Creating the culture of value addiction
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Make money with controls, instead of just spending to enforce those
Business Transformation is “making fundamental changes in how a business
is conducted in order to help cope with a new, more challenging market
environment.” (HBR, 2007) When it comes to it’s essential components,
Business Transformation covers People, Processes, Technology and Data (a
new addition to the well established diagram). Business Transformation is
divided into three broad types (also courtesy of HBR, 2016)
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Operational transformation – doing current things cheaper, faster and/or better.
N.B. This is where Digital Transformation starts to come into the picture. While
Digital Transformation has a broader remit in the world of transformations, there is a
significant overlap where Digital Transformation means using technology to deliver
business processes, value for customers and innovation (Source)
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Operational model transformation – doing what you’ve been doing but in a completely
new way
Strategic transformation – fundamentally changing the essence of the organisation.
COSO 2013
Controls can be classified using a multitude of criteria:
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Category (i.e. Process or Business Controls, Access Controls, IT General Controls)
Type (i.e. Preventative, Detective, Corrective)
Design (i.e. Automated, Semi-Automated or IT-Dependent, Manual)
Frequency (Ad-hoc/Daily/Weekly/Monthly/Bi-Annually/Annually)
Organisation level (i.e. Entity, Division, Operating Unit, Function).
o
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Strategic and high value scenarios
Bring cash back on the balance sheet – DPO/ DIO/ DSO, Bad debt/ Bookings, Supply
chain, duplicate payments, inappropriate disbursements
or example, process mining can focus on analyzing the corresponding invoice
information, suppliers, business departments and users that may lead to the occurrence
of prepayment risk, and explore the business risk events such as poor process design
or fraud.
l. It aims to meet service expectations with
appropriate business control, to help enterprises
reduce resource consumption and gain cost
advantages by shortening business processing time,
and finally to reduce operational risks through
appropriate control design.
Inventory-forecast-shipment mismatch (VW Fiat/Uno)
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Procurement needed too many operational buyers due to the lack of
automation and high effort for manual rework in the process
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Internal clients were unsatisfied with the service levels for purchase order
management – leading to procurement receiving low acceptance as a
business partner
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Process disruptions caused by late deliveries and high effort to fire fight new
issues
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Payments were too late which lowered purchasing market position and did
not attract suppliers to compete for contracts