thinking about outsourcing: business service centre - sharedserviceslink.com
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1Date 18.3.09
Thinking about outsourcing:Business Service Centre
Juan Fernandez Laporta
Nissan Europe, Finance Restructuring General Manager
2Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's
Questions
Topics
3Date 18.3.09
Introduction to NissanContinuing Innovation as a Global Brand
Vision: Nissan: Enriching People’s LivesMission: Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders in alliance with Renault.For the automakers, products are one of the key elements for success. Nissan strives to develop and introduce innovative and attractive products, which are aligned with market trends. Main Models:
Micra, Micra C+C, Almera, Primera, Maxima OX, 350Z, Roadster, X-TRAIL, Terrano, Patrol, Navara, Pathfinder, Murano, Pickup, Kubistar, Primastar, Interstar, Cabstar, Atleon, Note, Qashqai
Renault-Nissan Alliance: Since March 1999
New face of Nissan in Europe: Qashqai crossover concept car
4Date 18.3.09
Nissan Company Fact & FiguresNet Sales 10,824.2 billion yen
Operating Income 790.8 billion yen
Operating Profit Margin 7.3%
Ordinary Income 766.4 billion yen
Net Income 482.3 billion yen
Global Retail Sales Volume 3,769,886
Global Vehicle Production Volume
3,657,629
Number of Employees 31,453 (non-consolidated basis)180,535 (consolidated basis)
Headquarters Locations Date ofEstablishment
Nissan MotorCo., Ltd.
Tokyo,Japan
Dec 1933
Nissan NorthAmerica, Inc.
Tennessee,U.S.A
Sep 1960
Nissan EuropeS.A.S
France Nov 2002
Nissan InternationalSA
Switzerland Jun 2006
Nissan Europe:Management of European sales and manufacturing operations in 20 European countries
Nissan International SA -Management of European sales and manufacturing operations Nissan Europe S.A.S - Holding company for European subsidiaries and pan-European
operational support
As of March 31, 2008
5Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's
Questions
Topics
6Date 18.3.09
Background of OutsourcingRevival Plans
In 1999 a 3 year Nissan Revival Plan (NRP) to put Nissan back on a firm footing after several years of decline. Affected all parts of the Nissan organisation world-wide. Achieved in just two years. Another 3 year plan, NISSAN 180 (N180), was implemented to achieve growth.April 2005, Carlos Ghosn has announced a third strategic plan (2005-2007) named NISSAN Value-up.
Nissan Value-Up commitments3 key Pillars:
Sustained Profitability: to maintain top level of operating profit margin among global automakers for each of the three years of the plan.Growth/Volume: to achieve global sales of 4.2 million units in fiscal 2008.ROIC: to achieve 20 % or higher return on invested capital on average over the course of the plan.
How to achieve Nissan Value-Up regarding F&A?Standardization and Simplification of Finance Processes across with a view to Consolidate, Re-Engineer, Migrate & Explore :
Opportunities for productivity and / or improved process capabilityEnhanced Controllership across ProcessesIntroduction of Performance Metrics
7Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's
Questions
Topics
8Date 18.3.09
Project ScopeObjective: Migrate Finance and Accounting processes in 2 phases: 59 FTE then 30 FTE , in
total 89 FTEs to 3rd party BPO (Business Process Outsourcing) provider in Budapest.
In Scope Activities: Accounts Payables, Travel & Expenses, Accounts Receivables, General Accounting incl. month-end processes, and few administrative processes like handling ofincoming & outgoing mails.
