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A.I.C.M. National Conference Gold Coast 12th October 2007 Prepared & Presented by Colin Prosser FICM CCE PowerPoint Presentation
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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. My Background. 36 years in Credit Management & Accounting Hold Diploma in Business Studies in Accounting - 1988

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A.I.C.M. National Conference Gold Coast 12th October 2007 Prepared & Presented by Colin Prosser FICM CCE


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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

my background
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
my employer s background
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
outsourcing definitions
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 ).
when did outsourcing start
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 ).
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

Global Giant Companies – Outsourcing Overseas
outsourcing overseas issues
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)
everyday outsourcing
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
types of non core operations that are outsourced
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
benefits of outsourcing
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 )
reasons to outsource
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)
service level agreement
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
possible sla duties responsibilities
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
possible sla duties responsibilities continued
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
considering outsourcing some questions to ask yourself
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
example credit department
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 )
example outsourced credit department
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