Unapplied Cash:eIKON Dealer Compensation

Joyce Darson NE Region CCC

2

Project Overview

We bill leases and service contracts to IOSC IOSC funds us weekly through the “dealer

compensation report” The 2 systems frequently don’t match up Result = research, rework, added costs to apply cash

at Macon Shared Service Center Project Objective: reduce costs associated with this

research and rework

3

Preliminary Data Overview

As of 08/21/03 eIKON Unapplied Cash

$23.6 million

Dealer Comp Vendor Credit Trade A/R

eIKON

$4.3 M

eIKON

$11.8 M

eIKON

$7.5 M

Top 3 Defects #• Billing Equip.Issue=

46.5 % of errors

• Need service invoice

• Billing service issue

4 6

4

Project Definition

Problem Statement:

Unapplied cash: lease equipment record differences between IOSC and IKON make up an estimated 46.5 % of the unapplied items in the eIKON related dealer compensation as of 08/21/03.

Project Objective:

- 65-70 % reduction in these defects.

Project Benefits:

- Estimated headcount savings of 15 and $525K per year from FY 2004 plan of 34; (reduction in required headcount for reconciliation and research).

- Existing resources will be re-allocated to support future migrations.

- Pending validation with financial analyst.

5

Project Definition, Cont’d

Defect Definition: Any cash transaction that can not be automatically matched.

Leveragability: Project leveragability: additional savings in non-eIKON Regions

6

Project Team

7

Team After 6 hours of Process Mapping!!

8

“Critical To” Tree

CT Satisfaction

Y1 = Cash Applied withoutRework

Critical to QualityCritical to Cost Critical to Delivery

Project # 0307-46-01CT TreeJ.Darson

8/22/2003

Unapplied Cash: eIKONDealer Compensation

Inconsistent Base Rate & Billing Date

Correct BillingDate

Correct BillingAmount

2 systemsmatch exactly

CTQ’s

Reducerework $$ by$550K

CTC’s

Invoicegeneratedtimely

Systemsupdatedtimely

Dealer comp.report rec’dtimely

CTD’s

9

SIPOC

Process:

Cash Application: eIKON Dealer Compensation Process Owners:

Suppliers Inputs Outputs(Providers of the required

information)(Resources required by

the process)(Deliverables from the process)

7 6 8 3 5 4

Requirements START Requirements

Sales Reps Sales Order Complete order Start Valid lease documents No discrepancies Macon Sharedbetween systems Service Center

External Customers Service Contract info Complete contract Validated orderNo need for rework

IOSC Lease info Complete lease 2 eIKON Invoice

MSSC cash apps Lease documents Valid lease IOSC Fundingdepartment Accurate invoice Customer Care

Dealer Comp report Funding for invoices Cash Applied No need for rework CentersCCC Order Mgt

Metrics/tracking Information on whatCCC Cust.Billing was applied

Valid lease IOSC1 Accurate invoiceProcess

Accurate invoice External Customersrec'd timely

Smooth process Sales Repsso get paid

3

End

END

Project # 0307-46-001J.Darson, 8/14/03

Macon Shared Service Center, Donna Wood; CCC's Order Management and Customer Billing Departments

Process(Top level description of activity)

Customers(Anyone w ho receives a deliverable from the

process)

Order Coordinator receives deal

Cash Application:eIKON DealerCompensation

Cash Applied = Amount Invoiced

MSSC Cash Apps

Order Mgt.

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Detailed Process Map

# 0307-46-001J.Darson

8/23/2003

Unapplied CasheIKON Dealer Compensation

Order CoordinatorReceives Deal

ValidatePaperwork

PaperworkComplete?

VerifyCreditStatus in CLAS

Credit StatusOK?

Enter lease infointo CLAS

ID what’s wrong &notify rep &

manager

Place on OracleHold

Escalate to SalesManager after 72

hours

Correction(s)Received

Billing date & amount * Terms (# months) * Cross outs * Bill to/ship to * Buyout amount * PO Std service offering Customer signature PO Tax exempt status Comm.Worksheet Svc Blending Worksheet SOW/NASSD Others as needed

Validated order

No

Yes

List of issues Capp Sheet E-Mail

Oracle Hold Report

E-Mail

Valid paperwork

App # Credit app sheet Deal pkg Customer # IOSC Stipulations Legal Name

Credit approval Stips met

Yes

No

ID what’s wrong &notify rep &

manager

Equipment setup Contract setup Funding amount Buyout info Notes

Equipment type Lease type Payment type Cust.bill to/ship to Accessory info Service info Notes as needed

Enter funding intoOracle

Funding enteredin Oracle

Clas App # inOracle

Rep Board Credit Funding Amount Buyout amount Trade in amount CLAS App #

(Continue nextpage)

List of issues E-Mail

(Steps 1 & 2 of 9)

A Miracle Happens somewhere in here!