Out of Scope Activities: AP, AR, GL control, Controlling, Tax, Risk Management
Different Regional Scope diversity:
FTEs outsourced by Sales, Factory and HQorganizations:
Region Country AP AR GL TotalRBU WEST France, Holland 4 2.5 2.5 9RBU CENTER Austria, Germany, 5 4 2 11RBU IBERIA (Sales) Spain, Portugal 2.5 1.5 2 6RBU IBERIA (Factory) Spain 7 1.5 2.5 11RBU Central Eastern Europe
Hungary, Czech Republic, Slovakia, Poland 3 3 3 9
RBU Nordics Finland, Denmark, Norway, Sweden, Baltics 4.5 3.5 2 10
RBU East Russia, Ukraine, 0 0 0 0RBU North (Sales) Great Britain 4 1 1 6RBU North (Factory) Great Britain 9 0 0 9RBU South Italy 1.5 0 0.5 2HQ (Head Quarter) France, Switzerland 8 3 5 16Total 48.5 20 20.5 89
Region AP T&E AR GLRBU WEST YES YES YES BOTHRBU CENTER YES NO YES BOTHRBU IBERIA (Sales) YES YES YES BOTHRBU IBERIA (Factory) YES NO YES BOTH
RBU CEE YES YES YES BOTH
RBU Nordics YES NO YES BOTH
RBU East NO NO NO NORBU North (Sales) YES YES YES BOTHRBU North (Factory) YES YES NO NORBU South YES YES NO BOTHHQ YES BOTH YES BOTH
9Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's
Questions
Topics
10Date 18.3.09
Outsourcing Evolving
Start Transition
Stabilisation
Standardisation
Transformation
Solutioning
Training at Nissan & work shadowing
PMs (Process Maps) & SOPs (Standard Operating Procedures) preparation
1st Transition
‘05 ‘06 ‘07 ‘08 ‘09
ImplementationTransition cont.
Production starts at outsourcing company
Measurements (KPIs)
Bench reduction
Performance improvement (new KPIs, level-up)SPOT
(Supplier Paid On Time)CPOT
(Customer Paid On Time)ControllershipStart of
standardisation with common workflow tool
Standard process definition & implementation
Process oriented organisation
Quality in focus
Productivity improvement
End-to-end process improvements
Technology
High business impact projects
Focus on Value-add
Re-engineering of business’processes
Business partners
11Date 18.3.09
Transition Measurements Bench Reduction
Achievements:Production starts at BPO Provider
Setup Governance Structure at BPO Provider
Measurements: First KPI measurement in May 2006
Concerns/ Issues:Different activities on different ERP platforms are outsourced by regions, which adds to complexity and difficulty in standardization processHired BPO FTE’s skill/experience are not equivalent with Nissan FTEsDay to day operations not effectively managed , backlogs and inefficient process
compared to process prior to transition
Nissan feels out of controlNo proper communication between BPO & NissanNo baselining data to compare to new BPO performance, only subjective at the time
AP: Late payments to vendorsIncreased manual payments → duplicate paymentsIncreased coding errorsMissing invoices – vendors hesitant to send
invoices to BPO countryMissing information on invoice: >20years
experience cannot be transitioned in a couple of months
No robust workflow tool and no common ERP– double registration
Email approval increases workload significantly at BPO provider
BPO can only manage with double workforce (bench) .
Start and implementation
12Date 18.3.09
StabilisationPerformance Improvement Projects Workflow tool
Performance Improvement:End to End KPIs introducedIncreased number of KPIs and targets levels to encourage BPO provider to improve Monthly workshops introduced to improve communications
Workflow tool:Design & deploy common workflow tool interfaced to ERP system with standardized SCOA (Standard Chart of Account) and standard cost center structure
Controllership
Projects launched:SPOT (Supplier Paid On Time) to increase % of number of paid on time invoice from 28.6% to 53.1%CPOT (Customer Paid on Time) to decrease unallocated cash from 1.8 Billion to an average of 30M with an incoming cash of average 75M dailySCOA , SCCS structure and Cost center structure implementationRoadmap to Green KPIs to achieve new KPI level
