The outsourcing of the Canon Rupee’s finance and accounting management to Accentuate Total words: 2772 Contents l. Introduction In 2006, the Canon Europe decided to outsource its finance and accounting business to the Accentuate consulting company. As a well-known imaging solution company, Canon Europe confronted with fierce competition in 2006. Although Canon Europe is a subsidiary of Canon Inc. Of Japan, the company contributes about one-third of Canon Inc. ‘s worldwide sales revenue.
At the initial stage of transforming, to focus on those activities which are significant to its competitive positioning, the executive of Canon Europe determined to establish a shared-service center to centralize the company’s finance operations. After a series of testing and analysis, Canon Europe found out that cooperating with the right outsourcing partner is the only way to achieve greater effectiveness. This measure not only can be used to reduce costs of their finance processes and improve the efficiency of them, but also to create powerful differentiating relationships with supplier.
After the careful review of the proposals of all the candidates of vendors, Canon Europe finally decide outsource the finance and accounting business operation to Accentuate. The contract duration is seven years, and Accentuate provided Canon Europe with a range of finance processes through the management of the Accentuate Delivery Center in Prague. II. Outsourcing Project Overview By the reason of Cannon Europe was constantly confronted with increased completion and tighter, the executives of Canon Europe decided to create a powerful, differentiating relationships with suppliers by improving finance processes to reduce he costs.
They also determined to improve the finance and accounting, like ordering from approved suppliers using standardized purchase orders, could increase their compliance . Initially, the executives thought that centralizing the company’s finance operations would be the right way to achieve the goals which were mentioned above. But by 2006, they found out that the only way to further savings and greater process effectiveness is through outsourcing. In the autumn of 2006, Accentuate submitted a proposal to Canon Europe that included significant details about its research on high performance.
Subsequently, Canon Europe executives recognized Accentuates capabilities are relevant to their company’s own strategic direction, and they also initiatives to achieve world-class finance operations, following detailed conversations with Accentuate leaders, the executives finally decided to outsource the company’s European shared-services operation to Accentuate. Canon Europe signed a seven-year business process outsourcing contract with Accentuate, focusing on finance and accounting.
Managed through the Accentuate Delivery Center in Prague, Accentuate provides Canon Europe with a range of finance recesses, including accounts payable, cash posting and fixed assets administration, as well as travel expense processing. Services are provided in 12 languages to Canon Europe businesses in 14 European countries. Ill. Client Perspective The experience of client Canon Europe had a good experience in this whole outsourcing process. Accentuate helped Canon achieve the objectives because running finance and accounting back offices is teacher business of them.
Accentuate were able to deploy their economies of scale, and their expertise and process focused to help Canon achieve world-class performance. In fact, within the outsourcing activities, the Canon Europe reached the goal of improving their productivity baby percent in three years. Sourcing model The model that Canon Europe used is sole supplier model, which means Accentuate provides the entire finance accounting service to them. To the Canon Europe, the outsourcing model they chose is appropriate.
Outsourcing finance and accounting presents a series of unique challenges that require deep expertise and sophisticated toolkits. Furthermore, the vendor corporations need the right resources, innovation and talent to positively impact their business. The main benefit of this model is the sole accountability of the supplier, which makes the governance of the venture easier relative to other configuration models. Briefly speaking, it is a wise decision for Canon Europe outsourcing its whole finance and accounting process to an onshore vendor.
Canon Europe selected a offspring outsourcing model to cooperate with Accentuate. According to the Decision-making matrix on outsourcing which was suggested by Hillocks (2002), the Canon Europe outsourced their “Qualifiers”, which means the organization outsourced their finance and accounting department-?the radical activity for business operations, but do not contribute to the company’s competitive positioning in a major way. Strengths and weaknesses The company intended to invest more in their core competitiveness such aspirator marketing, customer service and looking after their channel partners.
Therefore they are realistic in paying vendors, and recognized back office administration as a secondary activity and do not wish to invest in back office innovations. Secondly, “thereat a number of strength that Canon has realized through the relationship with Accentuate. “, said by Chris Poppa(Accentuate Senior Executive). For instance, this outsourcing activity increased visibility and transparency on the finance processes, more responsive service from the Prague Deliver Centre improved management control through the formal discipline.
And finally, Canon Europe can focus on their core business and not worry about the back-office processes. The Canon Rupee’s outsourcing weakness lies in that they are a large company, this fact results to the difficulties when they selected vendors. There are so many factors they need to consider, for instance, the reputation, the capability of handle massive ATA and the technology innovations of the suppliers. The organization’s own characters decide that the number of vendors they can choose from is limited, and it due to the cost controlling becomes even more difficulty.
Retained capabilities The capabilities that developed by Canon Europe through the outsourcing activities are as following: First, relationship building. Creating a powerful, differentiating relationship with supplier is one of the aims of Canon Europe. Actually,building a relationship involves helping users understand developmental of finance and accounting for the business ND the improvement of productivity, helping users and financialexpertscollaborate, and ensuring users’ ownership and satisfactions. The second capability is informed buying.
Generally, this capability related to the challenge of managing the finance and accounting outsourcing strategy in a way that meets the interests,priorities, and goals of the business. For example, the transition from a shared-services model to the Accentuate Delivery Center in Prague was completed in only four months, furthermore, there was no reengineering needed and all finance activities were quickly stabilized. Thirdly, to protect the current and future contractual position of the firm, Canon Europe also had the contract monitoring capability.
It is important to note that the contract monitor ensures that the business position is contractually protected at all times while the contract facilitator is mainly involved in the day-to-day operational 1 . Furthermore, as a contract monitor, Canon Europe needs to ensure that their business position is contractually protected at all the timely 2. Risks in outsourcing deal The Canon Europe also met several risks. First of all, considering that Canon Europe ND Accentuate are both influenced organizations in the world, they both have the differentiations culture.
