Richard Fifield, Head of Outsourcing, Grant Sayer, Head of IT, Tenon Outsourcing In this session, Tenon Outsourcing share their experience of implementing online accounting solutions and explain the benefits realised using case study examples.

1. Save time, reduce risk and improve quality:
“How online accounting adds value”
TENON OUTSOURCING
Presented
by
Grant Sayer
National Operations and Technical Director
14 October 2009

2. Agenda
Introduction
Tenon plc
Tenon Outsourcing
Tenon experience [and wisdom] of delivering online
accounting solutions
Online solution for accountants [ITIO – “Case Study”]
Adding value - Save time, reduce risk and improve
quality
SALT – “Client Experience” [Video]
Conclusions
Questions & Answers

3. Tenon plc Turnover
£m
PBTA
£m
Underlying values, year to 30 June:
2004 80.5 6.4
2005 100.5 7.9
AIM Listed (Ticker:TNO) 2006 122.9 10.3
Top 10 accountancy and business services provider 2007 136.7 12.3
2008 160.0 16.0
Over 1800 employees, Over 40 offices 2009 151.0 18.0
Current run rate turnover c£151m
Purpose
“Top quality financial, taxation and business advice to make our clients more wealthy”
Key service lines
Business Tax & Advice Business Tax &
Audit & Accounts Advice
Accounts &
Financial Services & Specialist tax Audit
Outsourcing Corporate
Finance
Corporate Finance Outsourcing
Turnaround & Recovery Turnaround &
Our clients Recovery
FS & Specialist
Self-made men and women Tax
Growing businesses
Funders to these businesses
30,000 clients, 10,000 corporates
www.tenongroup.com

4. Geographical reach (UK)
1. Aberdeen 23.Leicester
2. Bacup 24.London Baker Street
3. Basingstoke 25.London Chiltern Street
4. Birmingham 26.London Finsbury Circus
5. Bolton 27.London Tavistock Place
6. Boston 28. Manchester
7. Bournemouth 29.Melton
8. Brighton 30.Middlesbrough
9. Chelmsford 31.Nottingham
10. Chorley 32.Perth
11. Doncaster 33.Portsmouth
12. Edinburgh 34.Preston
13. Glasgow 35.Reading
14. Grangemouth 36.Rochdale
15. Grimsby 37.Sheffield
16. Harrogate 38.Southampton
17. Hull 30.Southend on Sea
18. Inkberrow 40.Sunderland
19. Inverness 41. Wakefield
20. Isle of Man 42. Windsor
21. Kendal 43. Worcester
22. Leeds 44. York

5. About Tenon Outsourcing
Tenon Outsourcing (TO) ranks as one of the leading outsourcing providers outside
the “Big 4” and sources Financial and HR solutions for businesses, ranging from
owner-manager firms across the UK, through to global corporations.
TO offers a unique combination of locally delivered services, backed up by national
and international expertise and experience.
This capability enables TO to deliver high-quality yet cost-effective solutions.
A leading provider of finance, accounting & human resource outsourcing solutions
to “entrepreneurial” businesses
Range from OMBs to ‘blue chip’, listed and International
Mission: to reduce risk, improve performance… at best price
Turnover - c£10m, People - 170
Clients - 1600 (c500 “full” outsourcing clients)
Hosted accounting systems
NOA Award Winner
Strategy to build a 20 million business as soon as we can

6. International Links
Strong international links and offering
10 years of experience, helping companies move into Europe
3 brands for dealing with Internationals….
Morison International

7. Pain in time turns to Wisdom
2005 was about how do we build a ‘proper’ outsourcing business
> 4 Building blocks
> Excellence of solutions
> Excellence of delivery
> Excellence of sales and marketing
> Excellence of technology
– The future was ASP, Hosted, SaaS, in cloud
> Benefits
> Cost benefit to both us and the client
> Efficiency benefit
> Risk benefit [Resilience]

8. The path to wisdom
> 2000 – Microsoft Dynamics GP hosted internally
> 2006 – SAGE [Hosted with ITIO]
> 2006 – SAGE [Proof of Concept]
> 2007 – Microsoft [SaaS] in conjunction with SERVO
> 2007 – Netsuite Business Partner
> 2007 – Online Web Expenses
> 2008 – Online Timesheet Pay & Bill
> 2009 – Online HR solution
> 2009 – Online Payroll services [Self service, ePayslips]
> 2009 – Review of e-conomic, Xero, Dynamics AX, Aqilla + others.
> 2009 – Franchise, Recruitment, VC, International + other tailored
vertical solutions
> Year 2010 – More vertical solutions, including unified
communications [CRM, Mobile and email]

