1. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 1
Billing Adjustment Process
Improvement
University of South Carolina
Moore School of Business
Global Supply Chain & Operations Management Program
Spring 2016 Final Presentation: 04/22/2016

2. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 2
Define
Define Measure ImproveAnalyze Control

3. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 33
Delighters
Requirements
● Measure the impact of
the future-state process
on the adjustment tail,
number of adjustments
and reserve.
• Document and map current-state
process.
• Map process for reserve
calculations.
• Measure and track revenue
impact of adjustments.
3
• Propose an improved
future-state adjustment
process.
• Measure and Analyze the
causes behind adjustments.
• Propose control
mechanisms for continuous
improvement.
SatisfiersCustomer Satisfaction
Degree of Fulfillment
Kano Analysis

4. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 4
Measure
Define Measure ImproveAnalyze Control

5. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 55
Swim Lane Process Map (Complete)
P
a
y

6. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 66
Swim Lane Process Map (Part 1)OEFC Automated SAP
Place
Request
Sales
Generates
Quote
Receive
Quote
Send PO
to Avaya
Upload
Contract
Informa@on
Check
contract/
invoice for
errors
Generate
Invoice
Contract Upload Team
Dispute Team
Right
Invoice
Info?
Sends
Invoice at
Designated
Time
Receive
Invoice
Info
Have
PO?
Invoice
Info
Correct
?
Valid
Error
Claim?
Yes
Yes
No
No
Yes
Resolu@on
Iden@fied
No
Customer
No
Yes
Pay
Con@nued
Invoice
Generated
Dispute
Logged in
GetPaid
Collec@ons Team
Call or Log
Dispute in
Customer
Portal
Accept
Quote?
Yes
No

7. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 77
Easy
Fix?
Billing
Block
No
Need
New
PO?
Provide
New PO
Yes
Cancel
Invoice
(S1)
Yes
No
Modify
Contract
Info
Future
Revenue
Debited
Create
New
Invoice
Swim Lane Process Map (Part 2)
Exis@n
g
Billing
Block?
Remove
Billing
Block
Yes
No
Request
New PO
Dispute
Closed in
GetPaid

8. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 88
Generate
Monthly
EDW
Query
Convert to
Validity File
End of
quarter?
No
Generate
Monthly
S-1
Query
Convert to
Validity File
Calculate BAT
Calculate BAT
Sum Total
Adjustments for
GCS
Sum Total
Adjustments for
AGS
Moving
Monthly
Average* x
Adjustment Tail
Calculate Over/
Under Provision
Yes
Post to
General
Ledger
Duplicate removal and
other reasons for
excluding adjustment
data
Billing Adjustment Tail Process Map (monthly)
adjustment date – invoice date
*5 quarter moving average
Excluding:
Highest and lowest values
Avaya - 60 days
Team - 46 days
$7.3 million in the
quarterly Billing
Adjustment
Reserve

9. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 9
Net Value vs. Total S1 Count
Average Net Value $
Average Occurrence 1205

10. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 10
Analyze
Define Measure ImproveAnalyze Control

11. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 11
Problem Occurrence Pareto
Problem Description Definition
Incorrect Charges
Maintenance
Customer is charged
incorrectly for rendered
maintenance
PO Update Required Customer’s purchase order
has not been updated to
match the received invoice
No PO Customer’s purchasing
department has not been
cleared to issue a purchase
order for the received
invoice

12. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 12
Net Value By Problem Description - Pareto
Problem Description Definition
Incorrect Charges
Maintenance
Customer is charged
incorrectly for rendered
maintenance
PO Update Required Customer’s purchase order
has not been updated to
match the received invoice
No PO Customer’s purchasing
department has not been
cleared to issue a purchase
order for the received
invoice

13. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 13
Average Detection Time in Days

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Average Dispute Resolution Time (in days)

15. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 1515
Failure Modes and Effects Analysis (FMEA)
= failure points
P
a
y
Process Steps with Failure Points:
❏ Sales Generates Quote
❏ Accept Quote?
❏ Continued Invoice Generated
❏ Upload Contract Information
❏ Check Contract/Invoice for Errors
❏ Sends Invoice at Designated
Time
❏ Call or Log Dispute in GET PAID
❏ Remove Billing Block
❏ Modify Contract Info

16. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 16
FMEA- Top RPN’s
Process Step/Input​ FMEA #​ Failure Mode​ RPN
Sends Invoice at Designated
Time ​
25​ No PO provided by customer ​ 576​
​
Continued Invoice Generated ​ 40​ Avaya fails to notify customer of needed PO​ 576​
Sends Invoice at Designated
Time ​
26​ Incorrect PO provided​ 567​
​
Continued Invoice Generated ​ 41​ Updated PO Required 567​
Sales Generates Quote​ 1​ Service/Price/Quantity higher than agreed upon​ 504​
Customer Overlooks Error in
Quote​
7​ Service/Price/Quantity that is higher than agreed
upon​
504​
Upload Contract Information​ 13​ Service/Price/Quantity higher than agreed upon​ 504​
Check/Contract Invoice for
Errors​
19​ Overlooks Service/Price/Quantity that is higher than
agreed upon​
504​
Modify Contract Info​ 33​ Service/Price/Quantity higher than agreed upon​ 504​

17. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 17
Fishbone Analysis (Example)
No PO
provided by
customer
Workforce
Sales Team
Fails to obtain
PO from
customer
Upload Contract
Team
Uploads
contract
without the PO
Procedures
Policies System
No policies to stop a
contract from being
uploaded without a PO
Lack of communica@on
between Sales Team and
OEFC to verify contract
informa@on
Few checks in
place to verify
informa@on is
complete
SAP allows a
contract to be
uploaded
without PO
No formal disciplinary
system related to
genera@ng and uploading
incomplete contracts
A. No PO provided by customer – (Process
Step: Sends Invoice at Designated Time)
SAP allows an
invoice to be
generated and
sent without a PO

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S1’s with “PO Update Required” Problem Descriptions
Net Value spikes in
January and June.

19. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 19
S1’s with “No PO” Problem Description

20. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 20
Improve
Define Measure ImproveAnalyze Control

21. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 2121
Future State Process MapOEFC Automated SAP
Place
Request
Generate
Quote
Receive
Quote
Send PO
to Avaya
Upload
Contract
Informa@on
Check
contract/
invoice for
errors
Generate
Invoice
Contract Upload Team
Dispute Team
Right
Invoice
Info?
Sends
Invoice at
Designated
Time
Receive
Invoice
Info
Have
PO?
Invoice
Info
Correct
?
Valid
Error
Claim?
Yes
Yes
No
No
Yes
Resolu@on
Iden@fied
No
Customer
No
Yes
Pay
Con@nued
Invoice
Generated
Dispute
Logged in
GetPaid
Collec@ons Team
Call or Log
Dispute in
Customer
Portal
Accept
Quote?
Yes
No
Sales
= reports for expiring POs
Receive
Report
Generate
Expiring
PO Report
= create domestic SOA
= uniform set of reason codes
Validate
Report
Validate
Report
2
3
4

22. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 2222
Easy
Fix?
Billing
Block
No
Yes
Cancel
Invoice
(S-1)
Modify
Contract
Info
Future
Revenue
Debited
Create
New
Invoice
Future State Process Map
Exis@n
g
Billing
Block?
Remove
Billing
Block
Yes
No
Dispute
Closed in
GetPaid
Acquire
Necessary
Authoriza@on
Level
= reports for expiring POs
= create domestic SOA
= uniform set of reason codes
2
3
4

23. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 2323
Proposed New Set of Reason Codes- 95%
Original New Description
Incorrect Charges
Maintenance
Incorrect Charges- Credit Service/Price/Quantity higher than customer agreed upon
Incorrect Charges- Debit Service/Price/Quantity lower than customer agreed upon
Incorrect Charges- Time Incorrect timeline on Invoice or Contract
PO PO Update Required Continued Invoice - multiyear contract
Incorrect PO Either Initial or Continued Invoice
No PO Initial Invoice
Invoiced on Wrong Account Invoiced on Wrong Account Invoice Created with Wrong Customer ID
Payment Terms Disagreement Payment Terms
Disagreement
Dispute Concerning Billing Terms of the Contract.
Document Needed Document Needed Normally needed for government contracts that require
signatures on items, contract copy requests, invoice copy
requests, and tax document requests such as Avaya’s W2.
Manual Review Manual Review Customer requests review of contract by Avaya because of
previous errors identified.
Tax Issue Tax Issue Incorrect Tax Information that causes Avaya to under or over
pay
Other (remaining 5%) All Other Possible Disputes- All together account for 5% of
occurrences

24. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 2424
Summary of Future State Impact
Impact Area Current State Future State Percent Change
Number of S1s 21.1% decrease
Net Value of
S1s
48% decrease
Number of
Hours
21.1% decrease
Billing
Adjustment
Tail
10% increase
Billing
Adjustment
Reserve
22% decrease

25. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 2525
Total Annual Cost Savings
$202,856.16
(S1 reduction x hours to complete S1 adjustment x labor cost per hour)
+ (estimated total cost of capital x reserve reduction)

26. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 26
Control
Define Measure ImproveAnalyze Control

27. Avaya - Proprietary. Use pursuant to your signed agreement or Avaya policy. 2727
Future State Process Map (S1 Internal Review)OEFC
Establish
performance
metrics/
goals
Pull S-1 Data
from SAP
Define Measure Analyze Improve Control
Pull Dispute
Data from
GetPaid
Aggregate and
Match Data
Sets
Make Pareto
Charts for
Adjustment
Cause
Document
Results
Root Cause
Analysis
Cause and
Effect Diagram
Future State
Analysis for
Top
Occurrences
Develop
Implementa@on
Plan
Iden@fy
Process
Owners
If implemented,
countermeasure
4 will eliminate
these steps.
Countermeasure 5
quarterly
bi-annually