2015 APQC and SCOTTMADDEN FINANCE SHARED SERVICES PARTICIPANT REPORT

Transcription

1 2015 APQC and SCOTTMADDEN FINANCE SHARED SERVICES PARTICIPANT REPORT PREPARED EXCLUSIVELY FOR PARTICIPANT 123 N. Post Oak Houston, TX 77024

2 TABLE OF CONTENTS

3 EXECUTIVE SUMMARY

4 DEMOGRAPHICS

5 SSC CHARACTERISTICS

6 PERFORMANCE MEASURES

7 UNDERSTANDING THE TABLES The tables on the following pages show how your organization compares to all companies that participated in the study for each performance measure Number of finance function FTEs per $1 billion revenue Number of FTEs that perform the process "invoice customer" per $1 billion revenue Number of FTEs that perform the process "perform general accounting" per $1 billion revenue Number of FTEs that perform the process "perform planning/budgeting/forecast ing" per $1 billion revenue XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX

8 MEASURE DATA TABLES Number of finance function FTEs per $1 billion revenue Number of FTEs that perform the process "invoice customer" per $1 billion revenue Number of FTEs that perform the process "perform general accounting" per $1 billion revenue Number of FTEs that perform the process "perform planning/budgeting/forecast ing" per $1 billion revenue Number of FTEs that perform the process "process accounts payable (AP)" per $1 billion revenue Number of FTEs that perform the process "process accounts receivable (AR)" per $1 billion revenue Number of FTEs that perform the process group "manage internal controls" per $1 billion revenue Number of FTEs that perform the process group "manage taxes" per $1 billion revenue

9 MEASURE DATA TABLES Number of FTEs that perform the process group "manage treasury operations" per $1 billion revenue Number of invoices processed per "process accounts payable" FTE Number of receipts processed per "process accounts receivable" FTE Total cost to perform the finance function per $1,000 revenue Total cost to operate the shared services center(s) per $1,000 revenue Total cost to operate the shared services center(s) per shared services center FTE Cycle time in days to complete the monthly financial close Number of bank accounts per "manage treasury operations" FTE Inbound requests received via phone as a percentage of total inbound requests Inbound requests received via as a percentage of total inbound requests

10 MEASURE DATA TABLES Inbound requests received via employee portal as a percentage of total inbound requests Inbound requests received via vendor portal as a percentage of total inbound requests Inbound requests received via chat as a percentage of total inbound requests Inbound requests received via walk-up as a percentage of total inbound requests Inbound requests received via other channels as a percentage of total inbound requests

11 PEER GROUP COMPARISONS

12 PEER GROUP COMPARISONS

13 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue CYCLE TIME IN DAYS TO COMPLETE THE MONTHLY FINANCIAL CLOSE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 4.00 Between $5 billion and $10 billion 4.00 Between $10 billion and $15 billion 4.00 $20 billion or greater 3.00 N/S America 4.00 Eu-ME-Afr 4.00 Automotive 4.00 Consumer Products/Packaged Goods 4.00 Distribution/Transportation 3.00 Industrial Products 4.00 Pharmaceutical 3.50 Retail and Wholesale 4.00 Services

14 Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF BANK ACCOUNTS PER "MANAGE TREASURY OPERATIONS" FTE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 6.00 Between $5 billion and $10 billion 5.00 Between $10 billion and $15 billion 7.50 $20 billion or greater 4.39 N/S America 5.00 Eu-ME-Afr 5.00 Consumer Products/Packaged Goods 6.00 Industrial Products 5.00 Pharmaceutical 3.00 Retail and Wholesale 5.00 Services

15 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FINANCE FUNCTION FTES PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion Between $5 billion and $10 billion Between $10 billion and $15 billion $20 billion or greater N/S America Eu-ME-Afr Automotive Consumer Products/Packaged Goods Distribution/Transportation Industrial Products Pharmaceutical Retail and Wholesale Services

16 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS "INVOICE CUSTOMER" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 3.74 Between $5 billion and $10 billion 2.24 Between $10 billion and $15 billion 1.96 $20 billion or greater 0.96 N/S America 2.23 Eu-ME-Afr 2.61 Automotive 1.93 Consumer Products/Packaged Goods 2.20 Distribution/Transportation 2.86 Industrial Products 2.53 Pharmaceutical 2.75 Retail and Wholesale 1.02 Services

