiencies through utilization of a Customer dissatisfaction/ attrition due to installation core organizational competency such as the ability to do delays - improper logistics management have resulted customized technology interventions. A BPO will then be in issues like delayed installation due to CPE able to create a value multiplier for the CSP rather than (Customer Premise Equipment) being unavailable at merely provide a process level savings. the time of installation engineer visit/ loss of CPE etc. According to us a Value Multiplier is a combination of two Revenue Loss -Though revenue assurance systems have competencies been set up for most of the existing portfolio of products, 29