Process Intelligence: Your processes, transparent

What is the state of your business processes?

There is often a gap between how business processes are intended to be and what they are in reality. There are many reasons for this: the complexity of business and system landscapes; changes that have occurred over time; exceptions to process blueprints for operational reasons; users with too much freedom within the IT systems; and finally, people who often only see some of the processes whilst missing the complete picture.

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Understanding the real flow of your business processes is paramount when you want to improve process effectiveness or efficiency, ensure quality or compliance, standardise, or detect anomalies or fraud.

The traditional approach to understanding processes is through interviews, workshops, observations and document analyses, possibly accompanied by sample analysis. This method requires a lot of resources and time, and does not guarantee that the model which emerges reflects reality, as information may not be fully objective on the one hand, and incomplete on the other.

PwC’s Process Intelligence offering analyses the data from your IT systems as used by your people from day to day, and unveils what really happens in your business processes. The advantages of such a data-integrated approach are manifold:

  1. It is based on objective information – data doesn’t lie.
  2. It is based on the complete data set describing all transactions performed by the parties involved.
  3. It allows you to look at the process from different perspective (e.g., by process, by product, by person, by area, by company code, by team, etc.).
  4. The results are obtained quickly.
  5. The analyses deep-dive into every process detail.

PwC’s Process Intelligence

Our approach and tools empower us to analyse any process in any industry, as long as the system bookkeeps a “history” of steps carried out during the process execution.

Our approach to discover and analyse processes starts with a workshop to jointly analyse the extent of process automation and the expected level of standardisation within your business processes. This facilitates the identification of key focus areas, which will be further examined during the next phase. In an audit context, in general, we focus on areas where a high level of standardisation is assumed, as these could provide most audit efficiencies going forward.

In the next phase we analyse the selected processes in detail. This phase includes one or more iterations to be able to achieve the right level of process detail thus enabling us to distinguish between planned and unplanned process deviations. We utilise process mining techniques such as those described here:

  • Process discovery establishes how business processes are actually executed by your staff in your system. It enables you to evaluate the level of process standardisation, looking at frequent as well as exceptional activities in the process.
  • Process compliance and benchmarking techniques allow us to measure conformance to organisational rules or regulations and process blueprints, to compare how different entities execute the process, and identify factors causing deviations from the process blueprint.
  • Good practice identification searches for effective paths of process execution, identifies key people and potential training needs as well as success factors. By measuring performance characteristics, such as execution and lead times, and by spotting duplicate or unplanned activities, areas for improvement can be identified.
  • Organisational analyses show how people and teams collaborate, how they comply with segregation of duties, and assigned roles and responsibilities.

How does this work?

Based on the selected processes and the underlying system, we provide you with a set of tables and fields that you need to download for a specific time period. This includes master data, transactional data as well as change tables. If you use SAP, we have a proprietary, open-source download tool that will be made available to you to ensure smooth and efficient extraction of data.

We analyse your data with our Process Intelligence tool, which is paired with our proprietary SAP process and data dictionary knowledge to translate your data into actual business process flows. The output of this analysis is then discussed with the process owners and specialists and refined accordingly. This ensures that we adequately consider all business specifics.

After we arrive at a detailed understanding of your processes, we will share the results with you in a workshop and discuss the real process flows, any potential deviations and related implications for the audit as well as for your business.

For widely-used ERP systems, such as SAP ECC, Microsoft AX and Oracle, we have off-the-shelf scripts to analyse your main processes, e.g., procurement, sales and master data management processes. Further scripts can be developed depending on your needs.

What you get out of it?

The results of our analysis will be made available to you. Our Process Intelligence reports include:

  • Process transparency depicting the processes from various relevant angles.
  • A process health-check dashboard consisting of the top-ten most common or seldom used process paths, the value they generate, the most or least active users, and the most “expensive” paths, for example.
  • Transactional-level process indicators, such as “retrospective purchase orders”, “journals parked over 30 days”, “inventory movements” and “three-way-match configuration”.

For more information on the topic discussed above please contact me or visit our website.

Outsourcing for SMEs: corporate support services

Small and medium-sized businesses (SMEs) have been working with accountants and fiduciaries regularly for many years. With the emergence of new business models and the trend to outsourcing administrative functions, the role of the traditional accounting firm is changing. Some have evolved to become experts in providing support services, managing and running integrated financial functions, IT systems and service processes.

Topics of this article:

  • Many aspects to consider when outsourcing
  • Complex HR processes

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Summary

The role of the traditional accountant-fiduciary is changing. While not everyone in the profession is following the trend, some larger firms in the accounting and fiduciary industry have already established themselves as providers of outsourcing services (corporate support services). They do this by enabling their clients to reduce the burden of time-consuming administrative processes and rationalise repetitive financial functions by transferring them to a shared service centre (SSC). In many cases these clients are less interested in cost savings than in profiting from targeted technical, legal and process expertise.

Reputable firms offering outsourcing services do much more than just making electronic platforms available. Besides the know-how and expertise they provide, a particular benefit is that they manage the risks entailed in outsourcing processes. Companies outsourcing processes shouldn’t make the mistake of assuming that ‘out of sight’ means ‘out of mind’. Client/provider relationships tend to function well, for example, if the client appoints a contact to take responsibility for supplying the provider with the necessary information.

Outsourcing and offshoring finance functions

Large companies started delegating financial functions to external providers a long time ago. In recent years, more and more small and medium-sized enterprises have also been outsourcing their financial processes. This is a decision with strategic implications that can only be made properly on the basis of a well thought-out business case.

Topics of this article:

  • Nearshoring for SMEs
  • Pressure on costs and margins
  • Concentrating on core competencies
  • Operational readiness
  • Strategies for implementation

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Summary

There are various reasons why the trend towards shared services remains unbroken, with no end in sight: time and margin pressure, the desire and necessity of concentrating on core competencies while farming out as much of the rest as possible, and the need to maximise operational readiness.

Now that an increasing number of highly specialised service providers are offering shared services for many different small companies rather than just large organisations, outsourcing has become an interesting proposition for SMEs as well as big players. Since SMEs can rarely afford internal centralised shared services, nearshoring is generally more feasible than farshoring.

It’s important to bear in mind that processes at SMEs are often not as mature or standardised, meaning they’re only suitable candidates for outsourcing if the business case has been thought through properly.

SMEs in particular have to be aware that the processes set in motion by outsourcing have major implications in terms of culture change. If management fails to explain the intentions behind outsourcing clearly, they run the risk of losing staff with the best labour market profile who can find a new job most easily.

There are signs of imminent consolidation among providers of shared services to SMEs; they too have to go for volume, and providers who don’t have the critical mass won’t be able to compete.