DSO Diagnostic
Practus
December 2018
Knowing ABC Better
3
Preliminary Assessment
4
Diagnostic Plan of Action
8
Timelines and Resourcing
12
Fees
13
Engagement Team
14
Table of Contents
Knowing ABC Better
Annual Sales
Receivables
Customers
Project
Geographical
Group Entities
Managers
Spread
Client Name
Non-US Company
100 Technology Companies
Supplier Award
Sustainability Indices
Overall DSO Status as on November 30, 2018
106 days
77 days 29 days
Organization wide DSO
DSO for the sales
DSO for the unbilled
already billed
revenue
Preliminary Assessment
Ownership and
People
Process
System
Reporting
Accountability
Healthy mix of experienced
Absence of documented
Presence of a robust BI tool
Robust reporting capabilities
Exclusion of Delivery team from
team members and fresh
SOPs for the Billing and
for AR-related analytics
with ability to drill-down and
Collection & DSO accountability
blood in the overall team
Collection processes
slice-&-dice, enabled by
Absence of formal process of
composition
Access Rights issues in
strong IT enablement and a
Client-specific process
Peoplesoft leading to lack of
tech-savvy team.
agreeing collection targets on a
Commonality of goals across
variations, leading to lack of
end-to-end visibility of AR
weekly / monthly basis
most functions to improve
standardization
information to the DSO team
Absence of a reporting
collections and reduce DSO
calendar and standard
Absence of date-based
Commencement of Projects
Numerous manual
reporting timelines.
“promise-to-pay” commitments
Complex Organization
on the basis of an MSA,
interventions in the overall
and tracking of actuals against
Structure due to the size and
without issuance of PO from
billing and collection process
Scope of improvement in the
the same
scale of the company and
the customer
rigour of collection reviews
across different departments.
Absence of DSO-linked KPI
legacy of acquired entities
Time-lag in approval of RUS
setting across all depts.
(Resource Utilization
(Finance, SBU Finance, Delivery
Statement) by the client and
and Sales) & an end-to-end
consequent delays in raising
incentivization plan linked to
invoices, especially for T&M
KPIs
(Time & Material) contracts
Team Members We Met
JAIDEV IYENGAR
ASHISH TIKHE
• Vice President
• Group Manager
ANIRUDDHA GADRE
SUNNY BENJAMIN
• VP Finance
• Project Delivery Manager
MANOJ JOSHI
PRIYA BOSE
• VP Finance
• Business Analyst
ASHISH MALANKAR
JITENDRA PATIL
• Manager-Billing and Operations
• Manager - AR Communications
Key Objective
106 days
85 days
21 days
mn
Organization wide
Organization wide
No. of days of
as-is DSO
targeted DSO
reduction targeted
Potential for a maximum release of free cash flows of $ 290 mn by reduction of DSO.
The focus of the 12 month Gantt Chart will be to maximise the amount of free cash released. Even a fraction of this release would give a
significant improvement to the free cash flow of the organization.
Diagnostic Actionables
Process Mapping
Reporting & Review
Root Cause Analysis
Commercial
Behavioural
Framework
Diligence
Assessment
A detailed mapping of
A cross-functional
Identification of
Review of the process
Linkage of KPIs to
the As-is and To-be
assessment of the rigour
reasons for the major
of negotiating
collections and DSO and
“Order to Cash” cycle.
of reporting and reviews
AR outstanding's (both
commercial terms such
incentivization policy
around billing and
billed and unbilled) split
as credit periods,
linked to the
collections.
by customer,
payment milestones
achievement of such
geography, type of
(for FP projects) and
KPIs, for driving people
contract (FP / T&M).
adherence to those
behavior towards an
terms.
improved focus on
collections and DSO.
Deliverables
1. As-is and To-be Process Maps
2. RCA on Overdue Debtors
Detailed As-is process and to-be maps for
Root Cause analysis report by billed / unbilled,
Order to Cash Process
key customers, geography and type of
contracts
4. Project Plan for next 12 months
3. Action Plan Document
Detailed action plan containing a report on
Detailed project plan with Gantt for the next
gaps and recommendations
12 months
6 weeks
Diagnostic expected to
be completed in 6
weeks from the start
date
5 resources
Timelines and
Diagnostic to be
Resourcing
headed by an
experienced team
leader supported by 4
team members
The focus of Practus’s approach is to ensure and
enable a long-term working relationship with ABC in
the implementation phase. The Diagnostic is merely
a tool to help us define what the implementation
phase would entail.
We propose a fee of INR XX Lakhs (excluding taxes)
for the 6 weeks of diagnostic. The above is inclusive
of all out-of-pocket expenses.
This engagement will be done out of ABC Office in
Pune. The staff at Practus’s end will be combination
of both onsite and offsite.
We appreciate the importance of spending wisely in
today’s economic climate. Therefore we are keen to
ensure there is a balance between the cost of the
service, the value received by you, and the
confidence in the assurance provided by us. In
considering these factors, we have provided a quote
which we believe is commercially viable for both
Fees
parties and will deliver the overall quality that is
required by the business.
Engagement Team
Venkat S
Amit Modi
Karan Rathi
Co-founder & Director
Engagement Partner
Engagement Leader
A qualified Chartered
A qualified Chartered
Chartered Accountant,
Accountant, Cost &
Accountant with over 17
Company Secretary and
Management Accountant
years of experience in
Master of commerce with
and Risk Manager by
Finance and Accounts.
over 6 years of experience
qualification and an
Working as a Partner with
in Finance and Accounts.
entrepreneur and category
Practus, handling a diverse
Working as an
creator by vocation
portfolio of clients globally
Engagement Leader
for Practus
managing 4-5 clients
LinkedIn:
LinkedIn:
LinkedIn:
https://www.linkedin.com/
in/s-venkat/
https://www.linkedin.com/
https://www.linkedin.com/
in/amitumodi/
in/karan-rathi-2a966672/
You
Amit Modi
+91 98212 89184
[email protected]
http://www.Practus.in/