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Does simultaneous outsourcing of all your P2P processes and achieving  process improvement in just 12  months sound possib...
Agendaa.   Sony & Sony Europeb.   Baselinec.   Targetd.   Solutione.   Challengesf.   Journeyg.   Achievementh.   What Ifi...
Sony & Sony Europe  Sony  • app 65 Bill. EUR sales worldwide  • app. 165k employees  • Founded in 1946 by Masaru Ibuka & A...
Baseline                                                As Sony Europe was                                    Legal Entity...
Baseline               The Impacts• “Controllers controlling the controllers”• Long budgeting process (bottom-up – top-dow...
Target         Sony Europe Vision                     Customer focus / Our Purpose                      Competitive cost s...
Solution                            The Solution                                                                      Lega...
ChallengesTransformation of process, systems and ways of working inshort period of timeSimultaneous standardisation and ou...
Journey                       Key steps (P2P)1.     Define standard processes fast, communicate and control them2.     Out...
Journey                                                   Step 1•    Define standard processes fast, communicate and contr...
Journey                               Step 2•    Outsourcing of all activities     • No Po No Pay policy, exception list w...
Journey                              Step 3•    Implement delivery responsible     • Considered as not required by many co...
Journey                               Step 4•    Ensure Communication     • Communication has to be managed between the ou...
Journey                                                                                 Step 5•      Define targets (KPI’s...
Achievement                                   So far....100 90                                      •   Processes are trul...
What if..         ..we would not have done it?•    Market environment has changed significantly, decline in most     Europ...
Still to do            We are just getting started..•     Using the KPI’s for our improvement projects•     Acknowledged b...
Summary    So: Is it possible to simultaneously  outsource all P2P processes and achieve           process improvement?YES...
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Does simultaneous outsourcing of all your purchase-to-pay processes and achieving process improvement in just 12 months sound possible to you?

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Do the efficiencies gained by outsourcing P2P processes outweigh the costs? What is the business value in outsourcing?

Last year Sony was told by five consultants that what they wanted to do was impossible. Twelve months later they are reaping the rewards of having successfully outsourced ALL their P2P processes of Sony Europe, reducing their finance headcount from almost 70 to just 3 people whilst still remaining fully in control of how their P2P processes are managed by using a flexible, reliable and user friendly tool that allows easy communication between end users and the outsource centre.

This presentation from Jan Fonfara, Head of Finance Processes, Sony Europe explains how this was all made possible.

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Does simultaneous outsourcing of all your purchase-to-pay processes and achieving process improvement in just 12 months sound possible to you?

  1. 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. 2. Agendaa. Sony & Sony Europeb. Baselinec. Targetd. Solutione. Challengesf. Journeyg. Achievementh. What Ifi. Still to Doj. Summaryk. Q&A
  3. 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. 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 SITASPOR 1 1 SPO SOCE1 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. 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. 6. Target Sony Europe Vision Customer focus / Our Purpose Competitive cost structure Finance to deliver value Flexible Organisation Through Simplification Standardisation
  7. 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. 8. ChallengesTransformation of process, systems and ways of working inshort period of timeSimultaneous standardisation and outsourcing of processesMoving from local to central decision making andresponsibilityCost savings already required in first year (2011) and fullyto be realised in 2012 Massive challenges and very short timelines required a new and systematic approach
  9. 9. Journey Key steps (P2P)1. Define standard processes fast, communicate and control them2. Outsourcing of all activities3. Implement delivery responsible4. Ensure communication5. Define targets (KPI’s) and start monitoring
  10. 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. 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. 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. 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. 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. 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. 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. 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. 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. 19. Q&A

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