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  • 1. Thinking about outsourcing:Business Service CentreJuan Fernandez LaportaNissan Europe, Finance Restructuring General Manager Date 18.3.09 1
  • 2. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings Questions Date 18.3.09 2
  • 3. Introduction to NissanContinuing Innovation as a Global Brand New face of Nissan in Europe: Vision: Nissan: Enriching People’s Lives Qashqai crossover concept car Mission: Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders in alliance with Renault. For the automakers, products are one of the key elements for success. Nissan strives to develop and introduce innovative and attractive products, which are aligned with market trends. Main Models: Micra, Micra C+C, Almera, Primera, Maxima OX, 350Z, Roadster, X-TRAIL, Terrano, Patrol, Navara, Pathfinder, Murano, Pickup, Kubistar, Primastar, Interstar, Cabstar, Atleon, Note, Qashqai Renault-Nissan Alliance: Since March 1999 Date 18.3.09 3
  • 4. Nissan Company Fact & FiguresHeadquarters Locations Date of Net Sales 10,824.2 billion yen Establishment Operating Income 790.8 billion yenNissan Motor Tokyo, Dec 1933 Operating Profit Margin 7.3%Co., Ltd. Japan Ordinary Income 766.4 billion yenNissan North Tennessee, Sep 1960 Net Income 482.3 billion yenAmerica, Inc. U.S.A Global Retail Sales Volume 3,769,886Nissan Europe France Nov 2002 Global Vehicle Production 3,657,629S.A.S Volume Number of Employees 31,453Nissan Switzerland Jun 2006 (non-consolidated basis)International 180,535SA (consolidated basis) As of March 31, 2008Nissan Europe:Management of European sales and manufacturing operations in 20 European countries Nissan International SA -Management of European sales and manufacturing operations Nissan Europe S.A.S - Holding company for European subsidiaries and pan-Europeanoperational support Date 18.3.09 4
  • 5. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings Questions Date 18.3.09 5
  • 6. Background of Outsourcing Revival Plans In 1999 a 3 year Nissan Revival Plan (NRP) to put Nissan back on a firm footing after several years of decline. Affected all parts of the Nissan organisation world-wide. Achieved in just two years. Another 3 year plan, NISSAN 180 (N180), was implemented to achieve growth. April 2005, Carlos Ghosn has announced a third strategic plan (2005-2007) named NISSAN Value-up. Nissan Value-Up commitments 3 key Pillars: Sustained Profitability: to maintain top level of operating profit margin among global automakers for each of the three years of the plan. Growth/Volume: to achieve global sales of 4.2 million units in fiscal 2008. ROIC: to achieve 20 % or higher return on invested capital on average over the course of the plan. How to achieve Nissan Value-Up regarding F&A? Standardization and Simplification of Finance Processes across with a view to Consolidate, Re- Engineer, Migrate & Explore : Opportunities for productivity and / or improved process capability Enhanced Controllership across Processes Introduction of Performance Metrics Date 18.3.09 6
  • 7. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings Questions Date 18.3.09 7
  • 8. Project Scope Objective: Migrate Finance and Accounting processes in 2 phases: 59 FTE then 30 FTE , in total 89 FTEs to 3rd party BPO (Business Process Outsourcing) provider in Budapest. In Scope Activities: Accounts Payables, Travel & Expenses, Accounts Receivables, General Accounting incl. month-end processes, and few administrative processes like handling of incoming & outgoing mails. Out of Scope Activities: AP, AR, GL control, Controlling, Tax, Risk Management FTEs outsourced by Sales, Factory and HQ organizations: Different Regional Scope diversity: Region AP T&E AR GL Region Country AP AR GL TotalRBU WEST YES YES YES BOTH RBU WEST France, Holland 4 2.5 2.5 9RBU CENTER YES NO YES BOTH RBU CENTER Austria, Germany, 5 4 2 11RBU IBERIA (Sales) YES YES YES BOTH RBU IBERIA (Sales) Spain, Portugal 2.5 1.5 2 6RBU IBERIA (Factory) YES NO YES BOTH RBU IBERIA (Factory) Spain 7 1.5 2.5 11 YES YES YES BOTH RBU Central Eastern Hungary, Czech Republic,RBU CEE Europe Slovakia, Poland 3 3 3 9 Finland, Denmark, Norway, YES NO YES BOTH RBU NordicsRBU Nordics Sweden, Baltics 4.5 3.5 2 10 RBU East Russia, Ukraine, 0 0 0 0RBU East NO NO NO NO RBU North (Sales) Great Britain 4 1 1 6RBU North (Sales) YES YES YES BOTH RBU North (Factory) Great Britain 9 0 0 9RBU North (Factory) YES YES NO NO RBU South Italy 1.5 0 0.5 2RBU South YES YES NO BOTH HQ (Head Quarter) France, Switzerland 8 3 5 16HQ YES BOTH YES BOTH Total 48.5 20 20.5 89 Date 18.3.09 8
  • 9. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings Questions Date 18.3.09 9
  • 10. Outsourcing Evolving Transformation Standardisation High business impact projects Standard process Focus on Stabilisation definition & Value-add Performance implementation Re-engineering improvement Implementation (new KPIs, level- Process of business’ Transition cont. up) oriented processes organisation Start Transition Production SPOT Business Solutioning starts at (Supplier Paid Quality in focus partners outsourcing On Time) Training at Nissan company Productivity CPOT improvement & work shadowing (Customer Paid Measurements On Time) End-to-end PMs (Process (KPIs) Maps) & SOPs process Controllership (Standard Operating Bench improvements reduction Start of Procedures) standardisation Technology preparation with common 1st Transition workflow tool ‘05 ‘06 ‘07 ‘08 ‘09 Date 18.3.09 10
  • 11. Start and implementation Transition Measurements Bench ReductionAchievements: Nissan feels out of control No proper communication between BPO & Nissan Production starts at BPO Provider No baselining data to compare to new BPO Setup Governance Structure at BPO Provider performance, only subjective at the timeMeasurements: AP: Late payments to vendors First KPI measurement in May 2006 Increased manual payments → duplicate payments Increased coding errorsConcerns/ Issues: Missing invoices – vendors hesitant to send Different activities on different ERP platforms invoices to BPO country are outsourced by regions, which adds to Missing information on invoice: >20years complexity and difficulty in standardization experience cannot be transitioned in a couple of process months Hired BPO FTE’s skill/experience are not No robust workflow tool and no common ERP equivalent with Nissan FTEs – double registration Email approval increases workload significantly at Day to day operations not effectively BPO provider managed , backlogs and inefficient process BPO can only manage with double workforce compared to process prior to transition (bench) . Date 18.3.09 11
  • 12. Stabilisation Performance Projects Controllership Workflow tool ImprovementPerformance Improvement: Projects launched: End to End KPIs introduced SPOT (Supplier Paid On Time) to increase Increased number of KPIs and targets levels % of number of paid on time invoice from 28.6% to 53.1% to encourage BPO provider to improve CPOT (Customer Paid on Time) to Monthly workshops introduced to improve decrease unallocated cash from 1.8 Billion communications to an average of 30M with an incoming cashWorkflow tool: of average 75M daily Design & deploy common workflow tool SCOA , SCCS structure and Cost center interfaced to ERP system with standardized structure implementation SCOA (Standard Chart of Account) and Roadmap to Green KPIs to achieve new standard cost center structure KPI levelBiggest issues: BPO provider is KPI driven and oriented – need to measure as much KPIs as possible to gettasks done and drive process improvements Huge attrition – 53% annualized Date 18.3.09 12
