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Finding Focus: How Non-Core Activities Are Blurring Your Strategic VisionDario Mazurek, VP Finance & Accounting Services, Integrated BPO SalesSimon Speirs, Solution Architect EMEA, Finance & Accounting Services
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 2
Today’s Speakers
Simon is a member of the Association of Chartered Management Accountants (ACMA) with 18 years of experience in improving business and finance team performance. He has worked in a number of blue-chip companies including ABB, Accenture, PricewaterhouseCoopers and Hewlett Packard. Simon leads the design and implementation of back-office solutions across the European Region for Sutherland. He has a proven track record of designing and delivering shared service solutions and managing complex global projects. Simon’s experience spans across continuous improvement, finance and accounting, procurement, sourcing and IT management. The depth and breadth of his experience enables him to combine people, process and technology to design optimised and customised outsourcing solutions.Simon Speirs
Sutherland Global ServicesF&A Services
Dario leads our business development organisation for our Global Finance & Accounting Practice. Since joining Sutherland in 2009, he has held executive positions in our Business Transformation and within our Technology Vertical. He has over 20 years in the outsourcing industry in multiple management roles ranging from transition management and operations, account management, and a sales leader. He has held management and executive positions at such firms as IBM, AT&T, ACS (now Xerox Business Services), and Perot Systems. His leadership duties have had he and his team work with both large, global enterprises and increasingly more SMB clientele. His industry experience predominantly includes manufacturing, software and services, travel/hospitality/logistics, healthcare and Life Sciences. Dario Mazurek, VP
Sutherland Global ServicesF&A Services
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 3
Today’s Agenda
Who outsources and what are we outsourcing?
How does outsourcing work in the Finance Department?
How do I decide what to outsource? What is core and non-core?
What are the aims of the Finance Department?
What are the trends in Finance & Accounting Outsourcing?
What should I outsource and retain?
How do I get started and what should I do next?
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 4
Laying the Groundwork
Do any of you currently outsource?
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 5
Outsourcing Is More Common Than You Realise!
Oil changes for your car
Quick-serve food
Childminding services for your kids
Lawn and landscaping services
Contracted home improvements
Freelance contractors
Better use of your time Less complicated Better managed Access to best processes Access to better tools and
technologies Lower cost Time saving Allows you to focus on what you do
best without distractions
All of us outsource something everyday!We pay someone rather than doing it ourselves!
What We Outsource… …And Why We Outsource It
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And Outsourcing Works in Finance & Accounting!
Outsourcing Finance & Accounting provides the following benefits:
• Process improvement and standardisation• Visibility into what is going on in your business• Clear, accurate cost visibility• Management of HR, technology, etc.• Best-in-class technology solutions
– Automation– Collections– Productivity
• Manage and accurately forecast costs in uncertain economic times• Access to top talent• Ability to focus on your core business and grow nationally and internationally
Is outsourcing a good option for you? Let’s find out...
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 7
So How Do You Decide What To Outsource?
Guidelines to consider when outsourcing Finance & Accounting:
• What activities are core and what am I best at?– Areas of competitive differentiation– High business, financial, operational risk– Difficult to migrate out of (and back into) the business
• What activities are non-core and distract me?– Important, but not distinctive to how you and your customers
define your brand, products and services– Tend to be more transactional in nature, with defined business
rules and procedures– Such functions or processes can be readily integrated with core operations
• How do I find the dividing line and balance an outsourcing solution?
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 8
Aims & Ambitions for the Finance Department
Financial Reporting
Transaction Processing
Fina
nce
Focu
s
Business Decision Support
From• Finance as a function
• Transaction processing requiring effort & attention
• Focus on ad-hoc operational solutions
Administrative
Strategic
Time SpentTransactional Decision Making
To
• Finance as a business partner
• Focus on performance management for core processes
• Finance operations very low cost & effective
Outsourcing provides CFOs with the opportunity to focus their retained organisation on what is important to the business, in addition to reducing costs of the Finance function.
Cost Reduction
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8 Key Trends Driving Growth in F&A Outsourcing Market
Source: Bain experience; IDC deal database; Primary interviews; Press articles
EXAMPLES OF COMPANIES
Up the value chain: more complex processes being outsourced
• Shift from customised point solutions to integrated end to end solutions such as O2C and P2P
• New technologies (Software-as-a-Service, cloud, platform) based solutions are gaining influence
• Rising adoption of F&A outsourcing in mid-market companies
• Growth of F&A outsourcing in emerging and new verticals such as retail, healthcare and utility
• Rising bundled IT-BPO contracts for F&A outsourcing
• Globalisation of delivery locations - Brazil, China and Egypt are emerging destinations beyond India and Philippines
It is not all about costs - companies have leveraged sourcing footprint for activities (R&D, product development) that drive top line
KEY TRENDS
Publishing
1
2
3
4
5
6
7
8
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Transaction Management
• Decision Making Authority
• Acceptance and Approval
• Risk Management• Proximity to Business• Vision• Strategy• Policy Setting
Retained Shared Services (internal / external)
Finding the Dividing Line
Typical• Routine & Process
