thinking about outsourcing: business service centre - sharedserviceslink.com

1Date 18.3.09

Thinking about outsourcing:Business Service Centre

Juan Fernandez Laporta

Nissan Europe, Finance Restructuring General Manager

2Date 18.3.09

Introduction to Nissan

Background of Outsourcing

Project Scope

Outsourcing Evolving

Business Service Centre

Project Learning's

Questions

Topics

3Date 18.3.09

Introduction to NissanContinuing Innovation as a Global Brand

Vision: Nissan: Enriching People’s LivesMission: Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders in alliance with Renault.For the automakers, products are one of the key elements for success. Nissan strives to develop and introduce innovative and attractive products, which are aligned with market trends. Main Models:

Micra, Micra C+C, Almera, Primera, Maxima OX, 350Z, Roadster, X-TRAIL, Terrano, Patrol, Navara, Pathfinder, Murano, Pickup, Kubistar, Primastar, Interstar, Cabstar, Atleon, Note, Qashqai

Renault-Nissan Alliance: Since March 1999

New face of Nissan in Europe: Qashqai crossover concept car

4Date 18.3.09

Nissan Company Fact & FiguresNet Sales 10,824.2 billion yen

Operating Income 790.8 billion yen

Operating Profit Margin 7.3%

Ordinary Income 766.4 billion yen

Net Income 482.3 billion yen

Global Retail Sales Volume 3,769,886

Global Vehicle Production Volume

3,657,629

Number of Employees 31,453 (non-consolidated basis)180,535 (consolidated basis)

Headquarters Locations Date ofEstablishment

Nissan MotorCo., Ltd.

Tokyo,Japan

Dec 1933

Nissan NorthAmerica, Inc.

Tennessee,U.S.A

Sep 1960

Nissan EuropeS.A.S

France Nov 2002

Nissan InternationalSA

Switzerland Jun 2006

Nissan Europe:Management of European sales and manufacturing operations in 20 European countries

Nissan International SA -Management of European sales and manufacturing operations Nissan Europe S.A.S - Holding company for European subsidiaries and pan-European

operational support

As of March 31, 2008

5Date 18.3.09



Project Scope



Project Learning's

Questions

Topics

6Date 18.3.09

Background of OutsourcingRevival Plans

In 1999 a 3 year Nissan Revival Plan (NRP) to put Nissan back on a firm footing after several years of decline. Affected all parts of the Nissan organisation world-wide. Achieved in just two years. Another 3 year plan, NISSAN 180 (N180), was implemented to achieve growth.April 2005, Carlos Ghosn has announced a third strategic plan (2005-2007) named NISSAN Value-up.

Nissan Value-Up commitments3 key Pillars:

Sustained Profitability: to maintain top level of operating profit margin among global automakers for each of the three years of the plan.Growth/Volume: to achieve global sales of 4.2 million units in fiscal 2008.ROIC: to achieve 20 % or higher return on invested capital on average over the course of the plan.

How to achieve Nissan Value-Up regarding F&A?Standardization and Simplification of Finance Processes across with a view to Consolidate, Re-Engineer, Migrate & Explore :

Opportunities for productivity and / or improved process capabilityEnhanced Controllership across ProcessesIntroduction of Performance Metrics

7Date 18.3.09



Project Scope



Project Learning's

Questions

Topics

8Date 18.3.09

Project ScopeObjective: Migrate Finance and Accounting processes in 2 phases: 59 FTE then 30 FTE , in

total 89 FTEs to 3rd party BPO (Business Process Outsourcing) provider in Budapest.

In Scope Activities: Accounts Payables, Travel & Expenses, Accounts Receivables, General Accounting incl. month-end processes, and few administrative processes like handling ofincoming & outgoing mails.

Out of Scope Activities: AP, AR, GL control, Controlling, Tax, Risk Management

Different Regional Scope diversity:

FTEs outsourced by Sales, Factory and HQorganizations:

Region Country AP AR GL TotalRBU WEST France, Holland 4 2.5 2.5 9RBU CENTER Austria, Germany, 5 4 2 11RBU IBERIA (Sales) Spain, Portugal 2.5 1.5 2 6RBU IBERIA (Factory) Spain 7 1.5 2.5 11RBU Central Eastern Europe

Hungary, Czech Republic, Slovakia, Poland 3 3 3 9

RBU Nordics Finland, Denmark, Norway, Sweden, Baltics 4.5 3.5 2 10

RBU East Russia, Ukraine, 0 0 0 0RBU North (Sales) Great Britain 4 1 1 6RBU North (Factory) Great Britain 9 0 0 9RBU South Italy 1.5 0 0.5 2HQ (Head Quarter) France, Switzerland 8 3 5 16Total 48.5 20 20.5 89

Region AP T&E AR GLRBU WEST YES YES YES BOTHRBU CENTER YES NO YES BOTHRBU IBERIA (Sales) YES YES YES BOTHRBU IBERIA (Factory) YES NO YES BOTH

RBU CEE YES YES YES BOTH

RBU Nordics YES NO YES BOTH

RBU East NO NO NO NORBU North (Sales) YES YES YES BOTHRBU North (Factory) YES YES NO NORBU South YES YES NO BOTHHQ YES BOTH YES BOTH

9Date 18.3.09



Project Scope



Project Learning's

Questions

Topics

10Date 18.3.09


Start Transition

Stabilisation

Standardisation

Transformation

Solutioning

Training at Nissan & work shadowing

PMs (Process Maps) & SOPs (Standard Operating Procedures) preparation

1st Transition

‘05 ‘06 ‘07 ‘08 ‘09

ImplementationTransition cont.

Production starts at outsourcing company

Measurements (KPIs)

Bench reduction

Performance improvement (new KPIs, level-up)SPOT

(Supplier Paid On Time)CPOT

(Customer Paid On Time)ControllershipStart of

standardisation with common workflow tool

Standard process definition & implementation

Process oriented organisation

Quality in focus

Productivity improvement

End-to-end process improvements

Technology

High business impact projects

Focus on Value-add

Re-engineering of business’processes

Business partners

11Date 18.3.09

Transition Measurements Bench Reduction

Achievements:Production starts at BPO Provider

Setup Governance Structure at BPO Provider

Measurements: First KPI measurement in May 2006

Concerns/ Issues:Different activities on different ERP platforms are outsourced by regions, which adds to complexity and difficulty in standardization processHired BPO FTE’s skill/experience are not equivalent with Nissan FTEsDay to day operations not effectively managed , backlogs and inefficient process

compared to process prior to transition

Nissan feels out of controlNo proper communication between BPO & NissanNo baselining data to compare to new BPO performance, only subjective at the time

AP: Late payments to vendorsIncreased manual payments → duplicate paymentsIncreased coding errorsMissing invoices – vendors hesitant to send

invoices to BPO countryMissing information on invoice: >20years

experience cannot be transitioned in a couple of months

No robust workflow tool and no common ERP– double registration

Email approval increases workload significantly at BPO provider

BPO can only manage with double workforce (bench) .

Start and implementation

12Date 18.3.09

StabilisationPerformance Improvement Projects Workflow tool

Performance Improvement:End to End KPIs introducedIncreased number of KPIs and targets levels to encourage BPO provider to improve Monthly workshops introduced to improve communications

Workflow tool:Design & deploy common workflow tool interfaced to ERP system with standardized SCOA (Standard Chart of Account) and standard cost center structure

Controllership

Projects launched:SPOT (Supplier Paid On Time) to increase % of number of paid on time invoice from 28.6% to 53.1%CPOT (Customer Paid on Time) to decrease unallocated cash from 1.8 Billion to an average of 30M with an incoming cash of average 75M dailySCOA , SCCS structure and Cost center structure implementationRoadmap to Green KPIs to achieve new KPI level

Biggest issues:BPO provider is KPI driven and oriented – need to measure as much KPIs as possible to get

tasks done and drive process improvements Huge attrition – 53% annualized

13Date 18.3.09

StandardizationStandard process

definition & implementation

Process oriented organisation

Productivity improvementQuality in focus

Standard process definition and

implementation:Processes fully mapped in the light of standardizationRedefined, simplified and streamlined processes Streamlined AP processes with standard document types

Process oriented organization:Reallocated tasksFunctional changes regarding work allocation Functional operation and reportingRedefined systems access rights in conjunction with JSOXCreated call centre environment for vendor & customer calls

Quality in Focus:Best practice sharing in focus Quality project: Debtor Vendor analysis, GR/IR account reconciliation