Biggest issues:BPO provider is KPI driven and oriented – need to measure as much KPIs as possible to get
tasks done and drive process improvements Huge attrition – 53% annualized
13Date 18.3.09
StandardizationStandard process
definition & implementation
Process oriented organisation
Productivity improvementQuality in focus
Standard process definition and
implementation:Processes fully mapped in the light of standardizationRedefined, simplified and streamlined processes Streamlined AP processes with standard document types
Process oriented organization:Reallocated tasksFunctional changes regarding work allocation Functional operation and reportingRedefined systems access rights in conjunction with JSOXCreated call centre environment for vendor & customer calls
Quality in Focus:Best practice sharing in focus Quality project: Debtor Vendor analysis, GR/IR account reconciliation
Productivity Improvement:Reduced processing timeIncreased outsourced task without additional cost to Nissan – without FTE increaseIncreased Nissan Governance – number of FTE to drive process/ productivity improvements
Process oriented organization is to drive down huge impact of attrition
14Date 18.3.09
Summary of Current BPO PerformanceOctober 2008
0Stable88# of not transitioned KPIs0Stable1414# of unmeasured KPIs
109Positive6787Total KPIs met 27Stable516* DBM*** met43Positive2936* ISL** met39Stable3335* CSL* met
Roadmap to Green KPIs LevelMar09TrendConfidenceTargetDirectionStatusActualPlanAll Activity
0Positive130# of missed KPIs (2 CSL, 3 ISL, 9 DBM)
0Stable70# of exempted KPIs
* CSL – Critical Service Level, **ISL – Independent Service Level, ***DBM – Dashboard Metrics
84% 94%
15Date 18.3.09
AccountPayable
16Date 18.3.09
AP KPIs
* SOW – Statement of Work
• TAT – Turn Around Time• Wd – Working days
Definitions of AP KPIs:
17Date 18.3.09
Operational Definitions for K2 Reports
Awaiting AP - Uploaded Invoices in K2, not in any state of processing (untouched) –Not yet processed by AP team
Returned to AP - Invoices already entered into Financial System, sent for clarification returned to AP for further processing
Awaiting Feedback - Invoices already entered into Financial System, waiting for clarification/ payment approval all except for Payment Approval
Payment Approval - Invoices already entered into Financial System, waiting for clarification/ payment approval Price Query and VAT Query
GL Approval – Invoices already entered & approved in Financial System waiting to be released in K2 only.
Awaiting Rejection – Invoices to be rejected in K2Secondary Classification – Invoices to be moved from one secondary
classification to another (incorrectly classified) within the same entity
AP - K2 Queues Definitions
Stock in K2
18Date 18.3.09
European YTD SPOT
0%
20%
40%
60%
80%
100%
April May June July Aug Sept Oct Nov Dec Jan Feb Mar
% o
f lat
e Pa
ymen
t
365<
121-365
061-120
031-060
015-030
004-014
001-003
<1
Main AP KPI SPOT & YTD Trend
SPOT Target
70.0%Stable65.3%70.0%SPOT +14 YTD
75.0%Positive70.0%70.0%SPOT + 14 MTD (as part of Q3TD)
50.0%Stable48.8%50.0%SPOT YTD
65.0%Positive53.1%55.0%SPOT MTD (as part of Q3TD)
Supplier Paid on Time LevelMar09Trend
ConfidenceTargetDirectionStatusActualPlan
19Date 18.3.09
Detailed AP Performance Report
ISL Performance
2010
19
618
7
23
6
25
6
26
7
25
9
28 30 2918 20
20
6
22
5
23
4
18
5
16
5
16
4
17
2
14 12 12
3 25
1
1 1 1
1 1 1 1 1
1
20 20
4 3 2 2 2 2 2 2 2 2 6 2
0
10
20
30
40
50
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2008
2009
2008
2009
2008
2009
April May June July Aug Sept Oct Nov Dec Jan Feb March
AchievementsCSL (24 Met v/s 24 in September. 96% met)Awaiting AP Met for 8 sites out of 10 also met for European levelAwaiting AP (T&E) Met for 6 sites out of 6GL Release Met for all sites. also met for European levelISL (9Met v/s 7 in September. Met 72%)Returned to AP Met for 9 sites out of 10DBM (1 met out of 3 measured)Qulaity KPI was measured at NMGB this month and we were able to reach the target in the accuracy level (95%)
