OpusCapita Journal 1/2015

SETTING THE NEW STANDARD FOR FINANCIAL PROCESSES

MICHIEL STEEMAN:

SUPPLY CHAIN FINANCE

ENDS THE TUG-OF-WAR OVER WORKING CAPITAL 8

CLIMATE N 441 209 Printed matter

MATTER ED

SETTING THE NEW STANDARD FOR FINANCIAL PROCESSES

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HÄMEEN KIRJAPAINO OY

ABOUT OpusCapita sets the new standard for financial processes. With 2,300 passionate professionals, we focus on Purchase-to-Pay and Order-toCash processes where we combine software, outsourcing and services with a delivery model that offers the best value for our customers. We have operations in nine countries and vast experience accumulated with over 10,000 customers, with end-users in more than 50 countries.

In 2014, OpusCapita’s net sales totaled EUR 260 million. OpusCapita is part of Posti Group.

OPUSCAPITA JOURNAL SET TING THE NEW STANDARD FOR FINANCIAL PROCESSES / PUBLISHER OpusCapita / EDITOR IN CHIEF Ulla Kenttä / EDITORIAL TEAM Karoliina Haikonen, Sara Hokkanen, Kimmo Kauranen, Toni Paloheimo, Marketta Tammisto / EDITORS Communications Agency Effet Oy / TRANSLATIONS Bellcrest Translations / LAYOUT Milko Tarvainen, Tiina Lautamäki / COVER PHOTO Sami Mannerheimo / PRINTED BY Hämeen Kirjapaino Oy, Finland, 2015 / ISSN 14580012 /ADDRESS SOURCE OpusCapita customer register / www.opuscapita.com

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06 10

WHEN LIQUIDITY IS AT RISK

12 16

CONTENTS 04 No pressure, no diamonds 05 Hot topics 06 Ready, steady, go 08 Supply chain finance

ends the tug-of-war over working capital 10 The robots are here 12 Let’s get emotional 14 Sapa turned mission impossible

into mission accomplished 16 Nearshoring in Vilnius – closer to home 19 News and events 22 Inside stories

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February 2015

NO PRESSURE, NO DIAMONDS Customers and their needs are the top priority for any company, and customers are served with the utmost commitment in all circumstances. Alongside this, companies are increasingly implementing extensive organizational projects that are necessitated by the rapid pace of change today. Such projects include strategy work, restructuring and the development and adoption of new products, services and operating models.

Sound familiar?

It certainly does to us: here at OpusCapita, 2014 was our first year as an independent company, at arm’s length from Posti Group, our owner. To enable the change, in early winter, we created administrative functions for OpusCapita – functions that had previously been provided by the Group. We created a new OpusCapita brand, and all of our employees also participated in defining a new corporate culture and new values that help us focus on meeting your needs in our work. By the summer, we had prepared a new strategy based on extensive research, and its implementation began in the fall.

It was a tough undertaking – but totally worth the effort. To quote the wise old saying: ­no pressure, no diamonds.

Our goal is to offer you more and more advanced solutions for managing your financial processes. Our new vision, “Setting the new standard for financial processes,” helps us keep this goal in mind at all times. We defined strategic cornerstones to help us provide a superior customer experience for you and your customers and to ensure measurable effects on your business operations. Our new Ventures business unit looks into the future for you. Its research focuses range from software robotics in the development of financial processes to the development of corporate software distribution channels in the global market, to name a few. We also reformed our organization to support the continuous development of our in-depth expertise in financial processes as of ­January 2015. Our acquisition of the financial management company Norian last fall strengthens our leading position as a Nordic service provider and improves our ability to ­produce services for SMEs.

HEIKKI LÄNSISYRJÄ CEO, OPUSCAPITA

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The weak economic development has made the market situation difficult in many sectors. However, future success cannot be based on the operating models of the past.

OpusCapita offers new, intelligent solutions for your organization to face the challenges of today and tomorrow.

Let’s work together to develop your business to make it a diamond in its sector!

HOT TOPICS

ALMOST HALF OF JOBS TODAY WILL NOT EXIST IN TWENTY YEARS Almost half of current occupations are very likely to disappear or change drastically over the next two decades due to technological advances, concluded an Oxford study on the future of employment in the United States. The situation is similar in other developed countries: for example, ETLA researchers estimated that computerization threatens one third of Finnish occupations.

Even office and administrative jobs, and other knowledge work and services jobs are vulnerable to automation. Most management, business and finance occupations are largely

confined to the low risk category, but many office roles in accounting, payroll, insurance and auditing, for instance, are in the group of jobs at a high risk of being automated.

The researchers compare this process of ‘creative destruction’ resulting from technological progress to the Industrial Revolution and also the Computer Revolution. Human workers will transfer to tasks requiring creative and social intelligence.

Source: The Future of Employment: How Susceptible are Jobs to Computerisation? Publication by the Oxford Martin Programme on the Impacts of Future Technology. Frey, C.B. & Osborne, M.A. (2013). Download the publication (pdf ) www.oxfordmartin.ox.ac.uk/publications/view/1314.

COMPANIES BELIEVE PAYMENT TERMS HAVE A CRUCIAL ROLE FOR THEIR FINANCIAL SITUATION Optimizing both Days Payables Outstanding (DPO) and Days Sales Outstanding (DSO) by negotiating changes in payment terms is high on the agenda of companies in Finland, Norway and Sweden. In a recent survey, the companies anticipate that the lengthening or shortening of payment terms will have the biggest impact on their financial situation in the future.

The companies also consider that extending payment terms is one of the main ways to reduce working capital.

Over half of Finnish and Swedish respondents said that they had already extended their payment terms. In Norway, only one fifth of the companies had done the same.

