Transformation of Accounting Processes Bayer s Accounting Operating Model

Transcription

1 DRAFT Transformation of Accounting Processes Bayer s Accounting Operating Model Markwart Lutterbeck/Ake Roesmann Leverkusen, June 16 th, 2015

2 Agenda Starting Point and Objectives of Transformation Process Governance and Shared Service Center Expansion Additional Concepts Outlook Page 2 8. Praxisforum BPM & ERP

3 Within the organizational structure of the Bayer Group Accounting is centrally managed and steered Group Structure Holding company Group Management Board Bayer AG Corporate Center Group Accounting (ACC) < 100 FTE in Corporate Center > 700 FTE in BGP around the world Business areas Bayer HealthCare Bayer CropScience Bayer MaterialScience Bayer Business Services Bayer Technology Services Currenta Service areas 1700 FTE in Shared Service Centers Page 3 8. Praxisforum BPM & ERP

4 Transformation of Accounting Processes Process Governance for 12 Standard Processes and 32 Enablers 700 transitions and 350 fit gaps in order to reach process standardization realized 2400 job descriptions changed and 1700 FTEs moved into Shared Service Center organization 3000 technical enabler implementations performed Page 4 8. Praxisforum BPM & ERP

5 Global Challenges: A benchmark analysis unveiled optimization potential for Bayer s Accounting operations Benchmark 2010 Optimization Potential Accounting costs as % of revenue Business Complexity TransformationStrategy Quartile 4 Under-Exploited Labor Arbitrage Governance & Responsibility Quartile 3 Fragmented Process Governance SSC Expansion Objective Bayer Quartile 2 Suboptimal Demand Management Process Standards Quartile 1 Suboptimal organizational discipline Page 5 8. Praxisforum BPM & ERP

6 Agenda Starting Point and Objectives of Transformation Process Governance and Shared Service Center Expansion Additional Concepts Outlook Page 6 8. Praxisforum BPM & ERP

7 Process Governance: standardization is the main lever for delivering efficient and excellent Accounting services Global Service Delivery Model Targets and Outcomes Operating Lever and Importance Service quality increases with consistent global process standards and excellence Challenge 1 Process standardization and automation (enabler) Efficiency gain through automation (enabler) and labor arbitrage Cost pressure and efficiency Central KPI based process management for internal and external benchmarking 2 Activity split Lean and efficient operations Agile reaction to change Page 7 8. FDP Praxisforum Challenges BPM in Accounting & ERP February 2015

8 Process Governance: Next generation organizational service delivery models are characterized by global SSO with global processing Global Service Delivery Model First generation service delivery models Decentralized accounting Local accounting July Solution outsourcing August September Regional platforms Functional near-shore BPO October November Global accounting network December Outsourced June Consolidated accounting Next generation service delivery models Selective off-shore BPO January February Captive SSC Stora Enso Unilever Novartis Fully global processing Single global BPO model March April Philips Bayer 2015 Bayer 2011 Merck Adidas Henkel Local accounting Country level SSCs Source: Ernst & Young Praxisforum BPM & ERP Page 8 8.FDP Challenges in Accounting February 2015 Regional shared services Siemens JCI MSD BASF Global SSC network Maersk HP Ford Global SSC organization

9 Process Governance: The Shared Service Center target set-up established Overview Shared Service Centers Global Front / Back Greater China Service Area: All countries Global Gdansk Service Area: China, Hong Kong, Taiwan Barcelona Shanghai Manila Front EU + LATAM Front EEU Front / Back SEA Service Area: Western Europe, LATAM Service Area: Germany, Eastern/ Southeastern Europe, Scandinavia, Switzerland Service Area FO: Southeast Asia, GB/I, USA, Canada Service Area BO: Global (w/o China) Page 9 8. Praxisforum BPM & ERP

10 Process Governance: House of Accounting part of BHC Process MAP Process Areas (Tier 1) Strategy & Governance Monitor & Improve the Company Financial Performance Management House of Accounting Discover & Develop Product Supply Product Commercialize Product Global Accounting SGs Corporate Accounting Accounting Process Governance & Internal Controls Communication F&A IT Management Processes Core Processes Support Processes Engineering Health, Safety & Environment Information Technology Legal Market Access Personnel & Training Procurement Product Quality & Safety Plan & Move Product Global (GO) FASS Front (FO) Regional Accounting / Accounting Platform Legal Entity Back (BO) Page Praxisforum BPM & ERP

11 Process Governance: Global standardized processes, enablers, activity splits and authorization concept 12 Accounting Processes base for global processing (Tier 2) House of Accounting Global Accounting SGs Corporate Accounting Process Governance & Internal Controls F&A IT Transactional Accounting (TRA) Accounts Payables (AP) Accounts Receivables (AR) Travel & Expenses (T&E) Inter Company (IC) Tax Operation (TO) SSC Back (BO) AP IC * AR IA T&E AP AA SSC Front (FO) AR GL T&E IA PP TO SSC Global (GO) IC Cl GL REP IA PP General Accounting (GA) General Ledger (GL) Asset Management (AA) Closing (CL) Reporting (REP) Regional Accounting ACCOUNTING PLATFORM Business Partnering BHC BCS BMS Central Accounting TRA GA IA Internal Accounting (IA) Value Flow (VFC) Product Costing (PC) Service Accounting (SA) * SSC BO for IC with direct link to the AccP (C-Cluster) Page Praxisforum BPM & ERP