Provided that during the process of outsourcing, both parts have limited opportunities for interactions, hence it will cause misunderstandings and poor change management controls 3. The structural risk may also exist in the process of the duration of outsourcing. Structural risk refers to the danger that the relationship between clients and suppliers may not work as expected. Whatever, transaction preprocessing insurance claims processing are happily easy to monitor using preciseness’s to measure their quality 5.
Therefore these activities present low structuralism. Lastly, if an organization decides to outsource some business which includes sensitive data, then a carefully managed outsourcing contract may be preferable. This is because large established clients are probably more careful about protecting their reputation. Expected value Within Canon Rupee’s new finance and accounting outsourcing environment, there is now greater assurance that activities are being executed effectively with maximum efficiency, and that productivity and continuous improvement are daily priorities.
Such advancements demonstrate why the goal to improve productivity within the outsourced activities by 25 percent in three years is well within reach. To sum up the foregoing, the business achieving performance continually. To keep the relationship between Canon Europe and Accentuate getting better is also the value that this outsourcing activity brought. Actually, Canon Europe paid careful attention to the levels of relationship competency of the supplier, without they wish to maintain a close long-traineeships.
Whatever, they found out that Accentuate has the ability to support the future changes in their business direction, and the needs of their innovations the supplier, so the long-term relationship would be a potential value they wish to obtain. ‘V. Supplier Perspective Good pick for supplier From the perspective of Accentuate, this contract was a good pick undoubtedly. First and for most, Accentuate built the partnership with Canon through this outsourcing process, this laid the foundation of theorization’s of strategic partner in the future. Actually, in 2010, Canon enters $9. Ban to launch in collaboration with
Accentuate to deliver customized information and media management solutions for large European organizations. Given these facts, we can make a conclusion of both parts already built good relinquishment’s the finance and accounting outsourcing process. Advantages and disadvantages The vendor selected in this outsourcing case possessed plenty of advantages. First of all, finance and accounting (F) was one of the first processes that Accentuate start to outsource, henceforward have more than 15 years operational experience in Finance and Accounting business process outsourcing.
Secondly, Accentuate was also en of the best consultant companies in that time, which means they had better reputation and lower risk than other companies. Last but not least, Accentuate has their own R teams, which maximize the efficiency and increase the possibilities of reaching the goal successfully. While outsourcing, three technology innovations of Accentuate play an important role. For example,the first of these is an Accentuate- developed self-service portal that is updated daily to help Canon Rupee’s suppliers control, access and monitor invoicing and payment activities.
As for the disadvantages, one of them is the technology solutions growth in Accentuate is much slower than consultancy roles in the fierce competition of the consultant industry. Therefore, once Canon encountered some technique problems in the outsourcing process, Accentuate may not provide powerful supports to them efficiently. Risks to vendors Like most of devotedness, Accentuate also had risks in this outsourcing process. One of them is reputation loss, it would happen as the venture failed.
No matter what the real reason is, the supplier always should take the responsibility for the failure first. Another risk is the security of techniques and intellectual property. Elementally repertory rights are also one of major concerns to both the client and the supplier 19. Thus, companies should be particularly careful, because the absence of suitable contractual safeguards can put at risk the firms’ rights to its own intellectual property. For example, the development and the application of Accentuates technology innovations are belong to the core competence of the organization.
And the Accentuate-developed self-service portal also has key function to the completeness of the whole outsourcing project. Expected value As an outstanding consulting company, Accentuate expects not only to manage the entire successfully, but also to develop the partnership with the Canon Europe. Cooperating with some well-known companies successfully, like Canon, will expand the influence of itself. Furthermore, building the partnership with those companies will also bring plenty of opportunities to the future development to Accentuate.
Hillocks suggests that enterprise partnership’s involves risk-reward and Joint ownership arrangements, offers promising way to leverage cost and quality gains as well as knowledgeableness and exploitation. V. Recommendations Safeguard of client’s position To mitigate the risk that Canon Europe may face, the organization interacted on a daily basis with Individual Accentuate teams (one for each process such as accounts payable and cash posting).
Besides, to increase the visibility of the clients, the Accentuate Planning and Control enables management and process owners to capture and track critical path activities and issues in real time. The extraction of value for supplier For the supplier, provided atone of their targets is obtaining extraction of value from the contract, then the following factors are important: firstly, Accentuate should ensure they provided the desired services according to the contract.
Secondly, manage to protect the safety of the sensitive data, like ensure the data to be used in appropriate ways, and periodically check that authorized personnel are following designated procedures. Win-win situation As the contract manager of insubstantial public sector agency noted “Suppliers have to make a reasonableness’s to stay in business. You don’t want them to lose moneybags the worse their business gets, the worse your business gets. “Theodosius uncovers that both parts in the outsourcing process are interest- elated.
Creating a win-win situation’s the client receives increased value- adding services and disruptive generates better revenues and obtaining more opportunities. When Accentuate completed the outsourcing project, the Canon Rupee’s employees were free from time-consuming finance transactional tasks, and they are now able to focus on strategic activities to add value to the businesses. Improvement or changes In the next five years, the organizations recognize back office administration as a secondary activity and do not wish to invest in back office innovations, whereby the equines process outsourcing will overshadow IT outsourcing.
The clients should invest much more in contract value due to the contract management is a major determinant of outsourcing successes. Second, to avoid the outsourcing failure, the thing that Canon Europe should considerately suppliers other than sole supplier model, as a large company, the outsourcing process of Canon Europe would be more complex than others, therefore continue with only one vendor would carry high amount of risk. In the future, selective sourcing with multiple suppliers will remain the dominant trend.
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