Almost half of the companies also stated that their clients’ payments were delayed occasionally or regularly. Credit losses have increased in 11 percent of the companies.

Lengthening / Lengthening / shortening of shortening of payment times payment times

Supplier funding Supplier funding

Cash discounts Cash discounts

PLANNED MEASURES IN COMPANIES TO REDUCE WORKING CAPITAL

Source: OpusCapita Financial Study 2015, carried out by TNS Gallup.

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READY STEADY GO! Kimmo Kauranen, Vice President, O2C Business, OpusCapita

It is time to start focused exercise and mobilize idle money in operations.

With the right methods, every company can improve its working capital performance. The rewards are measured in the millions.

TEXT: MARKETTA TAMMISTO PHOTO: SAMI TIRKKONEN

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Working capital is just like fat in the human body. Fat is vital, but most of us have more than we actually need.

Kimmo Kauranen, Vice President, O2C Business, encourages companies to put idle money into action and optimize working capital through focused exercise.

His message comes at the right time.

Financing from banks is expensive and difficult to come by, so companies can no longer rely on banks for help with investments or momentary liquidity crises. The optimization of working capital tied up in operations is an effective way to ensure sufficient funding over the long term.

“Companies are no longer expecting the good old times to return. They realize that they need to get serious about developing processes to ensure financing in the future,” says Kauranen.

The three key indicators of working capital development are DSO (Days Sales Outstanding) for measuring the efficiency of sales receivables management, DPO (Days Payables Outstanding) for monitoring the company’s own payment performance and DIO (Days Inventory On-Hand) for monitoring inventory turnover.

While these concepts are familiar to financial professionals, they are neglected in practice surprisingly often. In the early 2000s, when the availability of financing was not yet a problem, it was easy to forget all about these indicators. Kauranen illustrates

the business impact of the indicators with an example.

“Let’s assume that your company is at the median level in terms of working capital, but your competitor is in the top fourth. Your competitor receives payment for its products more than two weeks earlier than you, its inventory turnover is faster than yours by a third and its terms of payment for its purchases are more than two weeks longer than yours. This means that the working capital tied up in your competitor’s net sales is up to 60% smaller than yours.”

“No wonder your competitor’s financing expenses are just a fraction of yours and its bottom line is considerably higher, even though your net sales are on a par. This enables your competitor to finance new technology, for example, and continue to improve its competitive position.”

The difference between the median level and the best fourth can be surprisingly large.

“The difference is easily dozens of millions of euros of assets lying idle in processes or kept as buffers, just in case. In a large corporate group, this difference can add up to hundreds of millions of euros.”

Kauranen illustrates his message with another example: “Let’s take a corporate group that generates 300 million euros in net sales and has numerous subsidiaries in many countries. Its units operate independently and have their own functions: production, storage, trans-

port, sales, purchasing, financial administration and ERPs – and a few million euros tied up in working capital. Investments and loans are managed locally. Intra-group invoicing is significant, meaning that it also poses a currency risk.”

“Because the group has a decentralized business model with no shared systems, the financial managers of the units each submit a weekly Excel report and liquidity forecast to the group treasury.”

However, the group has no way of knowing where the assets of the units are tied up, and a lack of indicators means that the units do not know either. The units are isolated, and their expenses cannot be scrutinized.

“The money needed for an investment of 30 million euros, for example, may easily be hiding in processes and buffers in the units. With no transparency, the required funding must be sought from banks or other channels. However, external funding is often uncertain and always expensive.”

The above example is simplified, but it describes a type of company that abounds in the market.

However, the example is encouraging.

According to Kauranen, every company can improve process efficiency and quality and be among the best by streamlining, standardizing and automating its processes.

“By automating and harmonizing its processes, the group treasury at the company described in the example was able to tackle idle money and reduce the share of working

“As is” and “Improved”. An example of the effect of centralizing cash flows on working capital in a company making EUR 300 million in revenue. The figures are based on several OpusCapita customer cases. n Decentralized corporate structure n Plenty of subsidiaries n Local cash management n Local business processes n The lack of integration leads to suboptimization

AS IS

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GROUP

GROUP

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Group Treasury

Group Treasury d an ortast eek t( p Re rec a w hee fo nce ads o pre )s

UNIT eXm

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Working capital EUR 30 million (10% of revenue)

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UNIT

n Centralized cash management n Full visibility and control of all cash flows in all subsidiaries n Option to optimize the working capital n The freed working capital creates the opportunity to invest

eXm

Working capital EUR 12 million (4% of revenue) Automated centralized processes = total visibility and control

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MICHIEL STEEMAN: capital in its net sales from 10% nearly down to 1%,” says Kauranen.

In freeing up working capital, transparency and the use of the DSO, DPO and DIO indi­ cators are the keys to improved performance.

Cash hides in processes and consistent endto-end processes that run beyond departmental boundaries can make this cash visible.

“Automation and transparency enables a corporate group to examine costs by category, such as its purchasing process. Why are cleaning services acquired from 20 companies, even though the company has signed a framework agreement with one company?

Is the group making use of its centralized equipment acquisition agreement even in spare part purchasing?”

Kimmo Kauranen says that the share of indirect purchases in annual net sales can be hundreds of millions of euros. When improving efficiency, the hypothesis is that indirect expenses can be cut by 2–10%.

“You should calculate what this means for your company. As a bonus, you will also get tools for continuous process development.”

DSO, an important O2C process indicator, helps companies ensure fast and efficient receivables management.

The transparency of the O2C process is reflected in the customer experience, espec­ ially if a customer has questions about an invoice.

