LoBue: Real Resources: Success Story: Accounting & Financial Functions

SUCCESS STORY: ACCOUNTING & FINANCIAL FUNCTIONS

CLIENT:	Major US Direct Mail Marketer/Mass Advertising Mailer
DIVISION:	Controller's Organization
CONTACT:	Chief Financial Officer
MAJOR FUNCTIONS:	Accounting, Accounts Payable/Receivable Billing, Purchasing, Collections Payroll/Commissions Processing

SITUATION
The client announced a plan to consolidate its 16 regional finance offices into its Eastern US headquarters and create a Shared Financial Services Department. SFS was to be a centralized organization servicing 16 regions, 60 sales offices and a dozen printing/distribution centers across the country.

The announcement also stated a significant downsizing was expected as a result of centralization. There was a great deal of skepticism throughout the company, since it had an inconsistent track record of follow-through on several previous change initiatives. Client senior management engaged LoBue Associates to execute this centralization effort. The client employs approximately 4,000 people, about 200 of which are in the Finance Organization.

LOBUE RECOMMENDATIONS
The project team developed a total of 127 detailed process- related recommendations and built capacity plans for each department, showing an FTE reduction of 44%. The team then developed a regional office consolidation project plan comprising some 300 tasks. At the conclusion of the program, two pilot regions had been consolidated, the projected savings were on track, and LoBue was contracted for an extension to manage the roll-in of 14 remaining regions. Some of the key recommendations were:

To streamline order processing and eliminate work on 77% of all orders reducing the error rate from 25% to <2%
To redesign the billing process, reducing the cycle time from 5-7 days to 24 hours
To implement a purchasing card system, thereby reducing travel and expense from 40,000 transactions per year to <1,000
To reengineer the production release process to eliminate the need for human intervention on >80% of the jobs
To reengineer the attendance tracking process to eliminate the need for regional payroll department staffs
To streamline the payables process and reduce the amount of work by 50%
To redesign payroll and compensation processes to eliminate 25% of the workload

The above recommendations were validated during the pilot and extrapolated to the entire organization during the roll-in of the 14 regions.

REAL RESULTS
According to the client, the project team and LoBue Associates in particular, were widely recognized as having achieved the "impossible." Shared Financial Services is the most successful large-scale reorganization in the client's history.