ChallengesCSL (1 Missed v/s 1 in September)Awaiting AP Missed for 2 site out of 10. European level 99% v/s target 98% (NITA* NNE) ISL (2 Missed v/s 4 in September) Supplier paid on time @ 48.76% for Europe v/s target of 50%AP Ageing was missed as well (30% of the open items are aged more than 10 days)DBMSRFP European level was missed (61,00% vs 70% target)Total pending invoices in average was missed (8015 vs target 6250)
KPI Status
DBM Performance
1 1 0 2 1 3 1 4 3 4 4 410 10 102
103
103
123
102
8 9 8 8 8
45
13
45
13
44
11
44
10
43
10
42
10
42
10
43 43 43 43 43
010
20304050
60
20072008
20072008
20072008
20072008
20072008
20072008
20072008
20072008
20072008
20082009
20082009
20082009
April May June July Aug Sept Oct Nov Dec Jan Feb March
CSL Performance
310
6
179
2013 15 12
2114
24
12
24
14 13 1617
1414
12
11
4
68
8
4
6
1
8
1
6 7 4
1 1 1
2
4
2
4
2
4
2
4
2
4
2
4
2
4
2 2 2 2 2
3
322
20 20
0
10
20
30
40
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2008
2009
2008
2009
2008
2009
April May June July Aug Sept Oct Nov Dec Jan Feb March
Met # Missed # Exempt Not Yet Transitioned Not Measured #
20Date 18.3.09
Example of Awaiting AP performance
* SOW – Statement of Work
Awaiting AP 98% within 5 WDs:SOW* Target for Awaiting AP 98% within 5 WDs (working days)
KPI Met for 9 out of 10 sites for week 44. 7 sites met for MTD Oct. KPI for European level at 98%.NNE – from the 7 items 3 of them were processed on the 6th day, 4 of them were classified as disputed and at processing time we reclassified as PO / Non PO invoice.RBU Center – 6 invoices were classified as disputed and were rejected from this status
Total invoices processed for Oct 23,783
* SOW – Statement of Work
21Date 18.3.09
Next Step: TransformationHigh business
impact projectsFocus on Value-
add Business PartnersRe-engineering of business processes
Next Steps on AP:
Simplify and streamline processes further and focus on Value-add reengineering business
processes
Introduce E-Invoicing
Improve PO coverage and quality in line with ‘No PO No pay’ policy
Introduce Duplicate Audit tool
Reduce processing time to as minimum as possible
Introduce work force on Debtor Vendor analysis, GR/IR account reconciliation
Further increase outsourced task without additional cost to Nissan – without FTE increase
Benchmark with other BPO providers and captive companies
New contractual agreement (SOW) – move toward transactional base KPIs rather than FTE base
Introduce robust quality KPIs
22Date 18.3.09
AccountReceivable
23Date 18.3.09
AR Weekly IRF Processing status
•All the IRFs were parked within 5 WDs.
•Comments on pending IRFs:
-RBU hhh – xxirfs are pending because of missing data. xx irfs are still in x workdays.
-RBU hhhh – all the irf are still in x workdays.
Entity NMGB RBU CEE RBU Center RBU Iberia RBU Nordic RBU West ASSC Grand TotalTotal processed 564 211 27 26 128 90 238 1284Total pending 30 0 110 82 12 0 0 234
ASSC NESS 100.00%NFE 100.00%NISA 99.32%NMPC 100.00%INEU 100.00%INUE 100.00%
ASSC Total 99.58%NMGB NMGB 100.00%NMGB Total 100.00%RBU Center NAUS 100.00%
NGER 100.00%NSWI 100.00%
RBU Center Total 100.00%RBU Iberia NPOR 100.00%
NSPA 100.00%RBU Iberia Total 100.00%RBU Nordic NNDK 100.00%
NNNO 100.00%RBU Nordic Total 100.00%RBU West NFRA 100.00%RBU West Total 100.00%NSCEE NCCZ 100.00%
NCHU 100.00%NCPL 100.00%NCSK 100.00%
NSCEE Total 100.00%Grand Total 99.92%
24Date 18.3.09
•Global overdue is at 38%, 49% older than 60 days. Issues faced in ageing due dates of parts invoices and miscellaneous. Invoice states at SAP as overdue, but as per agreement with customer they are still not overdue.•Reporting includes all types of invoices financed and not financed.•Collection proposal for Spain is still not accepted. WEST, NMGB, NITA and NMUK are not in scope.