“The more visible the various phases of orders, deliveries and invoicing are to Customer Service, the faster any issues can be examined and resolved. This improves cash turnover and reduces customer attrition.” n

EXTRA

Bad, bad debts. According to Kimmo Kauranen, companies are dangerously passive in terms of receivables management. Read his top ten tips for receivables management development at opuscapita.com/debts

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SUPPLY CHAIN FINANCE

ENDS THE TUG-OF-WAR OVER WORKING CAPITAL

When both purchasers and suppliers are trying to optimize liquidity at the same time, the situation results in a sort of tu progress by one party will tighten the situation at the other It’s time to cut the rope!

TEXT: RIIKKA TIETÄVÄINEN-AROLA PHOTO: SAMI MANNERHEIMO

FREE UP THE CASH Although supply chain financing is not ­a new concept by any means, it is rather unknown in the Nordic countries. Not for long, though, according to Miikka Savolainen, ­Director, OpusCapita.

“Even over here in the Nordic countries major corporations have extended their payment terms – and will extend them further – to improve their financial situation. As a result, the cash of smaller suppliers is tied to their sold products and services. Yet efficient cash flow and the ability to operate is probably more important now than ever before.

OpusCapita has more than 30 years of experience in the development and automation of financial processes to strengthen customers’ to optimize their working capital. The Supply Chain Finance service helps SMEs finance single deliveries. Learn more about our services

The financial turbulence has left small and ­medium-sized suppliers, in particular, trapped in a ­vicious circle: extending payment terms increase their need for liquidity, but at the same time the financiers refuse to provide them with finance.

“The large buyers are now starting to feel the ­financial pain of their suppliers and are looking into new ways to support them,” says Michiel Steeman, Professor of Supply Chain Finance at the Windesheim University of Applied Sciences in the Netherlands and also the founder and chairman of the international Supply Chain Finance Community.

“The emerging trend is to broaden the collaboration to the financial dimensions of the supply chain and to optimize not only the logistics but also the finance. The lack of operating liquidity and its cost for the smaller suppliers are making supply chains in Europe as a whole more fragile and less competitive than they should be in order to thrive in the prevailing economic conditions.”

Thus, Steeman believes supply chain finance solutions will become common in the Nordic countries and in Central Europe in a few years. Supply chain ­finance programs are already well established in some parts of Europe, for example in Spain and in Italy, where the payment horizon has always been long – up to a hundred days on average.

their operating ug-of-war: end of the rope.

Supply chain finance usually refers to reverse factoring, a solution where the supplier receives funding from a bank based on an approved invoice and leveraging of the purchaser’s higher credit rating. The purchaser improves its working capital by maintaining cash liquidity longer while the supplier gains faster access to low-cost cash.

In the Netherlands, for example, it has been cal­ culated that there is a total of 25 billion euros worth of working capital stuck in the supply chain, that is in ­receivables waiting to be paid. A little over a third of this concerns SMEs delivering to large purchasing ­corporations. Michiel Steeman estimates that effective supply chain finance solutions could easily free up

Opus Capita’s new supply chain financing solution optimizes both the buyer’s and the supplier’s working capital and helps both parties ensure that they have liquid assets at their disposal when needed.

“The financing program allows the buyer to, in a way, compensate suppliers for the harm caused by long payment terms and the suppliers can have their money in a matter of days. That is a significant advantage when you think that today, only very few companies get paid in less than 30 days. The supplier can still choose whether to wait until the payment date or make use of the financing offered,” Savolainen says.

2­ .5 billion euros of this 25 billion euros as additional ­liquidity for suppliers.

“The longer the suppliers have to wait for the payment, the larger the number, if there aren’t viable options in the market.”

The most important driver that is currently boosting supply chain finance is the squeeze the SMEs are experiencing, as payment terms are creeping up from under 30 days to 60 days and even up to 90 days.

“Politicians have tried to curb this with new legis­ lation, but for instance the EU payments directive actually made the situation worse in countries like Finland, where the payment terms were notably short to begin with. Focus has now shifted to promoting alternative financing solutions.”

Another driver is technological development and digitalization, which will promote wider adoption of supply chain finance even on the markets were it is already being utilized. Standardization and automation of the solutions will make it possible to reach out to a broader supplier base and also increase the benefits gained.

“Those actors specializing in the financial processes who already possess the right information have an important role to play. For example, the suppliers’ order-to-cash process, especially the parts concerning invoicing, needs to be solid.”

According to Steeman, the real development in supply chain finance will go beyond reverse factoring.

“I believe the collaboration will go deeper over the next decade and other solutions, such as inventory financing or other pre-shipment finance models will evolve throughout the multiple tiers of suppliers.” n

EXTRA

What are the strategic reasons behind large companies’ decisions to start a supply chain finance program? Read Michiel Steeman’s perspective on opuscapita.com/strong

When the buyer has approved an invoice, the supplier will receive a real-time notification. The solution enables the supplier to request financing from a third party, usually a bank. The supplier benefits from the buyer’s credit rating, which is usually higher than its own, and gains quick access to financing, at low cost and without collateral. The buyer, on the other hand, can use the long payment term to release assets for other uses and pay the invoice to the financing party on the original payment date.

The arrangement improves the supplier’s cash flow and makes it easier to forecast liquidity. In the long term this can reduce pres-

sure on suppliers to raise prices, thus helping to keep procurement prices in check. n

EXTRA

Calculate the potential benefits and see how supply chain financing can help all parties on opuscapita.com/scf How can invoices be linked to the procurement process? Read Miikka Savolainen’s answer on opuscapita.com/cash

business operations. Purchase-to-Pay and Order-to-Cash processes offer comprehensive solutions for companies and organizations at opuscapita.com/supply-chain-finance

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THE ROBOTS ARE HERE!