9. Wisdom
> Hosted model is here to stay
> Demand is increasing – culture of ‘plug and play’
> We need to remain close to our clients
> Clients want choice as to what elements to outsource
> Technology is key in driving out cost and streamlining business
processors
> The price of accounting and other infrastructure is becoming
immaterial
> Contractual elements remain vague
> Bureau licensing
> Sharing risk
> Liability clauses
> Data protection
> Pricing and service elements need to be transparent to clients

10. Wisdom
> Technology drives changes in our working practices
> Still a resistance to change
> Services are increasingly interlinked
> Requires skills to connect applications together
> We need to offer solutions at different levels, one size does
not fit all
> Solutions need to be tailored to specific vertical markets and
provide an end-to-end solution
> Many new entrants [Need resource to evaluate]
> Stay strong, be clear on your strategy [Remember,
functionality over form]

11. Wisdom - Restructuring to deliver online
services
>Consolidation of process
centres
>National Framework for quality
control
>Specialisation of tasks and
process
>Product / vertical market
development
>Academy training
>Sourcing technology partners
>Focus on technology and
integration
>Simple messaging and
structured marketing campaigns
>Develop channel (eg. REC,
BFA)

12. Wisdom - Simple communication
HR
•Tenon Employer Protect Web Expenses
•Staff Portal
Core Service
Payroll Timesheet
•Self Service
•ePayslips Pay & Bill
Finance
•Sage
•E-conomic
•Netsuite
•Dynamics GP

13. Wisdom – right partner for the right vertical
> Microsoft [Client experience to come]
> Our experience of ITIO
> ITIO [Sage – smaller client]
> Case study by Rob Lambden
[Delivering services to accounting practices]

14. Recap – save time, reduce risk,
improve quality, best price
“We need to match our offering to the clients needs and ROI
requirement”
Clients focus:
> we must find ways to increase revenues”
> “we must continue to control and reduce costs”
> “we must identify, understand and reduce risk”
> “we must find better ways to support business change”
> “we must improve service levels”
> “we must get better value from our finance and HR
function”

15. The business case for an Online solution
1. Build base case components
- Understand business issues/strategy
- Cost today and tomorrow
- People - cost, sick, hols etc
- Composite skills requirements Strong methodologies
(devil in detail)
- Technology
- Space etc
Document processes
Compare apples and apples

16. Working up a business case
2. Highlight barriers and agree solutions
3. Design best technology and delivery solution
4. Specify the services
Table of responsibilities
5. Create a pricing model
Predictability, variability, scalability
Pricing structure
Per head/division
Volume
6. Final business case prepared
7. All of this culminates in the best solution, with the
best service delivery team to back it up.

17. SALT video
> Tenon, Microsoft, Servo – Client case study

18. SALT – Key messages
Started in 2003 – 1st year Turnover = £600k & 8 employees
2009 Turnover = c£2.2m & 25 employees
> Owner manager time saved
> Access to a breadth of expertise
> Systems that grow with you
> Big business solution – small business cost
> Saving on high cost of investment in accounting systems
> Low cost hosting solution – gives security of data
> Local & Global – access anywhere in the world
> Helps owner manager drive value into the business
> A Perfect Partnership!

19. Conclusion…more or less pain?
> We believe online proposition adds value….and so do our
clients [eg. SALT]
> Time, risk, quality……..quantifiable ROI
> The online community will get stronger, broader and
cheaper….the differentiator will be those who can glue the
applications together
> Google, Microsoft, SalesForce, Oracle, SAP, IBM,…will
drive change…..do we really care?
> We all need a differentiator……Tenon’s is adding in specific
financial [Tax, Financial services and Compliance]
outsourcing products into the mix
> We all need a friend…..partnerships and alliance are key

20. Proof Outsourcing ‘can’ be more Cost Efficient
Model based on a company with £2m turnover with 10 staff
In-house Accounts Costs Outsourcing Costs
Bookkeeper / Annual fee (based on
£28,000 £25,800
Accountant £2,150 per month)
ERS NI (12.8%) £3,584
Pension (3%) £840
Management Time £3,500 Training - systems £350
Plus SSP, SMP,
Remote access (1
admin, software, £5,000 £1,250
user)
hardware
Recruitment costs
£7,000 Set up fee** £2,100
(25%)**
Total annual savings TOTAL –
TOTAL – one off
£ 7,000 of £13,524 £2,100 annum
per one off
TOTAL - ongoing £40,924 pa TOTAL - ongoing £27,400 pa

21. Questions