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European Conference Amsterdam 14 th – 16 th April 2013. ‘Credit Management Roadmap to Improvement…’. The Credit Management Journey. ‘Building Credit Together’ One Team One Goal. Nick King, MICM Group Credit Director. HEADS or TAILS. HEADS. or. TAILS. 2. Setting the Scene. 3. - PowerPoint PPT Presentation
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Building Credit TogetherOne Team One Goal
‘Credit Management Roadmap to Improvement…’
The Credit Management Journey
‘Building Credit Together’One Team One Goal
European ConferenceAmsterdam 14th – 16th April
2013
Nick King, MICMGroup Credit Director
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Building Credit TogetherOne Team One Goal
HEADS or TAILS
HEADS or TAILS
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Building Credit TogetherOne Team One Goal
SETTING THE SCENE
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Building Credit TogetherOne Team One Goal
Strong group brands
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Building Credit TogetherOne Team One Goal
Business Overview – 4 Divisions with shared support
GeneralMerchants
SpecialistMerchants Retail
BUSINESS DIVISIONS SUPPORT FUNCTIONS
Supply Chain
Finance
HR
IT
Property
Commercial / National Sales
MarketingPlumbing & Heating
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Building Credit TogetherOne Team One Goal
Renewable Energy
SOLFEX Acquired by TP Group in Jan 2013
SOLFEX energy systems is one of the UKs first and leading innovators and suppliers of solar energy systems.
Allow TP to offer our customers an integrated approach to energy efficient building
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Building Credit TogetherOne Team One Goal
Key Figures
• £5 billion t/o – 2012• Excluding retail = £3.6 Billion• Total Staff = 25,000• Total Branches – 2,000+ (over 19 brands)• 137,000 to 140,000 credit account Customers• Receivables Ledger of £ £300,500,000• DSO y/e 2012 = 56.45• Bad debt Provision - £5 million • 37,000 cheques per month total value of £85 million• 50,000 bacs payment per month value of £154 million
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Building Credit TogetherOne Team One Goal
Organisation
Total Credit Services Staff = 253
Bus Unit
Managers
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Building Credit TogetherOne Team One Goal
From the Beginning
• Started in October 2011• Follow in the Steps of Predecessor• Integration of New Business• Difficult Market Conditions• Insurance Renewal (BSS Group)• Change of Mind set• Art of Delegation
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Building Credit TogetherOne Team One Goal
Integration of BSS Group
GeneralMerchants
SpecialistMerchants Retail
BUSINESS DIVISIONS SUPPORT FUNCTIONS
Supply Chain
Finance
HR
IT
Property
Commercial / National Sales
MarketingPlumbing & Heating
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Building Credit TogetherOne Team One Goal
BSS Integration
• Staff structure• Insurance• Credit Limits• System and Process• “Them & US” Mentality
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Building Credit TogetherOne Team One Goal
PERCEPTION
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Building Credit TogetherOne Team One Goal
TP Group
• Attitude• Skill Level• Engagement• Knowledge
• System• Policy• Relevance• Control/Audit
• Tools• KPI• Reward• Opportunity
• Functionality• Integration• Fit for purpose• Technology (latest)
People Process
Performance
Measurement
IT/Systems
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Building Credit TogetherOne Team One Goal
Perception
• Attitude• Skill Level• Engagement• Knowledge
People
• Complacent• Lack of Investment• Low Engagement• Low to Medium Skill set• Not engaged with peers “credit
industry”• Loyal• Knowledgeable about Industry• Low to medium attrition • Willingness to do well• Made best of a bad job
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Building Credit TogetherOne Team One Goal
Perception
People Process
Stale/FragmentedMinimum control/review“Make do”
WorkedUnderstood and Accepted (with region)Integrated into systemDoes the job
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Building Credit TogetherOne Team One Goal
Perception
Performance
Measurement
OutdatedComplicatedManualNot understood/communicatedNot flexibleReward not seen as beneficialAcceptedDelivered the results
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Building Credit TogetherOne Team One Goal
Perception
IT/Systems
Lack controlOld technologyFragmentedPoor reporting capabilityLack of investmentDoes the jobIntegrated into businessHas good collection capabilityOpportunity to invest