Productivity Improvement:Reduced processing timeIncreased outsourced task without additional cost to Nissan – without FTE increaseIncreased Nissan Governance – number of FTE to drive process/ productivity improvements

Process oriented organization is to drive down huge impact of attrition

14Date 18.3.09

Summary of Current BPO PerformanceOctober 2008

0Stable88# of not transitioned KPIs0Stable1414# of unmeasured KPIs

109Positive6787Total KPIs met 27Stable516* DBM*** met43Positive2936* ISL** met39Stable3335* CSL* met

Roadmap to Green KPIs LevelMar09TrendConfidenceTargetDirectionStatusActualPlanAll Activity

0Positive130# of missed KPIs (2 CSL, 3 ISL, 9 DBM)

0Stable70# of exempted KPIs

* CSL – Critical Service Level, **ISL – Independent Service Level, ***DBM – Dashboard Metrics

84% 94%

15Date 18.3.09

AccountPayable

16Date 18.3.09

AP KPIs

* SOW – Statement of Work

• TAT – Turn Around Time• Wd – Working days

Definitions of AP KPIs:

17Date 18.3.09

Operational Definitions for K2 Reports

Awaiting AP - Uploaded Invoices in K2, not in any state of processing (untouched) –Not yet processed by AP team

Returned to AP - Invoices already entered into Financial System, sent for clarification returned to AP for further processing

Awaiting Feedback - Invoices already entered into Financial System, waiting for clarification/ payment approval all except for Payment Approval

Payment Approval - Invoices already entered into Financial System, waiting for clarification/ payment approval Price Query and VAT Query

GL Approval – Invoices already entered & approved in Financial System waiting to be released in K2 only.

Awaiting Rejection – Invoices to be rejected in K2Secondary Classification – Invoices to be moved from one secondary

classification to another (incorrectly classified) within the same entity

AP - K2 Queues Definitions

Stock in K2

18Date 18.3.09

European YTD SPOT

0%

20%

40%

60%

80%

100%

April May June July Aug Sept Oct Nov Dec Jan Feb Mar

% o

f lat

e Pa

ymen

t

365<

121-365

061-120

031-060

015-030

004-014

001-003

<1

Main AP KPI SPOT & YTD Trend

SPOT Target

70.0%Stable65.3%70.0%SPOT +14 YTD

75.0%Positive70.0%70.0%SPOT + 14 MTD (as part of Q3TD)

50.0%Stable48.8%50.0%SPOT YTD

65.0%Positive53.1%55.0%SPOT MTD (as part of Q3TD)

Supplier Paid on Time LevelMar09Trend

ConfidenceTargetDirectionStatusActualPlan

19Date 18.3.09

Detailed AP Performance Report

ISL Performance

2010

19

618

7

23

6

25

6

26

7

25

9

28 30 2918 20

20

6

22

5

23

4

18

5

16

5

16

4

17

2

14 12 12

3 25

1

1 1 1

1 1 1 1 1

1

20 20

4 3 2 2 2 2 2 2 2 2 6 2

0

10

20

30

40

50

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2008

2009

2008

2009

2008

2009

April May June July Aug Sept Oct Nov Dec Jan Feb March

AchievementsCSL (24 Met v/s 24 in September. 96% met)Awaiting AP Met for 8 sites out of 10 also met for European levelAwaiting AP (T&E) Met for 6 sites out of 6GL Release Met for all sites. also met for European levelISL (9Met v/s 7 in September. Met 72%)Returned to AP Met for 9 sites out of 10DBM (1 met out of 3 measured)Qulaity KPI was measured at NMGB this month and we were able to reach the target in the accuracy level (95%)

ChallengesCSL (1 Missed v/s 1 in September)Awaiting AP Missed for 2 site out of 10. European level 99% v/s target 98% (NITA* NNE) ISL (2 Missed v/s 4 in September) Supplier paid on time @ 48.76% for Europe v/s target of 50%AP Ageing was missed as well (30% of the open items are aged more than 10 days)DBMSRFP European level was missed (61,00% vs 70% target)Total pending invoices in average was missed (8015 vs target 6250)