  • 13. Standardization Standard process Process oriented Productivity definition & Quality in focus organisation improvement implementationStandard process definition and Quality in Focus: implementation: Best practice sharing in focus Processes fully mapped in the light of Quality project: Debtor Vendor analysis, GR/IR standardization account reconciliation Redefined, simplified and streamlined processes Productivity Improvement: Streamlined AP processes with standard Reduced processing time document types Increased outsourced task without additionalProcess oriented organization: cost to Nissan – without FTE increase Reallocated tasks Increased Nissan Governance – number of FTE Functional changes regarding work allocation to drive process/ productivity improvements Functional operation and reporting Redefined systems access rights in conjunction Process oriented organization is with JSOX to drive down huge impact of Created call centre environment for vendor & attrition customer calls Date 18.3.09 13
  • 14. Summary of Current BPO PerformanceOctober 2008All Activity Plan Actual Status Direction Target Confidence Trend Mar09 LevelRoadmap to Green KPIs* CSL* met 35 33 Stable 39 84% 94%* ISL** met 36 29 Positive 43* DBM*** met 16 5 Stable 27Total KPIs met 87 67 Positive 109# of exempted KPIs 0 7 Stable 0# of missed KPIs (2 CSL, 3 ISL, 9 DBM) 0 13 Positive 0# of unmeasured KPIs 14 14 Stable 0# of not transitioned KPIs 8 8 Stable 0 * CSL – Critical Service Level, **ISL – Independent Service Level, ***DBM – Dashboard Metrics Date 18.3.09 14
  • 15. Account PayableDate 18.3.09 15
  • 16. AP KPIs Definitions of AP KPIs: • TAT – Turn Around Time • Wd – Working days Date 18.3.09 * SOW – Statement of Work 16
  • 17. AP - K2 Queues DefinitionsOperational Definitions for K2 Reports Stock in K2Awaiting AP - Uploaded Invoices in K2, not in any state of processing (untouched) –Not yet processed by AP teamReturned to AP - Invoices already entered into Financial System, sent for clarification returned to AP for further processingAwaiting Feedback - Invoices already entered into Financial System, waiting for clarification/ payment approval all except for Payment ApprovalPayment Approval - Invoices already entered into Financial System, waiting for clarification/ payment approval Price Query and VAT QueryGL Approval – Invoices already entered & approved in Financial System waiting to be released in K2 only.Awaiting Rejection – Invoices to be rejected in K2Secondary Classification – Invoices to be moved from one secondary classification to another (incorrectly classified) within the same entity Date 18.3.09 17
  • 18. Main AP KPI SPOT & YTD TrendSupplier Paid on Time Plan Actual Status Direction Target Confidence Trend Mar09 Level SPOT MTD (as part of Q3TD) 55.0% 53.1% Positive 65.0% SPOT YTD 50.0% 48.8% Stable 50.0% SPOT + 14 MTD (as part of Q3TD) 70.0% 70.0% Positive 75.0% SPOT +14 YTD 70.0% 65.3% Stable 70.0% Europe an YTD SPOT 100% 365< 80% 121-365 ent 061-120 aym 60% 031-060 SPOT Target % of late P 015-030 40% 004-014 001-003 20% <1 0% Apr il May June July Aug Sept Oct Nov Dec Jan Feb Mar Date 18.3.09 18
  • 19. Detailed AP Performance Report KPI StatusAchievements CSL Performance 40 CSL (24 Met v/s 24 in September. 96% met) Met # Missed # Exempt Not Yet Transitioned Not Measured # Awaiting AP Met for 8 sites out of 10 also met for European 30 3 4 4 4 4 4 4 4 level 2 2 1 1 1 3 1 1 12 4 20 2 2 2 4 2 8 2 2 2 2 2 2 2 2 Awaiting AP (T&E) Met for 6 sites out of 6 14 6 8 6 8 6 7 4 14 11 24 24 GL Release Met for all sites. also met for European level 10 17 17 20 21 20 20 13 15 14 14 13 16 10 12 12 ISL (9Met v/s 7 in September. Met 72%) 3 6 9 0 Returned to AP Met for 9 sites out of 10 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 8 09 20 8 09 20 8 09 0 0 0 0 0 0 0 0 0 0 0 0 20 20 20 20 20 20 20 20 20 20 20 20 DBM (1 met out of 3 measured) April May June July Aug Sept Oct Nov Dec Jan Feb March Qulaity KPI was measured at NMGB this month and we ISL Performance 50 were able to reach the target in the accuracy level (95%) 3 2 2 2 2 2 2 2 2 6 2 4 1 1 1 1 40 14 12 12 16 16 17 18 20Challenges 30 20 22 23 20 CSL (1 Missed v/s 1 in