TEXT: RIIKKA TIETÄVÄINEN-AROLA PHOTO: SAMI TIRKKONEN PICTURE: TEEMU JUHANI

NOW IS THE TIME TO BENEFIT FROM ROBOTIC PROCESS AUTOMATION Please welcome the financial department’s newest employee! He gets down to work straight away, carries out the routine jobs without complaining and gives others time to focus on the tasks which require real expert knowledge.

You won’t be able to shake his hand though, because he is a virtual employee, a software robot.

EXTRA

Learn how to recognize your RPA potential. See the list of things to consider and find out how OpusCapita can help you to get started at opuscapita.com/potential

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“Robotic process automation (RPA) is nothing like traditional software development, with its time-consuming IT changes and integrations.

Implementing a software robot is very similar to teaching a new employee the tasks in a certain process. The robot uses the existing applications in the same way as a human, but is more efficient,” explains Jaakko Lehtinen, Manager from OpusCapita’s Ventures Unit.

This year, 2015, will be the year for soft­ ware robots in Europe say Lehtinen and­­­ Jarkko Vesa, Network Partner at Eera, OpusCapita’s associate company. At the turn of the year they participated in an international ­conference in New York, which presented the major savings achieved by RPA pilot projects in finance and accounting, the insurance and health care sectors and IT operations.

“The technology is ready and more will happen in software robotics this year than has

happened in the previous four or five years in total. We are now entering a very rapid phase, where a big proportion of the remaining routines are being automated. A lot of the routine work that is suitable for robots still exists in financial management in spite of the current high degree of automation.”

Vesa and Lehtinen are referring to the tasks in which data is moved from one system to another, for example, or in which data is ­retrieved from several incompatible systems and combined. In other words, exactly the type of simple and repetitive routine tasks in which a human is likely to make mistakes while clicking a mouse and going from one application window to another. These tasks are also the most boring and unmotivating parts of a job.

“In the public sector, such as health care or tax administration, RPA makes it possible

to increase automation without extensive IT projects. It decreases the need for integrations and IT implementation projects in the transition phase, where legacy systems are replaced with more automatic solutions.

This also helps to keep costs under control and provides an answer to a question that is linked to the subject of retirement: where will we find people to take care of all the tasks?” says Vesa.

“Software robotics is a very attractive option as it provides the opportunity to improve the quality and efficiency of processes in the current production environment almost immediately. The people who previously handled the routine tasks are able to become true experts and problem solvers,” says Lehtinen.

A robot will not need breaks or holidays, get ill, suffer from lack of motivation or ask for pay raises. A robot can also be programmed to carry out tasks during the night and at weekends. However, intelligent people are still needed in the team in addition to the intelligent robots. For example, software robots are unable to carry out tasks requiring complicated judgment and they are unable to understand human communication and different contexts within the language.

“A robot learns to do a certain task through work shadowing. It consistently and precisely does what it has been taught to do. It will not know what to do if there is a deviation in the routine and will leave this problem for a human to solve.”

When a robot starts its work it may, for example, at first complete half of the tens of thousands of transactions in a certain process. When a human goes through all the

deviations he or she may quickly notice that they are not real exceptions and that half of these can also be automated by teaching the robot a new rule. And so on.

“This enables continuous automation and continuous development of the process.

And the work required to remove these routines requires creativity and intelligence. The company’s process experts are in control, not the IT experts or programmers.

It has been suggested that in the next few years the development of RPA will be a challenge for the low-cost offshore centers that focus on data processing, and may bring back the outsourced offshore work. Jarkko Vesa thinks there is a lot of truth in this claim and also states that RPA is actually a step up to the next level for business process outsourcing.

“Customers expect BPO companies to provide them with added value. At the conference I heard someone say, ‘RPA is a catalyst for change’. And that is exactly what it is. It gives the processes better functionality and transparency, and makes it necessary to really analyze the way in which the process works.”

Jaakko Lehtinen laughs and says that the world of financial management will probably not require very innovative robots, but developing artificial intelligence applications will open up new possibilities in the near future.

“We are already talking about eRPA, i.e. extended robotic process automation. In the first stage, adding a degree of artificial intelligence might only mean that a robot carrying out tasks on a computer will understand free-form speech or will be able to carry out a certain amount of tasks that require complex judgment reasoning. This is a very fascinating world that constantly opens up new areas for process development.” n

“The evolution of automation in financial management has now reached a point where the repetitive tasks are handled by a software robot, leaving the human operator to focus on being a true expert and developing the process further,” says Jaakko Lehtinen.

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OpusCapita places a lot of focus on providing a superior customer experience company-wide and, most of all, on helping its customers succeed with their own customers. The photo is from one of OpusCapita’s customer experience workshops in November 2014.

LET’S GET EMOTIONAL! 12 |

What are great customer experiences made of? OpusCapita’s customer experience evangelist, Toni Paloheimo, went out to ­explore the topic together with Tuomo Ketola and Susanne Hedlund, two experienced professionals in the field. Read what the three have to say about this vital and exciting topic.

Toni Paloheimo, Head of Service Design, OpusCapita.

Toni Paloheimo has been nominated to lead the activities that focus on reviewing every detail of customer feedback and expectations and adjust the operations to deliver accordingly.

n

Tuomo Ketola, Service Designer, Palmu. Palmu is a service design agency with over 50 professionals helping customers – from start-ups to international corporations – to develop their service business and design new service concepts.

n

Susanne Hedlund, Unit Head, Mälarenergi AB. Mälarenergi is a Swedish energy company offering both private and corporate customers heating, electricity, water and broadband solutions and related services. The company has approximately 580 employees and a turnover of SEK 3 billion.

n

The customer experience is the new ­“competitive battlefield” if we are to believe Gartner’s outlook for 2015 and beyond. ­Traditional ways to develop competitive ­advantage, such as product or business model innovation, are expected to have a decreasing impact, while improving the customer experience is reckoned to be the only way to build and maintain brand ­loyalty in a h ­ yper-competitive business ­environment.