AR Ageing Summary 3rd party …(status by site by amounts only entities where cash collection is performed by Genpact)
AR Aging
(20,000,000.00)
-
20,000,000.00
40,000,000.00
60,000,000.00
80,000,000.00
100,000,000.00
120,000,000.00
Not Due 1-30 31-60 61-90 91-180 181-360 >361
RBU CENTER
NSCEE
NNE
ASSC
Team Company Not Due 1-30 31-60 61-90 91-180 181-360 >361 Total Total OverdueASSC 53,721,888.44 15,242,203.40 8,906,584.64 4,340,305.51 512,472.45 5,802,475.83 6,860,836.28 95,386,769.00 41,664,878.11
NESS 2,419,381.12 1,376,344.26 77,468.32 (72,441.91) (1,195,700.00) 1,279,531.86 6,590,553.47 10,475,143.00 8,055,756.00 NFE 4,583,857.76 1,810,936.01 1,249,143.46 1,217,590.58 633,879.24 446,665.82 90,752.07 10,032,825.00 5,448,967.18 NISA 46,618,649.56 12,054,923.13 7,578,722.60 3,194,359.46 1,067,797.38 2,970,319.52 (205,126.87) 73,279,641.00 26,660,995.22 NMPC 100,000.00 - (267.75) - - 54.59 499,892.08 599,679.00 499,678.92 PLC - - 1,518.01 797.38 6,495.83 1,105,904.04 (115,234.47) 999,481.00 999,480.79
NNE 30,828,235.27 813,207.09 2,905,949.64 1,148,305.19 2,418,623.73 636,829.06 215,129.41 38,966,273.00 8,138,044.12 NNDK 9,410,268.55 (245,618.24) 1,728,425.74 (718,748.14) 1,809,893.09 159,411.51 6,297.03 12,149,930.00 2,739,660.99 NNEE 208,702.58 217,966.89 14,289.60 68,208.07 15,108.95 982.40 885.19 526,143.00 317,441.10 NNFI 7,207,333.29 (224,291.56) (32,295.25) 106,258.67 (16,711.59) (96,229.77) 4,319.59 6,948,385.00 (258,949.91) NNLT 236,305.17 98,640.42 11,673.68 23,308.67 55,805.60 40,415.25 (5,000.00) 461,149.00 224,843.62 NNLV 80,586.37 418,611.07 82,794.60 104,506.76 84,013.41 (731.76) (418.30) 769,362.00 688,775.78 NNNO 6,097,082.14 271,323.37 529,742.20 606,756.32 288,863.80 49,602.58 15,036.74 7,858,404.00 1,761,325.01 NNSE 7,587,957.17 276,575.14 571,319.07 958,014.84 181,650.47 483,378.85 194,009.16 10,252,900.00 2,664,947.53
NSCEE 699,921.43 4,946,346.70 2,667,379.36 2,091,924.94 5,230,312.16 1,149,707.66 3,941,770.05 20,727,366.87 20,027,440.87 NCCZ 562,177.97 1,306,455.84 694,535.59 262,475.46 1,124,726.27 484,818.38 119,212.22 4,554,406.00 3,992,223.76 NCHU 780,245.20 1,347,236.10 667,181.67 576,609.58 434,698.91 (30,316.04) 1,586,330.41 5,361,985.87 4,581,740.63 NCPL (851,408.97) 1,871,010.38 894,695.15 881,002.61 2,724,697.54 288,954.67 1,720,459.85 7,529,412.00 8,380,820.20 NCSK 208,907.23 421,644.38 410,966.95 371,837.29 946,189.44 406,250.65 515,767.57 3,281,563.00 3,072,656.28
RBU CENTER 26,770,910.08 396,445.14 (276,436.60) 75,945.07 1,402,902.39 656,596.55 (1,916,486.44) 27,109,864.00 338,966.11 NAUS 15,236.23 (397,234.10) 22,581.53 17,210.32 3,638.30 20,100.00 (39,624.29) (358,096.00) (373,328.24) NGER 22,385,116.29 980,700.21 (157,539.90) 538.31 1,310,102.49 604,337.13 (1,858,351.33) 23,264,903.00 879,786.91 NSWI 4,370,557.56 (187,020.97) (141,478.23) 58,196.44 89,161.60 32,159.42 (18,510.82) 4,203,057.00 (167,492.56)
Grand Total 112,020,955.22 21,398,202.33 14,203,477.04 7,656,480.71 9,564,310.73 8,245,609.10 9,101,249.30 182,190,272.87 70,169,329.21
25Date 18.3.09
Overdue items 3rd party – trend by site
•Increased in the NNNN region (8 MM )
Weekly trend by site
-€ 20M
€ 5M
€ 30M
€ 55M
€ 80M
€ 105M
€ 130M