17 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS "PERFORM GENERAL ACCOUNTING" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 3.27 Between $5 billion and $10 billion 1.88 Between $10 billion and $15 billion 1.82 $20 billion or greater 0.87 N/S America 2.03 Eu-ME-Afr 1.95 Automotive 1.22 Consumer Products/Packaged Goods 1.25 Distribution/Transportation 2.01 Industrial Products 2.06 Pharmaceutical 1.86 Retail and Wholesale 2.27 Services

18 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS "PERFORM PLANNING/BUDGETING/FORECASTING" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 1.10 Between $5 billion and $10 billion 0.68 Between $10 billion and $15 billion 0.45 $20 billion or greater 0.25 N/S America 0.73 Eu-ME-Afr 0.72 Automotive 0.50 Consumer Products/Packaged Goods 0.68 Distribution/Transportation 0.60 Industrial Products 0.96 Pharmaceutical 0.86 Retail and Wholesale 0.71 Services

19 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS "PROCESS ACCOUNTS PAYABLE (AP)" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 3.02 Between $5 billion and $10 billion 2.20 Between $10 billion and $15 billion 1.93 $20 billion or greater 1.15 N/S America 2.21 Eu-ME-Afr 2.16 Automotive 1.45 Consumer Products/Packaged Goods 2.24 Distribution/Transportation 1.65 Industrial Products 2.06 Pharmaceutical 2.41 Retail and Wholesale 2.35 Services

20 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS "PROCESS ACCOUNTS RECEIVABLE (AR)" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 3.57 Between $5 billion and $10 billion 2.07 Between $10 billion and $15 billion 2.14 $20 billion or greater 0.96 N/S America 2.31 Eu-ME-Afr 2.59 Automotive 1.95 Consumer Products/Packaged Goods 2.03 Distribution/Transportation 2.07 Industrial Products 2.34 Pharmaceutical 2.83 Retail and Wholesale 1.60 Services

21 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS GROUP "MANAGE INTERNAL CONTROLS" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 2.12 Between $5 billion and $10 billion 1.12 Between $10 billion and $15 billion 1.09 $20 billion or greater 0.53 N/S America 1.23 Eu-ME-Afr 1.07 Automotive 1.01 Consumer Products/Packaged Goods 1.08 Distribution/Transportation 0.96 Industrial Products 1.20 Pharmaceutical 1.15 Retail and Wholesale 1.29 Services

22 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS GROUP "MANAGE TAXES" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 1.94 Between $5 billion and $10 billion 1.13 Between $10 billion and $15 billion 1.23 $20 billion or greater 0.54 N/S America 1.30 Eu-ME-Afr 1.22 Automotive 0.98 Consumer Products/Packaged Goods 1.08 Distribution/Transportation 1.13 Industrial Products 1.31 Pharmaceutical 1.81 Retail and Wholesale 1.14 Services

23 Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF FTES THAT PERFORM THE PROCESS GROUP "MANAGE TREASURY OPERATIONS" PER $1 BILLION REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 0.89 Between $5 billion and $10 billion 0.42 Between $10 billion and $15 billion 0.38 $20 billion or greater 0.26 N/S America 0.47 Eu-ME-Afr 0.44 Consumer Products/Packaged Goods 0.29 Industrial Products 0.42 Pharmaceutical 0.39 Retail and Wholesale 0.49 Services

24 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF INVOICES PROCESSED PER "PROCESS ACCOUNTS PAYABLE" FTE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 2, Between $5 billion and $10 billion 1, Between $10 billion and $15 billion 3, $20 billion or greater 7, N/S America 3, Eu-ME-Afr 3, Automotive 4, Consumer Products/Packaged Goods 2, Distribution/Transportation 3, Industrial Products 1, Pharmaceutical 1, Retail and Wholesale 4, Services 3,

25 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue NUMBER OF RECEIPTS PROCESSED PER "PROCESS ACCOUNTS RECEIVABLE" FTE Median value for each industry, region, and revenue group Between $1 billion and $5 billion 4, Between $5 billion and $10 billion 5, Between $10 billion and $15 billion 6, $20 billion or greater 4, N/S America 4, Eu-ME-Afr 5, Automotive 6, Consumer Products/Packaged Goods 10, Distribution/Transportation 4, Industrial Products 6, Pharmaceutical 3, Retail and Wholesale 4, Services 5,

26 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue Revenue TOTAL COST TO OPERATE THE SHARED SERVICES CENTER(S) PER $1,000 REVENUE Median value for each industry, region, and revenue group Between $1 billion and $5 billion $2.94 Between $5 billion and $10 billion $1.63 Between $10 billion and $15 billion $1.58 $20 billion or greater $0.84 N/S America $1.80 Eu-ME-Afr $1.95 Automotive $1.46 Consumer Products/Packaged Goods $1.10 Distribution/Transportation $1.84 Industrial Products $1.86 Pharmaceutical $2.05 Retail and Wholesale $1.64 Services $

27 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue TOTAL COST TO OPERATE THE SHARED SERVICES CENTER(S) PER SHARED SERVICES CENTER FTE Median value for each industry, region, and revenue group Between $5 billion and $10 billion $131, Between $10 billion and $15 billion $138, $20 billion or greater $130, N/S America $133, Eu-ME-Afr $136, Automotive $136, Consumer Products/Packaged Goods $118, Distribution/Transportation $142, Industrial Products $151, Pharmaceutical $133, Retail and Wholesale $133, Services $138,

28 Industry Industry Industry Industry Industry Industry Industry Region Region Revenue Revenue Revenue TOTAL COST TO PERFORM THE FINANCE FUNCTION PER $1,000 REVENUE Median value for each industry, region, and revenue group Between $5 billion and $10 billion $3.30 Between $10 billion and $15 billion $2.72 $20 billion or greater $2.83 N/S America $3.40 Eu-ME-Afr $3.28 Automotive $4.67 Consumer Products/Packaged Goods $3.44 Distribution/Transportation $3.98 Industrial Products $3.30 Pharmaceutical $2.75 Retail and Wholesale $3.33 Services $

29 QUALITATIVE RESPONSE RATES

30 UNDERSTANDING THE TABLES Which of the following functions best describes the role your business entity performs in the corporate organization? (Select only one.) Headquarters XXXX XXXX XXXX Shared services center/centralized processing center Manufacturing, operating, or business unit XXXX XXXX XXXX XXXX XXXX XXXX

31 QUALITATIVE RESPONSE RATES Which of the following functions best describes the role your business entity performs in the corporate organization? (Select only one.) How long has your finance shared services center been operating? Headquarters Shared services center/centralized processing center Manufacturing, operating, or business unit Less than one year At least one but less than three years At least three but less than five years At least five but less than ten years Ten or more years

32 QUALITATIVE RESPONSE RATES To whom does your finance shared services center report? Are incoming inquiries (internal or external) channeled to a dedicated group of finance employees? Finance executive (e.g. CFO, Controller, etc.) Multi-function shared services executive Matrixed between finance and multi-function shared services executives Non-finance executive (e.g. COO, CAO, etc.) Other Yes No

33 QUALITATIVE RESPONSE RATES Which of the following processes are in-scope for your finance shared services center? In scope means that the shared services center is performing the process on behalf of one or more business entities within the organization Process accounts payable (10756) Process expense reimbursements (10757) 8.5 Process payroll (10732) Perform general accounting (10748) Perform fixed asset accounting (10749) Process customer credit (10742) Process accounts receivable (10744) Manage and process collections (10745) Invoice customer (10743) Perform financial reporting (10750) Perform cost accounting and control (10739)

34 QUALITATIVE RESPONSE RATES Which of the following processes are in-scope for your finance shared services center? In scope means that the shared services center is performing the process on behalf of one or more business entities within the organization Develop tax strategy and plan (10765) Process taxes (10766) Manage cash (10759) Manage in-house bank accounts (10760) 8.8 Manage internal controls (10735) Perform planning/budgeting/forecastin g (10738) Develop and manage pricing (10151) Perform due-diligence (16794) Other