September) 20 5 3 2 28 30 29 6 25 1 26 1 25 1 Awaiting AP Missed for 2 site out of 10. European level 10 20 1 19 5 1 18 4 23 1 5 5 4 2 18 20 10 9 99% v/s target 98% (NITA* NNE) 0 6 7 6 6 7 ISL (2 Missed v/s 4 in September) 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 20 8 09 20 8 09 20 8 09 0 0 0 0 0 0 0 0 0 0 0 0 20 20 20 20 20 20 20 20 20 20 20 20 Supplier paid on time @ 48.76% for Europe v/s target of April May June July Aug Sept Oct Nov Dec Jan Feb March 50% DBM Performance 60 AP Ageing was missed as well (30% of the open items are 50 aged more than 10 days) 40 DBM 44 44 43 42 42 43 43 43 43 43 30 45 45 SRFP European level was missed (61,00% vs 70% target) 20 Total pending invoices in average was missed (8015 vs 10 target 6250) 10 13 10 13 10 11 10 10 10 10 12 10 10 10 8 9 8 8 8 0 1 2 1 03 2 3 1 3 3 12 4 3 4 4 4 09 20 8 09 20 7 20 8 09 20 8 08 20 7 08 20 7 08 20 7 08 20 7 08 20 7 08 08 20 7 08 20 7 20 7 08 0 0 0 0 0 0 0 0 0 0 0 0 20 20 20 20 20 20 20 20 20 20 20 20 April May June July Aug Sept Oct Nov Dec Jan Feb March Date 18.3.09 19
  • 20. Example of Awaiting AP performanceAwaiting AP 98% within 5 WDs: SOW* Target for Awaiting AP 98% within 5 WDs (working days) KPI Met for 9 out of 10 sites for week 44. 7 sites met for MTD Oct. KPI for European level at 98%. NNE – from the 7 items 3 of them were processed on the 6th day, 4 of them were classified as disputed and at processing time we reclassified as PO / Non PO invoice. RBU Center – 6 invoices were classified as disputed and were rejected from this status Total invoices processed for Oct 23,783 * SOW – Statement of Work Date 18.3.09 * SOW – Statement of Work 20
  • 21. Next Step: Transformation Re-engineering of High business Focus on Value- business Business Partners impact projects add processesNext Steps on AP: Simplify and streamline processes further and focus on Value-add reengineering business processes Introduce E-Invoicing Improve PO coverage and quality in line with ‘No PO No pay’ policy Introduce Duplicate Audit tool Reduce processing time to as minimum as possible Introduce work force on Debtor Vendor analysis, GR/IR account reconciliation Further increase outsourced task without additional cost to Nissan – without FTE increase Benchmark with other BPO providers and captive companies New contractual agreement (SOW) – move toward transactional base KPIs rather than FTE base Introduce robust quality KPIs Date 18.3.09 21
  • 22. Account ReceivableDate 18.3.09 22
  • 23. AR Weekly IRF Processing statusASSC NESS 100.00% NFE 100.00% NISA 99.32% NMPC 100.00% INEU 100.00% INUE 100.00% •All the IRFs were parked within 5 WDs.ASSC Total 99.58%NMGB NMGB 100.00% •Comments on pending IRFs:NMGB Total 100.00%RBU Center NAUS 100.00% NGER 100.00% -RBU hhh – xxirfs are pending because of missing NSWI 100.00% data. xx irfs are still in x workdays.RBU Center Total 100.00%RBU Iberia NPOR 100.00% -RBU hhhh – all the irf are still in x workdays. NSPA 100.00%RBU Iberia Total 100.00%RBU Nordic NNDK 100.00% NNNO 100.00%RBU Nordic Total 100.00%RBU West NFRA 100.00%RBU West Total 100.00%NSCEE NCCZ 100.00% NCHU 100.00% NCPL 100.00% NCSK 100.00%NSCEE Total 100.00%Grand Total 99.92% Entity NMGB RBU CEE RBU Center RBU Iberia RBU Nordic RBU West ASSC Grand Total Total processed 564 211 27 26 128 90 238 1284 Total pending 30 0 110 82 12 0 0 234 Date 18.3.09 23
  • 24. AR Ageing Summary 3rd party …(status by site by amounts only entities where cash collection is performed by Genpact) AR Aging 120,000,000.00 100,000,000.00 80,000,000.00 RBU CENTER 60,000,000.00 NSCEE NNE 40,000,000.00 ASSC 20,000,000.00 - Not Due 1-30 31-60 61-90 91-180 181-360 >361 (20,000,000.00)Team Company Not Due 1-30 31-60 61-90 91-180 181-360 >361 Total Total Overdue ASSC 53,721,888.44 15,242,203.40 8,906,584.64 4,340,305.51 512,472.45 5,802,475.83 6,860,836.28 95,386,769.00 41,664,878.11 NESS 2,419,381.12 1,376,344.26 77,468.32 (72,441.91) (1,195,700.00) 1,279,531.86 