2. To continue offering quality products at competitive prices, several company processes
need improvement.
Our focus is on the Accounts Payable department. As consultants, our job is to:
Founded in 1882; Headquartered in High Point, NC.
One of the largest fine wood/upholstered furniture producers in the US.
Manufacturing/distribution facilities located in the southeastern US.
Multiple sales offices maintained abroad.
Investigate the issues.
Identify areas for improvement.
Make recommendations.
Implement solutions.
Growing competition from overseas
the financial bottom line!
4. Contributing factors include:
Inefficient handling of paperwork.
Inability to track due dates, billing cycles, and other invoice issues.
Monthly reports generated with Excel, leading to reliance on outdated
information during the decision making process.
A flood of unnecessary vendor telephone calls.
Outdated equipment currently in use.
The most pressing issue of concern for Accounts Payable is the loss of
revenue resulting from late payments and fees to vendors.
Fully installed, tested, and
operational prior to April 2015
furniture market season.
The project completion date is firm.
The project budget is $120,000.00.
5. Primary business benefit = immediate reduction in late payments/fees to vendors.
They will gain a greater capability to compete with overseas furniture producers.
More immediate benefits include:
Ability to efficiently track materials and reconcile vendor invoices.
More efficient processing of paperwork.
Reduction in incoming vendor telephone inquiries.
More efficient reporting process using up-to-date information.
Strengthen their position as a worldwide leader in the industry.
6. The proposed new system and processes will allow:
Vendors to transmit invoices using an electronic submission process.
Vendors to view/track outstanding payments.
Production to directly input Purchase Orders.
Accounts Payable to easily reconcile Vendor invoices and Purchase Orders.
It will further provide:
A convenient “AP Dashboard” to track invoice due dates and billing cycles.
Automatic alerts to avoid late payments and fees.
Up-to-date reporting for improved decision making.
The new system will maintain vendor, invoice, and payment history information to
support robust data analytics.
7. Top-tier management has exhibited operational support.
The proposed new system and processes will:
Increase department efficiency.
Reduce outside vendor demands.
Enhance the corporate image.
Increased efficiency = more job satisfaction; little risk to workforce reduction.
Nominal operational risks from implementation downtime and employee training,
which are reasonable and can be mitigated by:
Successful project scheduling.
Adequate financial investment in employee training.
FINDINGS: The proposed new system and processes are operationally feasible, will
result in a more efficiently operated department, and will provide many
operational benefits.
8. FINDINGS: The proposed new system and processes are sound business investments;
however, financing of $120,000.00 is not economically feasible.
The proposed new system and
processes include new servers,
user computers, and other
necessary peripherals.
Initial acquisition costs $170,000
Yearly licensing fees
and system support* $10,000
Facility improvements $20,000
Total Cost of Ownership $200,000
*(approx. 10 yr system life)
Nominal financial risk of rising costs of licensing fees and support is expected.
Tangible/Intangible Benefits:
Improved efficiency.
Reduced late payments and fees.
Decreased information lag time.
User-friendly operating environment.
Increased user/vendor satisfaction.
High financial risks include:
Continued loss of revenue
from late payments and fees.
Decreased productivity.
Increased probability of
losing vendors.
9. Current technical infrastructure is inadequate for successful implementation.
The proposed new system and processes will:
Provide sufficient capacity for substantial increases in data flow, transactional
volume, and corporate growth.
provide more than adequate performance and reliability.
Technical risks are low and include:
Inability to procure necessary equipment.
Inability to improve existing infrastructure.
System design flaws.
FINDINGS: The proposed new system and processes are technically feasible.
Risks associated with product performance and reliability are minimal and to be
expected. They can be mitigated with proper maintenance and updating.
10. Risk mitigation measures include:
Scheduling installation during “off hours” whenever possible.
Creation of an easy to understand User’s Guide.
Group and one-on-one employee training sessions.
FINDINGS: The proposed new system and processes schedule is feasible.
Risks associated with scheduling are minimal, expected, and include:
Downtime during business hours for installation.
Inadequate departmental coverage during operational hours.
Employee frustration that follows the introduction of new system and
processes.
The schedule provides for minor delays and provides sufficient time to accomplish the
necessary tasks. As the furniture market season provides a firm end date, risks associated
with project acceleration are minimal.
11. EVENT DESCRIPTION SOURCE TRIGGER PROCESS RESPONSE DESTINATION
Need to add new
vendor to the system
Accounts Payable New vendor Create Vendor
Vendor creation
confirmation
Accounts Payable
Need to search for a
specific vendor
Accounts Payable Vendor search request Lookup Vendor Vendor details Accounts Payable
Vendor information
needs to be edited
Accounts Payable Vendor update notice Update Vendor Vendor update confirmation Accounts Payable
Production needs to
orders materials
Production
Purchase Order
request
Create Purchase Order
Purchase Order creation
confirmation;
Accounts Payable notification
Production;
Accounts Payable
Production needs to update
purchase request
Production Purchase Order update
Update Purchase
Order
Purchase Order update
confirmation;
Accounts Payable notification
Production;
Accounts Payable
Vendor submits invoice
to Accounts Payable
Vendor Invoice submission Create Vendor Invoice
Vendor invoice creation
confirmation
Accounts Payable
Vendor inquires about
invoice payment
Accounts Payable Invoice inquiry request
Lookup Vendor
Invoice
Invoice details Accounts Payable
Accounts Payable authorizes
invoice payment
Accounts Payable New payment Create Payment
Payment authorization
confirmation
Accounts Payable
Accounts Payable updates
invoice
Accounts Payable Invoice update request Update Invoice Invoice update confirmation Accounts Payable
Accounts Payable inquires
about payment
Accounts Payable
Payment search
request
Lookup Payment Payment details Accounts Payable
Time to produce reports
(weekly, monthly, quarterly,
yearly)
“Specified date
reached”
Create Reports Reports Accounts Payable
System triggers upcoming
payment due auto alert
“Pending payment
deadline”
Create Auto Alert Alert notification Accounts Payable
15. Table design is straightforward.
Primary and foreign keys clearly
identifiable.
Indexing allows for quicker lookup.
16. Lost revenue due to an inefficient Accounts Payable system is
the basis for the System Request.
As consultants, we endeavored to thoroughly identify and examine the operational,
economic, technical, and scheduling feasibility of providing a new system and
processes to the Accounts Payable department of High Point Living, Inc.
Contributing to this loss of revenue:
Inefficient handling of paperwork.
Inability to track due dates, billing cycles, and other invoice issues.
Reporting frequency is also a concern in that critical decisions are being made
using outdated information.
17. High Point Living, Inc. should proceed with the
new Accounts Payable system and processes as
defined within the System Scope with an
increased estimated budget of $200,000.00.
There are many tangible and intangible benefits.
Risks associated with this project are low.
Our Recommendation:
Overall Findings:
