arjuna - sap finance day
TRANSCRIPT
Arjuna Realize Financial Excellence in Shared
Services Organizations
Felix Pechtold
November 2012
Page 1
Agenda
1. DSM & Explanation of Arjuna
2. Scope & Business Case
3. Strategy & How Tooling Supports
4. Shared Services Framework
5. Question & Answers
Page
Bright Science. Brighter Living.TM
creating
value for
CUSTOMERS EMPLOYEES
SHAREHOLDERS
Meeting consumer
demands, becoming supplier of choice
Engaged, motivated and talented team
Delivering sustainable value creation
Page 2
Innovations addressing:
Global Shifts
Health & Wellness
Climate & Energy
SOCIETY
Page
Materials Nutrition
Unique business positions of DSM
• Global leader in nutritional ingredients for feed, food and personal care
• Market leader in anti-infectives and key custom manufacturing player
• Market leader in sustainable high performance materials
• Merchant market leader in nylon precursor caprolactam
• Innovator active in advanced biofuels, biochemicals and biomedical materials
Health
Page 3
Page
DSM at a glance 2011, continuing operations
• Net sales € 9,048m
• EBITDA € 1,296m
• Net Profit € 594m
• ROCE 14.0%
• Capital Employed € 6,581m
• Capex incl acquisitions € 1,508m
• R&D € 476m
• Workforce 22,224
• Amongst leaders in sustainability
No 1 in 6 out of 8 years DJSI
* Innovation Center and Corporate Activities related Sales & EBITDA weighted distributed over clusters
Page 4
Page 5 5
1. Explanation of Arjuna: The way to Arjuna
Collaborating in
‘One DSM’
“CSD” “One DSM” Finance
Management
Agenda
Leverage
Financial
Operations
Arjuna
Page
With Arjuna we are creating a strong foundation for excellent shared
financial services within DSM worldwide.
We introduce a new vision on organisational excellence, with different
points of view, new insights and inspiration.
We develop harmonised and streamlined financial processes and
supporting tools which will be serviced by a new global Financial
Shared Service Organisation, with a Back-Office in India and 6 regional
Front-Offices close to our Business Groups and markets.
And we do all this in a down-to-earth and respectful way.
We are on a journey.
Finance in motion, creating new perspectives!
6
1. Explanation of Arjuna: Arjuna mission statement
Page 7 7
1. Explanation of Arjuna: Arjuna objectives
1. Harmonized & lean processes;
improve quality, compliance,
speed, transparency
2. Enable Finance to focus on more
value adding tasks
3. Create platform for leverage of
other Functions
4. Enable Acquisitions and
Partnering via easier integration
(agility)
5. Reduce costs
Tooling Goal:
Implement financial processes and supporting systems for global
Financial Shared Service Organization
Page 8
1. Explanation of Arjuna: Arjuna roadmap
• Runs from 2011 – 2014
• 2011 Mobilization, design & development
• 2012 Build SSC Tooling/Processes and Piloting
• 2013 – mid 2014 Migration
• 5 Pilots with increasing scale & complexity to detail
design, test, demonstrate feasibility & capability
• Pilot 1 - AR/CM (DSM Business Support Sittard)
• Pilot 2 - AP (DSM Food Specialties Delft)
• Pilot 3 - AP, GL/Closing, AA (DSM Business Support
Sittard)
• Pilot 4 – AP, AR/CM, GL/Closing, AA, Reporting, Taxes
(SFAC DSM Nutrional Products Basel)
• Pilot 5 - AP, AR/CM,GL/Closing, AA, Reporting, Taxes
(DSM Engineering Plastics Sittard)
Page 9
Agenda
1. DSM & Explanation of Arjuna
2. Scope & Business Case
3. Strategy & How Tooling Supports
4. Shared Services Framework
5. Question & Answers
Page 10 10
2. Scope & Business Case: New organizational model
SSO Organisation
SSO Front-Offices
SSO Back-Office in Hyderabad India
Retained Organisation
Transactional processes, rule-based activities
Account Man.
BGs/SUs
Problem Solving
/Steering of BO
Language, bus.
proximity Legal/ Fiscal/
Statutory
Activities to be performed close to business for strategic, know-how,
sensitivity / confidentiality
Page 11 11
• G/L Accounting Completeness and Correctness
• GL Processing and Problem Resolution
• IC Reconciliation
• Cash man. Exec.
• Master Data (partly)
• Legal/Fiscal Acc.
• BS Valuation & Result Det.
• Accruals, prov., Prod.Cost., invent. val.
Reporting
• Data Coll. & Val. for Corp. & BU Rep.
• Man. & Fin. Report (SEM) (partly)
• KPI/process reporting
• CBS/Intrastat rep. (partly)
• Consolidation Entries
• Managerial Rep.
• Transfer pricing
• Master data
• Invoice Processing
• Payments Creation
• Accounts Payable Inquiry, Problem Resolution and Correspondence
• Procurement Card Program Administration
• Master Data Man.
• T&E
• Purchasing Support
• Tax Accounting
• Insurance Claims Handling & Processing
• Management Activities and Training
• Master Data
• Treasury
• Tax Planning and Advise
• Insurance Policy
Review & Negotiation
• Insurance Risk Assessment
• Capital Project Accounting
• Investment Related Accounting
• Master Data
• Budget Creation / Authorization
Retained Org. activities
SSC activities
• Billing
• Reporting (partly)
• Customer Payment Receipt and Application
• Accounts Receivables Inquiry, Problem Resolution and Correspondence
• Customer Credit Management
• Collections (partly)
• Master Data (partly)
• Collections (partly)
Accounts Payable
Accounts Receivable
Other
Asset Acc. General Ledger (incl closing and consolidation)
Controlling
• Bus. Proc. Man. (partly)
• Corp. & BU Planning, ASR, Analysis (non- routine)
• Performance
Man./MT’s
• Bus. Proc. Man.