Total 92.83 67.29 60.41 40.84 58.66 88.80 70.45 71.37 70.08 90.54 93.65 68.53 120.37 100.58 87.28 87.11 90.06 61.08 70.14RBU Center 3.66 4.70 2.22 -15.18 -6.16 4.80 -5.17 0.83 2.03 7.54 -0.94 -0.04 3.97 0.82 -6.22 -1.48 6.83 -4.67 0.33NSCEE 45.88 16.40 17.87 20.85 20.73 28.58 23.28 23.91 24.63 30.55 27.10 19.27 22.53 19.73 28.94 25.44 23.81 21.44 20.02NNE 4.57 8.25 3.59 -0.68 1.28 7.21 9.09 9.57 8.14 8.29 8.00 6.15 12.12 9.47 12.35 3.18 2.93 0.22 8.13ASSC 38.72 37.94 36.73 35.85 42.81 48.21 43.25 37.06 35.28 44.16 59.49 43.15 81.75 70.56 52.21 59.97 56.49 44.09 41.66
39/08 40/08 41/08 42/08 43/08 44/08 45/08 46/08 47/08 48/08 49/08 50/08 1/09 2/09 3/09 4/09 5/09 6/9 7/9
26Date 18.3.09
Operational Definitions
• Manual Invoice: Miscellaneous invoices• Invoice request: Filled out by NISSAN company and the approved,
checked form sent to Outsourced for processing• Open requests: IRF not parked into SAP• Unallocated cash: all the incoming payments posted to the AR
accounts and are not cleared yet
AR - Definitions
27Date 18.3.09
Treasury
28Date 18.3.09
TREASURY - Unapplied Cash by sites /AP/debit & credit items/ absoluteEUR value
Main allocated cash (49%) is www Decreased by kkkK since last week. Recap invoices have been booked as payment items at ppp, to
be cleared by month end.
As per 16/02
Unapplied Cash - Weekly trend by site
€ 0M
€ 1,000M
€ 2,000M
Total 1,963.0 1,907.8 1,317.4 619.00 626.75 555.47 500.09 523.97 575.97 575.19 RBU West 367.77 250.74 239.55 195.00 173.07 161.22 161.94 161.72 169.27 165.98 RBU Iberia 12.79 10.82 11.88 18.22 16.37 19.26 18.96 15.30 13.30 14.11 RBU Centre 1,076.5 1,139.4 715.15 12.38 74.40 73.00 18.87 21.70 75.55 72.11 NNE 2.08 3.44 3.71 4.65 5.16 5.26 5.79 6.08 4.40 4.32 NMGB 10.98 10.66 10.24 15.69 16.33 16.41 21.14 21.03 20.36 21.13 CEE 26.47 32.69 34.29 39.93 37.43 44.78 18.22 25.22 25.22 16.98 ASSC 466.38 460.00 302.61 333.13 303.99 235.53 255.18 272.91 267.86 280.58
02 Dec 8 Dec 15 Dec 05 Jan 12 Jan 19 Jan 26 Jan 2 Feb 10 Feb 16 Feb
29Date 18.3.09
GeneralLedger
30Date 18.3.09
TTTTTTTTTT Csilla A. is working on the reconciliation. Agreed with PPPPPPP that cut off date will be applied (~Apr,2007: netting before that date; item by item recs after that date)
Posting ME JE December (quarterly closing)100% in line with MECS CSLNumber of JEs processed by GL-team: 546 vs. 363 (Nov.)
tttttttt: 230 (167M EUR)ttttttt: 203 (11590M EUR)uuuuuuu: 44 (14.9M EUR)kkkkkk: 25 (5.9M EUR)…
Expected nr. Of JEs in Jan: ~400
Nissan GL weekly performance 2009 W5Results / next steps:
yyyy: open items follow up, reminder was sent to site to clarify not booked items on yyyy. pppp will follow on WD1 rrrr: official communication was sent to the sites to start sending their open item list to be able to close books on WD3. Scope of reconciled countries are extended (Intra/Inter)All work-files and finalized FAPs will be copied to shared drive ‘J’ for which NNNNNN team has access. E-mail exchange would decrease significantly and response time alsoVAT-clearing project: DET sent status-update to Pascale W., waiting for information from their sideGRIR: reporting of not touched items changed to be more accurate on data. Final report on W6.
