Daily Challenges Faced by Finance SSOs Today

© Copyright 2012 WNS (Holdings) Ltd. All rights reserved

Adding Teeth to Your Finance Shared

Services Organization

15th Annual Australasia Shared

Services & Outsourcing Week

April 16–19, 2012

Melbourne Australasia

1 © Copyright 2012 WNS (Holdings) Ltd. All rights reserved

Key Questions being asked of Finance SSO’s

Do business units view your finance shared services as a strategic

partner?

Is your finance shared services function adding value to your

organization beyond mundane processing and tactical tasks?

Do you have a roadmap to move up the value chain?

How will you reduce the cost of delivering Shared Services?

Are you equipped with best-practices and automation?

What technology automation are you considering?

Are you tracking the efficiency and effectiveness quotient of your

finance shared services?

How do I retain staff and provide a meaningful career path?

How will you go from “good” to “better” and from “better” to “best”?

How will you do “more” for “less”?


Daily Challenges Faced by Finance SSOs Today

Employee Expectation

Actionable Insights

Customer Satisfaction

Control

Process Visibility

Automation

Service Quality

Escalations

Exceptions

Turnaround Time

Headcount

Cost


Adding Teeth to Your Finance Shared Services

Organization

Finance

Shared

Services

Operating

Model &

Scope

Efficient &

Effective

Processes

Technology

&

Automation

Best People

Service

Quality &

Governance


Pillars for Moving up the Value Chain


Operating Model and Scope

1 Does your finance shared services deliver end-to-end services to the CFO’s

organization covering procure-to-pay, order-to-cash and record-to-report?

2 Does your finance shared services extend to all business units, product

lines and regions?

3 Is your shared services organization structured by process? (i.e. Center of

Excellence or Business Units / Regions / Product Lines)


Efficient and Effective Processes

1 Are your processes standardized across all business units and regions?

(Policies, systems, procedures, approval matrices, chart of accounts,

exception management, etc.)

2 Do you have a framework for documenting processes and procedures and

capturing knowledge acquired by key subject matter experts? (In other

words, are you process-dependent instead of people-dependent)

3 Do you have an ongoing framework to implement process improvements

focused on eliminating duplication, increasing visibility, enhancing controls

and improving reporting?

4 Do you have an institutionalized continuous process improvements program

leveraging Six Sigma, Lean and Kaizen principles?

5 Have you benchmarked your processes against your peer group? Do you

have a roadmap or a plan to improve?

6 Do you leverage advanced data analytics to provide actionable insights to

management (for example: spend analytics, inventory allocation analytics,

customer churn analytics)


Technology and Automation

1 Do you have a common ERP system across all business units and product

lines that are leveraged for core F&A transactional processes (AP Invoices,

T&E, Billing, Receivables, General Ledger)?

2 Have you implemented enabling tools like document imaging, workflow,

vendor portal, optical character recognition, automated reconciliation and

so on that help in substituting manual effort with technology?

3 Does your finance shared services have a separate budget / monetary

allocation allocated to fund automation initiatives?

4 Are you moving towards self help? For example, Vendor Portal, Customer

Portal, Employee Portal

5 Have you implemented business intelligence tools like Hyperion, Cognos,

Business Objects that are integrated with your ERP?


Best People

1 Is your finance shared services a preferred destination or perceived to be a

sound career option within your larger organization?

2 Are you able to provide a career path to employees working within your

finance shared services (both vertical and horizontal growth)?

3 Is your team highly experienced in SSC management; drawn from full

spectrum of constituencies (field, operations, corporate, consulting, etc.)?

4 Is your team driven by business results/outcomes vs. tasks/activities within

a plan?

5 Is attrition an issue within your SSO? In general, are you able to retain your

best talent?


Service Quality Governance

1 Do you track and report service metrics focusing on accuracy and

turnaround time each month (daily and weekly)?

2 Do you provide improvements in service metrics each year?

3 Do you measure and report satisfaction scores for vendors and customers

(both internal and external customers)? Do you have a mechanism to act

upon the feedback provided?

4 Do you measure and report Net Promoter Score (NPS)? The Net Promoter

Score is obtained by asking customers a single question on a 0 to 10 rating

scale, where 10 is "extremely likely" and 0 is "not at all likely". "How likely is

it that you would recommend our company to a friend or colleague?"

5 Do you have monthly performance review meetings and quarterly steering

committee meetings for more strategic discussions with your internal

customers (for example: business units)?


How Matured is Your Finance Shared Services Center?

Based on 5 key dimensions & 36 sub-dimensions

– Operating Model & Processes

□ Scope, Span, Standardization, Knowledge Mgmt.