Whether this turns out to be the whole truth or not, it is undeniably important to understand what the customer experience is all about in the first place.

Toni: “Customer experience has become a bit of a buzzword recently. No matter where you look it’s something most companies are talking about openly. But why should anyone care?”

Tuomo: “One reason for this growing interest in the customer experience is the digital revolution and its related business models. Today, it is increasingly hard to win customers’ loyalty when unprecedented levels of transparency make it easier for customers to see the benefits of alternative solutions and service providers.”

Toni: “So everybody wants to tilt the playing field to their own advantage?”

Tuomo: “Yes, everybody wants to influence the decision-making. The customer experience is about acknowledging that

our customers are each individuals with their own feelings, which will affect the way they make decisions. Improving the customer experience is about generating business by influencing the customer’s ­decision-making.”

Susanne: “Exactly! And everyone in the company has customer responsibility. For true success, it’s important to see cus­ tomers as individuals and understand their experiences. Simply by listening a little more, you will gain insights that can be ­mutually beneficial and a basis for moving forward.”

Tuomo: “I agree. Taking the customer experience seriously means it has to be at the center of all operations, and that is very hard to do in a real business environment.”

Toni: “And it’s not just B2C where ­emotions play a role. We conducted a study last year and found out that the two most important expectations from our customers when making a vendor selection were trust and caring – both very much emotional factors. Only after those two clear winners came rational things like reliability and speed.”

Tuomo: “It is still quite common to think that corporate clients are all rational and fact based. This, of course, is a gross generalization. Perceptions of value and therefore expectations include not only financial and functional dimensions but

Toni Paloheimo

also immaterial and emotional ones. The last two are not always easy to point out, making it much more challenging to form meaningful and lasting relationships.”

Susanne: “That’s true for Mälar­energi’s customers as well. Price is important but service is becoming more and more ­important for our customers. That’s where we want to walk the extra mile and exceed our customers’ expectations.”

Toni: “For us this is true as well. It seems operational excellence is needed to keep us in the competition but it’s definitely not enough to put us in pole position. That requires us to play a closer role as partner with our customers and constantly help them to develop their processes and services.”

Tuomo: “In general, improvements ­often focus on the functional aspects ­and very little on the immaterial and emotional.

Maybe we should look at things from a ­different perspective and start from these in order to discover areas which are really ­valuable to our customers.” n

EXTRA

Find Toni Paloheimo in LinkedIn, read his post “What are great customer experiences made of?” and join the discussion!

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SAPA TURNED MISSION IMPOSSIBLE INTO MISSION ACCOMPLISHED

Mission impossible: to create a new financial infrastructure, processes and tools for a new global merger-based business operating in 40 countries, from Asia to the Americas, in 12 months. Sapa tackled the challenge and turned a mission impossible into a mission accomplished.

TEXT MARKETTA TAMMISTO

When the joint venture, formed from the extrusion businesses of Orkla ASA and Norsk Hydro ASA, was completed, creating a new business named after Orkla’s Swedish subsidiary Sapa, it meant a hectic working period in the treasury department. A totally new financial infrastructure was to be created to implement the merger. And, as always in mergers and acquisitions, cash management was on the top of the trea­ sury’s to-do-list.

The task would not be easy. The financial landscape between the two companies’ legacy concepts had more differences than similarities, such as different banks and cash pool solutions, major differences in transaction processing, different – and numerous – ERP systems and different solu­tions in interfacing and conversion tools.

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PHOTO SAPA GROUP

“The project plan would have been stretched under any circumstances. But that was not all,” says Lars Grimsgård, Vice President & Corporate Treasurer at Sapa.

“We simultaneously moved the trea­ sury department from Stockholm to Oslo, re-built the technical platform for our treasury system, recruited new staff and ramped up the new Corporate Treasury department – all this without any breaks in the services to our units around the world.

In order to proceed we also had to take into account many changes of ERP systems and a larger restructuring project.”

Yet another challenge was the time­ scale, which was extremely tight for a project of this size.

“We were allowed to start the cash management project in September 2013, and the new solution had to be live a year

later, because the legacy systems of the two joint venture partners would no longer be available after that point. The main concern on the highest level was getting the new system in place in time.”

RACE AGAINST TIME Sapa decided to define a new treasury and payments factory concept that would meet Sapa’s operational and strategic requirements and that could be implemented quickly and efficiently. They chose OpusCapita to deliver the solution, and the companies adopted a phased approach to project implementation.

The implementation started in December 2013, and the last company exited from the legacy system and was integrated into the new payment factory solution by September 1, 2014, which was the ultimate

The solution helps us standardize our cash and liquidity operations and gives many possibilities to develop the financial processes further.

Lars Grimsgård, Vice President & Corporate Treasurer, Sapa.

ABOUT SAPA

deadline. When the technical implementation was complete, the project continued by rolling this out on a wider scale to the banking community and across all ERPs.

THE SUCCESS FACTORS The deadline was a challenge, but also a positive factor in the project that Sapa considers a great success.

“We had a handful of issues to decide, evaluate, implement and execute in a very short time. Everybody acknowledged this and the teams followed the agendas and time lines accurately,” Grimsgård says.

“We were also lucky to have extremely experienced implementation teams on both Sapa’s and OpusCapita’s side.

We knew what we wanted, Opus Capita understood what we were looking for, the cooperation with our Shared Service Centre was excellent, and all parties were completely committed to what we were doing together. The project was well structured and also very well anchored by the CFO, who gave full support for the new infrastructure.”

