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Hilton Case Study Creating a Best in Class SSO Example to Roll Out Globally
Neil Patmore Senior Regional Director of Finance – Australasia 17th June, 2016
© 2016 Hilton Worldwide Confidential and Proprietary 1
MEASURING
Six Pillars of Finance
CONTROLLING SAFEGUARDING RESOURCING MANAGING GROWING
...........to provide timely and
accurate financial information to be
used as a basis for performance
assessment of the business...........
...........to adhere to Company
policies, procedures and internal
controls in order to promote
efficiency and protect the
business...........
...........to ensure that Statutory,
Taxation and Legal compliance is
maintained thereby protecting the
hotel assets and future profit
streams of the business...........
...........influencing stakeholders
with financial guidance and
commercial direction to actively
drive the performance of the
business...........
...........to lead our partners through
strategic planning and
entrepreneurial activities that
continuously develop the
business...........
...........identifying, attracting,
developing and retaining the right
people in the right place at the right
time to operate the business...........
© 2016 Hilton Worldwide Confidential and Proprietary
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Measuring Controlling Safeguarding Managing Growing Resourcing
Time Spent by DOF’s
Only 34% of the DOF’s day is spent in the areas of Managing, Growing and
Resourcing the Business
© 2016 Hilton Worldwide Confidential and Proprietary 3
Strategic Direction
To provide a working Environment which improves our DOF’s ability to Partner the Business by
ensuring that they have the capacity to allow them to move further to the Right of the Six Pillars of
Finance thereby providing greater Opportunity to Add Value to the Operation.
Goals
© 2016 Hilton Worldwide Confidential and Proprietary
Standardise the transactional processes within the Hotel’s Back Office Function. Centralise and standardise the internal control requirements thereby removing the need of the Hotel DOF’s to monitor or implement any control changes
Remove the transactional paper flow from the business and replicate this in a standard electronic work flow that can be accessed anywhere, anytime, thereby giving the additional benefit of ‘plug and play’ for new Hotels
Build capability and knowledge within the larger available resource thereby creating greater flexibility, coverage and personal development within the Finance Community.
Rev
iew
Im
plem
ent
Gro
w
Key Milestones
© 2016 Hilton Worldwide Confidential and Proprietary
Rev
iew
Im
plem
ent
Gro
w 1. Review the current transactional processes across a broad range of hotels for all tasks
completed within the finance environment. 2. Document standard work flows for all tasks and subtasks of the four main transactional
sub-functions being Income Audit, Accounts Receivable, Payroll and Accounts Payable. 3. Work in conjunction with Internal Audit to ensure that the standardised workflows meet the
current control environment as well as ensuring the system flexibility
1. Identify and source a suitable IT system that can accommodate the transactional needs of the business in an electronic format
2. Implement the agreed transactional work flows in an electronic format and ensure flexibility remains to continually review and improve the processes.
3. Identify a suitable storage solution ‘Cloud vs Local’
1. Review current resource and propose future requirements based on the ‘centralised’ requirements.
2. Identify suitable resource from existing Finance Team Members and recruit internally where possible.
3. Implement development plans for Centralised team members to ensure a broad knowledge base is encouraged and exists.
© 2014 Hilton Worldwide Confidential and Proprietary
System Alignment – standardised requirements
Income Audit
Accounts Receivable Payroll Accounts
Payable Reporting /
Analysis
HLBFS / Essbase
OnQ AR OnQ Ops Audit
Ricoh / Laserfiche
Birch Street / Check
SUN – General Ledger
Meridian / Preceeda
Kronos / etivity
Document Management System - Doc Matrix
© 2016 Hilton Worldwide Confidential and Proprietary 7
Australian Finance Headcount – 59 FTE (2013)
SYD 12.5 FTE
SEQ 12 FTE
WA 7 FTE
0
NT 10 FTE
FNQ 9 FTE
VIC 8.5 FTE
© 2016 Hilton Worldwide Confidential and Proprietary 8
Current Status of Centralisation & Future Progress
12 Hotels Centralised by Nov 2014
Jan 2014
Jan 2015
Jan 2016
Mar 2016
Jan 2017
Income Audit
Accounts Receivable 12 Hotels Centralised by Nov 2014
Payroll
8 Hotels Centralised by Nov 2015
NT June 2016
Accounts Payable
WA, NT planned for completion by June 2016
7 Hotels Centralised by Jan 2016
CNS, BNE, VIC, WA, NT from Jun to Dec Reporting / General Ledger 1 Hotel Pilot from Nov 2015
© 2016 Hilton Worldwide Confidential and Proprietary 9
Future Australian Finance Headcount – 48 FTE (11 FTE)
SYD 3
FTE
SEQ 3
FTE
WA 2
FTE
NT 2
FTE
FNQ 2
FTE
VIC 2
FTE
34 Income Audit
Accts Receivable
Payroll
Accts Payable
General Ledger
© 2016 Hilton Worldwide Confidential and Proprietary 10
What have we achieved?