Start

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DPMO and other Statistics

Y 1 = Cash Interfaced not automatically applied(eIKON dealer compensation only)

DPMO Zst St.Dev. MeanBaseline: 196,500 .855 8.7 22.4 %

Target: 1.1 6 %(70 % reduction,includes allowance for shift)

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Pareto Chart of Defects

22 25 45 64 65 71 86329 3.1 3.5 6.4 9.1 9.210.012.246.5

100.0 96.9 93.4 87.0 77.9 68.7 58.7 46.5

700

600

500

400

300

200

100

0

100

80

60

40

20

0

Defect

CountPercentCum %

Perc

ent

Cou

ntUnapplied Cash Defects: eIKON Dealer Comp, SED

Note: 46.5 % of defects relate to a billing equipment issue

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Voice of the Process: Defect %May – August 2003

% Unapplied by MontheIKON Dealer Compensation

0.0%

20.0%

40.0%

60.0%

80.0%

May-03 Jun-03 Jul-03 Aug-03

Month

Note: high defect rate in May/June due to Oracle conversion; these data points were excluded from the analysis of the current process.

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Process Capability @ 8/03

50403020100

USLUSL

Process Capability Analysis for % Unapplied

PPM Total

PPM > USL

PPM < LSL

PPM Total

PPM > USL

PPM < LSL

PPM Total

PPM > USL

PPM < LSL

Ppk

PPL

PPU

Pp

Cpm

Cpk

CPL

CPU

Cp

StDev (Overall)

StDev (Within)

Sample N

Mean

LSL

Target

USL

942624.56

942624.56

*

997159.49

997159.49

*

1000000.00

1000000.00

*

-0.53

*

-0.53

*

*

-0.92

*

-0.92

*

9.14071

5.21277

6

22.4167

*

*

8.0000

Exp. "Overall" PerformanceExp. "Within" PerformanceObserved PerformanceOverall Capability

Potential (Within) Capability

Process Data

Within

Overall

Process Entitlement

@8/03, 100 % of process is outside of target

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Data Collection Plan

What to Measure? Type of Measure Type of Data Data Collection Form Sampling Baseline Measure

           

% of Items Unapplied Items Continuous

Existing Excel tracking spreadsheet by week

Population, by week, by reason, by pathname 20%

           

Reason Codes for Unapplied Items Count Discrete

Existing Excel tracking spreadsheet by week

By reason, by week, by pathname

46.5 % relate to billing equipment

discrepancies

           

Detailed reasons for equipment billing issues Detailed count Discrete

Modification of # 2 above, tracked weekly in Excel

By week, by detailed reason, by pathname t.b.d.

           

# hours spent on research & reconciliation Hours Continuous

Job responsibility analysis, starting 9/1/03

By department, by site, by week t.b.d.

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Red Flags

Paperwork validated multiple times in process, yet errors continue.

“The cart is before the horse”: validation of Oracle funding with IOSC funding happens after Oracle invoice is generated

Funding changes by IOSC were not communicated to the CCC’s for Oracle update; note: recent leasing announcement refers to new report available, needs research/validation.

Oracle “glitches” with multiple invoice number generation for one deal adding to defects in cash application.

Poor communication throughout process.

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Recommendations

Need to get inside detail of “equipment billing issue” reason code (see data collection plan)

Process mapping addressed only initial set-up of Oracle & CLAS records; need to evaluate possible X’s related to changes to equipment records after initial set-up

Evaluate impact of “lease details” enhancement due with Oracle release IKON 1.4, Nov/Dec. timeframe

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Next Steps

Validate measurement system Collect detailed data on “equipment billing issue” reason

code Collect data on # hours spent on research/reconciliation Evaluate possible X’s related to changes to equipment

records after initial setup Evaluate impact of “lease details” enhancement on the

process Make it through Week 2 training (without valium)

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Martini time!!