Ny Summit

New York Outsourcing Summit New Directions in Offshoring and Outsourcing in the Philippines

Finance and Accounting Business Processing in the Philippines

September 27th 2007

©

LogicaCMG 2006. All rights reserved

Finance and Accounting in the Philippines

Accounting and Procurement Back Office - Chevron Texaco, Shell, Deutsche Bank

Industry Financial Processing - AIG,

Manulife, HSBC, JP Morgan Chase

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Why Philippines? • The Philippines has more than 100,000 licensed accountants • Every year there are 3,000 CPAs qualified • Filipino accountants are well versed in GAAP and International Accounting standards used in the United States • Good customer service mindset and strong affinity with western culture

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What services are offered?

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F & A services Finance and Accounting services Services typically retained in-house

Accounting and business support

Financial analysis, accounting support, change governance, project accounting, audits

Financial planning Planning services Services

Budgeting and financial planning, forecasting

Accounts payable Payable

Invoice processing, credit note processing, payment processing, supplier administration, payroll service, expense management, project specific accounting & reporting

Accounts receivable

Customer invoice processing, cash application, credit & collections

Treasury and cash management

Payment management, cheque processing, receipt allocations, standing order mandate, bank reconciliation

General accounting

General ledger, inter/intra company, fixed assets, financial reconciliations, monthly/ quarterly/ annual close

Reporting

VAT reporting, management reporting, statutory & reporting, performance management

Help desk/ customer management

call logging, resolution, incident reporting, outbound calling

Document management

total invoice management (scanning invoices, OCR, workflow), printing & posting AR invoices & AP remittances, cheques

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Systems support

ERP and other system support & maintenance liaison with vendor report development

F&A shared service management

commercial, HR, Service improvement, client management, service management, training

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The Levels of Service approach Services are provided based on a tiered approach varying from basic to complex F&A processes based on the client requirements and extent of outsourcing.

Enhanced Plus

Enhanced

High value services such as financial and market analysis, budget process administration, and Consultancy.

Complex accounting services which demand specialist skills.

Foundation Plus

Ancillary services which, together with the foundation level, provide high levels of user support.

Foundation

Core transaction processing and reports generation, supported by a transaction information desk.

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Case Study: F&A process efficiencies F&A

Business case requirement

Controls

Metrics

 over 35 per cent operating cost reduction

• duplicate invoice detection

• supplier invoices from 7 to 3 days

 payback under 2 years

• high value reviews

• customer invoices – 100% on time

 on time delivery

• removed duplicate suppliers

 no impairment to financial control.

• removed duplicate customers.

• management reports – 20% quicker • staff debtors reduced by 70%

Improvement 60%

• missing timesheets reduction - 40%

Knowledge

Automation • 18 process automations

• policy

• 390 man-hours savings per month

• methodology • system • performance based

Systems upgrade 6%

• strong European language skills.

Operational changes 16%

Process transition changes 18% LogicaCMG BPO Concepts

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Case Study: Procurement Business targets achieved

Efficiency outcomes

• reduction in average lead time by 50 per cent. • reduced inactive supplier database by 15 per cent • implementation of Immediate monthly reporting.

Requisition approval

Purchase order

eCommerce

Requisition entry

• reduction in operating cost by 30 per cent

• payback within one year • consistent on-time delivery • internal control strengthened. Off-shored processes

• vendor management • quotes and ordering through platform and quote builder system

Supplier AP/GL

Invoice matching Posting

eCommerce

Match Not match

Invoice approval

Archive

• • • • • • •

negotiations fulfillment inventory management reporting to RPM/VRM/VPP non-cost of sales support quality procedures training.

E-procurement using ERP platform LogicaCMG BPO Concepts

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Case Study: Offshore Insurance Centre in the Philippines • What they do: – Set up transaction processing and call centre in early 2003 – Provided Quality Management and project work in 2005 for the parent – Fully USA focused

• Benefits: – Improvement in productivity over 10% by year 2 – Quality improvement and consistency – weighted average transaction quality at 98% – Lower attrition and higher level staff than the industry norms – Savings over US at 50% per employee

• Metrics (see next slide): – 482 positions transferred with work done by 462 Philippine staff. Volume increase over two years of 6%, giving a total 10% improvement in productivity – Actual costs almost USD400,000 less than planned as training was handled by local employees not travellers from US – Fully USA focused

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Case Study: Actual Customer Savings Cost Savings

66% total savings 66% total savings

US Project Office & Remote I/T Delivery SG&A International Telecom I/T Equipment & Maint.

49% hard dollar savings 49% hard dollar savings

Facility Indirect Labor Direct Labor - Supervision Direct Labor

US Baseline Costs

Fully-Loaded Costs (including customer's expenses) LogicaCMG BPO Concepts

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Case Study: Financial Services Management $ ` BANK (VARIOUS)

FUND ADMINISTRATION (USA)

`

INTERNET

ADMIN SYSTEMS A.S.P. (USA)

128-bit encryption ` DISTRIBUTORS (VARIOUS COUNTRIES) ` LOGICACMG BPO (PHILIPPINES) ` FUND MANAGER (I.O.M) PRODUCTION SYSTEM

E-FAX WEB

EMAIL MANAGEMENT

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LogicaCMG has taken reasonable care to ensure that the information contained herein is correct at the time of publication. Before using or relying on any content in this presentation, independent verification should be obtained. LogicaCMG accepts no liability nor responsibility for any use of or reliance upon the content of this document.

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