6,590,553.47 10,475,143.00 8,055,756.00 NFE 4,583,857.76 1,810,936.01 1,249,143.46 1,217,590.58 633,879.24 446,665.82 90,752.07 10,032,825.00 5,448,967.18 NISA 46,618,649.56 12,054,923.13 7,578,722.60 3,194,359.46 1,067,797.38 2,970,319.52 (205,126.87) 73,279,641.00 26,660,995.22 NMPC 100,000.00 - (267.75) - - 54.59 499,892.08 599,679.00 499,678.92 PLC - - 1,518.01 797.38 6,495.83 1,105,904.04 (115,234.47) 999,481.00 999,480.79 NNE 30,828,235.27 813,207.09 2,905,949.64 1,148,305.19 2,418,623.73 636,829.06 215,129.41 38,966,273.00 8,138,044.12 NNDK 9,410,268.55 (245,618.24) 1,728,425.74 (718,748.14) 1,809,893.09 159,411.51 6,297.03 12,149,930.00 2,739,660.99 NNEE 208,702.58 217,966.89 14,289.60 68,208.07 15,108.95 982.40 885.19 526,143.00 317,441.10 NNFI 7,207,333.29 (224,291.56) (32,295.25) 106,258.67 (16,711.59) (96,229.77) 4,319.59 6,948,385.00 (258,949.91) NNLT 236,305.17 98,640.42 11,673.68 23,308.67 55,805.60 40,415.25 (5,000.00) 461,149.00 224,843.62 NNLV 80,586.37 418,611.07 82,794.60 104,506.76 84,013.41 (731.76) (418.30) 769,362.00 688,775.78 NNNO 6,097,082.14 271,323.37 529,742.20 606,756.32 288,863.80 49,602.58 15,036.74 7,858,404.00 1,761,325.01 NNSE 7,587,957.17 276,575.14 571,319.07 958,014.84 181,650.47 483,378.85 194,009.16 10,252,900.00 2,664,947.53 NSCEE 699,921.43 4,946,346.70 2,667,379.36 2,091,924.94 5,230,312.16 1,149,707.66 3,941,770.05 20,727,366.87 20,027,440.87 NCCZ 562,177.97 1,306,455.84 694,535.59 262,475.46 1,124,726.27 484,818.38 119,212.22 4,554,406.00 3,992,223.76 NCHU 780,245.20 1,347,236.10 667,181.67 576,609.58 434,698.91 (30,316.04) 1,586,330.41 5,361,985.87 4,581,740.63 NCPL (851,408.97) 1,871,010.38 894,695.15 881,002.61 2,724,697.54 288,954.67 1,720,459.85 7,529,412.00 8,380,820.20 NCSK 208,907.23 421,644.38 410,966.95 371,837.29 946,189.44 406,250.65 515,767.57 3,281,563.00 3,072,656.28 RBU CENTER 26,770,910.08 396,445.14 (276,436.60) 75,945.07 1,402,902.39 656,596.55 (1,916,486.44) 27,109,864.00 338,966.11 NAUS 15,236.23 (397,234.10) 22,581.53 17,210.32 3,638.30 20,100.00 (39,624.29) (358,096.00) (373,328.24) NGER 22,385,116.29 980,700.21 (157,539.90) 538.31 1,310,102.49 604,337.13 (1,858,351.33) 23,264,903.00 879,786.91 NSWI 4,370,557.56 (187,020.97) (141,478.23) 58,196.44 89,161.60 32,159.42 (18,510.82) 4,203,057.00 (167,492.56) Grand Total 112,020,955.22 21,398,202.33 14,203,477.04 7,656,480.71 9,564,310.73 8,245,609.10 9,101,249.30 182,190,272.87 70,169,329.21•Global overdue is at 38%, 49% older than 60 days. Issues faced in ageing due dates of parts invoices and miscellaneous. Invoice states at SAPas overdue, but as per agreement with customer they are still not overdue.•Reporting includes all types of invoices financed and not financed.•Collection proposal for Spain is still not accepted. WEST, NMGB, NITA and NMUK are not in scope. Date 18.3.09 24
  • 25. Overdue items 3rd party – trend by site Weekly trend by site € 130M € 105M € 80M € 55M € 30M € 5M -€ 20M 39/08 40/08 41/08 42/08 43/08 44/08 45/08 46/08 47/08 48/08 49/08 50/08 1/09 2/09 3/09 4/09 5/09 6/9 7/9 Total 92.83 67.29 60.41 40.84 58.66 88.80 70.45 71.37 70.08 90.54 93.65 68.53 120.37 100.58 87.28 87.11 90.06 61.08 70.14 RBU Center 3.66 4.70 2.22 -15.18 -6.16 4.80 -5.17 0.83 2.03 7.54 -0.94 -0.04 3.97 0.82 -6.22 -1.48 6.83 -4.67 0.33 NSCEE 45.88 16.40 17.87 20.85 20.73 28.58 23.28 23.91 24.63 30.55 27.10 19.27 22.53 19.73 28.94 25.44 23.81 21.44 20.02 NNE 4.57 8.25 3.59 -0.68 1.28 7.21 9.09 9.57 8.14 8.29 8.00 6.15 12.12 9.47 12.35 3.18 2.93 0.22 8.13 ASSC 38.72 37.94 36.73 35.85 42.81 48.21 43.25 37.06 35.28 44.16 59.49 43.15 81.75 70.56 52.21 59.97 56.49 44.09 41.66•Increased in the NNNN region (8 MM ) Date 18.3.09 25
  • 26. AR - Definitions Operational Definitions• Manual Invoice: Miscellaneous invoices• Invoice request: Filled out by NISSAN company and the approved, checked form sent to Outsourced for processing• Open requests: IRF not parked into SAP• Unallocated cash: all the incoming payments posted to the AR accounts and are not cleared yetDate 18.3.09 26
