AOL transformed finance and administration services, improving efficiency and cutting costs

HP is a good cultural fit. Theres only so much that processes and systems can do for you. At the end of the day, it comes down to the people. HP takes a personal interest in the success of AOL. Thats what makes our relationship work.
Ned Worthington, Director, Accounting Services, AOL

Objective
Improve speed, accuracy and cost-efficiency of finance and administration (F&A) business processes

Approach
Provided expertise, flexibility and support for shared service center and Enterprise Resource Planning (ERP) system implementation Helped develop F&A transition plan including repeatable processes, proven methodologies, and a Best Shore global delivery strategy Established service level agreements (SLAs) aimed to improve cost-efficiency, accuracy and speed Managed Source-to-Pay, Order-to-Cash and Record-to-Report services within F&A Ensured performance and transparency by implementing a Service Excellence Dashboard

services to HP improved processing turnaround time and accuracy while dramatically reducing operating costs

HP customer case study: Outsourcing F&A

AOL wanted to align F&A operations and business

AOL Inc., formerly America Online, Inc., is a leading global Internet services and media company dedicated to providing customers with innovative Web services and one-of-a-kind content. AOLs network includes comprehensive tools and platforms, online advertising services, subscription-based access service and more than 80 premium and niche content sites. Continuing its leadership in business and technological innovation, AOL wanted to improve the agility, consistency and cost-efficiency of its F&A operations by moving to a shared services operating model, implementing an ERP system and transferring transaction services to a low-cost region.

Business benefits
Processed 100% of purchase orders,100% of billing contracts and 99.85% of invoices within just three business days Completed travel and expense audits with 100% accuracy ensuring accurate employee reimbursement Automated F&A processes, reducing opportunity for errors while enhancing quality and speed Consolidated disparate F&A functions and enhanced knowledge sharing capabilities Enhanced F&A accuracy, productivity, visibility and cost-efficiency

Industry: Communication,
Media & Entertainment

The beginning of the AOL-HP relationship was much more formal and driven by specific deliverables in the contract. As we learned to work with one another, trust and confidence grew, enabling much more work to be migrated than originally thought. Ned Worthington, Director, Accounting Services, AOL
When AOL began exploring outsourcing services, our functions were dispersed throughout the business, says Ned Worthington, AOLs Director of Accounting Services. We wanted to consolidate those functions under a shared services umbrella. In addition to dramatically reducing operating costs, implementing shared services would improve knowledge transfer, enhance process consistency, provide significant scale benefits and boost productivity. Driven by cost savings and efficiency initiatives, AOL sought an experienced, collaborative outsourcing partner to provide F&A services. HPs capabilities, transition expertise and Best Shore strategy for global delivery provided the flexibility that AOL needed for its ambitious F&A transformation. HP came in and worked with us to evaluate opportunities, says Worthington. HP helped guide us through process areas and the ERP system implementation.

Centralized F&A delivered new efficiencies and cost savings

Once AOL had its shared services and ERP system in place, HP collaborated with AOL to design a detailed F&A transition and execution plan for Source-to-Pay, Order-to-Cash and Record-to-Report service towers and affiliated processes. The scope of work included: Accounts Payable Billing Cash Applications Credit Collections Contract Management Fixed Asset Management Help Desk Master Data Management Partner Settlement Procurement Reconciliations Travel and Expense Multiple teams from HP worked with the delivery team, developing strategies that would maximize IT, streamline processes, automate technologies and ultimately bring greater efficiency, accuracy and operational savings to AOL. For example, knowledge transfer was a challenge. We didnt have a lot of visibility into processes, says Worthington. Tacit knowledge, often described as know-how as opposed to know-what, can be difficult to transfer to others and is not easily shared. Leveraging experience, HP provided AOL with valuable short cuts, insights and procedures to expedite data extraction and improve data analysis. HP helped us evaluate metrics and learn how to successfully break processes down into their component parts, says Worthington.

HP ensured transparency and high performance

Together, AOL and HP established a SLA for each process laying out minimum and expected targets. Detailed, well-written SLAs reflected our expectations, says Worthington. For instance, AOL expected HP to create and complete at least 85% to 95% of purchase orders within three business days. Then, AOL and HP executed the plan in just two months, effectively shifting F&A responsibility to HP. Standardized, repeatable processes, thorough change management strategies and proven methodologies helped ensure a smooth transition of work to HP. And, HPs capabilities to support multiple ERP and legacy systems allowed the solution to seamlessly blend with AOLs existing technology investments.

Part of the reason we chose HP was because it eats its own cooking, so to speak. HP went through a similar transformation, did its own work offshore, and used its own services. Ned Worthington, Director, Accounting Services, AOL
HPs new role included managing and monitoring everything from procurement and billing to collections and general accounting. Throughout the transition, HP worked with AOL to evaluate progress and ensure the transition was on track and meeting expectations.

To ensure high service quality, HP implemented a Service Excellence Dashboard. The dashboard provides AOL with a transparent view into F&A effectiveness while providing HP with real-time performance feedback. In addition, HP provided weekly reports on volumes and conducted monthly governance reviews to discuss SLA performance. HP consistently met SLAs, says Worthington.

AOL improved processing speed, accuracy and visibility

Today, AOL processes transactions faster and with higher accuracy. This includes 25,000 invoices, 3,800 purchase orders, 32,400 travel and expense audits, 3,600 billing contracts, 12,000 credit checks, 60,000 asset transactions and 360 bank reconciliations annually.

Customer solution at a glance

HP Services
Finance and Administration Services F&A Order-to-Cash Services F&A Record-to-Report Services F&A Source-to-Pay Services

With the help of HP, AOL processes 100% of purchase orders and 100% of billing contracts within just three business days despite fluctuations in transaction volumes. HP processes $40 to $55 million worth of invoice transactions in a single month. Whats more, HP processes 99.85% of these invoices within just three business days and with 99.55% accuracy. To ensure that employees are quickly reimbursed for their legitimate claims and AOL doesnt pay non-reimbursable claims, HP helps AOL complete employee travel and expense audits with 100% accuracy. Thats 10% higher than the minimum SLA.

The F&A transformation let HP take the wheel so we could focus on business outcomes.
Ned Worthington, Director, Accounting Services, AOL

HPs flexible, collaborative approach to outsourcing enables AOL to retain control over its F&A operations and adjust to dynamic business needs as they arise.
HP has been an excellent partner. It provides the flexibility to move quickly as AOLs needs change even month to month.
Ned Worthington, Director, Accounting Services, AOL

AOL extended partnership for three more years

Since the beginning of the partnership, HPs AOL account team has nearly doubled in size. To ensure continued success, AOL recently renewed its contract with HP for an additional three years. With finance and administration services shifted to HP, AOL can focus more on strategic decision-making and less on day-to-day operational issues.

HPs global economies of scale, proven process reengineering methodologies and comprehensive F&A solutions enhance AOLs business agility and quality while dramatically reducing finance and accounting costs, enabling AOL to re-invest savings back into its business. With newly automated processes, reduced opportunities for errors, increased operational visibility and improved scalability, AOL is geared for business growth.

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Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. 4AA3-2500ENW (100150-RCS), Created January 2011