BPM Logics (I.T. Group) has implemented a project at Kazakhtelecom Information Systems Directorate (ISD) to automate the accounts receivable management process using the Metasonic BPMS platform. The volume of receivables is expected to decrease by 10-20% during the first year of the system's use.
"We've tried somehow to revitalize BPM in the company for a long time," says Vladimir Tarasov, Head of the Business Processes Management Center at Kazakhtelecom ISD. "We've tried almost all possibilities, starting with Casewise, then ARIA, and now Oracle BPM. However, BPM tools are only used by IT staff, not by business users. And it should be vice versa."
This desire for managers who are responsible for business processes of the company to use BPM resources was the reason why Kazakhtelecom ISD initiated another BPM project. ISD specialists found Metasonic Suite to be the most user-friendly and interesting product, so it was deployed. It helped to build and automate an end-to-end process for the management of accounts receivable. It is not the key business process for a company, but still an important one. Everyone wants to organize with their debtors in a way that causes receivables to decrease, not increase. "Of course, receivables are a company asset," Tarasov explains, "but inflation devalues them."
Before, accounts receivable operating procedures at Kazakhtelecom ISD were hardly transparent. At the beginning of each month, data on debt were uploaded from the billing system and a manually created Excel spreadsheet was used for accounting and working with debtors. The accounting department was overloaded with manual work, which didn't allow them to thoroughly meet deadlines and work with all delinquent customers. Clearly this didn't decrease the number of receivables.
With Metasonic Build (a modeling module), a process model was developed taking into account all possible scenarios of customer interactions. All interested business divisions took part in the model's creation: accounting department of the sales center, regional sales managers, technical and legal services. Then the process model was transformed into an automated application and, for that purpose, was integrated with the billing system and IBM Notes/Domino.
"Usually integration with existing systems requires considerable effort," Vladimir Tarasov says. "But here everything went smoothly. When we deploy the new system at our branches, we'll also have to integrate it with a third existing system. But I've already seen that it's not complicated."
The project was completed in 4 months. The system was launched for pilot development.
One more advantage of the business process selected for the pilot project was that a project for automated management of accounts receivable was relatively easy to "defend" in front of the executive management: the economic effect (return on investment) in this case was very simple to calculate. As a rule, it is rather complicated after the implementation of IT systems.
"As the key ROI indicator, we already reduced receivables 10-20% during the first year. And the estimated return period was about two years," says Yakov Korobko, Business Development Director for Central Asia at BPM Logics (Metasonic's strategic partner in CIS countries).
Vladimir Tarasov believes that it is not the amount of accounts receivable that matters most but the ability to reduce the collection period of receivables, as well as for employees to be freed from routine work involving all (100%) delinquent customers.
"Another major effect, as we've seen, was the ability to reduce staff of the accounting department by 25%," Tarasov notes. "If you take all branches where the new system will be introduced, you can save money on dozens, if not hundreds, of jobs. The company has just set a goal to optimize human resources. That's why the new system can be useful and we'll be able to develop it - automating other similar processes with its help".
The results of the project will be presented at the BMP Forum "Mission Possible 2014", which will be held on June 6th in Moscow.