  • 27. TreasuryDate 18.3.09 27
  • 28. TREASURY - Unapplied Cash by sites /AP/debit & credit items/ absolute EUR value Main allocated cash (49%) is www Decreased by kkkK since last week. Recap invoices have been booked as payment items at ppp, tobe cleared by month end. Unapplied Cash - Weekly trend by site € 2,000M € 1,000M € 0M 02 Dec 8 Dec 15 Dec 05 Jan 12 Jan 19 Jan 26 Jan 2 Feb 10 Feb 16 Feb Total 1,963.0 1,907.8 1,317.4 619.00 626.75 555.47 500.09 523.97 575.97 575.19 RBU West 367.77 250.74 239.55 195.00 173.07 161.22 161.94 161.72 169.27 165.98 RBU Iberia 12.79 10.82 11.88 18.22 16.37 19.26 18.96 15.30 13.30 14.11 RBU Centre 1,076.5 1,139.4 715.15 12.38 74.40 73.00 18.87 21.70 75.55 72.11 NNE 2.08 3.44 3.71 4.65 5.16 5.26 5.79 6.08 4.40 4.32 NMGB 10.98 10.66 10.24 15.69 16.33 16.41 21.14 21.03 20.36 21.13 CEE 26.47 32.69 34.29 39.93 37.43 44.78 18.22 25.22 25.22 16.98 ASSC 466.38 460.00 302.61 333.13 303.99 235.53 255.18 272.91 267.86 280.58As per 16/02 Date 18.3.09 28
  • 29. General LedgerDate 18.3.09 29
  • 30. Nissan GL weekly performance 2009 W5Results / next steps: yyyy: open items follow up, reminder was sent to site to clarify not booked items on yyyy. pppp will follow on WD1 TTTTTTTTTT Csilla A. is working on the reconciliation. Agreed rrrr: official communication was sent to the sites to start with PPPPPPP that cut off date will be applied (~Apr,2007: sending their open item list to be able to close books on netting before that date; item by item recs after that date) WD3. Scope of reconciled countries are extended (Intra/Inter) KPI Status All work-files and finalized FAPs will be copied to shared Posting ME JE December (quarterly closing) drive ‘J’ for which NNNNNN team has access. E-mail 100% in line with MECS CSL exchange would decrease significantly and response time Number of JEs processed by GL-team: 546 vs. 363 also (Nov.) VAT-clearing project: DET sent status-update to Pascale tttttttt: 230 (167M EUR) W., waiting for information from their side ttttttt: 203 (11590M EUR) GRIR: reporting of not touched items changed to be more accurate on data. Final report on W6. uuuuuuu: 44 (14.9M EUR) kkkkkk: 25 (5.9M EUR) …Status of Account Reconciliation December: Expected nr. Of JEs in Jan: ~400 Nr. of not approved: 22 (or 13% of 167) Not Started In progress In progress / waiting for feedback Sub for Approval (eroom upload) Alicia FFFF 8 (8) Approved in eroom Rejected Antonio DDDD 7 (7) 180 0 0 0 0 0 0 0 0 0 4 4 5 5 5 5 3 3 3 3 0 Eva MMMMMM 5 (5) 160 30 5 5 40 39 40 Raquel TTTT 1 (1) 140 64 Pascale WWWW1 (57) 120 86 86 N O o f a c c o u n ts 0 Data as of 2nd of February 100 135 141 148 135 135 139 139 139 139 139 140 140 140 167 165 80 137 63 127 128 127 60 40 75 75 0 2 20 40 28 2 21 21 21 21 21 21 23 22 22 22 24 14 0 4 0 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 WD1 WD2 WD3 WD4 WD5 WD6 WD7 WD8 WD9 WD10 WD11 WD12 WD13 WD14 WD15 WD16 WD17 WD18 WD19 WD20 WD21 WD22 workdays Date 18.3.09 30
  • 31. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings 1 Questions Date 18.3.09 31
  • 32. If it were 2005 now, how would Nissan decide? Yes to outsourcing, but with a different approachDate 18.3.09 32
  • 33. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings Questions Date 18.3.09 33
  • 34. The business services concept proposal is to create a CAPTIVE Business services ≠ (internal) business services group, with OUTSOURCING NE employees. Business services ≠ No labor arbitrage included in the LOW COST COUNTRIES business case. No LCC considered Low value added tasks already outsourced Business services ≠ The idea of the business services Center is toLOW VALUE ADDED TASKS consolidate NE EXPERTISE Business services = CONSOLIDATION OF NE EXPERTISE Date 18.3.09 34
