Treasury Today Country Profiles in association with Citi

Microsoft

Microsoft, Winner, One to Watch

Kostas Bikos and Marlena Luczak, Microsoft

Microsoft WW Credit Services and WW Online Credit Services have signed a global multi-year managed service solution BPO contract that looks not only at the now but to the future. By doing that they created a credit services organisation that is capable of supporting Microsoft’s evolution to the “mobile first” and “cloud first” strategy as outlined by their CEO. The company believes the dollar savings will be greater in future years and technology enhancements together with productivity improvements will be even more evident; so certainly one to watch.

Photo of Kostas Bikos and Marlena Luczak, Microsoft.

Marlena Luczak

Global Process Improvement Manager

Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realise their full potential.

The challenge:

Microsoft WW Credit Services (WWCS), an arm of treasury in the company, is a global organisation that safeguards Microsoft’s accounts receivable (AR) assets – worth billions. With the announcement of a new CEO in February 2014 and respective changes in the company strategy, the organisation had to adjust in line with the continued evolution of the company’s ambition.

As Marlena Luczak, Global Process Improvement Manager, explains “our existing business process outsourcing (BPO) agreement was no longer sustainable to support the company’s future growth. We had agreements with one vendor covering EMEA and the Americas and with another vendor covering the Asia region. Furthermore, we had leveraged all available cost management solutions under existing vendor agreements, and as we were looking forward to the evolution of Microsoft’s business it became clear that we needed to transform our approach in order to manage our business in a more cost efficient and customer-focused way. Finally, WW Credit Services structure, due to demands of managing the day-to-day operational activities, didn’t give employees enough time to deliver value-add activities as per the company’s new strategy”.

The solution:

A decision was made to transform WWCS – starting with the BPO model it had in place. WWCS wanted to become more agile, to simplify processes and more importantly, to create an organisational model that would create better career growth opportunities for their employees. The objective was to achieve that by 1st September 2014, when their existing BPO contract was due to expire.

Now, for the first time, Microsoft WWCS and WW Online Credit Services have signed a global multi-year managed service solution BPO contract (project Rio) that looks not only at the now but also to the future. In doing so, they have created a Credit Services organisation that is capable of supporting Microsoft’s evolution to the ‘mobile first’ and ‘cloud first’ strategy as outlined by the company’s CEO. Here are just some examples of the solutions that are being and/or will be delivered as part of the transformation under project Rio:

  • A customer portal for credit and collections questions and queries. This will eliminate the need for manual query answering by collections agents today.

  • An automated credit management module to mitigate credit risk via automation and system controls – including an automated credit scoring and the ability to publish credit information to additional Microsoft systems, allowing users to make quick decisions – thus giving back the time to be spent on the most risky exposures.

  • An automated payment application including, but not limited to, enhancements in lockbox process, withholding tax clearing, automation of manual bank statements, cash application reporting. This will allow for 80% of transactions to be automated and thus increase the speed of cash application and reduce a number of agents required to do manual work.

  • An automated workflow, data and tracking of customer AR related queries to reduce the need for manual recording and tracking of customer disputes.

  • Enable customer segmentation and create an automated work-list for a user to know which customers to contact on a given day to increase their productivity.

In addition to the BPO agreement, a new organisational structure (called project Darwin) allows WW Credit Services employees to focus and specialise while at the same time having the time to do the value-add activities. The Darwin structure adds a new career progression for FTEs with opportunities for those who aspire to be experts in a particular area, opportunities for those who wish to broaden their regional horizons and do global roles and all round opportunities for future leaders by having individuals getting experiences across multiple functions.

Best practice and innovation:

The solution provides massive benefits in two areas: for WWCS employees and the supporting BPO business model that Microsoft utilises in credit and collections. Both of these areas complement each other. The new managed service solution provides Microsoft with the capability to meet the needs of the business and specifically the strategy of Microsoft. Meanwhile, the innovative part of the BPO contract is one of the key elements that provides fundamentals for future growth, creates scalability, process efficiencies and productivity improvements.

Luczak concludes “I believe Microsoft WWCS is One to Watch because the savings following the new model will be greater in future years and technology enhancements together with productivity improvements will be even more evident.”

Key benefits:

  • Cost savings.

  • Return on investment (ROI).

  • Productivity gains.

  • Process efficiencies.

  • Greater opportunities for career growth.