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Canon Europe is a subsidiary of Canon Inc. of Japan, a leading provider of imaging solutions such as photographic equipment, printers and scanners.
Canon Europe contributes about one-third of Canon Inc.’s worldwide sales revenue and employs about 11,000 people across Europe, the Middle East and Africa. When it decided that desired finance and accounting improvements could best be achieved through outsourcing, it turned to Accenture.
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Like most high-technology entities, Canon Europe is constantly confronted with increased competition and tighter margins. Not long ago, company executives set out to address both concerns. One idea was to create powerful, differentiating relationships with suppliers by improving finance processes to reduce costs, making it easier to do business with Canon Europe.
They also determined that finance and accounting improvements, like ordering from approved suppliers using standardized purchase orders, could increase compliance, reduce exceptions, and accelerate the procure-to-pay and order-to-cash cycles.
After much study, Canon Europe executives determined that centralizing the company’s finance operations would be the right way to achieve the above goals; therefore, the company established a shared-services center in the Netherlands. By 2006, however, it was clear that further savings and greater process effectiveness would only be possible through outsourcing. Attention then turned to identifying the right outsourcing partner.
For several years, Accenture has been working to define and quantify high performance: the characteristics of companies that consistently outpace their industry peers. The Harvard Business Review has referred to this initiative as one of the decade’s most important business-research programs. In the autumn of 2006, Accenture submitted a proposal to Canon Europe that included significant details about its research on high performance. Canon Europe executives recognized the relevance of the program to their company’s own strategic initiatives to achieve world-class finance operations and, following detailed conversations with Accenture leaders, decided to outsource the company’s European shared-services operation to Accenture.
Accenture’s commitment to high performance—combined with deep finance and accounting experience, innovative process methodologies and an established global delivery network capable of providing unparalleled scale and expertise—were key factors in the decision.
Canon Europe signed a seven-year business process outsourcing contract with Accenture, focusing on finance and accounting. Managed through the Accenture Delivery Center in Prague, Accenture provides Canon Europe with a range of finance processes, including accounts payable, cash posting and fixed assets administration, as well as travel expense processing. Services are provided in 12 languages to Canon Europe businesses in 14 European countries.
Individual Accenture teams (one for each process such as accounts payable and cash posting) interact daily with Canon Europe “finance process owners” and local finance teams. On a biweekly basis an operational committee composed of Accenture leads from each functional process convenes to share ideas, insights and concerns with finance process owners. Each quarter a joint Canon and Accenture functional committee reviews and assesses the outsourced operation’s overall performance and sets the direction for future improvements.
Three technology innovations also play an important role. The first of these is an Accenture-developed self-service portal that is updated daily to help Canon Europe’s suppliers control, access and monitor invoicing and payment activities. Each supplier has a secure account for logging on and acquiring up-to-date information on the status of its invoices.
The Accenture Transaction Compliance and Analytics Tool is another application deployed to Canon Europe to help prevent duplicate or improper payments before they happen. The tool handles large volumes of information (including invoice line-item data) and identifies where exceptions are likely to occur. The tool also enhances audit knowledge with advanced report-generation capabilities and minimizes the effort associated with post-payment audits. Accenture was also able to use this tool to identify and recover duplicate payments made prior to the outsourcing arrangement.
Thirdly, the Accenture Planning and Control tool helps financial controllers monitor the monthly close process.
The transition from a shared-services model to the Accenture Delivery Center in Prague was completed in only four months. Virtually no process reengineering was needed and all finance activities were quickly stabilized following the initial transition. This was a significant achievement since the second month-end close coincided with the end of Canon Europe’s fiscal year. Expansion of the outsourcing program to include further processes and more geographies since transition is further testament to its success.
It is clear that finance and accounting outsourcing—with dedicated Accenture teams supporting and regularly interacting with Canon Europe process owners—has positioned the company to achieve its finance-related goals:
Within Canon Europe’s new finance and accounting outsourcing environment, there is now greater assurance that activities are being executed effectively with maximum efficiency, and that productivity and continuous improvement are daily priorities. Such advancements demonstrate why the goal to improve productivity within the outsourced activities by 25 percent in three years is well within reach. Simply put, businesses that achieve high performance continually improve. And the desire to keep getting better is the foundation of the relationship between Canon Europe and Accenture.
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