  • 35. The Finance organization 3 levels Local Level Business services level Headquoters -level•Support and control the •Provide accounting services •Support Europeanbusiness (Data production (Standardized accounting processes are managementwork is pooled in the allocated to business services) •Define Financialbusiness services •Manage Master data and is the processes guidelines and standardsorganization removing the owner •Assess and supportdistraction from the •Provide performance reporting data (all European projectsbusiness) axis : product / entity / function) •Monitor performance•Financial director in •Support the preparation of the budgetcharge of …..with the •Manage Budgetingsupport of the business •Provide Tax and treasury expertise and process (top down)services group activities •Provide Product costing, gross margin and profitability analysis expertise All teams are there to support Nissan to meet its strategic objectives Date 18.3.09 35
  • 36. Business services principles Each service should have its price. The business canPrice transparency determine how much service it wants at that price Business Manage the service like a business, not a fixed cost. Serve management internal and potentially external customers Market Provide the service levels the businesses want, not the levels responsiveness staff think they need Best practices Identify and deploy Best practices quickly and globally proliferation Process Develop streamlined process standards that can be strandardization maintained and improve quickly Treat business units like customers, offering services they Service culture value and charging for each Date 18.3.09 36
  • 37. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings 2 Questions Date 18.3.09 37
  • 38. Ideal organization structure design principle : businessservicesIn (many companies) Nissan Finance Finance Finance Finance Finance Finance Master data Business process owners Systems ownership Outsourcers Business Business contract Mgt services services Logical Grouping of dispersed activities Business servicesOut Outsourcer Out Outsourcer Outsourcer Step 1 Step 2 Step 3 Current Ideal Date 18.3.09 38
  • 39. Project Learnings General Key Key Findings Recommendations ‘Ship and fix’ transition method applied: ‘Fix and Ship’ approach: Create a Nissan CoE Aim was reap immediate savings from first and after fixing all the processes in the CoE,Transition offshore centralization then drive to best ship what really can be outsourced as it has no in class added value for Nissan (or Nissan can not add Cost saving was the biggest driver at value)…. Nissan - pay back period just over a SOL ID team should remain the transition team year Establish Incentive Plan to middle management Team consistency during SOL ID and and trainers migration changed Do not lay off current staff before process is stabilized, provide them with incentives to make Lack of middle management Buy-in from the process stabilized asap Nissan plus lack of confidence in Take training and preparation of SOPs seriously – releasing control SOP preparation not to be done by BPO SOL ID was prepared too quickly and as associates a result at a high level. SOP was Request BPO to add Bench proactively to the prepared by BPO associates amount of associates, invest upfront into Nissan FTE does not equal BPO FTE transition and release associates when process is No dashboard/ Metrics stabilized Baselining before deciding on migrating tasks As KPIs are contractual and leading to If decision is made to outsource and no KPIs penalties in case not met, BPO experience in outsourcing, request 3rd party provider did not advise Nissan on consulting firm to advise / benchmark on ‘good’ KPIs KPIs and pricing methodology • CoE -Centre of Excellence Date 18.3.09 39