Status of Account Reconciliation December:Nr. of not approved: 22 (or 13% of 167)
Alicia FFFF 8 (8)Antonio DDDD 7 (7)Eva MMMMMM 5 (5)Raquel TTTT 1 (1)Pascale WWWW1 (57)
Data as of 2nd of February
KPI Status
167
137127 128 127
40
4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
0
3040 39 40
63
2824
140 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0
0
02
2
2 2 2 2 2 2 2 2 2 2 2 2 2
0 0 0 0 0
64
135 141148
165
75 75
21 21 21 21 21 21 23 22 22 22
0 0 0 0 0 0 0 0 0 0
86 86
135 135 139 139 139 139 139 140 140 140
0 0 0 0 0 0 0 0 0 0 4 45 5
5 5 5 5 3 3 3 3
0
20
40
60
80
100
120
140
160
180
WD1 WD2 WD3 WD4 WD5 WD6 WD7 WD8 WD9 WD10 WD11 WD12 WD13 WD14 WD15 WD16 WD17 WD18 WD19 WD20 WD21 WD22workdays
NO
of a
ccou
nts
Not Started In progressIn progress / waiting for feedback Sub for Approval (eroom upload)Approved in eroom Rejected
31Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's 1
Questions
Topics
32Date 18.3.09
If it were 2005 now, how would Nissan decide?
Yes to outsourcing, but with a different approach
33Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's
Questions
Topics
34Date 18.3.09
The business services concept
Business services ≠OUTSOURCING
Business services ≠LOW COST COUNTRIES
Business services ≠LOW VALUE ADDED TASKS
proposal is to create a CAPTIVE(internal) business services group, with
NE employees.
No labor arbitrage included in the business case. No LCC considered
Low value added tasks already outsourced The idea of the business services Center is to
consolidate NE EXPERTISE
Business services = CONSOLIDATION OF NE EXPERTISE
35Date 18.3.09
The Finance organization 3 levels
Local Level Business services level Headquoters -level
•Support and control the business (Data production work is pooled in the business services organization removing the distraction from the business)•Financial director in charge of …..with the support of the business services group
•Provide accounting services(Standardized accounting processes are allocated to business services)•Manage Master data and is the processes owner•Provide performance reporting data (all axis : product / entity / function)•Support the preparation of the budget•Provide Tax and treasury expertise and activities•Provide Product costing, gross margin and profitability analysis expertise
•Support European management •Define Financial guidelines and standards•Assess and support European projects•Monitor performance•Manage Budgeting process (top down)
All teams are there to support Nissan to meet its strategic objectives
36Date 18.3.09
Business services principles
Price transparency Each service should have its price. The business can determine how much service it wants at that price
Business management
Manage the service like a business, not a fixed cost. Serve internal and potentially external customers
Market responsiveness
Provide the service levels the businesses want, not the levels staff think they need
Best practices proliferation Identify and deploy Best practices quickly and globally
Process strandardization
Develop streamlined process standards that can be maintained and improve quickly
Service culture Treat business units like customers, offering services they value and charging for each
37Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's 2
Questions
Topics
38Date 18.3.09
Ideal organization structure design principle : business services
Fina
nce
In (many companies)
Step 1 Step 2 Step 3
Fina
nce
Bus
ines
s se
rvic
es
Fina
nce
Bus
ines
s se
rvic
es
Outsourcer
Fina
nce
Nissan
Current IdealFi
nanc
e
Fina
nce
Bus
ines
s se
rvic
es
Master dataBusiness process ownersSystems ownershipOutsourcers contract MgtLogical Grouping of dispersed activities
Outsourcer OutsourcerOutOut
39Date 18.3.09
Project Learning's GeneralKey
Recommendations
‘Ship and fix’ transition method applied: Aim was reap immediate savings from offshore centralization then drive to best in classCost saving was the biggest driver at Nissan - pay back period just over a yearTeam consistency during SOL ID and migration changedLack of middle management Buy-in from Nissan plus lack of confidence in releasing control SOL ID was prepared too quickly and as a result at a high level. SOP was prepared by BPO associatesNissan FTE does not equal BPO FTENo dashboard/ Metrics
‘Fix and Ship’ approach: Create a Nissan CoE first and after fixing all the processes in the CoE, ship what really can be outsourced as it has no added value for Nissan (or Nissan can not add value)…. SOL ID team should remain the transition teamEstablish Incentive Plan to middle management and trainersDo not lay off current staff before process is stabilized, provide them with incentives to make the process stabilized asapTake training and preparation of SOPs seriously –SOP preparation not to be done by BPO associatesRequest BPO to add Bench proactively to the amount of associates, invest upfront into transition and release associates when process is stabilizedBaselining before deciding on migrating tasks
