Expert Discussion Roundtable. Maximizing Back Office Efficiency with Performance Metrics
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1 Expert Discussion Roundtable Maximizing Back Office Efficiency with Performance Metrics 1
2 Back Office Performance Key questions asked by CFOs and CIOs How efficient are our payroll, billing and financial accounting operations compared to other staffing firms? What IT resources are required to maintain back office systems? Is our IT investment delivering the right level of automation and efficiency? How much can we save with best in class performance?
3 Determine Performance Metrics Primary Metrics Hours per time sheet Labor cost/hour $ per time sheet Other Key Metrics $ per timesheet for time capture $ per pay check $ per billing invoice $ per AP invoice Adjustments per 1000 timesheets Back Office Performance
4 Capture and Calculate Performance Data Track document volumes Track volumes for a period of 3-12 months Calculate average volume per week Calculate process hours and costs Allocate labor cost by process (time capture, payroll, billing, etc.) Carefully consider activity at branch offices Include all non-labor costs (outsourced payroll, mailing, bill printing, etc.) Track adjustments by month and reason Back Office Performance
5 Sample Data Capture Spreadsheet Back Office Performance Meeting the Challenge 5
6 Sample Benchmark Study Data Meeting the Challenge Clear metrics on cost/hour and hours per timecard 6
7 Sample Benchmark Study Data 1.0 Core Labor Hours/Timecard by Function Hours/Timecard Participant Time Card Processing and Payroll Billing A/R A/P Help Desk How much time is spent supporting back office operations? Note economies of scale as participant volume increases from left to right 7
8 Sample Benchmark Study Data Meeting the Challenge Total Back Office Labor Cost/Timecard $60 $50 $/Timecard $40 $30 $20 $10 $ Participant Core Back Office Other Internal Back Office Outsourced Back Office What is your back office cost/timecard? 8
9 Total Back Office Cost/Timecard (Including I/T) Total Back Office Cost / Timecard Sample Benchmark Study Data $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $ Total Back Office Processing Cost/Timecard Total IT Back Office Total Cost/Timecard Total Back Office Cost/Timecard ranked 5 th out of 11 participants. 9
10 Calculating Potential Cost Savings Sample Benchmark Study Data Meeting the Challenge $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,613,814 $2,500,000 $2,000,000 $1,500,000 $1,306,907 $1,960,360 $1,000,000 $500,000 $0 $653,453 $1,799,503 $1,349,628 $899,752 $449,876 5% 10% 15% 20% Potential Savings on Core Cost Per Timesheet Potential Savings on Internal & Outsourced/Other Cost Per Timesheet How much can we save with best in class performance? 10
11 Incorporate Metrics into Strategic Plan Identify specific processes for cost reduction Example: Time capture and Billing Set targets for performance improvement Goal: $14/timesheet Track metrics over time Back Office Performance Document savings Tie performance metrics to compensation
12 Benchmark Study Executive Summary Newbury Back Office & IT performance benchmark study Enable participating companies to: Assess back office efficiency Compare company performance to industry averages Calculate potential savings in achieving best in class performance Formulate strategies for maximizing process efficiency Measure effectiveness of IT resources Over 15 Participants to date AMN Healthcare inventive Clinical People 2.0 Advantage Resources Kelly Services (US) SFN Apex Systems Kelly Services (UK) Staffmark Comsys Kforce The Reserves Network Hudson Highland Manpower (US) Vital Services (UK) 12
13 Overview Professional Services Industry Leaders Partner with Newbury Mission: Staffing Advertising Consulting Any Project Based Organization Help service industry clients drive revenue and reduce cost through effective deployment of PeopleSoft front and back office systems Company Background: Founded 2005 Over 30 consultants Extensive US and EMEA experience Notable Customers: Founded by the originator of PeopleSoft ESA & Staffing A Leading Oracle partner to the professional services industry Highly experienced consultants specializing in Oracle s PeopleSoft ESA & Staffing industry solutions, HRMS, FMS Implementation/upgrade methodology specific to the service industry solutions Production support services Best practice assessments Back office benchmark study
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