the art of process design and automation · monitoring policy adherence controlling humans and...
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Process Design and Automation
November 2017
The Art of
Vivek Saxena:
Vice President and Global Practice Leader, Record to Report
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We had multiple ways to hail a taxi
Wait & wave Call and wait Plan/book and wait
But there were challenges that affected the user experience
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APP based services were invented with synergy of 2 dimensions
Dynamic pricing model
On-demand service
Instill trust
Virtual assets
Design
Global positioning system (GPS)
2-way communication
Digital Wallets
Ride Analytics
Automation
“AND”
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Similarly Finance Transformation is an
outcome of
Process design “AND” Automation
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A: Process design
Design driven companies outperform the S&P 500 by over
200%Source: Design Management Institute, http://dmi.org/?DesignValue
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Five essentials for process design in the digital age
Dynamic controls
Reimagined business outcomes
Design for agility
Design thinking
Zero based process design
5 Essentials
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Reimagined business outcomes are core to process design
Level 1 –Business Outcome
Level 2 –Activities
Reimagined L2 Outcome (BIC Benchmark)
Financial Leadership Speed Agility
Customer & User Experience Risk
Analytics Leverage
Inter-companyFixed Assets
Inventory Closing ReconciliationManagement
ReportingExternal
Reporting
On-Demand Financial Close
> 95% Touchless Manual journals
> 95% Touchless reconciliation
< 5% IC Exceptions>95% touchless
Sub-ledger Integration
Digital assets Framework assets
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Reimagining month-end close process
Close cycle Reduction
Continuous Close
On-demand Close
10 15 20 25 30 10Calendar Days
15 20 25 30 10Calendar Days
15 20 25 30 10Calendar Days
Closing Transaction processing
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`
Agility = Speed + Sustainability
…. Just as ios provides stable platform & space to dynamically add new apps
12:34
Sustainability
Practice essentialism
Minimum viable products
Speed
Drive architecture leverage
Design for futureDesign for modularity
Balance customization with
standardization
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BlackLine functionalities drive agility for organizations
Cloud BlackLine user community
BlackLine insights Faster upgrade cycles
Embedded controls
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Design Thinking: focusses on developing solutions..that create significant value by keeping stakeholder emotions & experiences at it’s core
Empathize
Say
Think
Do
Feel
2.Ideate
1.Define
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Example:– Intercompany cross charges
As Is customer journey oscillate between neutral to sad state
Invoice Processor (Billing)
Invoice receiver(AP)
IC settlement Team
IC Reconciler
Intercompany Agreement
Receives Invoice In Workflow/ Inbox
Discrepancy found in InvoiceInvoice not accepted
Investigate & root cause analysis of mismatches
IC payment not processed due to unresolved discrepancy
Resolve discrepancies
Agreement is either not documented or
adhered Cut-off date for service invoices is not
being adhered
Varied practice for Invoice generation - Enforcement
of policy is a challengeManual transaction matching between
ICP partners Significant mismatch between ICP across
regions
No standard list of supporting/ documents for
raising a recharge
Identify Intercompany Mismatches
No standard list of supporting/
documents for raising a recharge
TIMELINE
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Example:– Intercompany cross charges
To-Be customer journey lifts the neutral to delight
Auto-Posting of Invoice
Invoice Discrepancy are
flagged
Auto-match intercompany
transaction
Machine Learning automate root
cause & do course correction
I am able to raise a query for quick
response on the \Tool
Manage Mismatches on Exception basis
Zero outstanding or unreconciled items
Prompt resolution of >80% of intercompany
mis-matches
Auto- reconciliation
My invoices are auto-generated & posted in
ERP. I only do supervision and analysis
>80% invoices are auto flagged
Invoice Processor (Billing)
Invoice receiver(AP)
IC settlement Team
IC Reconciler
TIMELINEBlackLine Intercompany Hub BlackLine Smart Close RPA & Machine Learning Solution
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Zero based process design: Power of “Zero”
It is impossible to create a light bulb by iterating on a candle
Driver 1 Driver 2 Driver 3 Driver 4 New Drivers
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Transforming reconciliation process the zero based design way
Driver 1 Driver 2 Driver 3 Driver 4 New Drivers
Standardization
Excel based automation
BlackLinereconciliation
module
Standard reconciliation
template