12 Process Governance: Global standardized processes, enablers, activity splits and authorization concept One standard Activity Split House of Accounting Accounting Processes Global Accounting SGs Corporate Process Governance & Internal Controls F&A IT Global (GO) FASS Front (FO) Back (BO) Accounts Receivable (AR) 5% Accounts Payable (AP) 6% Travel & Expense (T&E) 7% Inter Company (IC) 17% Tax Operational (TO) 67% 95% 94% 93% 83% 33% Regional Accounting / Accounting Platform Legal Entity General Accounting (GA) 55% Asset Accounting (AA) 45% Internal Accounting (IA) 45% 55% 55% 45% Page Praxisforum BPM & ERP

13 Process Governance: Global standardized processes, enablers, activity splits and authorization concept Status Enabler implementation: Automation is well on track, about 85% will be completed by end of 2015 Transactional Accounting (TA) General Accounting (GA) Enabler implementations 01. Automatic AR Clearing 89% 17. WPA 91% 35% 32% 02. AR Process Harmon. 03. AP Workflow Harmon. 04. Redesign IMS Applications 98% 87% 78% 18. Provision Tool 19. Closing Tool Runbook 23. AKM / RRT 98% 89% 93% 05. SAP-VIM 100% 24. ACR Tool 92% 11. AP Centraliz. / Harmon. 64% 18% 12. T&E Tool 82% Internal Accounting (IA) % 14. IXB Tool 93% 26. Value Flow Catalogue 94% 15. Paperless IC Doc. Flow 95% 27. Workflow Tool (SAP-SSF) 77% 2012/ Autom. Accrual Posting TA GA IA Total In Scope % Completion Box Finished in Material Ledger In Scope Total % Total Finished 86% 90% 66% %* = Mandatory enablers = Critical = Other *Status Page Praxisforum BPM & ERP

14 Transitions are in line with the planned Roadmap: Last wave in stabilization Transition Overview July 2015 # LE Transitions by July 2015 Total Completed % AccP % BO % FO % Overall % Main transition: Not started yet Ongoing In stabilization/closed (further enabler roll-out projects planned) Out of scope West and Eastern Europe: All transitions completed Asia - SSC Shanghai: China TE/Concur project in process harmonization phase. Asia - SSC Manila: India, Pakistan is closed Latin America: ConoSur and Andina are closed Frozen due to BMS Carve Out: Centro and Ukraine, Bangladesh, Japan (II), BO move Latin America Page Praxisforum BPM & ERP

15 Agenda Starting Point and Objectives of Transformation Process Governance and Shared Service Center Expansion Additional Concepts Outlook Page Praxisforum BPM & ERP

16 Professional Accounting Operations supported by additional concepts Professional Accounting Operations < 30 additional concepts are in place (1) Multi Project Management Continuous Improvement Process / KPI Concept Knowledge Management Talent Management Multi Project Management approach developed to structurally work through projects Centralized Project Steering to align Dan efficient coordination of resources e si Objective to monitor performance and g identify early warning n signals Further optimization efforts will ensure sustainable operations in GAO Knowledge Management set-up supports the vision of establishing a self-learning organization Interactive collaboration Closely linked with training concept Development options in new GAC organization Definition of target jobs and development position Establishment of new career paths and development measures ICS Control Evaluation New System live for ICS Control Evaluation ICS strives for efficiency in ICS control performance via control automation and incident based control testing => Continous Control Monitoring Page Praxisforum BPM & ERP

17 Continuous Improvement - KPI dashboard Process Standardization and Service Excellence - Higher volumes are handled with improved process quality Page Praxisforum BPM & ERP

18 Several concepts have been developed and rolled-out Professional Accounting Operations -Tools and concepts (2) Documentation Charging Modell Transition Methodology Demand Management Master Data House of B LEGAL F G Global O ENTITY O O Accounti (receives ng Operatio 2 invoice ns AccP s) Global documentation of all accounting relevant processes & activities Country specific documentation to ensure knowledge management and handover to SSC A new charging methodology was developed to ensure transparency Charging KPIs and SLA targets were defined in close alignment between GPOs and SDMs Efficient and effective transition management concept developed Structures project methodology and project planning Provides standard tool kit, guidelines and project deliverables Includes Change Intensity Assessment Tool to collect, analyze and approve F&A demands Defines one central F&A demand management process Enables GPOs to perform their global process governance for F&A processes Globally harmonized Vendor Master Data process & tool landscape End-to-end process integration including SAP interface, compliance and anti-fraud measures Page Praxisforum BPM & ERP

19 Agenda Starting Point and Objectives of Transformation Process Governance and Shared Service Center Expansion Additional Concepts Outlook Page Praxisforum BPM & ERP

20 Outlook End-to-End Process Governance Global Accounting SGs House of Accounting Process Governance & Internal Controls F&A IT Corporate Accounting FASS Subprocess 1 Accounts Receivable (AR) Subprocess 1 Global (GO) Front (FO) Regional Accounting / Accounting Platform Back (BO) Subprocess 2 Accounts Payable (AP) Inter Company (IC) Tax Operational (TO) General Accounting (GA) Subprocess 2 Legal Entity Asset Accounting (AA) Internal Accounting (IA) Management Processes & other Support Processes Discover & Develop Product Supply Product Commercialize Product Communication Information Technology Legal Market Access. Page Praxisforum BPM & ERP

21 Thank you!