Transition
Key Findings
KPIs As KPIs are contractual and leading to penalties in case not met, BPO provider did not advise Nissan on ‘good’ KPIs
If decision is made to outsource and no experience in outsourcing, request 3rd party consulting firm to advise / benchmark on KPIs and pricing methodology
• CoE -Centre of Excellence
40Date 18.3.09
Project Learning's General 2Key
FindingsKey
Recommendations
SOW pricing/ invoicing to be determined by number of transactions and KPIs which reflect the Win/Win objectives by creating a situation where the BPO will focus on reducing and simplifying the work without being punished through lower incomeGained Share to be introduced to drive Process Improvements on End-to-End processesProcess Improvement team to be lead and financed by Customer (Nissan) and not only by BPO Provider
Process Improvement
BPO & Nissan do not have the same objectives due to FTE based pricingWith current FTE pricing BPO provider is not ‘interested’ in real process improvements, which can lead to decrease in number of FTE
Strategy on Outsourcing
Decide what’s more important: Cost or Quality
Cost: go for low cost BPO provider Quality: go for cost+ BPO provider working with ConsultantsCost and Quality: go for captive, create Centre of Excellence via investing in an experienced accounting force to drive process improvements
41Date 18.3.09
Project Learning's A/PKey
FindingsKey
Recommendations
Account Payables
Accounts Payable process must be standardized across Europe prior to migrationNecessary to have single workflow solution No central AP control and responsibility
Workflow Solution and common ERP system to be in place prior to migration or at least at the start of migrationPrior to migrating tasks, all processes must be process- mapped and written SOP signed off by Finance Managers and transferred to Standard processesSetup central AP controlling function with full authority Setup Functional organization before job transitioned
42Date 18.3.09
Project Learning's A/RKey
FindingsKey
Recommendations
Accounts Receivable
Accounts Receivable process must be standardized across Europe prior to migrationNo single workflow solution Not the same ERP implemented per regions Not the same tasks outsourced Without workflow tool measurement of KPIs are manual and done by BPO providerCash collections : customer financing methodology is not recorded in ERP Cash collection is either not in scope or FTE requirement is not well definedCustomer account reconciliation is not well defined for BPO
Common ERP system to be in place prior to migration or at least at the start of migrationPrior to migrating tasks, all processes must be process- mapped and written SOP signed off by Finance Managers and transferred to Standard processesAgree that same tasks to be outsourced from each region to BPOCash collection to be outsourced to real ‘cash collector’ companiesCustomer account reconciliation to be developed by Nissan prior to or during migration, otherwise task by BPO is not well performedSetup Functional organization before job transitioned
43Date 18.3.09
Project Learning's TreasuryKey
FindingsKey
Recommendations
Treasury Not the same tasks outsourced KPI for Cash allocation is measured by quantitative wise, no quality measurement Payment Run – different processes and task outsourced to BPO provider by region Different banks are used by regions –different accesses are provided to BPO if any Different Payment run schedule per regionsIncreased number of manual payments due to AP insufficiency
Prior to migrating tasks, all processes must be process- mapped and written SOP signed off by Finance Managers and transferred to Standard processesAgree that same tasks to be outsourced from each region to BPOStandardize bank usage on European level Centralize payment run responsibility
Manual payments to be kept at the very minimal
44Date 18.3.09
Project Learning's G/LKey
FindingsKey
Recommendations
General Ledger
Not the same tasks outsourced Account reconciliation outsourced by different region – requires huge amount of time investment by Nissan to provide all Account details to BPO provider
GL task as require deep accounting knowledge , should have not been outsourced
45Date 18.3.09
Introduction to Nissan
Background of Outsourcing
Project Scope
Outsourcing Evolving
Business Service Centre
Project Learning's
Questions
Topics
46Date 18.3.09
Questions?
http://www.nissan-europe.com/