How can you make process improvements easier to realise?
Jan Fonfara
Sony Europe
Agenda a. Sony & Sony Europe
b. Baseline
c. Target
d. Solution
e. Challenges
f. Journey
g. Achievement
h. What If
i. Still to Do
j. Q & A
Sony & Sony Europe
Sony • app 65 Bill. EUR sales worldwide • app. 165k employees • Founded in 1946 by Masaru Ibuka & Akio Morita Sony Europe: • Distribution of Consumer and Professional Electronics
across Europe (7.5 Bill EUR external sales) • Development and manufacturing of Professional Electronic
products • Covering every European country through 27 branch offices • app 5k employees
Sony Europe Electronics=
26 different legal entities
Legal Entity Restructuring
• Main Co in UK• Countries as branches of the Main Co• S/CIS, S/TUR not in scope
TODAY TOMORROW
S/CIS
STURK
SFR
SDL
SUK
SNORD
SESP
SITA
SOASCH
SHEL
SPOR
SPOL
SCZE
SHUN
SLVK
SBNL
SOCE
S/TURK
S/UA
1
1
1
1
SFRSFR
SDLSDL
SUKSUK
SNORDSNORD
SESPSESP
SITASITA
SOASOASCHSCH
S/CISS/CIS
STURKSHEL
SPORSPOR
SPOLSPOL
SCZESCZE
SHUNSHUN
SLVKSLVK
SBNLSBNL
SOEMSOEM
1
1
11
1
1
1
11
2
1
1
1
1S/TURK
1
S/UAS/UA
1
1
24
As Sony Europe was
• 26 legal entities across Europe • Independent local finance functions with
regional headquarter coordinating • 570 Finance employees (estimated..) • No outsourcing • Overlapping functions (local, regional,
sub-regional) • Limited process standardisation • Lack of transparency, difficult to
compare entities • Unsustainable cost structure accelerated
by unfavourable market environment
Baseline
2010
42 SAP company codes
The Impacts
• “Controllers controlling the controllers” • Long budgeting process (bottom-up – top-down
etc.) lasting 3 months • Re-budgeting process half yearly • Discussion about intra-SEU transfer prices • High effort for governance (e.g. SOX) • Lack of actual control • Relying on the middle (e.g. FD of local organisation) • (partially) meaningless KPI’s • Inwards focus • Finance not seen as part of the business
Baseline
Sony Europe Vision
Simplification
Standardisation
Customer focus / Our Purpose
Competitive cost structure
Finance to deliver value
Flexible Organisation
Target
Thro
ugh
The Solution
Sony Europe Electronics=
26 different legal entities
Legal Entity Restructuring
• Main Co in UK• Countries as branches of the Main Co• S/CIS, S/TUR not in scope
TODAY TOMORROW
S/CIS
STURK
SFR
SDL
SUK
SNORD
SESP
SITA
SOASCH
SHEL
SPOR
SPOL
SCZE
SHUN
SLVK
SBNL
SOCE
S/TURK
S/UA
1
1
1
1
SFRSFR
SDLSDL
SUKSUK
SNORDSNORD
SESPSESP
SITASITA
SOASOASCHSCH
S/CISS/CIS
STURKSHEL
SPORSPOR
SPOLSPOL
SCZESCZE
SHUNSHUN
SLVKSLVK
SBNLSBNL
SOEMSOEM
1
1
11
1
1
1
11
2
1
1
1
1S/TURK
1
S/UAS/UA
1
1
24
2011
Target
1 legal entity
1 standardised branch per country
1 SAP Company Code for Europe
1 Standard Process used (unless TLS)
Centralised process ownership
Outsource all processing (PTP, OTC, RTR)
Transformation of process, systems and ways of working in short period of time
Simultaneous standardisation and outsourcing of processes
Moving from local to central decision making and responsibility
Cost savings already required in first year (2011) and fully to be realised in 2012 (Finance costs -30% vs. base)
Massive challenges and very short timelines required a new and systematic approach
