A market leading specialty retailer was seeking to reduce its back office overhead and to allow its staff to better focus on high value activities rather than tactical operational tasks. Areas under scrutiny included all aspects of the finance & accounting functions. They sought an assessment of these operations to determine where improvement opportunities lay and guidance on the most appropriate means to realize the cost savings.
The purpose of the project was to review the finance & accounting processes to determine how best to improve the effectiveness and efficiency of the business processes in scope. The full range of accounting functions were examined, including accounts payable, accounts receivable, payroll, expense reimbursement, monthly reporting, and general ledger processing, budgeting and financial analysis. All the accounting functions were in-sourced, and the retailer was eager to explore alternative sourcing opportunities. The functions were working well with no significant problems but employees were working long hours to do things manually that might have been automated. The IS organization was very busy with key top line revenue driving or customer facing projects and so the resources available to F&A were limited.
Key managers for all the in-scope business processes were interviewed and relevant documentation was reviewed. The business processes were documented at a high level using process flow diagrams and narrative. TBI made observations on the efficiency and effectiveness of the processes and these were also documented along with process improvement opportunities that were identified. A number of recurring themes were discovered that were hampering overall process effectiveness. TBI’s experience in process best practice and the sourcing marketplace were applied to develop alternative sourcing approaches for the processes. Several different options were identified to supply the business support required including Application Service Provider (ASP) and several different options of Business Process Outsourcing. Business cases were developed for the alternative sourcing options enabling the retailer to understand the business impact of the sourcing decisions that were presented.
Successful Business Solutions
The client received:
- Process documentation (both flow graphical and narrative, including metrics)
- Process improvement opportunities that could be achieved in-house
- Key issues preventing process improvement that warrant management attention
- Alternative sourcing options with clear decision points
- Finance and Accounting functions
- Other administrative functions
- Inclusion of HR transaction intensive processes
- Spin off of the F&A function
- High level cost baseline and preliminary benefits model to support sourcing decision
- A decision tree and requirements/costs to move forward.