How to dive in at the deep end – and come out ahead

Kamila Sicinska
Vice President,
Capgemini’s Business Services

Have you ever seen a swimming race? At school, perhaps, or maybe an Olympic event on TV? While I’m no expert, I have Ironman triathletes in my team, and I’ve learnt quite a lot from working with them.

Swimming competitions are not like track events at all – and I don’t just mean they’re wetter. In a marathon, or a 100m sprint, competitors can see how they’re doing in relation to other people; but in a freestyle swimming event, the opportunity to gauge their relative performance must be pretty limited. Olympic swimmers only know their finishing position when they look at the scoreboard. Until that moment, they’re literally immersed in the world defined by the lane they occupy.

Objective and practical

Business can be like this. The shared service finance and accounting (F&A) function of a major manufacturing client of ours thought it was performing fairly well in its SAP implementation and process performance – but was only able to judge by its own frame of reference. What it needed was someone sitting poolside who could not only gauge relative performance, but who could make recommendations for individual improvement that were drawn from a wider range of experience.

Did this company want to be presented with a redefined strategic charter, or with statements of principle? It did not. It wanted practical recommendations that would deliver tangible results, which is why it turned to Capgemini.

ESOAR in action

We took a close look at the client’s previous process documentation – not just across the broad sweep of things, but at detailed elements of routine – and assessed them in the context of our ESOAR approach. This documentation review directed us to specific areas requiring a deep dive during workshop sessions and work shadowing.

The order of the ESOAR steps is really important – the best and also the fastest results can be achieved by first looking at what can be eliminated, standardized, and optimized within existing practices, before moving on to introduce new elements in the form of automation and robotics.

From the nine process maps we reviewed remotely, we were able to make 30 recommendations. We then explored three particular process areas – procure-to-pay (P2P), record-to-report (R2R), and order-to-cash (O2C) – and went deeper. For instance, we shadowed in-house teams while they were executing a payment run, so we could see how they were selecting their parameters. This led to even more recommendations – as many as 300.

More than half these recommendations needed no investment. After all, eliminating redundant process steps, such as printing out hard copies to make comparisons with files on-screen, costs nothing, and even saves money.

We standardized processes between countries. We also optimized the company’s use of SAP and other applications: although a great deal of functionality was available to the client in many cases they weren’t taking full advantage of it. Again, these were process improvements that could be achieved quickly and without investment.

Eliminate redundant and overlapping processes, e.g., country corrections and low value period end entries in R2A; disputes root causes in O2C; and processing of hard copy invoices in P2P
Standardize inconsistent processes, e.g., allocation logic across business units, and Chart of Accounts and accounts risk rating in R2A; tolerance levels on disputed/deducted amounts and resolution status and reason codes in O2C; and new vendor creation to a consolidated list of vendors
Optimize tasks and associated documentation, e.g., synchronizing ERP and reporting tool validation and master data in R2A; monitoring of price list timetable and introducing price reconciliation points with large and high-risk customers in O2C; reducing paperwork and streamline passage of supplier invoice through accounts payable in P2P
Automate various finance functions, e.g., developing RPA for data transfer to reporting module/system in R2A; automatic creation of dispute cases based on deductions and automated routing of dispute cases based on customer portfolio, cause, and value in O2C; and integrating intelligent character recognition (ICR) with accounts payable workflow and introducing a vendor self-service portal to resolve queries in P2P
Introduce robotics to repetitive and time-consuming tasks, e.g., leveraging RPA to prepare trial balance review package and notify end user via email in R2A; leveraging RPA for data transfer from ERP to reporting if no interface possible and to fetch and consolidate dispute data for quick and easy resolution in O2C; and leveraging RPA for invoice data transfer and creating a robot to generate a list of vendor accounts that need periodic checking in P2P

Lessons learned

Of course, in some cases investment was indeed needed – for example, to implement both the bank communication module and the workflows in accounts payable. The returns on these investments were considerable – but one of the principal lessons of this project overall was that significant dividends could be earned simply by doing more with what was already established and installed – for instance, with major software platforms such as SAP.

Another major conclusion that could be drawn was that process improvement isn’t just about the processes themselves. It’s about the people, the corporate culture, the attitudes and habits. We tuned into all this, and helped them explore how they could do things faster, more smoothly, and to a higher quality. They liked this. They were expecting to be preached at, and they found otherwise. They found we understood their pain points and gave them practical solutions rather than a strategic direction.

The outcomes

As a result of the ESOAR project, our client has improved the control it has over its processes, and decreased the amount of effort required to carry them out. Importantly, it also has more insight into the effectiveness of its own actions. It’s almost as though it can now cheer itself on from the side of the pool.

Some more tangible business outcomes of the project, include:

  • 25% improvement of payment on time
  • 30% increase in invoice processing efficiency
  • 15-point increase in user satisfaction
  • 50% increase in payment process efficiency.

Kamila Sicinska leads the Polish business process transformation team in helping global players to set up their transformation agenda, and transform their processes, technology, and organization.