KPI Status

DBM Performance

1 1 0 2 1 3 1 4 3 4 4 410 10 102

103

103

123

102

8 9 8 8 8

45

13

45

13

44

11

44

10

43

10

42

10

42

10

43 43 43 43 43

010

20304050

60

20072008

20072008

20072008

20072008

20072008

20072008

20072008

20072008

20072008

20082009

20082009

20082009


CSL Performance

310

6

179

2013 15 12

2114

24

12

24

14 13 1617

1414

12

11

4

68

8

4

6

1

8

1

6 7 4

1 1 1

2

4

2

4

2

4

2

4

2

4

2

4

2

4

2 2 2 2 2

3

322

20 20

0

10

20

30

40

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2007

2008

2008

2009

2008

2009

2008

2009


Met # Missed # Exempt Not Yet Transitioned Not Measured #

20Date 18.3.09

Example of Awaiting AP performance


Awaiting AP 98% within 5 WDs:SOW* Target for Awaiting AP 98% within 5 WDs (working days)

KPI Met for 9 out of 10 sites for week 44. 7 sites met for MTD Oct. KPI for European level at 98%.NNE – from the 7 items 3 of them were processed on the 6th day, 4 of them were classified as disputed and at processing time we reclassified as PO / Non PO invoice.RBU Center – 6 invoices were classified as disputed and were rejected from this status

Total invoices processed for Oct 23,783


21Date 18.3.09

Next Step: TransformationHigh business

impact projectsFocus on Value-

add Business PartnersRe-engineering of business processes

Next Steps on AP:

Simplify and streamline processes further and focus on Value-add reengineering business

processes

Introduce E-Invoicing

Improve PO coverage and quality in line with ‘No PO No pay’ policy

Introduce Duplicate Audit tool

Reduce processing time to as minimum as possible

Introduce work force on Debtor Vendor analysis, GR/IR account reconciliation

Further increase outsourced task without additional cost to Nissan – without FTE increase

Benchmark with other BPO providers and captive companies

New contractual agreement (SOW) – move toward transactional base KPIs rather than FTE base

Introduce robust quality KPIs

22Date 18.3.09

AccountReceivable

23Date 18.3.09

AR Weekly IRF Processing status

•All the IRFs were parked within 5 WDs.

•Comments on pending IRFs:

-RBU hhh – xxirfs are pending because of missing data. xx irfs are still in x workdays.

-RBU hhhh – all the irf are still in x workdays.

Entity NMGB RBU CEE RBU Center RBU Iberia RBU Nordic RBU West ASSC Grand TotalTotal processed 564 211 27 26 128 90 238 1284Total pending 30 0 110 82 12 0 0 234

ASSC NESS 100.00%NFE 100.00%NISA 99.32%NMPC 100.00%INEU 100.00%INUE 100.00%

ASSC Total 99.58%NMGB NMGB 100.00%NMGB Total 100.00%RBU Center NAUS 100.00%

NGER 100.00%NSWI 100.00%

RBU Center Total 100.00%RBU Iberia NPOR 100.00%

NSPA 100.00%RBU Iberia Total 100.00%RBU Nordic NNDK 100.00%

NNNO 100.00%RBU Nordic Total 100.00%RBU West NFRA 100.00%RBU West Total 100.00%NSCEE NCCZ 100.00%

NCHU 100.00%NCPL 100.00%NCSK 100.00%

NSCEE Total 100.00%Grand Total 99.92%

24Date 18.3.09

•Global overdue is at 38%, 49% older than 60 days. Issues faced in ageing due dates of parts invoices and miscellaneous. Invoice states at SAP as overdue, but as per agreement with customer they are still not overdue.•Reporting includes all types of invoices financed and not financed.•Collection proposal for Spain is still not accepted. WEST, NMGB, NITA and NMUK are not in scope.