Challenges
Key steps
Journey
1. Define standard processes fast and log them in a flexible, easy to understand system
2. Preventing the spread of outdated off-line process maps (Visio, PowerPoint etc.)
3. Enable communication between central, local and outsourced teams / see and talk about the common truth across all 26 Sony locations and 2 outsource locations (Pune and Bucharest)
4. Ensure changes to processes are controlled 5. Define targets (KPI’s) and start monitoring
Decision to go with Nimbus as a tool and Nimbus as a
partner for helping us create our process documentation
Step 1
Journey
• Define standard processes fast and log them in a flexible, easy to understand system • Process experts, SAP solution architect and future Process
Owner in workshops to define processes. Facilitated by Nimbus Process Author
• Build Sony Europe process framework (connecting the processes)
• Decide which parts are to be outsourced
Step 2
Journey
• Preventing the spread of outdated off-line process maps (Visio, PowerPoint etc.) • Project to include previous process documentation (e.g.
SOX) in Nimbus • Declaring Nimbus as mandatory • Roll-out of Core Process Map (Nimbus) across key
stakeholders • Integrating of existing training material (e.g. System task
guides, work instructions)
2011 Sony Corporation
Process / Risk / Control “Commitment to the Basics”
Ownership
• Single Global Process Owner for every process
Simplicity
Transparency
• Standardised process across Sony Electronics
• All processes documented in a single tool (Nimbus)
Control
• Any change or local variation must go through a strictly governed change control process
• Using the standard process is mandatory
Step 3
Journey
• Enable communication between central, local and outsourced teams / see and talk about the common truth across all 26 Sony locations and 2 outsource locations (Pune and Bucharest) • Create Sony me@work incl. landing page and defined
process areas • Roll-out across Sony Europe Finance community including
outsourcer • me@work is the only accepted documentation to be used as
reference for outsourced tasks
Step 4
Journey
• Ensure changes to processes are controlled • Implement a Change Request process including workflow,
review procedure, decision making body and escalation • Include different stakeholders (e.g. IS, Compliance) as
changes might need their support • Enforce the standard process (if something is incorrect CR
route still needs to be followed)
RequesterEuropean
Process OwnerCAFÉ Approval Implementation
Step 5
Journey
1. Define targets (KPI’s), start monitoring and improving • Developing the KPI structure and ensure they reflect clear
process responsibilities (e.g. Outsourcer – Sony) • Daily reports for driving process execution • Monthly report for KPI and SLA reporting in order to drive
further efficiency
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Untouched To be deleted
SONY APW Items WNS APW items
Return to vendor APW items Manual approval required by Sony
Manually approved, to be posted by WNS SONY AP2 Items (old SAP Workflow)
Closing Balance
So far....
Achievement
• Processes are truly standardised and fully outsourced
• A new operating model is established
• Business has not been disrupted • Central process and delivery
ownership • Local finance teams being
transformed and focus on credit risk and business partnering
• Organisation is flexible and focussed
AP Headcount 2010 2011
Sony 69 3
Outsourced 0 59
2010 2011 2012
Sony 95 43 35
Outsourced 0 53 60
AR and Credit ControlHC
vs. 2010 2011 2012
Finance cost -15% -30%
Sony Finance HC -32% -52%
..we would not have done it?
What if..
• Market environment has changed significantly, decline in most European CE markets / “LCD hangover”
• Margins and profitability are under even higher pressure • Significant disruptions due to natural disasters (Fukushima,
Thailand flooding) • Significant decline in European CE markets • Sony Consumer Products (global) -19% (LC) Dec YTD
We are just getting started..
Still to do
• Using the KPI’s for our improvement projects • Moving me@work (Nimbus) usage to a new level
• Integrating KPI reporting • Integrating further SOX evidence and testing documentation
• Acknowledged best practice across Sony – Utilising this advantage • ...