presenting your speakers

Presenting your speakers

Sarah Fane

Head of Research

sharedserviceslink

Arlene Nelson

Senior Director, Internal

Controls and Global

Business Process

Huntsman

Dan French

Founder & CEO

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Agenda

• Introductions & Objectives

• Global Process Ownership – Context

• The Huntsman Journey

• Overview

• Internal Controls and Sarbanes-Oxley at Huntsman

• The evolution of the Global Business Process Owner

• Strategy and tactics

• The road ahead

• GPO Tools & Frameworks

• Thoughts for the Journey

• Q&A

Context

• Since the advent of Sarbanes-Oxley most companies have

implemented, refined, consolidated, automated and optimized much

of their Internal Controls Framework.

• Traditionally Internal Controls has been the responsibility of a

dedicated team reporting into Finance.

• However, we are now seeing Internal Controls becoming part of the

Global Process Owners (GPOs) mandate – making it another notch

on the belt of the mature GPOs.

Our Mission: Solutions for World Class Finance

Areas

‐ Financial Control & Compliance

‐ Risk Assurance

‐ Finance Process Optimisation

Solutions

‐ Consulting services

‐ Project services

‐ Technology

‐ Turn-key solutions

‐ Sourcing solutions

7

8

Clients

9

Global Process Ownership: Context

Courtesy: KPMG

Global Process Ownership

1. Ownership of end-to-end process across functional silos, geographic and business unit boundaries

2. Responsibility for performance of the process and achievement of key objectives

3. Accountable for effective governance and control

4. Authority, accountability and ability to drive change

10

Context

12

“The typical organization loses the equivalent of 5% of its revenues to fraud & waste each year”

Source: Global Economic Crime Survey; PwC

13

Process Standardisation & Internal Control

14

Global Process Ownership: Pillars of Success

Efficiency Effectiveness Relevance Influence

Continually improve process efficiency, speed, and quality

Deliver expertise in financial stewardship and risk management

Provide analytical support that decision-makers need

Business partnering for superior outcomes

Internal Controls and Global

Business Process The Journey from Compliance to Process Improvement

Internal Controls

Agenda

Huntsman’s Business Structure Internal Controls & Global Business Process Role of the Global Business Process Manager Global Business Process Standardization

Governance Strategy Global BPO Structure Redefined GBPO Governance Committee Process Definition Forward Looking Strategy

17

Internal Controls

Polyurethanes

MDI

Polyols

PO/MTBE

TPU

PU Systems

Performance

Products

Amines

Surfactants

Maleic Anhydride

Upstream

Intermediates

Pigments and

Additives

Titanium Dioxide

Functional

Additives

Color Pigments

Timber Treatment

Water Treatment

Textile Effects

Dyes

Chemicals

_____

Apparel

Home & Institutional

Technical Textiles

Composites

Adhesives

Resins

Advanced

Materials

Huntsman Businesses

19

0 51 102

128 0 0

255 153 0

0 128 0

153 204 255

192 192 192

128 128 128

19

0 51 102

128 0 0

255 153 0

0 128 0

153 204 255

192 192 192

128 128 128

Industrial Applications 14%

Energy & Fuel Additives 12%

Insulation 11%

Paints & Coatings 8%

Construction Materials 8%

Intermediate Chemicals 6%

Adhesives, Coatings & Elastomers 4%

Agrochemicals 3% Aerospace 2%

Household Products 10%

Apparel 10%

Automotive & Marine 6% Home Furnishings 5% Other 1%

Polyurethanes 46%

Performance Products

28%

Advanced Materials

17%

Textile Effects 5%

Pigments & Additives

4% Polyurethanes

37%

Performance Products

23%

Advanced Materials

11%

Textile Effects 8%


21%

(1) Segment allocation is before Corporate and other unallocated items

(2) See Appendix for a reconciliation

(3) Pro forma adjusted to include the October 1, 2014 acquisition of the Performance Additives and Titanium Dioxide businesses of Rockwood Holdings, Inc. as if consummated at the beginning of the period; exclude the allocation of general

corporate overhead by Rockwood

$733

$1,069 $1,108 $1,270

$1,160 $1,099

$1,551 $1,607

$1,323 $1,495

$1,221 $1,150

12% 13% 11% 12% 12% 12%

2011 2012 2013 2014 2015 2Q16 LTMNon-Pigments Pigments & Additives

Portfolio Composition

2015 Revenues $ in millions Source: Management estimates

Consumer 32%

Adjusted EBITDA(1)(2) Revenue(1) 2Q16 LTM

Revenues

$9.9 billion

Adjusted

EBITDA

$1.2 billion

End Markets Adjusted EBITDA(2)(3)

