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Crossing the Borders Between Core F&A & Procurement

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  • 1. Crossing the borders between Core F&A & Procurement: The synergies are too great to ignoreShared services and Outsourcing week 2012 - AmsterdamTerje Kløvås – Global ERP Program Telenor ASA Sources: The Hackett Group, KPMG, Infineon technologies, ING, Mattel, Accenture, SAP and Oracle
  • 2. Telenor is one of theleading internationaltelecommunicationcompanies and has 146million mobilesubscriptions.Our Largest markets# of subscribersUninor India 31,5 millGrameene Bangladesh 37,6 millTelenor Pakistan 29,3 millDTAC Thailand 23,4 millTotal workforce 30 700
  • 3. Master your Master dataEmployeesLegal and department structureSuppliers Global – Regional – Local Authority Matrix Approval hierarchyItem categories
  • 4. How to serve and attract theorganization? Be a partner – get involved as early as possible in the decision making process Move beyond cost savings. Category-, demand-, supplier relationship-, and risk mgmt Operating model. Centralize strategic procurement and merge transaction related procurement with F&A processes Reduce supply chain risk. Where do your suppliers produce their core components?  Thailand flooding stops Honda and Toyota Nov.-11  Japan stops Mach-11  Iceland stops airfreight 6 days April -10  Palm oil, Indonesia and Unilever April -08 Leverage system and technology
  • 5. Questions to ask yourself to assessyour Procurement maturity Is the Procurement function organized to deliver optimal value to the organization by focusing on outcomes rather than cost? Are key organizational stakeholders fully engaged in the development of Procurement’s strategy, and does this reflect the wider organizational strategy? Is all spend managed through category management and strategic sourcing processes, with a competitive sourcing process mandated? Does Procurement actively lead SRM and SPM including the id of strategic suppliers, the setting of metrics and follow-ou of non performance? Does the Procurement function influence in excess of 80% of spend?
  • 6. Questions to ask yourself to assessyour Procurement maturity (cont.) Does the Procurement function lead or get actively involved in demand management initiatives in your organization? Is risk management an integrated part of day to day operations and the contract management process? Are Procurement processes automated including an integrated e-auction an web supplier portal? Is there a consistent benefits tracking framework (capture, realized & reported)? Is procurement policy used as a mechanism for driving behavioral change throughout the organization, with non compliance being exceptional?
  • 7. Change the business landscape to meetthe requirements of a coordinated andcollaborative responseObtain full spend visibilityControl your cash outflows withaccuracyDiscover why you should integrate amail system and vendors with your ERPsystemCoordinate local, regional and globalFinance and Procurement production in aSSC perspective
  • 8. Where to focus first?• Evaluate processes – Look for value to business v’s implementation complexity – Synergies with other Key Business Initiatives• Look for less visible benefits – Reduced admin time for managers and procurement – Simplified flows to eliminate waste – Transparency in financial data
  • 9. SustainableShared service support centres Embracing the easy wins byreducing Purchase to Pay cycle time
  • 10. Value Drivers Shared Services create value for Business units through Group Management through Reduced unit Appropriate Improved Increased costs of quality of internal control administrative administrative and organizational services services transparency flexibilityScale Minimise errors Governance of Reduces riskCommon processes On time common services Group policiesCommon platform Business units focus Standardisation on coreLabour arbitrage Common account Increased speed and string reduced risk in green field rollouts 10 10
  • 11. Procurement Process in a shared service perspective Call off RFI, Contract Call off under ApprovalVendor RFQ Vendor & Delivery existing &search Reversed selection Catalogue acceptance contract authorization auction registration Invoice Reconciliation Reporting Posting Payment entry AP/GL
  • 12. SustainableShared service support centres Closing Remarks
  • 13. What is difficult?• Supplier adoption in different markets• To many allowed access in core systems – Use Help Desk, Web forms and workflow systems instead• Accept that some processes are extremely costly to automate – then don’t• Deny supplier registration and move to reimbursement of personal expences
  • 14. What is less dificult?• Local Scanning of invoices• Personal order ID – Mine is: TN BC 540944• One common account string• One common IT platform• Do not sell process without system support• Do not sell IT systems without process governance
  • 15. People Power MotivationCross-centre training Meetings & visits International job opportunities Performing work in projects Special assignments
  • 16. QUESTIONS?