Chief Financial Planner/Manager, Rodney Johnson, was hired to rebuild oversight to the corporate accounting function, which had been outsourced to an overseas service provider (OSP), and create an internally developed software program in fixed assets. As he started his time there, several substantial problems became clear:
- The financial systems in the company were antiquated and required massive manual workarounds or support to function;
- Standard Operating Procedures (SOPs) were based on antiquated methods and an old department structure that existed prior to outsourcing;
- The OSP team was not able to complete significant amounts of work timely;
- The onshore team still performed substantial amounts of the work that was supposed to have been outsourced;
- There was no fixed asset team at the OSP and;
- there was constant and significant overtime for the onshore team.
Rodney Johnson, Chief Financial Planner/Manager
After reviewing with the existing small onshore team (consolidations and Intercompany) and evaluating review meetings with both onshore and offshore teams, Rodney realized there were several key differences from previous experience with the OSP and the current situation. Quality, communication, responsiveness, and teamwork are essential attributes for a productive relationship and none of those existed.
Remarkably, in light of all these issues, KPIs were all green with most close to 100%. Rodney initiated an initial quality program with unique protocols for both the onshore and offshore teams, with full cooperation from his OSP counterpart.
“I felt the most critical problem was the substantial amount of time the onshore team spent reviewing and completing the work from the offshore team. The onshore team could not begin to add value to the company until they could start to rely on the work of the offshore team. I instituted protocol changes that facilitated the next phase of the transformation to address this issue,” Johnson said. The second phase of the transformation established additional metrics to directly measure the quality of the offshore team’s work and the value created for the onshore team. The second phase was called the First Pass Yield program or “FPY”.
Documenting errors, rejections, and creating an incentive program to achieve specific results completely transformed the relationship. Previously, the onshore team, at best, was waiting on the offshore team to complete work. Frequently the offshore product required heavy onshore review and rework creating a significant delay to corporate accounting deliverables to its customers, or heavy overtime to meet deadlines. The bottlenecks became reversed in many areas to the point where the offshore team was completing quality work at a pace the onshore team worked hard to match.
“As the relationship became more and more efficient and productive, I built out the onshore oversight team and organized it into a 4-tower structure to focus expertise in specific alignment with key areas of the balance sheet globally across 3 regions of North America, EMEA, and Asia Pacific/Japan. This organizational structure was the third phase of the transformation. I worked with my OSP peer to realign the offshore team for support. With the two teams working together, accounting was transformed from struggling to complete deliverables timely or perform quality work into a zero-surprise year-end close with early deliverables to internal customers – management reporting, auditors, and external reporting schedules.”
There were many achievements and milestones reached, including:
- Migrating both EMEA and Asia Pacific/Japan regions to the shared service tower model under the onshore team’s management.
- Handling over 1,000 recons and simplified/standardized almost 500 across 3 regions.
- Creating/processing almost 1,500 monthly journal entries and 2x on quarter ends.
- Finishing 40 of 70+ running process improvement projects in one year.
- Implementing technologies to automate treasury and fixed asset functionality saving 30hrs/month in fixed assets in year one and 300hrs/month in cash journals in year two.
- With IT Finance, second largest organization, implementing key asset management and cost control measures impacting virtually every employee worldwide with a $3M cash impact.
- Developing robust Internally Developed Software capitalization review process eventually leading to $21M cash savings for the company in one year and $1M more annually thereafter.
- Standardizing all intercompany activities across the 3 regions.
- Developing and Implemented methodology for Asset Retirement Obligations.
- Remediating serious cash control issues and delinquent OSP practices in the Asia Pacific region.
- Reconciling comprehensive years long neglect in fixed assets and CIP.
- Beginning active co-management and control of IT projects and project accounting.
- Out of 450 company-wide submissions, corporate accounting project won top achievement in company-wide recognition program.
Watch full video interview below.
Contact Rodney Johnson via LinkedIn or his Career WebFolio.
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