AR Ageing Summary 3rd party …(status by site by amounts only entities where cash collection is performed by Genpact)

AR Aging

(20,000,000.00)

-

20,000,000.00

40,000,000.00

60,000,000.00

80,000,000.00

100,000,000.00

120,000,000.00

Not Due 1-30 31-60 61-90 91-180 181-360 >361

RBU CENTER

NSCEE

NNE

ASSC

Team Company Not Due 1-30 31-60 61-90 91-180 181-360 >361 Total Total OverdueASSC 53,721,888.44 15,242,203.40 8,906,584.64 4,340,305.51 512,472.45 5,802,475.83 6,860,836.28 95,386,769.00 41,664,878.11

NESS 2,419,381.12 1,376,344.26 77,468.32 (72,441.91) (1,195,700.00) 1,279,531.86 6,590,553.47 10,475,143.00 8,055,756.00 NFE 4,583,857.76 1,810,936.01 1,249,143.46 1,217,590.58 633,879.24 446,665.82 90,752.07 10,032,825.00 5,448,967.18 NISA 46,618,649.56 12,054,923.13 7,578,722.60 3,194,359.46 1,067,797.38 2,970,319.52 (205,126.87) 73,279,641.00 26,660,995.22 NMPC 100,000.00 - (267.75) - - 54.59 499,892.08 599,679.00 499,678.92 PLC - - 1,518.01 797.38 6,495.83 1,105,904.04 (115,234.47) 999,481.00 999,480.79

NNE 30,828,235.27 813,207.09 2,905,949.64 1,148,305.19 2,418,623.73 636,829.06 215,129.41 38,966,273.00 8,138,044.12 NNDK 9,410,268.55 (245,618.24) 1,728,425.74 (718,748.14) 1,809,893.09 159,411.51 6,297.03 12,149,930.00 2,739,660.99 NNEE 208,702.58 217,966.89 14,289.60 68,208.07 15,108.95 982.40 885.19 526,143.00 317,441.10 NNFI 7,207,333.29 (224,291.56) (32,295.25) 106,258.67 (16,711.59) (96,229.77) 4,319.59 6,948,385.00 (258,949.91) NNLT 236,305.17 98,640.42 11,673.68 23,308.67 55,805.60 40,415.25 (5,000.00) 461,149.00 224,843.62 NNLV 80,586.37 418,611.07 82,794.60 104,506.76 84,013.41 (731.76) (418.30) 769,362.00 688,775.78 NNNO 6,097,082.14 271,323.37 529,742.20 606,756.32 288,863.80 49,602.58 15,036.74 7,858,404.00 1,761,325.01 NNSE 7,587,957.17 276,575.14 571,319.07 958,014.84 181,650.47 483,378.85 194,009.16 10,252,900.00 2,664,947.53

NSCEE 699,921.43 4,946,346.70 2,667,379.36 2,091,924.94 5,230,312.16 1,149,707.66 3,941,770.05 20,727,366.87 20,027,440.87 NCCZ 562,177.97 1,306,455.84 694,535.59 262,475.46 1,124,726.27 484,818.38 119,212.22 4,554,406.00 3,992,223.76 NCHU 780,245.20 1,347,236.10 667,181.67 576,609.58 434,698.91 (30,316.04) 1,586,330.41 5,361,985.87 4,581,740.63 NCPL (851,408.97) 1,871,010.38 894,695.15 881,002.61 2,724,697.54 288,954.67 1,720,459.85 7,529,412.00 8,380,820.20 NCSK 208,907.23 421,644.38 410,966.95 371,837.29 946,189.44 406,250.65 515,767.57 3,281,563.00 3,072,656.28

RBU CENTER 26,770,910.08 396,445.14 (276,436.60) 75,945.07 1,402,902.39 656,596.55 (1,916,486.44) 27,109,864.00 338,966.11 NAUS 15,236.23 (397,234.10) 22,581.53 17,210.32 3,638.30 20,100.00 (39,624.29) (358,096.00) (373,328.24) NGER 22,385,116.29 980,700.21 (157,539.90) 538.31 1,310,102.49 604,337.13 (1,858,351.33) 23,264,903.00 879,786.91 NSWI 4,370,557.56 (187,020.97) (141,478.23) 58,196.44 89,161.60 32,159.42 (18,510.82) 4,203,057.00 (167,492.56)

Grand Total 112,020,955.22 21,398,202.33 14,203,477.04 7,656,480.71 9,564,310.73 8,245,609.10 9,101,249.30 182,190,272.87 70,169,329.21

25Date 18.3.09

Overdue items 3rd party – trend by site

•Increased in the NNNN region (8 MM )

