The first half of this post was originally published on BetterProjects.net on April 16, 2010.


This is another entry in our occasional series, You Make the Call. We will present a scenario from our past BA work, with the names changed to protect the guilty, and ask you to tell us in the comments what you would have done in the situation. The resolution to the issue may contain a system change recommendation, but the solution will be primarily concerned with the underlying business process.


The Setup

You are a BA for a multi-national service company operating in Europe. You are headquartered in France, but have local offices in most countries in western Europe. Your company is in the business of selling service contracts for computer equipment. Each country has its own sales and service team, along with its own internal systems for financials, billing and service tracking. Your company has grown its service arm organically over the years and thus none of the in country systems are integrated. Each country has a sales manager who focuses on bringing in revenue as service contracts and a service manager who controls the fulfillment of the contract through call centers and field technicians.

When a new service contract is signed in a country, the sales manager forwards a copy of the contract to the service manager, who enters the contract in the service system and a copy to the AR department who bills the customer. If the customer fails to pay their bill, the AR department contacts the sales manager who collaborates with the service manager to stop all service of the customer’s account until the bill is paid.

All countries, save one, have a very similar revenue to cost ratio. After an internal audit, it was discovered that the sales manager for this one country had been receiving off the books payments from customers for service contacts that were never billed through AR, but which were serviced by the service team.

The Question

The sales manager was dismissed from the company, but the executive team is now wondering if the same behavior is happening on a smaller scale in all of the countries. The audit team is currently undertaking a company-wide review of all contracts to ensure they were paid for by the customer.

You, as a senior BA, have been called in to assist in designing a new billing and service execution process. What changes do you make to the current process to ensure that all contracts sold are properly accounted for by both the service and the AR teams?

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This wrap-up was originally posted on April 23, 2010.

Our most recent You Make the Call focused on a service company in Europe that needs some help with its sales and billing processes. Check out the original post here before reading the solutions below.

The ‘Short Walk’ (Process Improvement)

The fastest way to lessen the possibility of theft would be to reorganize the flow of paperwork once it leaves the sales manager’s hands. Instead of multiple copies being sent to two different departments, the single set of paperwork can be sent first to the AR department, who creates an invoice, and then on to the service manager who enters the contract into the service system. By changing the flow in this manner, you ensure that a customer does not receive service who has not first been billed for the contract.

The downside of this solution is two fold: first, this will slow down the process of the customer receiving service. Many service contracts are active immediately after being signed, especially if the hardware being covered is old and not currently covered by a different service vendor. By making the process serial instead of parallel, it will take longer for the contract to be active. This could cause a customer satisfaction issue, if the wait is overly long.

The second issue here is that theft is still possible, but the sales manager, AR and service manager all now have to be in on the theft. If all three are complicit and collude to steal, then this solution will fail to stop the problem. This solution may work in the short term, but eventually a dishonest group of people will find a way to steal, if they really want to do so.

The 'Moderate Walk’ (Process Re-engineering)

Sales functions almost always require direct communication between the sales team and the customer. Because of the many cultural and language differences within Europe, it is usually best to have a sales team that is local to the country, if not different parts within the same country. But managing the service contract and billing functions are generally the same throughout the western part of the continent. These functions could be consolidated into a single processing and management center at the corporate headquarters.

By moving the billing and contract management functions out of the countries, the ability for collusion to occur is greatly diminished. It also can speed up the process of contract entry as it is possible that a smaller number of people would be needed to enter the same number of contracts. This efficiency would occur because the contract entry team can focus solely on that one job. If this company also has a product division, the AR services for the two divisions could possibly be combined, resulting in even greater savings for the company.

The 'Long Walk’ (Systems Project)

This is the most costly and time consuming way to resolve the issue, but each of the in-country billing and service systems could be removed and a single system could be implemented at the corporate headquarters. The contract could be entered a single time in this new system, which would then create a bill that is sent to the customer. This solution is nice because the contract is only entered a single time, instead of twice with the previous scenarios, and you can then provide service and billing functions with a single user role.

As a long term solution, this can seem especially attractive, especially if you combine this solution with the process re-engineering steps from the previous solution. You could conceivably make the cost of such an undertaking look even more attractive if the system included call center and service fulfillment capabilities. A single system for all service related information could also make outsourcing of functions to a lower cost country an option as well.

So how did you do? Would you have done anything different?