Adj. EBITDA Margin

Internal Controls

Global Presence

Operating >100 Manufacturing & R&D Facilities in ~30 Countries(1)

(1) As of December 31, 2015

(2) 2015 Revenues

U.S. & Canada

34%(2)

Europe

28%(2)

Asia Pacific

24%(2)

Rest of World

14%(2)

Europe 45%

Asia Pacific 27%

U.S. & Canada

21%

Rest of World

7%

~15,000 Employees(1)

Internal Controls 21

Division

Role Review/Sensitive Transactions

Segregation of Duties Conflicts

Corporate Level

IT

Admat

Textile Effects

Polyurethanes

Performance

Products

Application Controls

Accounts

Payable

Purc

hasin

g


Business Processes

Purchase to

Pay Record to

Report

ASSC

Vanquish

Oasis

Neon

Atlas

QM BPO PP BPO PM BPO MM BPO SD BPO CO BPO FI BPO

Fin

ancia

l Reportin

g

ERP(SAP) Process Owners

Application Process Owners

Global Business Process Manager

DBPO Business Subject Matter Experts (SME)

Global Projects

Process

Improvements IT Changes

/Change Management

Internal Controls & Global Business Process

Internal Controls

Role of the Global Business Process Manager

(GBPO)

22

Corporate strategies emphasizes the need for data content exchanges between Business,

Function and IT . The need for someone with both the business and technical knowledge to

manage the overall global business processes :

• Integrate and establish on-going cross functional committees between business owners

and IT

• Identify critical dependencies

• Establish a shared understanding of priorities for decision making

• Conduct business process design reviews with key user groups, stakeholders and other

people giving input

• Look across space , technology, services holistically for best practice overall

• Special projects that benefit corporate goals and initiatives

• Purchase Requisition Role rationalization

• SAP Role Review

• Streamlining Purchase Requisition Release strategies

• Management of IT requests – SLA’s

Internal Controls

Global Business Process Standardization

Governance Strategy

23

Governance utilizes a combination of processes, guiding principles, field stakeholders

and technology, necessary for achieving desired standardization goals

Roles/Stakeholders

• Determine a set of relevant Roles and Responsibilities in order to drive goals and

accountability Council-driven decisions

Guiding Principles

• Define a set of standard rules and principles to align field/ Corp efforts

Process

• Determine common set of actions and processes necessary to drive initiative charters and

manage change

• Limited number of cross-organization initiatives

Systems and Tools

• Leverage technology to land reporting requirements and measure results

Global BPO Structure Redefined

Huntsman Corporate Confidential - Draft

• Compliance • BPO

• IT • Master

Data

Input Execution

Auditable Request

• Define the Players – Roles & Stakeholders

Internal Controls

Define the Guiding Principles - Governance

Develop a GPO Governance Committee – Committee to drive Global Process Standardization within the BPO organization and establish accountability

Create repository of financial processes, systems, reports and controls

Core design authority for establishing Process Change Control governance Develop Change Advisory Board

Governance with Process Projects

Optimization and Training BPO Training

Communication of Change

Continuous Improvement Initiatives

25

Internal Controls

GBPO Governance Committee Goals

• Integrate and establish on-going cross functional committees between business owners and IT

• Identify critical dependencies • Establish a shared understanding of priorities for decision making • Conduct business process design reviews with key user groups,

stakeholders and other people giving input • Look across space , technology, services holistically for best practice

overall • Special projects that benefit corporate goals and initiatives

• Purchase Requisition Role rationalization

• SAP Role Review

• Streamlining Purchase Requisition Release strategies

• Management of IT requests – SLA’s

26

Internal Controls

Members Chair /Facilitator : Rotational Key Members

Members – IT, Internal Controls, Internal Audit, Divisional and Functional

BPO rep.