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Building Credit TogetherOne Team One Goal
Mountain to Climb
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Building Credit TogetherOne Team One Goal
THEN YOU WILL ALWAYS GET WHAT YOU ALWAYS GOT
IF YOU ALWAYS DO WHAT YOU ALWAYS DID
REALITY CHECK
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Building Credit TogetherOne Team One Goal
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
Organisational Alignment
Customer Focus
Consistent MI
Professionalism
One Set of Rules
Process & System Standardisation
Credit Strategies
Operational Excellence
Enablers
Professional &Customer FocussedCredit Management
FragmentedCredit Management
Differentiators
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Building Credit TogetherOne Team One Goal
Organisational Alignment
Customer Focus
Consistent MI
Professionalism
One Set of Rules
Process & System Standardisation
Credit Strategies
Operational Excellence
Enablers
Differentiators
Single Organisation for Credit Management• Group integration• One Team mentality• Single Organisation Archetype • New Risk Department
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
FragmentedCredit Management
Professional &Customer FocussedCredit Management
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Building Credit TogetherOne Team One Goal
Organisational Alignment
Customer Focus
Consistent MI
Professionalism
One Set of Rules
Process & System Standardisation
Credit Strategies
Operational Excellence
Enablers
Differentiators
One-Credit Learning Programme• Group Credit Management Learning & Development Programme. • Competency frameworks• Professional membership (ICM Group membership)• Career Ladder• Reward Programmes
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
FragmentedCredit Management
Professional &Customer FocussedCredit Management
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Building Credit TogetherOne Team One Goal
Perception
• Attitude• Skill Level• Engagement• Knowledge
• System• Policy• Relevance• Control/Audit
• Tools• KPI• Reward• Opportunity
• Functionality• Integration• Fit for purpose• Technology (latest)
People Process
Performance
Measurement
IT/Systems
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Building Credit TogetherOne Team One Goal
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
Organizational Structure
Mentor
Career Ladder/Succession Planning
Professionalism
Credit Management Learning & Development Programme
Right Person, Right Job
Credit Academy
Reward & Recognition
Enablers
Professional &Customer FocussedCredit Management
Current Status
DifferentiatorsPeople
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Building Credit TogetherOne Team One Goal
Organisational Alignment
Enablers
Differentiators
Job v Correct Talent• Individual Assessment Programme• Myers Briggs Process Introduction• Management Attitude, Desire Job Review • Aligned Recruitment Process• Key Point Talent Attraction Rules • Job Evaluation/capability – Grid Programme• Support and mini mentor Programme• Recurring Review Process and realignment
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
Current Status
Professional &Customer FocussedCredit Management
People Mentor
Career Ladder/Succession Planning
Professionalism
Right Person, Right Job
Credit Academy
Reward & Recognition
Credit Management Learning & Development Programme
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Building Credit TogetherOne Team One Goal
Credit Manual
Enablers
Differentiators
Single Manuel that fits the Business•1 single Group Updated Manual• Sign of by Executive Team• Awareness, roll out to Whole Business• Review Team and Time Frame
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
Current Status
Professional &Customer FocussedCredit Management
Online Trading/Management
Reporting
KRA’s
Process Manual
Risk
One Platform
Proactivness
Process
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Building Credit TogetherOne Team One Goal
Enablers
Differentiators
Single Measurement to Drive Performance• Review of current KPI’s• Align to Business• Drive continued Performance• Automated, Easy, Delivery
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
Current Status
Professional &Customer FocussedCredit ManagementPerformance
Measurement
Measurable KRA’s
Linked KRA’s
Personal KRA’s (Development Plans)
Tolerance Levels
Time Lines
Influence/Non Influence
Pulls and Push of Tolerance
Reward & Recognition
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Building Credit TogetherOne Team One Goal
Enablers
Differentiators
Correct External Systems• Review all current external systems (do they add value)• Are their better alternatives than current offering?• What will happen if we changed ERP system?• Are we missing something? (right tools)• Review External v Internal (cost, support, development)