35 QUALITATIVE RESPONSE RATES Which of the following end-toend processes are in-scope for your finance shared services center and report to a single leader? Procure-to-pay Order-to-cash Record-to-report Which of the following processes does your finance shared services center or organization outsource? Do not consider processes that may be outsourced by other parts of your organization; only answer for the business entity you previously identified. Other Process accounts payable (10756) Process expense reimbursements (10757) Perform general accounting (10748) Process accounts receivable (10744) What is the basis for calculating Transaction outsourcing prices? Prices in this respect are the fees charged by a Outsourcer FTEs vendor to the shared services center for the work performed Outcome/result by the vendor. Hybrid or mix Other

36 QUALITATIVE RESPONSE RATES How many countries receive Only one country services provided by your shared services or transaction center? At least two countries, but less than 10 At least 10 countries, but less than 40 countries At least 40 countries To which regions does your finance shared services or transaction center provide services? North America Latin America Europe Middle East/Africa Asia Pacific Which regions are served by other finance shared services centers besides this business entity? North America Latin America Europe Middle East/Africa Asia Pacific

37 QUALITATIVE RESPONSE RATES In which regions are your finance North America shared services centers or transaction centers located? Latin America Europe Middle East/Africa Asia Pacific If your organization has global operations, which of the following geographic models is used? Site/country-specific centers run locally Site/country-specific centers with global management and integration Regional centers run locally Regional centers with global management and integration Single global center N/A - my organization does not have global operations Other

38 QUALITATIVE RESPONSE RATES How are service level We began using SLAs and agreements used in your finance continue using them today shared services center? We began using SLAs but no longer use them We began without SLAs but are now using them We have never used SLAs Degree of centralization for "process accounts payable" (10756) Degree of centralization for "process expense reimbursements" (10757) Degree of centralization for "process accounts receivable" (10744) Regionalized - delivered through one or regional centers Globally centralized - delivered through a single global hub Not applicable Regionalized - delivered through one or regional centers Globally centralized - delivered through a single global hub Not applicable Regionalized - delivered through one or regional centers Globally centralized - delivered through a single global hub Not applicable

39 QUALITATIVE RESPONSE RATES Degree of centralization for "perform general accounting" (10748) Degree of centralization for "perform financial reporting" (10750) Degree of centralization for "process taxes" (10766) Regionalized - delivered through one or regional centers Globally centralized - delivered through a single global hub Not applicable Regionalized - delivered through one or regional centers Globally centralized - delivered through a single global hub Not applicable Regionalized - delivered through one or regional centers Globally centralized - delivered through a single global hub Not applicable Degree of centralization for Regionalized - delivered "perform through one or regional planning/budgeting/forecasting" centers (10738) Globally centralized - delivered through a single global hub Not applicable

40 QUALITATIVE RESPONSE RATES How does your business entity maintain knowledge of foreign laws and regulations, including tax laws? Local employee other than audit or legal team advice Software applications Consulting firm advice Internal or external legal advice Internal audit advice Other Which are your most significant challenges to implementing global services? Policy differences Business case Regulatory/Control challenges Quality/Service concerns Technology challenges Governance issues Change management Other

41 QUALITATIVE RESPONSE RATES Which of the following best describes your business entity's financial system strategy with respect to third party solutions vs. ERP systems? If existing ERP(s) have capability, third party is not an option Third party solutions are an option if capability exceeds existing ERP(s) Third party "bolt on" solutions are preferred over existing ERP(s) Other To what degree do your vendors use a vendor portal to access payable information? None More than 0% but less than 30% At least 30% but less than 60% 60% or more How would you best characterize Metrics and reporting focus: the use of data analytics in your some analytics, discrete finance shared services center? systems Analysis focus: data pulled across systems, data warehouse Predictive focus: on-demand data available via dashboards Comprehensive focus: incorporates structured and unstructured data, dashboards and predictive models Not applicable

42 QUALITATIVE RESPONSE RATES To which organization does payroll report in your company? Finance HR Joint reporting to Finance and HR Other Do the same staff that perform the process "develop tax strategy and plan" also perform the process "process taxes"? Yes No Do the same staff that perform Yes strategic treasury operations (e.g. bank relations, cash flow No management, etc.) also perform transactional treasury operations (e.g. payments, wires, etc.)?

43 AFTERWORD

44 AFTERWORD

45 APPENDIX

46 GLOSSARY

47 GLOSSARY

48 GLOSSARY

49 PARTICIPATING COMPANY LIST