Scaling the Finance Organization

MBAZG541 (Assignment)
Consultancy Practice
BITS Pilani Group 11
Pilani|Dubai|Goa|Hyderabad

1
The Team

SAAD ASHRAF 2018HB58048

SACHIN BALKRISHNA BHONSLE 2018HB58001

SELVI P 2018HB58042

SENTHIL S 2018HB58034

SHANMUGA SUNDARAM DHANDAPANI 2018HB58075

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Background and context

• A global IT company

• Steadily expanded its product and service offerings

• Ability to serve its customers globally
• Finance responsibilities and processes grown complex. 

• High administrative costs

• Rising Day Sales Outstanding (DSO)
• Falling customer satisfaction

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Contextual/ Client assumptions

• The function identified by client or improvement is Finance

• Within finance – reducing DSO is the focus area
• Improved DSO is expected to free-up cash
• The objective is to enhance Customer & Supplier service
• Controls & Compliance has also been cited as a concern
• Robotic Process Automation has a pivotal role for DSO,
yet its role in overall customer satisfaction is limited
• The client would also take separate CRM/ SRM measures
to address declining customer/ supplier satisfaction
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Contextual/ Client assumptions

• While the client senior leadership has already identified

RPA as a measure to improve process efficiency, they
would be open to other “non-IT” recommendations that
may be help in addressing their concerns

• Business SMEs from Sales, Project Delivery, Finance

and key leadership teams would be available for
interview/ discussions throughout the length of the
project – at least 0.25 FTE

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Industry Analysis

• Reining in the DSO has always been a

challenge for the IT Service Industry.
From and average of 45 days in 2002-
2003, the average DSO now stands at
70-75 days for Indian IT companies. **

• Although this by-and-large is due to

payments and warranty terms;
occasionally the bloat in DSO is due to
disputes, billing value errors, incorrect
detailing of items in the billing
document, incorrect tax break-up, etc.

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** Source Gartner Report on IT Service Industry, Annual Reports of LCS & LTI

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Industry Analysis

According to HfS Research, the global

market for RPA Software and Services
is expected to grow to $1.2 billion by
2021 at a compounded annual growth
rate of 36%, from $271 million in 2016.

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Industry Analysis

• Robotic Process Automation (RPA) has emerged as

software solution for automating rules-based business
processes that involve routine tasks, structured data and
deterministic outcomes
• The benefits of the application of RPA is in terms of
productivity, costs, speed and error reduction. Most of
these applications are carried out on back office
business process where the customer is not directly
involved
• RPAs in billing and payment follow-up could bring down
DSO by 20-30% and also reduce the admin costs
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** Source Gartner Report on IT Service Industry, Kryos website

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Industry Analysis

• *RPA including only one software license and maintenance. Excluding cost of infrastructure and implementation
• Note: It does not take into account the cost savings resulting from 24/7/365 operational capacity of RPA, Overhead costs and Back
office worker benefits 9

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Industry Analysis

RPA has become a game changer to enhance the

Operational Efficiency for back-office transactions

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** Source Kryos website

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Industry Analysis

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Methodology

Process Analysis
• Process Modelling
• Function-wise analysis
• Cross-team focus group
Business Process Re-engineering
RPA Demo
RPA Implementation RPA Demo

RPA
Implementation
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Relevance of Methodology

Process Modelling
• Although the area of improvement has been identified as Finance, it always good to now
the cross-functional interlinkages and hand-offs.

• This can be done by doing an End-to-End process modelling of key processes like
Order-to-Cash, Procure-to-pay, etc.

• Often the key value-add activities are identified with a critical look at the current
processes
Example - Typical End-to-End Order-to-Cash cycle

Sales/ Deliver Invoice Manage

Pre-Sales Contract Good/ Sent to Accounts
Mgmt Services Customer Receivables

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Relevance of Methodology

Function-wise Analysis
• Once we have done the end-to-end process modelling the next step would be to
conduct stream wise discussions to understand areas of concern or pain points

• Participants are encouraged to speak out their expectations from partnering

functions. This would serve as a input for the next stage of analysis

Example - Function wise Analysis for “Manage Account receivables”

Manage
Monitor Receive
Billing Dunning Credit
DSO Payments
exposure

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Relevance of Methodology

Cross-Function focus groups

• The input from the earlier stages would be used in this stage to conduct a SIPOC analysis.