• Bus. Risk Man.
• Ad hoc analysis
Wave 1 : focus on trans. processes ================= Wave 2: expand scope ====================================
2. Scope & Business Case: What is in scope of Arjuna?
Page 12
2. Scope & Business Case: 2-Wave Migration
Wave I Wave II
Now June-2014 Dec 2015
Wave I:
•Focus on Accounting
•Learning curve and mitigation of risks
on migration; starting with small units
•Consolidate small sites; revisiting
small site is not efficient;
consolidation to be led by BGs (esp
DNP)
Wave II:
•Increase scope by focusing on rule
based reporting & controlling
•Increase Back-Office ratio once
track-record established
S S
S
L
L
L
L
L
L L
70% 70% 70%
50%
50%
50%
50%
20%
20% 20%
FTE
BC realization
50%
Activity scope;
AP, AR,
GL/Closing, AA
20% Activity scope;
rule based
Reporting/Control
S S = Small sites (<
8 FTE)
addressing activities scope of ca 600 out of current 950 FTE
Page
3 VAT short-term
improvements
1 Master Data Cleansing
2 Harmonized & Fast Close
4 PtP improvement
5 Inter Company
simplification
Define and clean key Master Data and maintain the required level of quality
Benefit: efficient SSO (& higher Back Office ratio), less rework / trouble shooting
Execute fit-gap analysis and make an action plan to realize use same terminology Harmonized & Fast closing activities & schedule (5 days goal)
Develop implementation per business, ready by end 2012
Benefit: ensure smooth closing process & management report earlier available
Combine purchasing categories to uniform purchasing for indirect spent To be embedded in organization
Benefit: efficient SSO (& higher Back Office ratio), less rework / trouble shooting
Comprehensive and efficient budget process Simple invoicing/cost charging process with central monitoring
Benefit: reduce manual effort (also from outside finance) and enable ‘fast close’
2. Scope & Business Case: Process Improvements in short
Improve process indirect tax from new legislation to declaration Make rule based decision trees, when possible automate
Benefit: efficient SSO (& higher Back Office ratio), less rework, tax compliance
13
Page 14
Agenda
1. DSM & Explanation of Arjuna
2. Scope & Business Case
3. Strategy & How Tooling Supports
4. Shared Services Framework
5. Question & Answers
Page
How do we become Excellent?
The DSM Financial Shared Service Center can improve in 3 important directions:
• Gaining efficiency and growth through automation (e.g. SAP FSCM, VIM, FCC)
Core Financial Processes are Harmonized and Standardized
BG Finance Department able to perform Value Adding Tasks
• Gaining efficiency through streamlined communication (Shared Services
Framework)
Clear Rules of Engagement with standard communication Lines
Inbound and outbound communication with clients of the service center
are improved by tight integration between communication frontend and
business applications
• Increasing effectiveness by transparency on Business Performance and SLA’s
Measuring and Proving to each other we are keeping promises
3. Strategy & Tooling: Deliver Excellent Service
Page
How do we deliver Service?
Delivering to all BG’s across DSM
Harmonized & Lean Processes; improve quality, compliance, speed and transparency
Holistic overview across clients is necessary
Collaborate with all Customer Groups
Clear Rules of Engagement with standard communication Lines
Has an excellent customer care ethos and focus on service quality
Has sufficient scale to optimize economies of scale and adapt to changing demands
Using standard processes and technology to plug-and-play (create platform)
Enable Acquisitions and Partnering via easier integration
3. Strategy & Tooling: Deliver Excellent Service
Page
3. Strategy & Tooling: Supported by SSF
Page
Financial Closing Cockpit incl CPS SAP Invoice Management Multi Backend scenario
SSF Including Dispute, Credit, Collection Management
3. Strategy & Tooling: Integrated into one platform
Page 19
Agenda
1. DSM & Explanation of Arjuna
2. Scope & Business Case
3. Strategy & How Tooling Supports
4. SAP Shared Services Framework
5. Question & Answers
Page 20
4. SSF: High Level Process overview
Communication with (internal / external) partners
3. Complete service request
1. Start & create service request
2. Processing service request
4. Reporting
Page 21
4. SSF: Creation of a Service Request
Page 22
4. SSF: AP Process Integration Launch VIM Analytics Dashboard
Open SIM Analytics Document View
(prefilled with Vendor ID)
Open SIM Analytics Dashboard
Open DP Document
Create
Service Request
Page 23
4. SSF: Business Roles
• SSC Front Office AP/GL/AR
• SSC Back Office AP/GL/AR
• SSC Manager
• Occasional User
• - (Business Users working in ECC)
Each Business Role is specifically
designed for a certain task and
thereby has differences in screen
layout and Navigation Bar entries
Page 24
4. SSF: Account Fact Sheet Confirm Customer
Page 25
4. SSF: AP Process Integration Confirm Vendor and Company Code
Open SIM Analytics Dashboard
(prefilled with Vendor ID)
Result List with SIM Document View
Page 26
4. SSF: Inbox
Page 27
4. SSF: Reporting