HIGHER QUALITY REPORTING IN LESS TIME Lars Grimsgård says that the new solution gives many possibilities to develop the financial processes further.

One benefit close to his heart is the standardization of cash and liquidity operations.

“In my experience, with standardized reporting you can significantly decrease the time spent by each company on reporting while also getting a higher quality of reported figures.”

Sapa’s second phase is to implement the in-house banking functionality in the OpusCapita solution.

“We have hundreds of bank accounts in our liquidity forecast at the moment. I know the in-house banking project will be a challenge, but I’m really excited to see how far we will be able to get there.”

WHY OPUSCAPITA? Lars Grimsgård lists some deciding factors that worked in OpusCapita’s favor in Sapa’s scoring process: “Firstly, a high score for functional solutions and a generally good impression of the competence level and OpusCapita’s resources’ ability to understand Sapa’s operation and requirements.”

“Something that we liked very much was the Software as a Service concept, not only because it gave the solution a competitive price, but also because SaaS suits the company strategy.”

“We also appreciated the good dialog we had had with OpusCapita from the very beginning.” n

Formed in 2013 as a joint venture between the extrusion businesses of Orkla ASA and Hydro ASA, Sapa is the world leader in aluminum solutions. The new business combines global reach and local presence with 23,000 employees in more than 40 countries, promoting excellence in extrusion, building systems, and precision tubing. Headquartered in Oslo, Norway, Sapa has annual revenues of NOK 42 billion (EUR 5.1bn).

CHALLENGE

To develop a new financial infrastructure and accordingly implement new cash management processes to meet the needs of Sapa, the new global business established with the merger, within less than 12 months.

SOLUTION

A centralized cloud-based cash, liquidity and payments factory solution provided

by OpusCapita, using OpusCapita’s Payment Manager integrated with SWIFT’s Alliance Lite2 bank connections.

OpusCapita is an experienced pioneer of electronic banking and cash flow automation, and one of the first vendors to integrate SWIFT Alliance Lite 2 into its cloud-based payment factory solution.

Sapa was an early adopter of this integrated liquidity and bank communication solution.

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NEARSHORING IN VILNIUS

CLOSER TO HOME TEXT: RIIKKA TIETÄVÄINEN-AROLA

PHOTOS: RIIKKA TIETÄVÄINEN-AROLA AND VILNIUS TOURISM & CONVENTION BUREAU

The old and the new meet in Vilnius, the busy capital of Lithuania. The centrally located office building that houses OpusCapita’s service center is also a combination of old and modern. Inside, you are greeted with Scandinavian culture and languages. “Welcome to little Scandinavia,” say Lina Maroscikiene (left) and Dovile Lazinskiene.

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OpusCapita’s new service center is located on Vilnius’ beautiful main street, Gediminas Avenue. If I could speak Norwegian, I would have been greeted with “hyggelig å møte deg” upon arrival, since the majority of the people in this Lithuanian office are fluent in Norwegian.

General Manager Lina Maroscikiene describes the nearshoring center that provides financial accounting process and transaction services for customers in the Nordic countries in their native languages as “a little Norway” and “a little Sweden”. The atmosphere in the modern office is indeed very Scandinavian. You can hear discussions about Nordic movies and books in the coffee room, the news from Norway is a popular subject, and there are even small festivities arranged on the national days of Norway and Sweden.

“When you learn a language, you become familiar with the culture, too. We can

serve our customers in their own language, which removes the obstacles to effective communication and also from the ways of operating together.”

Maroscikiene and Dovile Lazinskiene, Team Leader for purchase-to-pay processes for large and medium-sized businesses, were among the first to receive extensive Norwegian language training in 2006. Today the center has about 100 employees who all speak Norwegian and/or Swedish, and also Lithuanian and English. At the moment 20 new employees are receiving language training – in classrooms named after gods from Norse mythology.

The language training takes five months and complies with university standards. On top of the general language studies there is a period spent learning the special financial accounting terminology and orientation in the system environment, working methods and the ethics and compliance issues, for instance.

“The first six months of employment is purely an investment in people. Thus we are an attractive employer, which makes it easy to attract the highly educated workforce of Vilnius,” states Maroscikiene.

“Learning a new language was very interesting, inspiring and intensive, and a

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great opportunity, too. This is a very unique working environment in Lithuania, and I think the customers visiting the premises are always impressed,” Lazinskiene says.

TRUST, QUALITY AND A DESIRABLE PRICE TAG The service center is a part of Norwegian financial accounting outsourcing company Norian Group, which OpusCapita acquired in September 2014. The operations in Vilnius have been growing steadily over the past few years. Lina Maroscikiene says the outsourcing trend has now reached the small and medium-sized businesses in the Nordic countries.

“The decision to transfer work to another country is never easy, especially the first time. In addition, a lot of companies may still have some doubts and think that they are ‘too small’ for outsourcing. Nearshoring

can be a way to cross this threshold.”

The service center has Norwegian- and Swedish-speaking teams for order-to-cash, purchase-to-pay and record-to-report processes. The teams provide effective and flexible transaction services mainly for large customer companies, and handle the financial accounting processes of smaller customers even end-to-end.

“The broader competence within a team, combined with the language be­n­ efits offer our customers true added value.

We can take the initiative and be more ­independent. Contacting the Swedish tax officials is not a problem, for example.”

Dovile Lazinskiene mentions that a mutual language builds a lot of trust, which is essential, and also creates a certain degree of familiarity.

“There are also the practical benefits ­­of geography: as we are located only a short flight and a time zone away, ‘in the

HIGHER COMPETENCE, LOWER COSTS “The feedback from our customers, both large companies a­ nd smaller businesses, has been nothing but positive,” says Knut ­Anders Opstad, CEO of Norian Group.

