Measure to Manage: Using Metrics to Achieve Best-in … · Measure to Manage: Using Metrics to Achieve Best-in-Class Performance ... • Help determine whether your ... Our Cameron

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 1 9/9/2016

Measure to Manage: Using Metrics to

Achieve Best-in-Class Performance

Facilitator: Elaine Stattler - APM, CPC

Editor APP2P and ARO2C Network

Panelists:

Chris Dritsas - Accounts Payable Manager

NSAM Financial Hub

Cameron, a Schlumberger Company

Kelly Coxon – APM, APPM, AIRP

Director, Procure to Pay

UPMC, Greater Pittsburgh Area

Derrick Skrycki - SSC Manager

Accounts Payable and Receivable

Shared Services Center

University of Michigan


Why Metrics?

Without them:

– You are running your

business blindfolded

– It is harder to identify and

correct inefficiencies

With them:

– Leaders can understand

business health

– Customers are provided

transparency

– Staff are provided

empowerment

– Improvement opportunities

become apparent

– All parties are on the same

page


What Metrics Can Do For You

Reviewing metrics can:

• Help determine whether your workload is growing or

shrinking

• Assist you in workforce and schedule planning

• Enable you to identify strengths and weaknesses your

processes

• Help you manage more effectively by enabling you to

prioritize and focus


Case in Point: Stabilizing Performance

How the University of Michigan met its full-year 2016 goal of

stabilization…


“Based on metrics – met FY 2016 goal of stabilization”


How KPIs Lead to Continuous Improvement


Relate KPIs to Improvement Goals

1) Be methodical when choosing and measuring KPIs to ensure the

metrics provide the desired result. The American Productivity and

Quality Center (APQC) recommends benchmarking and reporting on

the following key performance measures:

Cost effectiveness

Staff productivity

Process efficiency

Cycle time

2) All key performance indicators (KPIs) should relate to distinct

improvement goals and be directly aligned to the form, fit, and

function of the specific organization.


Consider These Questions

3) To select effective KPIs, AP should pose these questions:

What metrics do we use now and what is the current baseline

against which we measure progress?

What is important to the AP function and the organization as a

whole in terms of completing strategic objectives?

What is important to our customers, both internal and external?

What can we measure to help identify areas of opportunity?

What measures can we identify consistently, repeatedly, and

systematically?

What is the final goal for each measurement and for how long

will measurement be needed?


Take Corrective Actions 4) As AP's performance goals are met, corrective actions should be

implemented based on what is learned through measuring KPIs.

Good steps to help determine corrective actions include the

following:

Implement disciplined and robust reporting systems.

Identify team members and define responsibilities and authority.

Establish team goals and associated incentives.

Perform a root-cause analysis.

Document issues and concerns.

Solicit ideas from others in finance and other functional areas.

Define containment and counter measures to stop problems from

worsening.


Report on Your Findings

On a monthly basis, compile and distribute an “AP Executive Reporting

Package” that includes the performance metrics deemed critical to the

business.

Provide a snapshot of your metrics by presenting current and past trending as

well as verbal commentary that elaborates on your findings and suggests areas

for improvement based on established industry benchmarks. The package

utilized by Cameron/Schlumberger includes the following metrics:

Cost per invoice (CPI): CPI is measured in two ways and is reported on a regional and

global basis. Metrics include analysis by way of operating costs per invoice as well as payroll

costs per invoice and are compared to industry benchmarks. Our Global Payroll CPI is

considered “Best in Class” based on the “CEB 2015 Benchmarking Methodology” study.


Reporting, cont’d

Global invoice posting volumes: Global invoice posting volumes are measured by the

number of transactions processed on a monthly basis and include PO, Non-PO, P-card,

T&E, and Intercompany related items.

General invoice aging: General invoice aging is measured by analyzing our open/aged

invoices for each division based on scan date into our Vendor Invoice Management

system. Then we further categorize the open invoices into aging buckets (1-10 Days, 11-

20 Days, etc.)

Process Cycle time: For cycle time (receipt-to-post), we measure the validation and

processing steps required to post an invoice (PO & Non-PO) received either through e-

mail or paper in “calendar days”. This measurement excludes any automated processing

such as SUS/EDI.

On-time payment analysis: This is measured by calculating the difference between the

actual payment date vs. the date payment is due.

In addition to the analysis of these metrics, the reporting package features measures on automation trending, payment methods, blocked

invoices, # of invoices processed per FTE and updates on major accomplishments and initiatives within/affecting Accounts Payable.


Case in Point: Resolving Help Desk Backlog

Challenge: Our Cameron AP help desk experienced a backlog in open incident tickets and

several were aged greater than 30 days. We performed a root-cause analysis, analyzed our

findings, developed best practices, and realigned our HelpDesk processes. This realignment

included the use of an automated system to help us generate, monitor, and report on incident

tickets.

Outcome: Within 5 weeks of the help desk realignment, our team achieved a significant

process turnaround and was able to meet the aggressive performance metrics that had been

established: 90 percent of open tickets were 0 to 5 days old, 5 percent were 6 to 10 days old

and 5 percent were aged > than 10 days. (Of the 90%...80% of those were aged 3 days or

less).

“Improving this metric was all in the way we realigned our process, consistently monitored/

reported on a daily basis, and made adjustments as needed.”


Questions?


Key Takeaway

Adopt the philosophy that “problems become opportunities when the right

people join together.” “Be the Bridge” in the following ways:

• Through staffing, to ensure you have the right people, in the right

place, at the right time, doing the right things.

• By leveraging technology to streamline work processes and create

synergies.

• By utilizing best practices through a continuous improvement platform.

• By establishing and fostering a positive work environment for all staff.

• By fostering and cultivating productive working relationships.


The Bottom Line

Metrics should be usable and actionable

The implementation and maintenance of KPIs need to be

systemic, interactive, and provide a framework where

issues, concerns, ideas, and other criteria are exchanged

and communicated effectively throughout finance and the

larger organization.

Documents

Measure to Manage: Using Metrics to Achieve Best-in … · Measure to Manage: Using Metrics to Achieve Best-in-Class Performance ... • Help determine whether your ... Our Cameron