Driven• Rules Based• Can’t Be Automated• Data Mining
Value Add• Research• Analytics• Knowledge Driven
Business Processes
Strategy
Finding the Balance of Risk and Strategic Importance
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 11
A Detailed Look at What to Outsource & What to Retain
Strategy(Co-develop)
Business Process Management
(Co-develop)
Financial Accounting• Close Coordination &
optimisation support• Reconciliations, Analysis
& Adjustments• Consolidations
Credit Management• Credit Analysis • Credit Monitoring• Bad Debt Recovery
Strategy Development• Support to strategic analysis and strategy development• Policy design and maintenance• Strategy and policy implementation
Strategy Development• Strategic analysis• Vision/mission Development• Policy Setting and Approval• Investor Relations
Budget & Forecasts• Model Maintenance• Data Compilation,
Maintenance & Reporting
Transaction Management
Approval
Approval
Approval
Typically Retained Typically Outsourced
Decision MakingAuthority
Acceptance and Approval
Financial Planning & Analysis
Tax Planning & Income Tax Admin
Treasury (Hedging)
Investing & Financing
Management Reporting• Analysis & Commentaries• Ad-hoc ReportingDecision Making Authority
Acceptance & Approval
Management Reporting• Proforma reporting• Variance Analysis• Reconciliation vs Books• Ad hoc reporting
Transaction Processing• Accounts Payable• Accounts Receivable• Cash & Banking• Invoicing• Fixed Assets• Cost Accounting• Inventory Accounting• Inter-Company Accounting• General Ledger Processing
Administrative• Maintenance of procedure,
processes• Maintenance of chart of
accounts, cost centres, vendor & customer master data
• Document handling & archiving
Tax-Compliance• Payment/refund Processnig• Model Maintenance• Reporting
Cash Forecasting• Daily Cash Management• Forecasting & Reporting External Reporting
• Pro-forma Statutory reporting
• Production of technical notes Performance Reporting
Integration (e-enablement)
CENTRE SUPPORT ACTIVITIES: SLA REPORTING, KPI MONITORING, CONTINUOUS IMPROVEMENT,
SERVICE RELATIONSHIP MANAGEMENT, STAFF MANAGEMENT &DEVELOPMENT, MAINTENANCE OF PROCEDURES AND PROCESSES
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A View on What is CORE to a Finance Department
95%
AccountsPayable
AccountsReceivable
80%
Payroll
100%
Cash& Banking
50%
95%
FixedAssets
70%
FinancialAccounting
ManagementReporting
50%30%20%
Credit Monitoring Physical collections Report finalisation
Books ownershipTax liaison
F&AOutsourced
F&ARetained
70%
30%
Cash ManagementBank Relations
Contract Financing
5% 5%
New Skills for the RetainedOrganisation
Risk Management
Process Change Management
HR Change Management
Service Level Management
Supplier Management
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Outsourcing and Offshoring Are Widely Prevalent Across the Entire Spectrum of FAO Activities
Transaction Processing Treasury
External Reporting Decision Support
SOX Internal Audit Financial analysis, Project Mgmt
Control
M&A and Divest. Risk Mgmt
Actuarial Analysis/ Reserving
Expertise
Revenue/ Expense
Allocation
PerformanceMeasurement
Product line profitability
MIS/Management Reporting
Investment Planning
Budgeting & Fin Planning Forecast
Planning
Legal Entity Reporting Statutory Reporting
Regulatory Reporting Rating Agency Relations
Investor Relations
External reporting policy/mgmt
Treasury Mgmt
General Ledger
Accounting
Consoli-dations
Monthly/ Quarterly
Close
Financial Recon
Fixed Asset Accounting
Benefits Admin/
Accounting
Inquiry Handling
Record to Report
Source to Gross Calc
Gross to Net Calc
Payroll Process
Time & Attendance
Payroll
Management & Policy design
Procure to Pay
Requisition Materials Purchasing
Payment Approval Process
Accounts Payable
T&E Accting/ Reimbur-sement
Procurement Card
Admini-stration
Management & Policy design
Tax policy & theory Accounting management/policy
Billing
Order Entry
Cash App
Collection Bank Recon
Order to Cash
Credit
Management & Policy design
Tax
Tax admin & comp.
Tax strategy & policy
>50% offshoreable 20-50% offshoreable
<20% offshoreable
Strong outsource potential
Typically in house
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Getting Started: Outsourcing Some Non-Core Areas
How best do I get started on my outsourcing journey?
• Pick one (of just a few) pain points that you can link to a defined, successful business outcome(s)
• Make sure you can measure the business outcome (failure or success)
• Construct the program in such a way you can find ways to fail faster and cheaper
• Find ways to measure success quickly, then scale smartly
• Consider third-party partners that understand your business
• Find out what it looks like for other mid-market companies…
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Real Case Studies:Cash Applications and Credit & Collections
95% outsourced 40% outsourced
• Receive and process cheques
• Manage EFT/Chaps payments
• Clear down customer payments
• Manage unapplied / unidentified cash
• Manage reconciliations
• Troubleshooting support for payment exceptions
• Reconciliation sign-off
• Low value, high volume customers within early debt cycles
• Credit management – limits & legal management
• Strategic accounts – high value / sensitive accounts
• Dunning & very old debt collections
Cash Applications B2C / B2B Collections
Service Delivery Management
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 16
What Should I Do Next?
Use the checklist you’ll receive to determine what is core and non-core
Talk to an Accounting Expert who can partner to help you:• Lay out your organisational landscape• Review existing technology and technology gaps• Review specific volumetrics
Review a basic solution with an Accounting Expert to see:• What like-for-like delivery looks like• What the plan looks like to get you on your journey• What the quick wins are that will make your outsourcing partnership
successful
Look for our next webinar in March where we’ll talk about an outsourcing solution for every mid-market company!
© 2013 Sutherland Global Services Inc., All rights reserved. Privileged and confidential information of Sutherland Global Services Inc. www.sutherlandglobal.comApril 10, 2023 17
Thank You
Dario Mazurek—Presenter Vice President, Integrated BPO SalesFinance & Accounting OutsourcingSutherland Global [email protected]
Simon Speirs—Presenter Senior Director, Solution Architect, EMEAFinance & Accounting OutsourcingSutherland Global [email protected]