•(* Include NEXUM and sales ledger and risk)
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
Current Status
Professional &Customer FocussedCredit Management
IT
Equipment
APPS
Development
External
System/s
One Platform
Multichannel
Customer on-line
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Building Credit TogetherOne Team One Goal
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
Organisational Alignment
Customer Focus
Consistent MI
Professionalism
One Set of Rules
Process & System Standardisation
Credit Strategies
Operational Excellence
Enablers
Professional &Customer FocussedCredit Management
FragmentedCredit Management
Differentiators
Start Point
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Building Credit TogetherOne Team One Goal
‘Building Credit Together’
Achieving Quality in Credit Management
The Credit Management Journey ‘Credit Management Roadmap to Improvement…’
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Building Credit TogetherOne Team One Goal
• June 2012 – QiCM Project Team Founded Criteria Discussed and Evaluated Task Groups formed for Accreditation Areas
• August 2012 – Stakeholder Group founded• Development Process
Pilots and Prototypes• Ongoing Execution and Further
Development
Our Journey So Far...
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Building Credit TogetherOne Team One Goal
• A New Credit Policy Standardised throughout the function Clarification
• Revised Procedures Manual Interlinked with the Credit Policy Accessible to all Colleagues
• Upload to iConnect• Credit Control Bulls-eye
Credit Policy and Compliance
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Building Credit TogetherOne Team One Goal
Credit Manageme
nt Function
HOW WILL THE CREDIT MANAGEMENT FUNCTION MAKE OUR CUSTOMERS FEEL?
HOW DO WE WANT OUR CUSTOMERS AND COLLEAGUES TO THINK?
PERSONALITY
WHAT WE STAND FORA leading Credit Management Function constantly striving to
better itself. We provide an honest and reliable Credit Management Function with our customers and
other Functions in mind at all times.Valued
Confident
Supported
Satisfied
FriendlyProfession
alReliabl
eUnderstanding
Helpful
They Will Help Me
They Help
Prevent Bad
Debts
They Provide Quality Service
They Take
Pride In Their
Performance
SERVICE•Our staff are helpful, friendly and knowledgeable•We provide an efficient and reliable service
COMMITMENT•We will develop relationships with our customers and branches
PERSONAL TOUCH•We will treat each situation on its own merits•We are people dealing with people
WHAT OUR CUSTOMERS WANT
The Bulls Eye
Building Credit TogetherOne Team One Goal
• Increased 1-2-1’s• Enhanced Performance Reviews• Dedicated Competency Frameworks• New Reward Schemes and Incentives• Improved Training and Development• Bespoke Induction Process
Personal and Professional Development
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Building Credit TogetherOne Team One Goal
Example Competency FrameworksCredit Management
Level 1 Level 2 Level 3
Customer Focus I listen to my customers and empathise with them.I balance customer needs with business needs.I understand the benefit of building a rapport with my customers and colleagues.I deal with customer queries in a polite and professional way and in a timely manner.I ask for help when I can’t resolve a customer query.
I act as a role model by setting clear standards of customer service.I handle complaints quickly and fairly explaining the outcome to the customer.I give help to other team members when queries are escalated to me.I review outstanding queries for the team and ensure action is taken to resolve them.
I communicate the standards for good customer service.I explain and value the needs and expectations of customers.I share information with all relevant parties, to ensure a timely resolution of queries.
Personal Development
I keep my area of expertise up to date.I am aware of Travis Perkins Group’s Credit Management Policy and I follow this in my day to day work.I keep up to date on developments within the business.I ask for, and respond positively to feedback and learn from the work I have done.I contribute to my PDP and I understand the objectives for my role.I aim for a healthy work / home balance.
I lead by example by keeping my area of expertise up to date.I ensure my objectives are in line with the credit management policy.I give feedback in a positive way and recognise good performance.I am confident when communicating at different levels of the business.I give training and advice required to promote team development.I set PDP objectives and conduct reviews on a regular basis.
