NederlandsOnly afterwards, he has realized how cumbersome and inefficient the financial administration of KPN was actually organized. And Leo Spaans is still a little surprised by how that is streamlined with a relatively simple innovation style. The department is now making quicker results with fewer people, he proudly concludes. These people are involved in a continuous innovation of a process, which has become more transparent and much easier to manage.
Like many companies, KPN had its hands full with its data management systems, including Oracle, SAP and Baan, says Spaans. Traditionally, the financial function of the enterprise was scattered over districts and regions. How much energy went lost , came to the surface in 2005 when the financial administration of their systems, cultures and methods of working were centralized in a shared service center.
That was also the time when the demands on the accountability of transactions went up sharply, by new compliance processes in response to accounting fraud, by making stringent audits and by the Sarbanes Oxley legislation in the United States. The combination of integration and increasing job demands put pressure on the accounting department.
"The Oracle or SAP systems are powerful, but inflexible," says Spaans. "It is not customized for the client, but a modified version of software is written for a large group of users. Such a system does not bow along with changes in business processes or in the organization, which are being implemented regularly in a large enterprise."
That led to alarming many manual adjustments in the financial records of KPN. This was concluded by a work group, led by Spaans who was ordered to streamline the processes in the new shared service center. "We process approximately 4,000 monthly journal entries per month, of which 90% was being edited manually. An employee then re-entered a new line or sometimes an entire list. All these adjustments and the consent for this were administered on paper, often by printing e-mails or keeping it in a folder. "
A new, more individualized system, that makes fewer mistakes, costs millions and over time this will again lag behind reality, says Spaans. Therefore, it was decided to consider the correction process as one workflow, and to streamline this and make it transparent. KPN Shared Service Center Accounting then set this order out in the automation market.
Out of this tender came Quality Online, a software company in Enschede, that previously delivered a system for the storage of documents to KPN. The essence of the solution that was built by this software company, is the digital storing of all steps in the correction process and all authorization involved with this.
Quality Online was receptive to taking the wishes of the KPN Shared Service Center and its staff into the development process and still does this through its consultancy division and a periodic review, says Spaans. "The development philosophy is to build themselves with support, instead of handing the entire process to a supplier." The system, baptized "Memo-to-book '(M2B), appeared to cost a fraction of a new customized version of Oracle or another major supplier.
The benefits are impressive, according to Spaans. First of all, employees are now much more involved in the process. They innovate the process from the bottom, through the consultants of Quality Online and through the brainstorming group. The organization learns much more. Along with this, an awareness has taken place that force of the system is not accepted, in the belief that it can be done different and better.
A second advantage is, that the information flow has become transparent. Process steps are not buried in folders, but are visible for everyone. Furthermore, everyone's role and responsibility in the process immediately becomes much clearer. And taking on each other's tasks is easy, because all data is available and no longer hidden in someone's head or in a drawer.
This makes the process much more efficient. The number of journal entries, with manual intervention, has more than halved as well as the number of people working on it. Thanks to better management of the process, the accounting process can save time: the month balance of the whole enterprise, with 60 ledgers for all divisions, subsidiaries and associates, previously took five to six working days. Now this is done within four days. Moreover, the audit control is done faster, and thus at lower cost.
But the main advantage is perhaps, that the management has more grip on the process, says Spaans. This makes the organization more agile. The management sees faster where disturbances occur in the process, and can intervene earlier. Also, a reorganization or a change in the process gives less problems.
For example, we have very simply outsourced a number of process steps to a service provider in Surinam, because they were easy to define, "says Spaans. " In addition, we use the time difference: their working day starts as ours has finished, so that the work is done when we continue the next morning." He is not reluctant to further integration of the department, shrinking from three to two branches. " For the people it is radical, but the process is not disturbed because there is no need to move information."
According to Spaans, Memo-to-book entirely fits in the 'six sigma' quality management philosophy, which has found entrance at KPN. That philosophy assumes, that the error margin has to be minimized from the first process step, otherwise an extrapolation of errors will occur throughout the process. By making the process transparent from step one, employees can quickly identify and creatively solve problems in order to keep the accuracy at the highest level, and to prevent an escalation of error after error.
And so a sequel is planned. Quality Online has developed a second module, which must map the internal settlement between KPN's divisions, subsidiaries and associates. Intercompany-to-book (I2B) follows the same lines as Memo-to-book and promises similar benefits. A third module is in preparation. Spaans still sees many opportunities within the enterprise, for example in the fields of financial information, HR, complaints management, audit or compliance.