The document discusses Sony Europe's simultaneous outsourcing of all Procure-to-Pay (P2P) processes and the expected improvements within a year. It outlines the transformation journey, including steps to standardize processes, outsource all activities, implement delivery responsibilities, and communicate effectively across various teams. The challenges faced during this transition include tight timelines, the need for full commitment from management, and achieving significant cost savings.

1. Does simultaneous outsourcing of all
your P2P processes and achieving
process improvement in just 12
months sound possible to you?
Jan Fonfara
Sony Europe

2. Agenda
a. Sony & Sony Europe
b. Baseline
c. Target
d. Solution
e. Challenges
f. Journey
g. Achievement
h. What If
i. Still to Do
j. Summary
k. Q&A

3. Sony & Sony Europe
Sony
• app 65 Bill. EUR sales worldwide
• app. 165k employees
• Founded in 1946 by Masaru Ibuka & Akio Morita
Sony Europe:
• Distribution of Consumer and Professional Electronics
across Europe (7.5 Bill EUR external sales)
• Covering every European country
• app 5k employees

4. Baseline
As Sony Europe was
Legal Entity Restructuring
• 26 legal entities across Europe
SNORD
1
S/CIS • Independent local finance functions with
SNORD
S/CIS
regional headquarter coordinating
1 1
4
SUK
SBNL SPOL 1
SUK
SBNL
2 2
SDL
SDL
SPOL
1 S/UA
SCZE 1 SCZE
S/UA
1 SLVK
1 SCH SLVK
• 10%+ Finance employees (estimated..)
SFR
SCH SOA SHUN SOA
SFR
1 1 SITA 1 1
SHUN
SOEM SITA
SPOR
1 1 SPO SOCE
1 SESP
R SESP
1
STURK
S/TURK
SHEL STURK
S/TURK
1 1
• No outsourcing
SHEL
1
1
2010
TODAY TOMORROW
Sony Europe Electronics
• Overlapping functions (local, regional,
• Main Co in UK
42 SAP company=
26 different legal entities
codes sub-regional)
• Countries as branches of the Main Co
• S/CIS, S/TUR not in scope
• Limited process standardisation
• Lack of transparency, difficult to
compare entities
• Unsustainable cost structure accelerated
by unfavourable market environment

5. Baseline
The Impacts
• “Controllers controlling the controllers”
• Long budgeting process (bottom-up – top-down
etc.) lasting 3 months
• Discussion about intra-SEU transfer prices
• High effort for governance (e.g. SOX)
• Lack of actual control
• Relying on the middle (e.g. FD of local
organisation)
• (partially) meaningless KPI’s
• Inwards focus

6. Target
Sony Europe Vision
Customer focus / Our Purpose
Competitive cost structure
Finance to deliver value
Flexible Organisation
Through
Simplification
Standardisation

7. Solution
The Solution
Legal Entity Restructuring
1 legal entity
1 standardised branch per country SNORD
1
S/CIS
SNORD
S/CIS
1 1
1 SAP Company Code for 4Europe
SBNL
1
SUK SUK
SBNL SPOL
2 2
SDL
SDL
SPOL
1 S/UA
SCZE 1 SCZE
S/UA
SFR
SCH
1 SLVK
1 SCH SLVK
SOA SHUN SFR SOA
1 1 SITA 1 1
SHUN
SOEM SITA
1 Standard Process used (unless TLS) 1
SPOR
1 SESP 1 SPO
R
SOCE
SESP
1
STURK
S/TURK
SHEL STURK
S/TURK
1 SHEL 1
1
1
Centralised process ownership
TODAY 2011
TOMORROW
Outsource processing (PTP, OTC,Electronics
Sony Europe
=
RTR) • Main Co in UK
• Countries as branches of the Main Co
26 different legal entities • S/CIS, S/TUR not in scope

8. Challenges
Transformation of process, systems and ways of working in
short period of time
Simultaneous standardisation and outsourcing of processes
Moving from local to central decision making and
responsibility
Cost savings already required in first year (2011) and fully
to be realised in 2012
Massive challenges and very short timelines
required a new and systematic approach