I coach and mentor individuals to improve their performance and development.I communicate expectations and make sure peoples objectives are in line with the company’s priorities.I encourage my staff to identify their training needs and seek assistance when required.I follow up on PDP’s to ensure objective and development plans are being achieved, offering guidance where necessary.I ensure the credit policy is communicated to stakeholders in the wider business.
Credit Management – Competency Framework
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Building Credit TogetherOne Team One Goal
Example Competency FrameworksCredit Management
‘Building Credit Together’
Level 1 Level 2 Level 3
Planning & Management
I prioritise my workload to achieve my goals.I manage my time through effective planning.I manage my workload to ensure that my daily / monthly tasks are completed on time.I understand Travis Perkins Groups Environmental values and I use my resources accordingly. I understand the importance of recovering debts and I adjust my priorities to reflect this.
I help and support my team to achieve the financial goals of the business.I respond to changes to make sure that the team can still successfully manage their workloadI encourage my team to consider the cost and environmental impact of resources.I plan the work rota’s shifts to ensure sufficient cover.
I consider how changes will impact my team.I communicate changes to my team at the appropriate time, considering their workload and priorities.I take responsibility for ensuring my team have the appropriate skills and resources.I identify risks and make stakeholders aware so we can take appropriate action in a timely manner.
Using Information for Communication and Decision Making
I work confidently with the information available when making decisions.I am aware of various sources of information and how to use these to make decisions.I understand where to go and who to involve when making my decisions.I know when decisions should be escalated to a higher level.
I can identify the issue and choose the types of relevant evidence I need to support, alter or reject decisions.I communicate all of my decisions to the relevant people.I review credit limits as and when escalated and ensure credit violations are dealt with.I give guidance to the team on when and how to access additional information.I use my experience and knowledge to help others with their decision making.
I communicate decisions, policies and strategies to my team and any relevant stakeholders.I support my team in their decisions; encourage them to use all information and sources available in order to minimise risk.I act decisively in the interests of the business.
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Building Credit TogetherOne Team One Goal
Example Competency FrameworksCredit Management
Level 1 Level 2 Level 3
Working as a Team
I understand the importance of working as a team and being a team player.I value the opinions of others and openly contribute to the team by giving and receiving helpful feedback and sharing knowledge and ideas.I treat everyone with respect and courtesy.I am flexible in my approach and I am willing to adapt as required to accommodate the needs of the team.I take responsibility for my own actions and deliver my commitments to the team.I deal with negativity in a constructive and professional way.
I promote the importance of teamwork to achieve results.I share credit and recognition with the whole team where appropriate.I manage the team and take steps to create a positive working environment.I demonstrate and encourage flexibility within the team.I am open and approachable to everyone and encourage effective communication on all levels.I treat my colleagues fairly and consistently.
I set and communicate clear standards to deliver an effective team.I meet with different departments to share information and best practice.I know when to liaise with different departments when specialist information is required.I build trust through sharing information, knowledge, experience and expertise.I lead my team to ensure they are motivated and engaged.I know when to take action to help improve performance.