Blackline transaction matching
Automatic posting & status tracking
Auto-certification
Automate system to system
reconciliation
Machine Learning for exception
handling
Blockchain
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Dynamic real time preventive controls
Control Environment Control Activities
Predefined rigid controls
Outcome based controls
Moral-driven compliance
Post-facto audits
Dynamic controls based on pattern studies
Action based controls
Cognitive control ecosystem
Immutable records
Controlling humans
Post-facto monitoring
Policy adherence
Controlling humans and machines
Real-time continuous monitoring
Exception management
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BlackLine embeds & automates controls
Real time visibility
Policy adherence
Auditor’s window
Robotic controls
Open item monitoring
Access to auditors for transaction
audits
Customizable risk thresholds
Automated controls through Smart Close
Real-time status tracking
Self-service exception review
Key accounting information
Built-in validation
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B: Automation
Finance resources agree that new wave of digital technologies is fundamentally
changing the way finance operates
76%
Source: HfS Survey Finance is Digital Age
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While process engines provide power, the digital wheels are vital to take off…
ERP advancements Micro platformsRobotics and
machine learning
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Power of “And” : Process design and automation
are mutually inclusive events that result into non linear gains
A B
Process Design Automation
Efficiency X Efficiency Y
A B
Process Design Automation
Efficiency X Efficiency Y
Efficiency Effectiveness User experience
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Power of “AND” : Enhancing ERP advancements
Example : Implementation of SAP for a beverage major
Dual control for GL master sensitive fields change
New SAP implementation
SAP CoA mirrored in non SAP entities
Chart of account governance
Standardized closing calendar
Define Policy – frequency, threshold, cut-offs, settlement rules etc.&
Standardized templates & inputs
Preventive validations
Effort automation
Controllership
User experience
>30%
Automation Process design
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Power of “AND” : Supplementing micro-platforms – BlackLine
Example : Redefining global reconciliations for a CPG major
Compliance enforcement checklists built in to BlackLine
Auto certification rules
Single Global BlackLineinstance globally
Embedded controls` Risk scoring template
Monthly review mechanism
6 reconciliations criterion
Pre close reconciliations for sub ledger accounts
&
Automation Process Design
Auto-certification
Cycle time reduction
Open item analytics
45%
33%
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Power of “AND” : Enhancing the machine learning journey…Example : Leverage of RPA & NLP to automate thousands of manual journals during month end close for an CPG major
NLP solution reviews contracts to identify key elements/covenants
Robotics/NLP solution receives inputs by email
Dynamic workflows automate and accelerate manual accrual
booking process Embedded controls
Dedicated email box and sender list
Define pattern based rules
&Embedded controls automation of
standard accruals
reduction in manual efforts
automation of non-standard accruals
Automation Process Design
70%
100%
70%
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3 Scenarios to see the AND effect of process design and automation
Design Automation
Scenario 1
Scenario 2
Scenario 3
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Scenario 1: Digital intervention without any design intervention
Manual Reconciliation
Risk based recon frequency
No Reporting / analytics of
reconciliations
Manual tracking of open items in
excel
No governance mechanism
Regional Variations
Inaccurate/ Incomplete
reconciliation
Incomplete supporting back-
up
Person driven and not Process
Driven
Open items backlog
Balance sheet at Risk
Eliminate Challenges
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Scenario 2: Process design without any digital intervention
Balance sheet at Risk
Eliminate Challenges
Manual Reconciliation
Risk based recon frequency
No Reporting / analytics of
reconciliations
Manual tracking of open items in
excel
No governance mechanism
Regional Variations
Inaccurate/ Incomplete
reconciliation
Incomplete supporting back-
up
Person driven and not Process
Driven
Open items backlog
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Scenario 3: Process design AND digital intervention synergy yield higher returns and resolve most challenges
Manual Reconciliation
Risk based recon frequency
No Reporting / analytics of
reconciliations
Manual tracking of open items in
excel
No governance mechanism
Regional Variations
Inaccurate/ Incomplete
reconciliation
Incomplete supporting back-
up
Person driven and not Process
Driven
Open items backlog
Balance Sheet Risk Known with defined Actions
Eliminate Challenges
Thank You