Weekly trend by site

-€ 20M

€ 5M

€ 30M

€ 55M

€ 80M

€ 105M

€ 130M

Total 92.83 67.29 60.41 40.84 58.66 88.80 70.45 71.37 70.08 90.54 93.65 68.53 120.37 100.58 87.28 87.11 90.06 61.08 70.14RBU Center 3.66 4.70 2.22 -15.18 -6.16 4.80 -5.17 0.83 2.03 7.54 -0.94 -0.04 3.97 0.82 -6.22 -1.48 6.83 -4.67 0.33NSCEE 45.88 16.40 17.87 20.85 20.73 28.58 23.28 23.91 24.63 30.55 27.10 19.27 22.53 19.73 28.94 25.44 23.81 21.44 20.02NNE 4.57 8.25 3.59 -0.68 1.28 7.21 9.09 9.57 8.14 8.29 8.00 6.15 12.12 9.47 12.35 3.18 2.93 0.22 8.13ASSC 38.72 37.94 36.73 35.85 42.81 48.21 43.25 37.06 35.28 44.16 59.49 43.15 81.75 70.56 52.21 59.97 56.49 44.09 41.66

39/08 40/08 41/08 42/08 43/08 44/08 45/08 46/08 47/08 48/08 49/08 50/08 1/09 2/09 3/09 4/09 5/09 6/9 7/9

26Date 18.3.09

Operational Definitions

• Manual Invoice: Miscellaneous invoices• Invoice request: Filled out by NISSAN company and the approved,

checked form sent to Outsourced for processing• Open requests: IRF not parked into SAP• Unallocated cash: all the incoming payments posted to the AR

accounts and are not cleared yet

AR - Definitions

27Date 18.3.09

Treasury

28Date 18.3.09

TREASURY - Unapplied Cash by sites /AP/debit & credit items/ absoluteEUR value

Main allocated cash (49%) is www Decreased by kkkK since last week. Recap invoices have been booked as payment items at ppp, to

be cleared by month end.

As per 16/02

Unapplied Cash - Weekly trend by site

€ 0M

€ 1,000M

€ 2,000M

Total 1,963.0 1,907.8 1,317.4 619.00 626.75 555.47 500.09 523.97 575.97 575.19 RBU West 367.77 250.74 239.55 195.00 173.07 161.22 161.94 161.72 169.27 165.98 RBU Iberia 12.79 10.82 11.88 18.22 16.37 19.26 18.96 15.30 13.30 14.11 RBU Centre 1,076.5 1,139.4 715.15 12.38 74.40 73.00 18.87 21.70 75.55 72.11 NNE 2.08 3.44 3.71 4.65 5.16 5.26 5.79 6.08 4.40 4.32 NMGB 10.98 10.66 10.24 15.69 16.33 16.41 21.14 21.03 20.36 21.13 CEE 26.47 32.69 34.29 39.93 37.43 44.78 18.22 25.22 25.22 16.98 ASSC 466.38 460.00 302.61 333.13 303.99 235.53 255.18 272.91 267.86 280.58

02 Dec 8 Dec 15 Dec 05 Jan 12 Jan 19 Jan 26 Jan 2 Feb 10 Feb 16 Feb

29Date 18.3.09

GeneralLedger

30Date 18.3.09

TTTTTTTTTT Csilla A. is working on the reconciliation. Agreed with PPPPPPP that cut off date will be applied (~Apr,2007: netting before that date; item by item recs after that date)

Posting ME JE December (quarterly closing)100% in line with MECS CSLNumber of JEs processed by GL-team: 546 vs. 363 (Nov.)

tttttttt: 230 (167M EUR)ttttttt: 203 (11590M EUR)uuuuuuu: 44 (14.9M EUR)kkkkkk: 25 (5.9M EUR)…

Expected nr. Of JEs in Jan: ~400

Nissan GL weekly performance 2009 W5Results / next steps:

yyyy: open items follow up, reminder was sent to site to clarify not booked items on yyyy. pppp will follow on WD1 rrrr: official communication was sent to the sites to start sending their open item list to be able to close books on WD3. Scope of reconciled countries are extended (Intra/Inter)All work-files and finalized FAPs will be copied to shared drive ‘J’ for which NNNNNN team has access. E-mail exchange would decrease significantly and response time alsoVAT-clearing project: DET sent status-update to Pascale W., waiting for information from their sideGRIR: reporting of not touched items changed to be more accurate on data. Final report on W6.