– Technology Enablement & Optimization

□ System standardization, Consolidation, Workflow, Self-Service

– Operational Controls & Service Delivery

□ Governance, Process Controls, Reporting, Business Intelligence, Performance Management, Benchmarking

– Organizational Development

□ Org Structure, Staffing, Incentives, Career Management, Development and Retention

– Strategic Business Value

□ Strategic Planning, Customer and Vendor satisfaction, Risk Management, Actionable Insights


Moving up the Maturity Curve Leverage the Domain-specific Maturity Models

Source-to-Procure Maturity Model

Tactical Collaborative Strategic Value

Creation

Spend visibility >75%

Spend under management

>75%

<10% Suppliers for 80% of

spend

Catalog based buying 50+%

PO Cycle Time 1day

eSourcing adoption >75%

Spend visibility 50-75%


50-75%

10-20% suppliers for 80% of

spend

Catalog buying 25-50%

PO Cycle Time 3-5 days

eSourcing adoption 50-75%

Spend visibility <50%


~50%

20-30% Suppliers for 80% of

spend

Catalog buying <25%

PO Cycle Time 5 -10days

eSourcing adoption <50%

Low spend visibility

Decentralized sourcing

Fragmented supplier base

No catalog buying

PO Cycle Time > 10 days

Level 1

Level 2

Level 3

Level 4

Level of Effectiveness (Quality and Business Impact)

Leve

l o

f E

ffic

ien

cy (

Au

tom

ati

on

, P

rod

ucti

vit

y)



Procure-to-Pay Maturity Model


Creation

100% Electronic Invoices

Supplier Self Service

Dynamic Discounting

Fraud prevention

Supplier OnBoarding

Vendor Portal

PO flip

Automated Matching

Online Dispute Resolution

Key from Image and OCR

Point-to-Point edi

Online Matching

Exception Management

Approval Workflow

Automated Reports

Centralized

Scan Invoices

Manual Indexing

Manual Approval

Leve

l o

f E

ffic

ien

cy (

Au

tom

ati

on

, P

rod

ucti

vit

y)

Level of Effectiveness (Quality and Business Impact)

Level 1

Level 2

Level 3

Level 4



Order-to-Cash Maturity Model


Creation

Collection Strategy Engine

Customer Profitability

Portfolio Risk Predictive

Analytics

Customer Satisfaction

Online Payments / EFT

Automated Cash Application

algorithms

Advanced Credit Analytics

Credit Portfolio Mgmt

Cash Forecasting

Integrated Dispute

Management Tools

Electronic Bill Presentment

Customer Portal

Electronic Sales Order Mgmt

Collection Workbench &

Audit Log

Contract Management

Database

View of Credit Demographic

Digital Dashboard

Centralized AR

Standard Invoice Generation

Invoice / Remittance Tracking

Manual Collection /

Contract Mgmt.

Operating Measures / Metrics

Level 1

Level 2

Level 3

Level 4



Record-to-Report Maturity Model


Creation

Continuous forecasting and

auditing capability and tools

Synchronization capability (GL,

Sub-ledgers, Consolidation &

Reporting Engine, etc)

User self-service capabilities for

querying and reporting

Finance as the custodian of

enterprise master data, business

rules, hierarchies (automated

master data management)

Business outcome measures –

rolling forecast vs actuals

(monthly, quarterly, annual)

Duration to complete strategic

plan, annual plan and forecast

Single Chart of Accounts and

ERP

Online repository of policies,

practices, schedules

Automated consolidation &

reporting engine integrated with

GL , drill down from GL to sub-

ledgers

Automated reconciliations

Workflow for journal approval

Automated closing calendar and

workflow

Effectiveness measures – Days

to close (GL Close,

consolidation, MD&A, earning

release), %Finance Cost /

Revenues, FTE/ Million $

Revenues, No of ERP / GL

systems

Standardization of policies,

practices, schedules

Sub-ledger to GL consolidation

through automated batch data

feeds

Template based transactional

tasks (Journals ,

Reconciliations, etc)

Efficiency metrics – Revenue /

Finance FTE, Finance back

office cost as a percentage of

revenue

Multiple ERPs

Non standard Chart of Accounts

Business unit consolidation and

reporting

Manual / non-standard

reconciliation templates

Email / paper based workflows

Non-standard closing calendars

Operating metrics limited to

timeliness and accuracy of

transactions

Level 1

Level 2

Level 3

Level 4


Next Steps Where do I go from here?

Conduct a discovery session in which

discrete opportunities are identified and

preliminarily sized / evaluated

Get organizational buy-in from key

stakeholders

Consider a formal assessment through

High Level Due Diligence:

– Will unearth clear opportunities without significant

investment

– Driven by industry practices & thought leadership,

specifically the Finance Shared Service Maturity

Model

Establish a Program:

– Leveraging existing SSC staff, technology and

other stakeholders

– Formalize as the opportunities, roadmap, and

business case become clear (i.e. Detailed Due

Diligence)

– Create timelines, define roles, assign

responsibilities

– Plan the work and work the plan!