Cadence Monthly

Objective • Process Improvement & Standardization–

• Communicate best practices to support process standardization

• Structure for oversight, measurement, and decision making on process performance

• Mechanism for ensuring processes are delivering business value

• Communicate learnings and status from key projects

• Ensure controls requirements are identified and monitored in all process changes

• Develop People - Training addresses compliance

• Establish accountabilities for BPO and end to end owners of a process

Escalation Escalation point for:

• Process conflicts

Remit

• Establish process ownership -roadmap to demonstrate business value of having global business process owners identified and agreed

• Recommend data standardization using best practices and tools

• Governance and Compliance

• Visibility of end to end processes

Inputs

Suggested

Composition

• Division BPO’s

• Functional BPO’s

• IT Process leads

• Internal Controls

• Data and Analytics

Outputs

Huntsman Global BPO Governance Board -Charter

Internal Controls

Process Definition

28

Define the Process Hierarchy

• Organization

• Data

• Systems

• Controls

Centrally defined and controlled processes Define end to end process ( ie O2C, R2R, S2P)

Global operational consistency Define process playbook – understand & document e2e

process, via data, system, controls and roles

Internal Controls

Supporting Components

Define and document the core components of e2e (ie

business cycle – S2P, O2C, R2R, etc.) processes

Data – Master, transactional, and analytical data entities

Systems – Applications that support the process

Controls – Policies and control points

Measure Performance KPIs – Key performance measures used

29

Internal Controls

Forward Looking Strategy

30

• Find individuals who see the vision –

get senior management buy in!

• Select a pain point / area of focus – ie

Internal Audit finding

• Select a process cycle – ie P2P

• Focus on the process before

implementing a new tool/software

Solution is to look first at the

process and the individuals

involved in the process, not at the

software !

Observations, GPO Tools & Frameworks, Conclusions

5/26/2016 31

Global Process Ownership: The Road to Success

32

GPO Capability Framework for Effective Steering

33

Business Service Management

Stakeholder Management

Service Catalogue

Process, Placement & Sourcing

Risk, Controls

and Compliance

Automation & Enabling Technology

GPO FRAMEWORK

Monitor

34

What should happen What is happening

Global Process Ownership - Driving Performance

Objectives/Outcomes

‐ Optimise Efficiency

‐ Maximise Contract Value Added

‐ Optimise Working Capital

‐ Ensure Stakeholder Satisfaction

P2P Outcome KPIs – Lagging Indicators

‐ P2P Cost per Invoice, % Early Payment Discount Captured

P2P Value Driver KPIs – Leading Indicators

‐ % Purchase by P-Card, % non PO Invoices, % 3 way match

P2P Process Exceptions - Analytics

‐ Invoice/PO price variances, backdated POs

35

Analytics drive Simplification & Standardisation

36

‐ Duplicate and redundant activity

‐ Incomplete or erroneous master data

‐ Unusual requests & vendors

‐ Changes in behavior of invoice / payment entry / approval

‐ Changes in patterns of invoices / payments over time

‐ Dissimilarity of invoices submitted by same vendor

‐ Dissimilarity of payments made to same vendor

‐ Unusual invoiced items and quantities based on previous history

‐ Unusual P2P process flow

‐ PO-Invoice-Payment period outliers

‐ Backdated POs

Optimisation as a Process

Business Process

Target

What good looks like for us?

Current

Process performance, process exceptions

Tools

Metrics, process mapping, best practices...

Process Community

Assess Gaps & Opportunities

Actions & Initiatives

Action performed by

Change Results

Impacts

Best in Class

Managing Today vs Leading Tomorrow

Dual Operating System – source Kotter

Managing 1. Planning & Budgeting 2. Organising & staffing 3. Problem solving 4. Doing what we know well 5. Continuous reliable results

Leading 1. Establish direction 2. Align and motivate people 3. Inspiring and mobilising 4. Exploring and creating 5. Propelling into the future

Process Operator Robust

Process Owner Agile

38

Process Operator vs

Process Owner

Thoughts for the Journey!

Stakeholder Management – Governance & RAEW

Use Framework to drive consensus and roadmap

Internal Control is a key lever

Use Analytics to identify and eliminate Wastage

Quick wins can drive the Business Case

Read Kotter & Kahneman

40

Review • Introductions & Objectives

• Global Process Ownership – Context

• The Huntsman Journey

• Overview

• Internal Controls and SOX at Huntsman

• The evolution of the Global Business Process Owner

• Strategy and tactics

• The road ahead

• GPO Tools & Frameworks

• Thoughts for the Journey

• Q&A

41

42

Q&A - Discussion

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