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Building Credit TogetherOne Team One Goal
• Customer Service Policy Introduced Accessible as part of the Credit Policy and Procedures Manual
• Customer Surveys and Questionnaires• Utilisation of Hold Music• Out of Hours Management
Message Service Additional options for Out of Hours Payments
Customer Service
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Building Credit TogetherOne Team One Goal
• Collation of Paper Reports• Adaptation of the KRA Screen to report on the Credit
Management Function• Enable Management to Review and Improve team and
Individual Performances Time Saved accessing reports A good starting point for Further Enhancement
• Currently awaiting a project date from IT• Assessing other viable options for Uniformed Reporting
Performance Measurement
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Building Credit TogetherOne Team One Goal
Performance MeasurementKPI’s
DSO Collections Query ResolutionDebtor Days Month on Month Cash targets Month on Month Outstanding Credit NotesYear on Year Year on Year Query by branch/region/divisionCurrent Credit Sales (Cash Vs Sales) Debt Accumulator registered queriesUnallocated Cash Remaining after stop day actioned queries
resolved queries
Prior New Accounts Bad DebtPayment plans Accounts opened Bad debt provisionPrior by branch/controller accounts denied Legal accounts/legal cash
accounts on hold Failures
Risk/WatchSlow Payers Group Top 30Risk Factors Top 30 by brandHi Risk Accounts/watch list Top 30 by regionCredit Violations Top 30 by credit controller
Required to have financial reporting tool showing up-to-date figuresAnd Key Performance Indicators. Recognised Key areas that required reporting on
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Building Credit TogetherOne Team One Goal
Roadmap
3 Months
12 Months and
Beyond
9 Months
6 Months
Credit Policy
Personal and Professional Development
Customer Services
Performance Measurement
1-2-1 and Performance Reviews Initiated
Compliance Process
Future Customer Service Objectives Set
Receiving a Timescale from IT.
Feedback on Functional Audits
All Staff to have Completed A 1-2-1
Benchmarking from Questionnaires
Expand, Educate and Incorporate Targets
Credit Management Road shows
Training and Development Focus
Credit Management Conference
Feedback on Dashboards and development to Live Screens
Review Policy and Benchmarks
Review and Modify Policy
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Building Credit TogetherOne Team One Goal
Corporate Membership Programme
AFFILIATE LEARNER
MICM/MICM(Grad)
FELLOW
AFFILIATE / CORPORATE AFFILIATE
ASSOCIATE AICM
Member Management Training QICM Best Practice
ConferencesMasterclasses
Essential Skills Training
Specialist Training
Corporate Affiliate Briefings ICM Branch events Regional Roadshows
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Building Credit TogetherOne Team One Goal
Recommended TrainingEssential
Essential Skills Recommended for credit management generalists, those working in operational roles or new to credit
Optional Assessment: Level 2 CERTIFICATE
orTWO knowledge units:•Credit Management•Business Environment
‘Cash Collections’ plus THREE skills units Front Office:•Telephone Collections•Negotiation and Influencing• Customer Relations
Back Office:Introduction to Credit Risk Debt Recovery Business Communications & Personal Skills
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Building Credit TogetherOne Team One Goal
Recommended TrainingSpecialist
Specialist
‘Credit Management’ plus ONE of the following paths
Credit Risk Path:• Credit Risk Analysis• Advanced Credit Risk• Financial Analysis
Legal Path:• Business Law• Handling Small Claims• Insolvency and Bankruptcy• ICM Law Conference
Collections Path:• Developing Credit
Management Skills• Team Leadership• Collections Management
Recommended for credit management specialists, managers, supervisors and team leaders
Optional Assessment: Level 3 DIPLOMA AICM
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Building Credit TogetherOne Team One Goal
Other Initiatives The Morning Board
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Building Credit TogetherOne Team One Goal
• M4M (March For Millions)
• Average April Cash Collection = £260M
• Ambitious Aim to Increase of £140M
• A Minimum of 10 Day DSO Reduction
• Business Wide Advertising Strategy
£260M
£400M
The Event... M4M
£300M
£350M
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Building Credit TogetherOne Team One Goal
WHERE AM I TRYING TO GET TO?
THE END GAME
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Building Credit TogetherOne Team One Goal
End Result
We’re Proud
We’re Team
We’reGrowing
We’reValued
We’reprofession
alWe LeadWe add value
• Travis Perkins Credit Academy
• High Engagement
• Qualifications
• Centre of Excellence
• Training centre for Customers
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Building Credit TogetherOne Team One Goal
Challenges
“Nothing is stronger than habit.” (Ovid).
“They always say time changes things, but you actually have to change them yourself.” (A. Warhol).
“Nobody can go back and start a new beginning, but anyone can start today and make a new ending”(Maria Robinson)
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Building Credit TogetherOne Team One Goal
When it goes wrong.
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