XYZ has been a pioneer in & stands as a 'one stop shop' for all its customers in packaging, safety & hygiene products / needs. Today XYZ offers a wide range of packaging products & services with its exceptional service, & highest level of packaging expertise in this area with a sole aim of passing on genuine economic benefits to its customers, partners, and share holders.
For the year ended June 20XX, XYZ reported a solid and pleasing set of results including profit after tax up 19% to $6.9 million which translates to an increase in earnings per share of 16% to 3.01 cents and dividends per share up 10% to 2.75 cents. Net cash from operating activities was also up 162% to $14.2 million.
Sales were down 1% on the prior year (from 243MM to 240 MM $) reflecting a sluggish Australian economy and competitive markets. Demand from the manufacturing, distribution, resources and meat processing sectors was soft, particularly later in the first half and continued for the remainder of the financial year. However, the Company experienced good growth in the pharmaceutical, healthcare, retail and dairy sectors
XYZ is focussed on “Cost reduction initiatives and measures to stabilise its margins”. The Company also continues to look for attractive acquisitions that are accretive and meet return on investment hurdles.
XYZ is currently delivering its Finance & Accounting services (“F & A”) through decentralized structure, spread across multiple primary locations. As part of its cost reduction & performance improvisation initiatives “XYZ can plan to take up a business transformation project aiming at centralizing & standardizing the transactional F&A and Non F&A activities & there by bringing in process efficiencies leading to savings in operational costs”.
BPO Decision Background
- Continued emphasis on identifying “Cost Saving Opportunities” within business functions & implementing initiatives to realize savings.
- To Centralize & standardize the functional activities and bring in Center Of Excellence (COE) concept as to drive process efficiencies.
Strategy / Approach
- XYZ to pursue BPO (Service Provider) / SSC (Setting up of own Shared Service Center) solution for select finance processes.
Goals & Objectives
- By pursuing either BPO / SSC solution XYZ aims to achieve below strategic goals.
- Achieve structural cost improvements i.e. projected cost savings
- Achieve process synergies through standardization & centralization
- Improve & maintain consistency, accuracy, reliability, flexibility & overall quality of service delivery.
BPO Transition & Targets
Beyond to develop phase wise approach for transition of in scope business processes either to own SSC / Service provider (Note : TP would be drafted once solution is finalized with a typical 90-120 day approach)
Transition Plan (TP) consists of the activities required to transfer the responsibility of services to SSC set up / Service provider under the aegis of single project (“Transition”). Transition responsibilities will include :
- Ensuring smooth set up of SSC / Identification of third party service provider
- Ensuring seamless transfer of services to SSC / identified service provider
- Draft & agree on the service level agreements for ongoing service delivery in new set up.
Transition Plan(TP) Components
- Transition Approach / Solution
- Transition Timelines (Considering all Key phases / milestones – Lead times)
- Knowledge Transfer Approach
- Critical tollgates / milestones
- Transition / PMO team structure including roles & responsibilities of each team / member involved
- Governance mechanism to drive the transition
- Transition assumptions & Risks coverage plan(s)