Status of Account Reconciliation December:Nr. of not approved: 22 (or 13% of 167)

Alicia FFFF 8 (8)Antonio DDDD 7 (7)Eva MMMMMM 5 (5)Raquel TTTT 1 (1)Pascale WWWW1 (57)

Data as of 2nd of February

KPI Status

167

137127 128 127

40

4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0

3040 39 40

63

2824

140 0 0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0

0

02

2

2 2 2 2 2 2 2 2 2 2 2 2 2

0 0 0 0 0

64

135 141148

165

75 75

21 21 21 21 21 21 23 22 22 22

0 0 0 0 0 0 0 0 0 0

86 86

135 135 139 139 139 139 139 140 140 140

0 0 0 0 0 0 0 0 0 0 4 45 5

5 5 5 5 3 3 3 3

0

20

40

60

80

100

120

140

160

180

WD1 WD2 WD3 WD4 WD5 WD6 WD7 WD8 WD9 WD10 WD11 WD12 WD13 WD14 WD15 WD16 WD17 WD18 WD19 WD20 WD21 WD22workdays

NO

of a

ccou

nts

Not Started In progressIn progress / waiting for feedback Sub for Approval (eroom upload)Approved in eroom Rejected

31Date 18.3.09



Project Scope



Project Learning's 1

Questions

Topics

32Date 18.3.09

If it were 2005 now, how would Nissan decide?

Yes to outsourcing, but with a different approach

33Date 18.3.09



Project Scope



Project Learning's

Questions

Topics

34Date 18.3.09

The business services concept

Business services ≠OUTSOURCING

Business services ≠LOW COST COUNTRIES

Business services ≠LOW VALUE ADDED TASKS

proposal is to create a CAPTIVE(internal) business services group, with

NE employees.

No labor arbitrage included in the business case. No LCC considered

Low value added tasks already outsourced The idea of the business services Center is to

consolidate NE EXPERTISE

Business services = CONSOLIDATION OF NE EXPERTISE

35Date 18.3.09

The Finance organization 3 levels

Local Level Business services level Headquoters -level

•Support and control the business (Data production work is pooled in the business services organization removing the distraction from the business)•Financial director in charge of …..with the support of the business services group

•Provide accounting services(Standardized accounting processes are allocated to business services)•Manage Master data and is the processes owner•Provide performance reporting data (all axis : product / entity / function)•Support the preparation of the budget•Provide Tax and treasury expertise and activities•Provide Product costing, gross margin and profitability analysis expertise

•Support European management •Define Financial guidelines and standards•Assess and support European projects•Monitor performance•Manage Budgeting process (top down)

All teams are there to support Nissan to meet its strategic objectives

36Date 18.3.09

Business services principles

Price transparency Each service should have its price. The business can determine how much service it wants at that price

Business management

Manage the service like a business, not a fixed cost. Serve internal and potentially external customers

Market responsiveness

Provide the service levels the businesses want, not the levels staff think they need

Best practices proliferation Identify and deploy Best practices quickly and globally

Process strandardization

Develop streamlined process standards that can be maintained and improve quickly

Service culture Treat business units like customers, offering services they value and charging for each

37Date 18.3.09



Project Scope



Project Learning's 2

Questions

Topics

38Date 18.3.09

Ideal organization structure design principle : business services

Fina

nce

In (many companies)

Step 1 Step 2 Step 3

Fina

nce

Bus

ines

s se

rvic

es

Fina

nce

Bus

ines

s se

rvic

es

Outsourcer

Fina

nce

Nissan

Current IdealFi

nanc

e

Fina

nce

Bus

ines

s se

rvic

es

Master dataBusiness process ownersSystems ownershipOutsourcers contract MgtLogical Grouping of dispersed activities

Outsourcer OutsourcerOutOut

39Date 18.3.09

Project Learning's GeneralKey

Recommendations

‘Ship and fix’ transition method applied: Aim was reap immediate savings from offshore centralization then drive to best in classCost saving was the biggest driver at Nissan - pay back period just over a yearTeam consistency during SOL ID and migration changedLack of middle management Buy-in from Nissan plus lack of confidence in releasing control SOL ID was prepared too quickly and as a result at a high level. SOP was prepared by BPO associatesNissan FTE does not equal BPO FTENo dashboard/ Metrics