To provide a working Environment which improves our DOF’s ability to Partner the Business by
ensuring that they have the capacity to allow them to move further to the Right of the Six Pillars of
Finance thereby providing greater Opportunity to Add Value to the Operation.
Where are we now within Asia Pacific?
Currently, each region has been looking at centralisation strategies separately by country.
Australia – centralised 12 hotels IA, AR, 8 payroll, 7 AP, GL (trial ongoing) New Zealand – currently clustered AR (semi), AP (semi), Payroll (full) Japan – looking to roll out AR, Payroll (std HRIS EOY) and IA China – looking to roll out IA and AR to 3 hotels within Shanghai
Various systems are in place across the estate i.e. OnQ PM or Opera, BirchStreet, Check, HRIS/T&A, SUN There existed a requirement for a more focussed review and implementation process
Country centric shared service model covering all functions (Australia model) Regional hub with specific or specialised tasks (Memphis, FAAST model) Area hub with specific or specialised tasks (RMCC model) Mixed model i.e. onshore + offshore with specific or specialised tasks
© 2016 Hilton Worldwide Confidential and Proprietary
Phase 1 – Site visits
© 2016 Hilton Worldwide Confidential and Proprietary
Review of Income Audit processes covering OA process, daily tasks, reconciliations, reporting, document approvals – 1 day Review of AR processes covering direct bills, collections, allocations, reconciliations, daily tasks – 1 day Review of AP processes covering invoice processing, method/frequency of disbursements, supplier reconciliations, invoice approvals, PO system integration – 1 day Review of Payroll processes covering payroll processing and disbursements, reconciliations, deductions, statutory requirements – 0.75 day Review of GL processes covering daily tasks, reporting, reconciliations, analysis, tax compliance – 0.75 day Understand Hotel Finance manning structure, task distribution and labour cost for IA, AR, AP, Payroll and GL Review of IT systems, network speed and versions Interaction of each of the functions with operations
Phase 1 – Process Flows
© 2016 Hilton Worldwide Confidential and Proprietary
Income Audit
Accounts Receivable
Payroll
Accounts Payable
General Ledger
1.Credit Approval
2.Direct Bill – City Ledger and TA
3.Direct Bill – F&B Coupons/Vouchers 4.Direct Bill – Concessionaires, Commissions
5.C&E Invoices
6.Weddings
7.Rebates
8.Under/Over Charge
9.High Balance Report
10.Advance Deposits
12.Refund of guest deposit/credits
11.Unidentified Deposits
13.Cheque Payments
14.Credit Card Reconciliation
15.Bill queries and CC queries
16.Team Member City Ledger
17.Credit Meeting
18.Bad Debt Provision
19.Payment Allocation
20.Pro-Forma Invoice
Phase 1 – Process Flows Differences
© 2016 Hilton Worldwide Confidential and Proprietary
• Same Task • Same Country • Same City • Similar Hotel • Different Process
No of FTE in Hotel Transactional Team
11 vs 7
Take Aways
© 2016 Hilton Worldwide Confidential and Proprietary
Don’t assume all your operations are following the same processes. Don’t under-estimate the change management required to ALL areas of the operation.
Do understand what the financial resource requirement in the operationa should look like post implementation.
Hilton Case Study Creating a Best in Class SSO Example to Roll Out Globally
Neil Patmore Senior Regional Director of Finance – Australasia 17th June, 2016