9. Journey
Key steps (P2P)
1. Define standard processes fast, communicate and control them
2. Outsourcing of all activities
3. Implement delivery responsible
4. Ensure communication
5. Define targets (KPI’s) and start monitoring

10. Journey
Step 1
• Define standard processes fast, communicate and control them
• Process experts, SAP solution architect and future Process
Owner in workshops to define processes (supported by
Nimbus). Declare them as mandatory! Define ownership.
• One single truth regarding process documentation (Sony
me@work) to prevent outdated and multiple process
descriptions (Visio, PowerPoint)
• Decide which parts are to be outsourced
• Implement a change control process Process / Risk / Control “Commitment to the Basics”
• Single Global Process Owner for every
Ownership
process
• Standardised process across Sony Electronics
Simplicity
• All processes documented in a single tool
Transparency (Nimbus)
• Any change or local variation must go through
a strictly governed change control process
Control • Using the standard process is mandatory
European
Requester CAFÉ Approval Implementation
Process Owner
2011 Sony Corporation

11. Journey
Step 2
• Outsourcing of all activities
• No Po No Pay policy, exception list with coding instructions
for unsuitable categories (communication and enforcement)
• No retained activities
• Purchasing systems (e.g. SRM) and invoice approval flows to
implemented
• Train outsourcer in new standard processes and systems
• Knowledge transfer from local Finance teams to outsourcer
• Review differences and ensure outsourcer follows new
processes

12. Journey
Step 3
• Implement delivery responsible
• Considered as not required by many consultants as
outsourcers are supposed to work independently
• For organisations which change processes simultaneously to
outsourcing this function is very beneficial
• Guide outsourcer on a day to day basis
• Must ensure delivery regardless which part of the
process breaks down
• Contact point of last resort
• Ensures it gets done
• Close communication between Process Owner and Delivery
Lead
• Communicate shift of responsibility (from local Finance
Director to Delivery Lead)

13. Journey
Step 4
• Ensure Communication
• Communication has to be managed between the outsourcer
(two locations), delivery lead, process owner, vendors,
stakeholders and Sony users in 26 offices / branches
• Clear escalation route in case standard contact to outsourcer
did not deliver the required results
• Keep stakeholders updated regarding delivery results and
reasons for missing targets

14. Journey
Step 5
• Define targets (KPI’s), start monitoring and improving
• Developing the KPI structure and ensure they reflect clear
process responsibilities (e.g. Outsourcer – Sony)
• Daily reports for driving process execution
• Monthly report for KPI and SLA reporting in order to drive
further efficiency
7000 6341
6090 5908 5908 5908 5974 5968
5592
6000
5000
4000
3000
2000
1000
0
29 01 02 03 04 05 06 07
Untouched To be deleted
SONY APW Items WNS APW items
Return to vendor APW items Manual approval required by Sony
Manually approved, to be posted by WNS SONY AP2 Items (old SAP Workflow)
Closing Balance

15. Achievement
So far....
100
90
• Processes are truly standardised
80
PTP and fully outsourced
70
60
50 Outsourcer
• A new operating model is
40
30
Sony
established
20
10
• Business has not been disrupted
0
2010 2011
• Central process and delivery
ownership
• Local finance teams being
transformed and changed their
focus
• Significant cost savings through
labour arbitrage

16. What if..
..we would not have done it?
• Market environment has changed significantly, decline in most
European CE markets / “LCD hangover”
• Margins and profitability are under even higher pressure
• Significant disruptions due to natural disasters (Fukushima,
Thailand flooding)
• Significant decline in European CE markets
• Sony Consumer Products (global) -19% (LC) Dec YTD

17. Still to do
We are just getting started..
• Using the KPI’s for our improvement projects
• Acknowledged best practice across Sony – Utilising this advantage
• Automation to improve process efficiency

18. Summary
So: Is it possible to simultaneously
outsource all P2P processes and achieve
process improvement?
YES, if:
• A experienced change programme is in place (incl. IS, HR)
• Full buy in from senior management, no back-off when problems
start – the principles are not changing
• A strong central team who takes full ownership and control
• The outsourcer operates as an extended arm of the organisation
• Direct operational communication
• No hiding behind SLA and contractual obligations

19. Q&A