“It is the combination of the language skills and cultural knowledge, the high level of education and competence also in the local standards of accounting, and the utilization of web-based platforms which make it possible for even medium-sized and small businesses to successfully outsource – and enjoy the cost savings.”

According to Opstad, the number of Norwegian and Swedish customers whose accounting operations are handled as a whole directly from Vilnius is growing. The center has over doubled in size within a few years. In the future the focus will be on continuing the development as a competence center.

“The question is where we can offer the best value in terms of competence and costs. The production of accounting services in Vilnius will increase, but of course we need highly skilled outsourcing experts in Norway and Sweden, as well, to serve our customers.

And as a part of OpusCapita we have more resources to grow and an even broader service range to offer.”

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­ orning’ is the same time for us and for m ­our cus­tomers. But still, a certain amount of t­ olerance for small differences is needed, too.”

Although the reason driving outsourcing, near or far, is generally the price tag, Lina Maroscikiene says that “it is not just about the costs”. According to her, cus­ tomers are looking for a better price and also for improvements in the quality of the processes. Also large companies who may already have experienced offshore outsourcing are now appreciating a certain sophistication of services more, not just mere cost savings.

“We have been developing our competence constantly to ensure our competi­ tiveness. As the requirements for not only cost efficiency but also for quality grow, the interest in nearshoring will only increase.” n

NEWS AND EVENTS

OPUSCAPITA TO BUILD A GLOBAL PAYMENT SOLUTION FOR VALMET

OPUSCAPITA TO PROCESS DNA’S SALES INVOICES

OpusCapita and Valmet have extended their cooperation to implement a global cloud based payment and collection solution. The solution includes modules for payment management, incoming payment reconciliation and posting, and it will be gradually taken into use in all Valmet Financial Services geographical areas.

With OpusCapita solution Valmet will be able to globally harmonize cash management and payment and reconciliation processes to support the company’s future business objectives. Valmet has positive experiences from the solution in its operations in Finland.

Valmet Corporation is a leading global developer and supplier of services and technologies for the pulp, paper and energy industries. Valmet’s services cover everything from maintenance outsourcing to mill and plant improvements and spare parts. Valmet’s net sales in 2014 were approximately EUR 2.5 billion. Valmet’s head office is in Espoo, Finland and its shares are listed on the NASDAQ OMX Helsinki Ltd.

In Finland, telecommunications group DNA has selected OpusCapita as its multichannel invoice processing operator. OpusCapita will take responsibility for handling all of DNA’s sales invoices, for both private and business customers.

DNA is one of the largest invoicing companies in the Nordic countries sending around 20 million invoices every year. As much as two thirds of these invoices are electronic.

The integration of invoicing systems into one service environment ensures a high-quality and harmonized invoice sending process, and also cuts costs for customers. The new contract, the value of which is significant on the Nordic scale, will further develop the company’s service process and give DNA the opportunity to utilize invoices for targeted customer communication.

DNA Ltd has more than 3 million mobile communications and fixed network customers.

The company recorded a turnover of EUR 766 million in 2013.

Photo: Valmet

NORDNET CHOOSES OPUSCAPITA FOR NORDIC PAYMENT FLOWS OpusCapita will deliver a complete payment factory solution for Nordic online bank Nordnet. The solution includes the bank’s payments throughout the Nordic countries and enables centralized control of all incoming and outgoing payments.

“OpusCapita and its solution will help us to streamline and future-proof the handling of our payment flows on a Nordic basis,” states Carina Tovi, COO of Nordnet.

Nordnet chose OpusCapita following a comprehensive procurement with multiple bidders. The project is expected to be complete in the fall 2015.

Nordnet online bank has about 527 700 accounts in Sweden, Norway, Denmark and Finland. The holding company, Nordnet AB, ­ is listed on NASDAQ QMX Stockholm.

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Strong growth expected in Germany: OPUSCAPITA OPENS NEW OFFICE IN FRANKFURT OpusCapita expects strong growth for finance and accounting outsourcing in Germany and has opened a new representative office in the financial center Frankfurt. OpusCapita’s German head office is ­located in Hanover.

According to Christian Scherf, Managing Director of OpusCapita GmbH, there are three things driving the development in the German market. Firstly, the increasing cost pressure and the fear of crisis, secondly, rapidly growing e-invoicing in Europe adds to the trend of automating and outsourcing of financial processes, and thirdly, the finance departments’ unfounded reservations towards F&A outsourcing are fading.

INTERNATIONAL OUTSOURCING PROJECT FOR A NEW MAJOR CLIENT

A TOUCH OF LUXURY AND CHRISTMAS MAGIC OpusCapita offered its Polish customers and their families a bit of Christmas magic at an event organized just before Christmas. Guests were delighted by the chance to have a makeover with a stylist and a make-up artist, and the children enjoyed various activities from making cards to face painting. The most anticipated event was, of course, meeting an important visitor from OpusCapita’s homeland, Santa Claus, who had presents for everyone.

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One of the latest major contracts in the German market is a transnational outsourcing project, where OpusCapita streamlines and automates the client company’s financial processes in Germany and six additional European countries.

The client is European market leader in its in­ dustry and has active branches and production sites ­in several countries. In the future the client’s about ­200 000 incoming and 240 000 outgoing annual payments will be processed by OpusCapita.

“We can contribute with our specialized knowledge on transnational invoice processing and long experience in automation of financial processes. It is exciting to start a new partnership with a project of such interesting scope,” says Christian Scherf.

