Our
skills provide our customers the ability to maintain
control over processes while drastically reducing
costs. We offer the flexibility to choose the technologies
used, the methodologies of single or multifunctional
transaction processing and offshore service center
processing.
.
| The
following chart is ABL’s road map
to reach the next summit of outsourced
processes. |
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Three
Components in the Changing Environment
Three things are imperative in an emerging
global business environment :
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Most functions as finance and
accounting will be even more standardized. |
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Service centers will be placed
in low cost, resource abundant
locations. |
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The process will take advantage
of the Internet. |
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To get there, this chart splits
the journey into two parts:
the process effectiveness path
and the cost efficiency path.
Both proceed at the same time
but at different speeds depending
on the complexity of the specific
process. In this hypothesis,
a system is assumed with 10
employees who would cost an
average of $75,000 a year each
in a realistic description of
a typical operation today. That
operation would spend $.75 million
annually processing F&A
transactions. A remote location
would service deliver @$.375
million.
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|
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| The
Process Effectiveness Path |
.
This part of the journey to a foreign
land is a virtual one. The goal is
" to take advantage of 'e'."
Operating on the assumption that new
technology "will radically change
existing processes," it can be
safely assumed that a two-to-one gain
from that technology is achieved over
a period of time. Therefore, emerging
technology will require only 5 or
fewer employees to process the transactions
that today require 10 thus reducing
the original budget of .75 million
to .375 million.
Pricewaterhouse
Coopers has identified 15 specific
activities that add extra cost to
this business cycle. Examples include
having to enter the same data into
the system more than once, having
to match invoices with purchase orders,
and having to stop things while waiting
for crucial data. Removing these and
other, similar roadblocks make the
process more accurate, reliable, faster
and cheaper.
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|
| The
Cost Efficiency Path |
.
Saving money comes from scale. If
companies focus on the geography/location
issue, seeing "compelling"
reasons to move the work out of the
United States to India. In this part
of the equation, a process will still
need 10 employees, but quality workers
will only cost $25,000 a head, an
immediate $.5 million savings.
|
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| Putting
the Two Together |
.
The two journeys will culminate in
the box on the right, where the combined
benefits of creating cost efficiency,
building to scale, driving standardization
and optimizing location will result
in more than 50 percent savings.
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| Plug
+ Play = Flexibility |
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Cost and process effectiveness are
two compelling reasons corporations
embark on the journey to outsource.
The question faced by a business is
– “ What if the back office
finance and accounting application
operated like a standard electrical
plug and could be plugged into anything?”.
If an organization could create a
plug and play back office, the front
office could change its applications
whenever it liked. All the front office
would need is a data interface into
the finance and accounting plug. Instead,
the solution is much simpler. In Pricewaterhouse
Coopers’ view, corporations
"need to produce data" that
crosses the plug into the finance
and accounting system. For example,
the sales system might only require
three of a total of say 50 pieces
of information :
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What is the name of the customer
? |
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How much did the corporation sell
to the customer ? |
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How much has the customer paid
? |
The
front office could then have dozens
of different systems and change them
at will. They would be able to react
more quickly to market changes. The
real benefit of the process effectiveness
path is to liberate the business staff.
No longer will the finance function
hold them up !!
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