• Here processes are studied with each function being analyzed as a Supplier or Customer,
providing an input or receiving an output from the process. For AR the group would be Finance
and Delivery, for or AP it would be Finance and Purchase

A SIPOC flow diagram

Supplier Customer
Input Process Output
Function function

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Relevance of Methodology
• Business Process Re-engineering
The output of Process Modelling, Function-wise and Cross-functional interactions would
be used for BPR to rationally identify processes where a Re-design or IT enablement
might help to improve the outcomes

• RPA Demo for an Accounts Receivable process

A call would be taken to go ahead with this, only if favorable output is obtained from BPR.

For example - if the output of BPR is that Billing occurs late because of delayed project
closures in client’s Project Management Software, then there is nothing that could be
done by RPA.

However, if there is a delay in Billing due to Communication lag between Delivery &
Finance teams or complex calculations, then RPA can add a great value. 16

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Relevance of Methodology

Reason for proposing a Demo – seeing is believing

Industry acceptance of RPA for FI processes

15%
Not Considered RPA
Evaluating RPA software
Implemented or Implementing
19% RPA

66%

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** Source Gartner Report of Robotic Process Automation

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Method Example

Process Modelling – End-to-End billing cycle P-1.0

P-1.1 P-1.2 P-1.3 P-1.4

Invoice
Milestone Billing
Invoicing Sent to
Completion Request
Customer
Project Delivery Team Sales Team AR Team AR Team

P-1.8 P-1.7 P-1.6 P-1.5

Acknowled
Booked in Payment Payment
gement
the system Received Follow-up
Sent
AR Team AR Team Sales Team Sales Team

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Method Example

Function-wise mapping – Invoicing P-1.3

P-1.3.1 P-1.3.2 P-1.3.3 P-1.3.4

Validate Enter
Receive Check
with values in
request values
contract ERP

P-1.3.8 P-1.3.7 P-1.3.6 P-1.3.5

Send Create
Check Check A/c
Invoice to Billing
Print/ EDI posting
customer Document

Process Steps – 1.3.2, 1.3.3, 1.3.4 & 1.3.5 are potential candidates for Robotic Process
Automation, since these are routine tasks which could be rule-based automated
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

 Method Example
Cross-Function mapping – Receive, Validate Request & Check Values

SIPOC Diagram - Receive, Validate request & Check Value P-1.3.1, P-1.3.2 & P-1.3.3
Suppliers Inputs Processes Outputs Customers Requirements

Who supplies the process What inputs are required? What are the major steps in the What are the process outputs? Who receives the outputs? How do we bridge the gaps?
inputs? process?
Project Delivery Team Milestone are tracked in a PM Receive Request - 1.3.1 Only legitimately billable AR Manager Automation of PM software
Software not integrated with amount is billed with ERP
ERP
Project Delivery Team Milestone completion details Validate milestone with Validated billabale amount AR Manager Ensure only completed
contract - 1.3.2 milestones are billed

AR Manager Contract Check Values - 1.3.3 Calculated billing values The Biling Clerk who enters the Automation of value
values in ERP calculations based on contract

• Closer analysis of “RECEIVE REQUEST” would reveal that from compliance point of view., we need
to recommend an integration between PM software and ERP. .This would ensure that only
“completed” milestones are billed. It would also be good to integrate it further with customer
acknowledgement for milestone completion

• Process “CHECK VALUES” which involves manual calculations could be speeded up using Robotic
Process Automation. RPA for this process step could decrease the billing delay be 2-3 days
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Relevance of Methodology
Sample Process for Vendor Invoice Posting Without RPA

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Relevance of Methodology
Vendor Invoice Posting after implementing RPA

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Timelines for the project
Overall timeline – 4 months
Discovery Phase – 2 months
Project Phase Duration Wk 1 Wk 2 Wk 3 Wk 4 Wk 5 Wk 6 Wk 7 Wk 8
Process Modelling 2 weeks
Function-wise Analysis 2 weeks
Cross-function focus groups 2 weeks
Business Process Re-engineering 1 week
Final evaluation and presentation 1 week

Solution Delivery – 2 months

Project Phase Duration Wk 9 Wk 10 Wk 11 Wk 12 Wk 13 Wk 14 Wk 15 Wk 16
Requirement Gathering/ Blueprint 2 weeks
Build 3 weeks
Test/ Train 1 weeks
Cutover/ Go-live 1 week
Hypercare/ Transition to AMS team 1 week