NEWS AND EVENTS

FIND OUT about

UPCOMING EVENTS and WEBINARS opuscapita.com

FREDRIK AF KLERCKER APPOINTED AS CUSTOMER SERVICE DIRECTOR OpusCapita is continuing to build a strong Customer Service organization and has appointed Fredrik af Klercker as Customer Service Director. He has held various management positions in CRM and Customer Service, most recently in Tele2, and has a total of over 15 years of experience, especially in driving change programs in large organizations improving the end-to-end customer process.

“My focus is to ensure a customer oriented approach in everything we do and set a new standard for the customer experience,” af Klercker says.

MORE NEWS

opuscapita.com

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INSIDE STORIES There are 2,300 OpusCapita employees at your service. Meet some of us!

Peter, Germany

Steinar, Norway

Ewa, Sweden

Ahti, Estonia

I am Peter Naumann, Senior Solution Consultant for FAO and AS in Germany. I am still not sure how I ended up completing a Bachelor and Master in F&A in Sydney, as both my parents are neuropsychologists. However, I truly enjoy my work.

My responsibilities are fairly broad: I calculate the business cases for our service offerings, come up with finance and accounting process improvements and build up the German business operations in cooperation with the sales team. We have a unique opportunity to develop the market in Germany and it’s really exciting to be able to set up a

strategy and see your ideas becoming a part of the OpusCapita development path.

When I have a day off, I like to play a round of golf. I also love playing football. However, I am currently spending most of my free time doing my finance diploma. n Feel free to contact me whenever you want to discuss finance and accounting process optimization or outsourcing approaches – or if you just want to grab a cup of coffee!

My name is Steinar Lindtvedt and I joined OpusCapita last year as Cross Border Project Manager in Norway. I am finding this opportunity to work internationally very exciting. OpusCapita’s organizational structure is interesting as it gives me an insight into other countries and their cultures.

I work primarily with implementation projects and interact with customers and project teams, which suits me well as I am quite outgoing and energetic. For me, the chance to overcome challenges and accomplish goals together with highly compe-

tent colleagues is a huge motivational factor.

Like most Norwegians, I really enjoy cross country skiing and downhill skiing during the winter. I enjoy competing and challenging myself and spend most of my free time working out by weight lifting, running and road cycling.

I am Ewa Wollschläger, Global Business Process Development Manager located in Sweden. I first started working for OpusCapita three years ago as a Key Account Manager.

As a person I am positive, and I enjoy new challenges that help me to develop as a person. I find working at OpusCapita very varied and enjoyable.

Since last autumn I have been focused on developing the concept of Evidenced Value for Customers both internally and externally. It is really rewarding to be a part of a process that helps to ensure and increase our existing and prospective

c­ ustomers’ satisfaction, and offers new business possibilities and the chance to grow with us. I’m looking forward to continuing the work in this area further.

Outside the office I am very passionate about downhill skiing, which I previously practiced actively. In the summertime I enjoy boating. Just spending time with family and friends is a good way to spend free time.

My name is Ahti Allikas. I recently took over the responsibility for developing the Order-to-Cash (O2C) concept as a Product Director in the O2C Business Unit. Previously I worked as a Product Director responsible for the Receivable Manager offering. Altogether I have worked for OpusCapita for 16 years in different positions.

Product management work is fascinating, because I like to consider situations and put myself into other people’s shoes to try and work out what they might have on their minds. You also have the opportunity to work together with different units within the company and get them working towards a common goal. I believe in good argumentation

and don’t like discussions just for discussions’ sake.

As a person I am open and straightforward, and admire honesty in other people, too.

I travel quite a lot for my work, so I like to spend my free time at home with my lovely wife and three kids. We have a house with a small garden just outside Tallinn.

n Feel free to contact me if you have any questions related to Purchase-to-Pay implementations and projects.

n Feel free to contact me if you are interested in the concept of Evidenced Value for Customers.

n Feel free to contact me whenever you have any questions about OpusCapita’s Order-to-Cash (O2C) offering. You can also ask about product management or product development – actually, you can pretty much ask about anything. If I can, then I will give you an answer, too.

CONTACTS firstname.lastname(at)opuscapita.com 22 |

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OpusCapita provides financial process automation – either outsourced or as a service – to more than 10,000 customers in over 50 countries.

OPUSCAPITA USERS WORLDWIDE

OPUSCAPITA HEAD OFFICE OpusCapita Group Oy, Keilaranta 13, FI-02150 ESPOO, FINLAND, Tel. +358 20 452 3000 Fax +358 20 452 9271, www.opuscapita.com, information.fi@opuscapita.com ESTONIA OpusCapita AS, Tartu mnt. 43,10128 Tallinn, Tel. +372 6519 000 FINLAND OpusCapita Group Oy, Keilaranta 13, 02150 ESPOO, Tel. +358 20 452 3000 GERMANY OpusCapita GmbH, Büttnerstr. 21, D-30165 Hannover, Tel. +49 511 336 30 2777 LATVIA AS OpusCapita, Mūkusalas iela 41 b, 1004 Riga, Tel. +371 7 066 500 LITHUANIA UAB OpusCapita, Užubalių k., Avižienių pšt., LT-14180 Vilniaus r. sav., Tel. + 370 5 278 0330 NORWAY OpusCapita AS, Rosenkrantzgate 16, 0157 Oslo, Tel. +47 22 72 84 70 POLAND OpusCapita Sp. z o.o., ul. Poleczki 35, Poleczki Business Park, Building A1, 02-822 Warszawa, Tel. + 48 22 461 25 00 SLOVAKIA OpusCapita s.r.o, Elektrárenská 4, 831 04 Bratislava, Tel. +421 2 4961 9200 SWEDEN OpusCapita AB, Englundavägen 7, 171 23 Solna, Tel. +46 8 475 28 00

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