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