  • 40. Project Learnings General 2 Key Key Findings Recommendations BPO & Nissan do not have the same SOW pricing/ invoicing to be determined by number objectives due to FTE based pricing of transactions and KPIs which reflect the Win/Win Process With current FTE pricing BPO provider objectives by creating a situation where the BPO willImprovement is not ‘interested’ in real process focus on reducing and simplifying the work without improvements, which can lead to being punished through lower income decrease in number of FTE Gained Share to be introduced to drive Process Improvements on End-to-End processes Process Improvement team to be lead and financed by Customer (Nissan) and not only by BPO Provider Decide what’s more important: Cost: go for low cost BPO provider Strategy on Cost or Quality Quality: go for cost+ BPO provider working Outsourcing with Consultants Cost and Quality: go for captive, create Centre of Excellence via investing in an experienced accounting force to drive process improvements Date 18.3.09 40
  • 41. Project Learnings A/P Key Key Findings Recommendations Accounts Payable process must be Workflow Solution and common ERP system to standardized across Europe prior to be in place prior to migration or at least at theAccount migration start of migrationPayables Necessary to have single workflow Prior to migrating tasks, all processes must be solution process- mapped and written SOP signed off No central AP control and responsibility by Finance Managers and transferred to Standard processes Setup central AP controlling function with full authority Setup Functional organization before job transitioned Date 18.3.09 41
  • 42. Project Learnings A/R Key Key Findings Recommendations Common ERP system to be in place prior toAccounts Accounts Receivable process must be migration or at least at the start of migration standardized across Europe prior toReceivable migration Prior to migrating tasks, all processes must be process- mapped and written SOP signed off No single workflow solution by Finance Managers and transferred to Not the same ERP implemented per Standard processes regions Agree that same tasks to be outsourced from Not the same tasks outsourced each region to BPO Without workflow tool measurement of Cash collection to be outsourced to real ‘cash KPIs are manual and done by BPO collector’ companies provider Customer account reconciliation to be developed by Nissan prior to or during Cash collections : customer financing migration, otherwise task by BPO is not well methodology is not recorded in ERP performed Cash collection is either not in scope or Setup Functional organization before job FTE requirement is not well defined transitioned Customer account reconciliation is not well defined for BPO Date 18.3.09 42
  • 43. Project Learnings Treasury Key Key Findings RecommendationsTreasury Not the same tasks outsourced KPI for Cash allocation is measured by Prior to migrating tasks, all processes quantitative wise, no quality must be process- mapped and written measurement SOP signed off by Finance Managers Payment Run – different processes and and transferred to Standard processes task outsourced to BPO provider by Agree that same tasks to be outsourced region from each region to BPO Different banks are used by regions – Standardize bank usage on European different accesses are provided to BPO if level any Centralize payment run responsibility Different Payment run schedule per regions Manual payments to be kept at the very Increased number of manual payments minimal due to AP insufficiency Date 18.3.09 43
  • 44. Project Learnings G/L Key Key Findings RecommendationsGeneral Not the same tasks outsourced GL task as require deep accounting Account reconciliation outsourced by knowledge , should have not beenLedger outsourced different region – requires huge amount of time investment by Nissan to provide all Account details to BPO provider Date 18.3.09 44
  • 45. Topics Introduction to Nissan Background of Outsourcing Project Scope Outsourcing Evolving Business Service Centre Project Learnings Questions Date 18.3.09 45
  • 46. Questions?http://www.nissan-europe.com/ Date 18.3.09 46

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