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A.I.C.M. National Conference Gold Coast 12th October 2007 Prepared & Presented by Colin Prosser FICM CCE Back Office - Outsourcing in Australia & Overseas.

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Presentation on theme: "A.I.C.M. National Conference Gold Coast 12th October 2007 Prepared & Presented by Colin Prosser FICM CCE Back Office - Outsourcing in Australia & Overseas."— Presentation transcript:

1 A.I.C.M. National Conference Gold Coast 12th October 2007 Prepared & Presented by Colin Prosser FICM CCE Back Office - Outsourcing in Australia & Overseas

2 1 My Background  36 years in Credit Management & Accounting  Hold Diploma in Business Studies in Accounting - 1988  AICM Member since 1985  Fellowship Membership with A.I.C.M - 2004  Hold Certified Credit Executive ( CCE ) Status – 1998  AICM Councillor – Vic / Tas Div’n – 1997 to 99 & 2003 to 2006  AICM President – Vic / Tas Div’n – 2005/6  Currently AICM Director – Member Services – 2006 to now  Worked in various Industries over the years including Manufacturing, Media, Finance & Title Searching, Telecommunications, Local Govt, 3@Law, Supplier / Distribution – Retail, Wholesale & Service, Accountancy, Electricity Supply, Plant and Equipment, Construction / Building

3 2 My Employer’s Background Stamfords Advisors & Consultants  Been in Business for over 25 years  Has over 200 Employees  Has Offices in Perth, Sydney and Melbourne  Provide a wide variety of Accounting Services including: – Business Process Outsourcing – Assurance & Risk Management – Management Consulting – Business Advisory Services – Corporate Finance – Information Systems & Technology Consulting

4 3 Outsourcing “Definitions”  To contract outside ( jobs, services, etc.) the company rather than employ more in-house staff: e.g: a small business that outsources bookkeeping to an accounting firm.  Negotiated Agreement, creating understanding about services, responsibilities, expectations & priorities.  Strategically place business functions, by using an outside ( 3rd party) business to manage.  Complete tasks or duties for others and to do it cheaper, better & / or more efficiently ( improve productivity / results ).

5 4 When did Outsourcing Start ??!!  Recognised as starting in the 80’s ( called - work specialisation ) but what about these: – Middle Ages – Royalty and Nobles used Armies to fight battles, the Butler & Staff tend to their household, Serfs and Slaves to harvest their Food and tender their Animals / Stables – Industrial Revolution – Line Assembly Production – Components, Weaving, Packaging, Cars – Parts, Welding, Spray Painting & Assembly Robots / Mechanical Arms -Japan smaller / cheaper – Telecommunication / Computer Age - Marketing / Research / Polls by Phone / Message Bank – Home ( 101 ); Mobiles / Electronic Media ( save trees ).

6 5 Global Giant Companies – Outsourcing Overseas  IBM  Hewlett Packard  General Electric  Reebok  Fujitsu  Microsoft  General Motors  Phillips  Oracle  AT&T  Governments: – Federal; – State; or – Foreign  Banks: – Deutsche; – HSBC; and – Bank of America

7 6 Outsourcing Overseas Issues  Privacy Issues – Name, Address, DOB and Phone  Security Issues – Credit Card and Bank Account details  Australian ( ASIC/ACCC ) Debt Collection Guidelines Issues  Language Issues – Understanding & Comprehension  Different Time Zones (India, China, Indonesia, Mexico, Botswana, Columbia & Philippines)  Lack of Knowledge (only cover FAQ’s)

8 7 Everyday Outsourcing  Marketing & Call Centre by Phone ( your Goods / Services )  HPA – Locked Bag ( Mail, Processing & Banking )  Dry Cleaners & / or Ironing  Mechanic ( Grease, Oil change, Tune up )  RACV Roadside Assist ( Flat Tyre, out of Petrol )  Jim’s Mowing ( Lawn & Gardening )  Babysitter / Child Minding Services  Takeaway Food / Restaurants  House Keeping / Maid Services  Taxi / Chauffeur  Surrogate Mothers

9 8 Types of Non–Core Operations that are Outsourced  Accounts Receivable / Credit Management  Accounts Payable  Billing – Invoicing, Standard Follow up Letters & Statements  Call Centre  Customer Service  Data Entry / Payment Processing  IT Server/s & Maintenance  Payroll  Human Resources  Procurement  Mailing / Printing / Photocopying / Scanning / Binding

10 9 Benefits of Outsourcing  Improves Cash flow ( Wages / Super ), Administration Costs  Floor Space – Better Usage  Electricity and Telecommunication Costs  Gain Knowledge and Expertise  Better Efficiencies and Effectiveness  Better Computer / IT Capabilities  Skills Upgrade, Retention & Access  Save on Supervision, Staff Replacement & associated Costs  No Sick Leave or Annual Leave Issues  Re-invest saving in Core Business activities  Economic Issues less effect ( Interest Rates )

11 10 Reasons to Outsource  Tight Job Market - National Skill Shortage  National Un-Employment is at 4.3%  Greater Efforts made to retain Critical Staff  Higher Salary Packages  Concentrate on Core Business – Selling & Marketing  Detailed Reporting  KPI’s & Timeframes must be met  SLA – Service Level Agreement (Guarantee Performance Levels)

12 11 Service Level Agreement  Communication Tool between Parties  Lists a Start / End Date or a Period; Objectives; Fees / Costs  Outlines Service/s and Management Levels  Define Tasks, Duties and Reporting ( Frequency )  Performance Agreement measure KPI’s and Deadlines  Monitor, Audit & Review of Service/s  Ongoing – Flexible Document – Review Annually

13 12 Possible SLA Duties & Responsibilities  Outline Daily, Weekly, Monthly, Quarterly and Yearly Reporting  Compliance, Insurance, Data Integrity, Records Management and Business Continuity Plan  Maintain and Update Credit Policy, Manual/s and Procedures  Communication lines – Phone, Email and face to face Meetings  Ledger/s Management – Phone Calls – Credit and/or Customer Service ( plus Feedback )  Reconcile Bank Accounts, G/L Journals, T/B, Revenue Forecasts  Data Input – Transactions and Debtor Notes  Daily Banking

14 13 Possible SLA Duties & Responsibilities Continued  Budgets – Monthly Comparison - Actual to Forecast  Risk Management, Legal Action, Internal / External Audits  Minimize Doubtful and Bad Debt/s  Six (6) monthly review and discussion of KPI’s and Timeframes

15 14 Considering Outsourcing some Questions to ask Yourself  Can your internal processes be improved  Can Staff time be better spent  How effective and efficient are you  Do you have the right expertise  What would costs savings be ( 30% to 60% )  How could you use the re-invest the savings  Can you better use the Floor Space

16 15 Example : Credit Department  Credit Manager, Supervisor & 8 Credit Officers  Old PC’s / Server, Accounting Programs and Microsoft Products  Cost of Phones, Electricity, Workstations, Floor space, Salaries, Super, W/Comp etc  Sick Leave, Annual Leave & Staff Replacement costs ( Down Time )  Old / Non Functional Office/s ( affect Moral )

17 16 Example : Outsourced Credit Department  Experienced Professional Credit Staff  Leading IT/Computer Software  Latest Communication Technology  Must meet KPI’s, Deadlines & Reporting  Increased Efficiencies & Effectiveness  Scaleable Solutions (Large or Small)  Reduces/Transfers Risk/Responsibility

18 17 Questions ??


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