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Project team - Tasks

Consulting Team Roles & Responsibilities

Partner Liaison with client top leadership

Lead Consultant Ensure that the KRAs are addressed
Project Manager Project Management

Business Analyst Process Mapping, Analysis and Recommendation

Solution Architect Solution Design and system integration
Coders & Testers Build and Test the solution, documentation, etc.
Quality Lead Ensure quality procedures are complied

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Project team - Interaction with Client Counterpart

Consulting Team Client Team counterpart

Partner CIO + CFO

Lead Consultant -1 Finance Director
Project Manager-1 Business Project Manager (DRI)

Business Analyst - 2 Business SME and actual Users

Solution Architect -1 Business SME and actual Users
Coders & Testers – 4 Business SME and actual Users
Quality Lead - 1 -

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Pricing

• The pricing is broken into 2 components viz – Consulting

and On-boarding
• The pricing sheet mentions just the professional charges
for providing the consulting team
• On-boarding costs, deploying the consultants at client-
site, lodging and boarding charges would be charged at
actuals – approximately $ 300/ per person per day.
• The travel cost would be at actuals ex-Bengaluru, would
include Air-fare, Taxi and other incidentals.
• Alternatively both travel and stay could be charged at $
350/ per person per day
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Pricing Sheet

Based on T&M basis:

Consulting Team Nos Rate - $/Day Duration (days) Loading (FTE) Cost ($)

Partner 1 1500 80.00 0.20 30000.00

Lead Consultant 1 1200 80.00 0.50 48000.00
Project Manager 1 1000 80.00 0.50 40000.00
Business Analyst 2 800 80.00 1.00 144000.00
Solution Architect 1 1000 40.00 0.50 20000.00
Coders & Testers 4 800 40.00 1.00 128000.00
Quality Lead 1 800 40.00 0.25 16000.00
Total       426,000.00

FTEs have been derived based on phased Ramp-up and Ramp-down during the project
life-cycle 27

BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Payment Terms

The payment needs to be

disbursed as per following
milestones:
1. 20% on award of contract
2. 20% on resource onboarding
3. 20% on completion of
Process Analysis
4. 40% at the end of the
Hypercare

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Proposal Assumptions
• The proposal is based on an assumption that we would be identifying and
developing RPAs for 4 process steps, additional RPAs would be taken as
CRs and charged on T&M basis
• The pricing of the proposal is for both the phases of Discovery & Solution Delivery
• If the client decides to stop after Discovery, then pro-rated T&M charges would
apply
• The RPA integration framework is based on standard BAPIs/ API, hence
adaptation to any customized process would be evaluated and charged extra
• Client would provide access for the consulting team to existing Organizational
Process Assets for analyzing the AS-IS process
• Business SMEs would be available for discussions as per a published meeting
cadence
• Application Support would be done by the client’s existing AMS team after the
hyper-care

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Out of scope

• Other measures for improvement of customer and vendor

satisfaction would be out-of-scope
• Any other measures for improvement of cash flow – like
Working Capital Management would be out-of-scope
• Interfacing and integration with IT systems – ERP and Project
Management software would be out of scope
• Closure of business transactions before the cut-off would be
out of scope, however the project team would guide on the
process
• We propose a “Train-the-trainer” approach, hence End-User
training is out-of-scope
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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

 BITS Pilani
Pilani|Dubai|Goa|Hyderabad

Thank You

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Case snapshot

Scaling the Finance organization

A global IT company has steadily expanded its product and service offerings, as
well as its ability to serve its customers globally. As the company grew, its
finance responsibilities and processes grew exponentially more complex.

With high administrative costs, rising Day Sales Outstanding (DSO) and falling
customer satisfaction, the company needed to better see and manage its
financial performance while freeing up cash to take advantage of market
opportunities and grow.

To address these challenges, the IT client wants to partner with a consulting firm
to transform its finance function by implementing robotics process automation
and enhancing controls and compliance - while boosting customer and supplier
service.
 

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956

Documents referred

Document Attachment
Gartner’s Report on IT Service
companies
Gartner IT
LTI Annual report for the Financial Services Study
Year 2017-18
TCS Annual report for the Financial LTI Annual Report
Year 2017-18
Gartner’s Deck on Finance Ready for TCS Annual
Robots Report

Kryon (a company into RPA

solutions) – Use Cases for Finance Gartner RPAs in
Finance

Kryon - RPA Use

Cases

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BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956