Crossing the borders between Core F&A & Procurement: The synergies are too great to ignore
Shared services and Outsourcing week 2012 - Amsterdam Terje Kløvås – Global ERP Program Telenor ASA
Sources: The Hackett Group, KPMG, Infineon technologies, ING, Mattel, Accenture, SAP and Oracle
Telenor is one of the leading international telecommunication companies and has 146 million mobile subscriptions. Our Largest markets # of subscribers Uninor India 31,5 mill Grameene Bangladesh 37,6 mill Telenor Pakistan 29,3 mill DTAC Thailand 23,4 mill
Total workforce 30 700
Master your Master data
Employees Legal and department structure
Suppliers Global – Regional – Local
Authority Matrix Approval hierarchy
Item categories
How to serve and attract the organization?
Be a partner – get involved as early as possible in the decision making process
Move beyond cost savings. Category-, demand-, supplier relationship-, and risk mgmt
Operating model. Centralize strategic procurement and merge transaction related procurement with F&A processes
Reduce supply chain risk. Where do your suppliers produce their core components? Thailand flooding stops Honda and Toyota Nov.-11
Japan stops Mach-11
Iceland stops airfreight 6 days April -10
Palm oil, Indonesia and Unilever April -08
Leverage system and technology
Questions to ask yourself to assess your Procurement maturity
Is the Procurement function organized to deliver optimal value to the organization by focusing on outcomes rather than cost?
Are key organizational stakeholders fully engaged in the development of Procurement’s strategy, and does this reflect the wider organizational strategy?
Is all spend managed through category management and strategic sourcing processes, with a competitive sourcing process mandated?
Does Procurement actively lead SRM and SPM including the id of strategic suppliers, the setting of metrics and follow-ou of non performance?
Does the Procurement function influence in excess of 80% of spend?
Questions to ask yourself to assess your Procurement maturity (cont.)
Does the Procurement function lead or get actively involved in demand management initiatives in your organization?
Is risk management an integrated part of day to day operations and the contract management process?
Are Procurement processes automated including an integrated e-auction an web supplier portal?
Is there a consistent benefits tracking framework (capture, realized & reported)?
Is procurement policy used as a mechanism for driving behavioral change throughout the organization, with non compliance being exceptional?
Change the business landscape to meet the requirements of a coordinated and collaborative response Obtain full spend visibility Control your cash outflows with accuracy Discover why you should integrate a mail system and vendors with your ERP system Coordinate local, regional and global Finance and Procurement production in a SSC perspective
Where to focus first?
• Evaluate processes
– Look for value to business v’s implementation complexity
– Synergies with other Key Business Initiatives
• Look for less visible benefits
– Reduced admin time for managers and procurement
– Simplified flows to eliminate waste
– Transparency in financial data
Sustainable Shared service support centres
Embracing the easy wins by reducing Purchase to Pay cycle
time
10
10 10
Value Drivers Shared Services create value for
Reduced unit costs of
administrative services
Appropriate quality of
administrative services
Improved internal control
and transparency
Increased organizational
flexibility
Business units through Group Management through
Minimise errors On time
Governance of common services
Business units focus on core
Increased speed and reduced risk in green field rollouts
Scale Common processes Common platform Labour arbitrage
Reduces risk Group policies Standardisation Common account
string
Call off under existing contract
Procurement Process in a shared service perspective
Vendor selection
Contract &
Catalogue registration
RFI, RFQ
Reversed auction
Vendor search
Delivery acceptance
Call off Approval
& authorization
Reconciliation AP/GL Posting Payment Invoice
entry Reporting
Sustainable Shared service support centres
Closing Remarks
What is difficult?
• Supplier adoption in different markets
• To many allowed access in core systems
– Use Help Desk, Web forms and workflow systems instead
• Accept that some processes are extremely costly to automate – then don’t
• Deny supplier registration and move to reimbursement of personal expences
What is less dificult?
• Local Scanning of invoices
• Personal order ID
– Mine is: TN BC 540944
• One common account string
• One common IT platform
• Do not sell process without system support
• Do not sell IT systems without process governance
Cross-centre training Meetings & visits International job opportunities
Performing work in projects Special assignments
People Power Motivation
QUESTIONS?