‘Fix and Ship’ approach: Create a Nissan CoE first and after fixing all the processes in the CoE, ship what really can be outsourced as it has no added value for Nissan (or Nissan can not add value)…. SOL ID team should remain the transition teamEstablish Incentive Plan to middle management and trainersDo not lay off current staff before process is stabilized, provide them with incentives to make the process stabilized asapTake training and preparation of SOPs seriously –SOP preparation not to be done by BPO associatesRequest BPO to add Bench proactively to the amount of associates, invest upfront into transition and release associates when process is stabilizedBaselining before deciding on migrating tasks

Transition

Key Findings

KPIs As KPIs are contractual and leading to penalties in case not met, BPO provider did not advise Nissan on ‘good’ KPIs

If decision is made to outsource and no experience in outsourcing, request 3rd party consulting firm to advise / benchmark on KPIs and pricing methodology

• CoE -Centre of Excellence

40Date 18.3.09

Project Learning's General 2Key

FindingsKey

Recommendations

SOW pricing/ invoicing to be determined by number of transactions and KPIs which reflect the Win/Win objectives by creating a situation where the BPO will focus on reducing and simplifying the work without being punished through lower incomeGained Share to be introduced to drive Process Improvements on End-to-End processesProcess Improvement team to be lead and financed by Customer (Nissan) and not only by BPO Provider

Process Improvement

BPO & Nissan do not have the same objectives due to FTE based pricingWith current FTE pricing BPO provider is not ‘interested’ in real process improvements, which can lead to decrease in number of FTE

Strategy on Outsourcing

Decide what’s more important: Cost or Quality

Cost: go for low cost BPO provider Quality: go for cost+ BPO provider working with ConsultantsCost and Quality: go for captive, create Centre of Excellence via investing in an experienced accounting force to drive process improvements

41Date 18.3.09

Project Learning's A/PKey

FindingsKey

Recommendations

Account Payables

Accounts Payable process must be standardized across Europe prior to migrationNecessary to have single workflow solution No central AP control and responsibility

Workflow Solution and common ERP system to be in place prior to migration or at least at the start of migrationPrior to migrating tasks, all processes must be process- mapped and written SOP signed off by Finance Managers and transferred to Standard processesSetup central AP controlling function with full authority Setup Functional organization before job transitioned

42Date 18.3.09

Project Learning's A/RKey

FindingsKey

Recommendations

Accounts Receivable

Accounts Receivable process must be standardized across Europe prior to migrationNo single workflow solution Not the same ERP implemented per regions Not the same tasks outsourced Without workflow tool measurement of KPIs are manual and done by BPO providerCash collections : customer financing methodology is not recorded in ERP Cash collection is either not in scope or FTE requirement is not well definedCustomer account reconciliation is not well defined for BPO

Common ERP system to be in place prior to migration or at least at the start of migrationPrior to migrating tasks, all processes must be process- mapped and written SOP signed off by Finance Managers and transferred to Standard processesAgree that same tasks to be outsourced from each region to BPOCash collection to be outsourced to real ‘cash collector’ companiesCustomer account reconciliation to be developed by Nissan prior to or during migration, otherwise task by BPO is not well performedSetup Functional organization before job transitioned

43Date 18.3.09

Project Learning's TreasuryKey

FindingsKey

Recommendations

Treasury Not the same tasks outsourced KPI for Cash allocation is measured by quantitative wise, no quality measurement Payment Run – different processes and task outsourced to BPO provider by region Different banks are used by regions –different accesses are provided to BPO if any Different Payment run schedule per regionsIncreased number of manual payments due to AP insufficiency

Prior to migrating tasks, all processes must be process- mapped and written SOP signed off by Finance Managers and transferred to Standard processesAgree that same tasks to be outsourced from each region to BPOStandardize bank usage on European level Centralize payment run responsibility

Manual payments to be kept at the very minimal

44Date 18.3.09

Project Learning's G/LKey

FindingsKey

Recommendations

General Ledger

Not the same tasks outsourced Account reconciliation outsourced by different region – requires huge amount of time investment by Nissan to provide all Account details to BPO provider

GL task as require deep accounting knowledge , should have not been outsourced

45Date 18.3.09



Project Scope



Project Learning's

Questions

Topics

46Date 18.3.09

Questions?

http://www.nissan-europe.com/

thinking about outsourcing: business service centre - sharedserviceslink.com

Documents