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Best AP/AR Solution Highly Commended: Microsoft

Published: Jul 2014

David Meunier and Jose Luis Marti, Microsoft

Photo of David Meunier and Jose Luis Marti, Microsoft.


The Worldwide Online Credit Services (WOCS) team at Microsoft had a problem. With a growing volume of transactions in a business where operating costs are highly correlated with business growth, how could it contain costs while servicing the explosive growth? The problem was further compounded through having to manage a large, geographically dispersed team, which handles dozens of detailed processes and procedures. The solution to the problem was Project Andromeda – a complete re-design of WOCS’s Cloud credit and collections operations.

Jose Luis Marti

Senior Credit Manager

Spencer Clevenger

Senior Treasury Director

David Meunier

Credit Manager EMEA

Microsoft

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 is re-inventing itself from a company which primarily sells software licenses to large enterprises, to a devices and services company, as demonstrated by the recent purchase of Nokia. The company is also looking to dramatically increase its customer base by focusing on selling software to SME’s and in doing so focus increasingly on the margin, as well as net income. Alongside this re-invention, the business operations are also undergoing a major restructuring with its cloud strategy at the heart of this transformation.

At the forefront of this ambitious move into the cloud and a higher volume of transaction business is the Worldwide Online Credit Services (WOCS) team, which handles credit, collections, cash applications, accounting and bank reconciliations. Comprising some 200 people, the WOCS team operates 24/5 across the globe from Redmond, Manila, Dublin, Buenos Aires, London and Singapore, with locations opening soon in Japan, India and China.

Microsoft and its vendor partner put on our thinking caps and drove at the core of the issue.

Jose Luis Marti, Senior Credit Manager

The WOCS team however were posed with a problem. With a growing volume of transactions in a business where operating costs are highly correlated with business growth, how could they contain costs while servicing the explosive growth? The problem was further compounded through having to manage a large, geographically dispersed team, which handles dozens of detailed processes and procedures.

“Microsoft and its vendor partner put on our thinking caps and drove at the core of the issue,” explains Jose Luis Marti, Senior Credit Manager.

The solution

The solution to the problem was Project Andromeda – a complete redesign of WOCS’s cloud credit and collections operations, based on specialisation, reporting and mobilisation:

  • Specialisation:

    Previously collectors were assigned accounts, and handled them through all phases of the collections cycle. No more – Andromeda split the workload into three distinct groups: pre-collections, collections, and post-collections. This allows teams to specialise in discrete tasks, like focusing on new customers until their first payment, providing higher levels of service to top-tier accounts, and acting more quickly on past due accounts. This enables collectors to master a few processes rather than coping with many.

  • Reporting:

    New reports were created to focus each team on the most important tasks. For example, reports now help quickly identify customers who have never paid, have longstanding unresolved disputes, or are trying to migrate their account to an Enterprise Agreement. These reports focus teams on key tasks and speed up resolution time without increasing resources.

  • Mobilisation:

    The new model allows Microsoft to quickly and effectively mobilise teams for special projects, peak loads, and projects which reports show are behind schedule.

Best practice and innovation

By pulling back and completely re-thinking how they did things, Andromeda has ensured that Microsoft can grow its margins, not just its revenues, with the cloud direct business. WOCS is excited to watch how Microsoft will continue to reap the benefits of Andromeda’s innovations by holding down costs as they attract more and more customers to the cloud.

Key benefits

  • Andromeda has produced some dramatic results – while revenues are doubling annually, operating costs are only growing 18% annually.

  • Andromeda has created a FY14 cost avoidance of $6.5m, which will only grow with the business.

  • In addition, Andromeda has not sacrificed quality. WOCS’s performance metrics and Customer Partner Experience scores have remained at consistent levels and furthermore, the results are improving even while costs are reducing. As a result of Andromeda, WOCS’s percentage of AR 60+ days overdue is also consistently decreasing.

  • The costs for managing Cloud collections have fallen to 1.5% of revenue as of year-end. And, relatively unheard of in the collections world, invoiced revenue is proving cheaper to collect than credit card revenue at 1.5% vs 3% of revenue.

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