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Breakthrough Process Improvement Case Study

“IMPROVING VISA INVOICING PROCESS”

The Kanoo Group Central Accounts Team

(Ashraf Ahmed, Mr. Ahmed Ali,

Mr. S.A. Kapadia)

SERVICES DIVISION

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• The Kanoo Group Services Division provides the following services to Kanoo Divisions, JVs and associated companies: – Arranging employment visa

– Visit visa from Immigration

– Consulate services (visa, passport renewal etc.)

– Attestation of papers from Chamber of Commerce, Ministries

• Six full time employees

• Covers Dubai and all Northern Emirates

Introduction

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The processes involved in providing above services had the

following problems:

• Excessive paperwork

• Manual handling of documents

• Manual job registers

• Manual typing of invoices

– Approx. 400 per month

– Each includes 10 to 15 transactions

• Manual checking and correction of errors in invoices

• No information on status of jobs

• Delays in invoicing causing

– Blocking Company’s cash in work in progress

– Delays by customer departments in their own invoicing to external

customers

– Difficult to PROs to account cash float (AED 250,000)

Business Case

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Stakeholders

• Internal customer departments, Kanoo

employees

• External customers (JVs, customers of

internal customers)

• PROs

• Service Accounts

• Central Accounts & Credit Control

• IT

• Development team (Gemini) 4

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Voice of Customer

• Meetings held with internal customers (Kanoo Shipping,

Kanoo Travel and JVs) to understand their service level

requirements.

• Each internal customer gave their needs and

expectations:

– Cycle times for

• response to queries

• Invoicing

– Cost and service charge details in invoices

– Periodic account statements and status reports

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Voice of People

• Meetings held with PROs to know their problems and

suggestions..

• PROs’ required:

– Shorter cycle times for

• Re-imbursement of cash float

• Reduction in paperwork

• Easy access to information to be able to answer

customers’ queries

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Project Charter

The Problem Statement: • Reduce paper consumption for invoices (1,200 sheets per

month) by 50%

• Reduce man-hours required for manual typing of invoices from 300 per month to 50 per month.

• Reduce time wasted in searching for job status from 50 hours to less than 5 hours

• Reduce errors from 25 per 100 invoices to near zero error.

• Reduce invoicing cycle time from 30 days to 1 day.

• Reduction in customer complaints (from 10% of transactions to near zero).

• Reduction in cash float from AED 250,000/- to less than AED 100,000/-

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Project Team

The teams involved: – Service Accountant

– PR Department

– IT Department

– Software developer (Kanoo JV).

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Project Timeframe

– Start Date January 2010

– Target completion by 30-April-2010.

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Process Flow (Before)

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Start

Receive request from

customer

Records details in a

Job Register

Standard documents

requirements and

service fees informed

to customers

Verify documents to be

submitted

All OK? Not OK

PRO submits

documents to the

relevant authority and

pays required fees

PRO’s cash float

Record payment other

details in the manual

job register

Check manual job

register periodically

and follow up for

pending jobs

Answer

customers’

queries

Collect processed

document from the

concerned authority

File all papers in job

file, update register

Type manual invoices

& costing sheet

Delivery to

customer

Check by

Accounts

Dispatch invoices

to customers

Reimbursement

to PRO

End

Corr

ectio

ns OK

Not OK

OK

25% error

rate, 50 man

hours per

month

Customer

complaints

for delays

Customer

complaints

for lack of

information

Excessive paper

consumptions

(1,200

sheets/month)

Retyping lost

invoices Delays, time

consuming

reconciliation of

cash float

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System Specification

A.The team developed a specification

document for an IT system considering the

VOC and VOP.

B.Designed formats for:

• Invoice

• Cost statement

• Job Status Report

• Work In Progress Report

• Proforma cost re-imbursement form

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System Specification

A.The team developed a specification

document for an IT system considering the

VOC and VOP.

B.Designed formats for:

• Invoice

• Cost statement

• Job Status Report

• Work In Progress Report

• Proforma cost re-imbursement form

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System Specification

C. The team identified various job types and

defined their require:

– Labour Department related

– Immigration related

– On-line visa

– E-wallet jobs

– Consulate jobs

• Sub categories of main job types were also

identified.

D. Modules were defined for each job sub-type. 13

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System Specification

E. Interfaces with other systems were defined:

– Pay roll system

– Main financial system

– Accounting rules were defined based on HR &

Accounting policies

– Auto generation of accounting entries were

specified based on the above rules

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System Development

A. Development team (Gemini) developed a

proto-type

B. Presentation was made to the project team

C. Proto-type system was evaluated by the project

team and auditors for one week.

D. Taking the feedback, the development team

developed “Visa Invoicing System”.

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Modified Process

Start

PR department

receives request from

customers

Verify documents to be

submitted

All OK? Not OK

OK

PR Deptt Secretary

enters job details in the

Visa Invoicing system

and creates a job

PR Deptt Secretary

allocates jobs to PROs

and hands over

documents to them

PROs carry out jobs

with the concerned

govt. deptt. and pays

the required fees

PROs updates job

status in the system on

daily basis

PROs prints the

Expense Claim form

on daily basis from the

system

Accounts verify the

expense claims and

settle the cash float

amount

Accounts raise invoice

to the customers

When the concerned

Govt. Deptt. approves /

disapproves the

application, PRO

collects the documents

and delivers to the

customer

End Customer queries

are answered

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Trial Implementation

A. “Visa Invoicing System” was implemented on

trial basis in April 2010.

B. Parallel run was carried out for the first one

week.

C. Minor problems were reported to development

teams and these were fixed.

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Full Implementation

A. “Visa Invoicing System” was fully implemented

in May 2010.

B. System was updated in October 2010 to

include reference numbers given by the

authorities (e.g. Ministries).

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Benefits 1. Invoicing for Service Jobs become instant (invoice is raised soon after completion

of a job)

2. Response time to customer’s queries was reduced.

3. Customer complaints reduced from 10% of transactions to less than 0.1%

4. Internal customers’ cycle time for invoicing to their customers was reduced (e.g. Kanoo Shipping)

5. Tailor made reports could be provided to customers.

6. Cash float reduced from AED 250,000 to AED 90,000/-

7. Man-hours required for invoicing and corrections reduced from 400 to 50 man-hours / month. This enabled us to take care of additional volume of business without increasing man-power.

8. Net Income increased from AED 0.6 million to AED 1 million p.a. with the same number of employees.

9. Month end accounts closing became shorter due to integration with Payroll and Accounting systems.

10. Paper consumption for invoicing reduced from 1,200 sheets to 200 sheets per month.

11. Increased employee satisfaction due to shorter reimbursement cycle.

12. Auditors satisfied with process due to reduced risks.

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Horizontal Deployment

• The same system is being implemented in:

• Kanoo Group Abu Dhabi

• YBA Kanoo Group, Oman

• YBA Kanoo Group, Bahrain

• YBA Kanoo Group, KSA

• The system can be commercially marketed to other big

corporate groups and business services providers.

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Further Improvements

• The system will be made web-based so that customers

can query job status on-line from anywhere in the

world.

• Modular structure is flexible and it can take up more

modules with changes in Government policies (e.g.

Mission Visa)

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Single Point Lesson

• By involving stakeholders and systematically taking

their inputs, a flexible, user friendly and efficient

system can be designed.

• Consultation with stakeholders at each stage of

development helped faster implementation.

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Recognition

• Appreciation received from external and internal

customers.

• Appreciation of project team by Group Management.

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