Kinetic Introduction to CreditManagement 2021

Introduction to Kinetic Credit Management

Contents 2 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

02 IMPROVING YOUR END TO END / ORDER TO CASH PROCESS 04 OUR APPROACH 06 01. DIAGNOSTICS 07 02. WORKSHOPS 08 03. RECOMMENDED IMPROVEMENT APPROACH 09 04. FOLLOW UP IMPLEMENTATION OF CHANGES 10 05. COMPANY WIDE ROLLOUT 11 COURSES – BUILDING CAPABILITY 12 CASE STUDIES 13 OUR TEAM 01

Improving Your End to End Order to Cash Process The Challenge The Opportunity To improve the effectiveness Free up immediate and and efficiency of the Credit longterm cash for your Management process and build business and translate Credit a sustainable approach to free Management into a significant up cash and reduce costs. business opportunity. Define a long term end-point and create confidence with some shorter term ‘quick wins’. 02 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

50% FTE reduction The Benefits We work closely with our clients Client in Robotic Automation to enable them to deliver real and Electrical Equipment results, fast. Examples of results: Client in Telecom and $350m Networking equipment DSO reduction $75m Client in Oil and Gas Industry DSO reduction $3bln AR reduction 10% improvement in Employee Engagement score 03

Our Approach Our structured approach has been tried and tested, covering the end-to-end Order to Cash process. Alternatively, we can support improvements in just one or two discrete areas. forRleodwuecrercdiussksetccouumsriettorymgrreeoqrwsutitrohemgeennetrsate Ruinlevos irceinlagtifnrgeqtouePnacyymteonrteMduectehoridsk& Debt Chasing rules DeixffpeorseunrteSatrnadteRgisieksCbaatseegdooryn 04 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

1 Diagnostics 2 Workshops in Selected Pilots 3 Recommended Improvement Approach in Pilots 4 Follow Up Implementation in Pilots 5 Company Wide Rollout through: Policies / Procedures, Systems, Organisation, Management Info, Capability Training STRATEGY CONSULTING STRATEGY ENABLING CAPABILITY BUILDING 5 123 4 VISION ACTION 05

01Diagnostics 0 This is always our very first step. We review your E2E OTC process to identify potential value leaks and set an initial target for approval – the ‘size of the prize’. From experience, this is a minimum of 20% reduction in Accounts Receivable. Then we agree a number of “hotspots”, select pilots and run workshops to start the improvement process. What is the ‘size of your prize’? 06 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

02 Workshops Our workshops in selected pilots cover all relevant areas in the E2E OTC process and are performed with your cross-functional teams on a face-to-face or virtual basis. WORKSHOP FEEDBACK “Not a normal consultant workshop.” “Good flow - problems, causes solutions, actions.” “No textbook complexity.” “We don’t get the chance to do this enough, it makes all the difference.” “A more focused approach to NWC.” “Clear and easy to understand actions.” 07

03Recommended 0 Improvement Approach Who-What-When actions are agreed with you. GLOBAL ACTIONS (6–12 months) MNEA ACTIONS (6–9 months) QUICK WINS (3-6 months) 08 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

04Follow Up Implementation of Changes Once workshops have been conducted with your teams and the process improvements are agreed, we support you in the implementation phase. This ensures the benefits are realised and the improvements are embedded within the business. 09

05Company Wide Rollout Based on the success of the pilots, we enable your teams to operationalise improvements with a structured, company wide rollout of OTC improvements. 10 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

Courses Building Capability As part of the As a discrete, end-to-end process standalone training We provide various credit We have a menu of credit management courses based on a trainings based on our experience blended approach to support the of the most frequent problem embedding of critical learnings areas. Tailored to your business required to make a difference in requirements, these offer short term your organisation. improvement opportunities in both operational and soft skills. We can also work with your managers and team leaders to Alternatively, if you have a credit provide competencies that support organisation and you are unsure of all roles in the credit management the competencies required, we can teams, with ideas on how to increase design the competence framework skills to move to the next role. for each of your teams based on our operational experience. This will not only recommend how to improve skills but also support you in the recruiting process. 11

Case Studies Changing the attitude ACTION to the balance sheet to We improved the Credit Management Process by: reduce working capital • Working with local teams in pilot countries CHALLENGE to identify the biggest reasons for delays in project lead time days relating To reduce project lead time days in order to cash generation to generate cash faster for a Networking • Managing the follow-up implementation & Telecommunications Multinational. of recommended improvement actions • Measuring the impact of reduced project lead time days in reduction in Accounts Receivable and working capital Improving the credit ACTION management process to We implemented activities to improve the Credit generate significant cash Management process working with Sales, Finance & business leadership to deliver: CHALLENGE • D iagnostics to analyse issues and root causes • A ccounts Receivable reduction by E2E process review, To design and embed a sustainable approach to generate additional cash from identifying value leaks, recommending action plans Accounts Receivable for a Leading Global • A plan to reduce overdues, structural improvement Technology Organisation. in the credit processes and raise cash awareness • Implementation plans and a robust follow up, contributing to the organisations objective of reducing working capital by CHF 2bn Analysing debt drivers ACTION to improve credit & cash We provided a clear signposted roadmap of improvements management and resilience to the existing credit management and collection function, analysing debt drivers and delivering clear actions to CHALLENGE improve cash collection and debt reduction by: • C ompleting a full ‘Credit Building Blocks’ diagnostics To provide an overview of the current credit and collections approach, debt drivers and with local and regional stakeholders. local engagement in corporate HQ cash • C ompare client activities with industry ‘Best Practice’ initiative for an Industrial Engineering & Manufacturing Organisation. methods and procedures • P rovided clear prioritised short, medium & long term actions based on Kinetic Credit Management ‘Building Blocks’ • P rovided a framework for actions at other client locations 12 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

IMPACT The team did a tremendous job with the guidance, experience and insight Awareness and understanding of cash of Joris, Chris and Michael. It’s great impact of internal processes raised to see tangible results but more around the company importantly, a change in attitude to the balance sheet in our organisation. Value leaks in end-to-end processes That bodes well for the future.” identified and a full plan of action agreed and implemented SENIOR VICE PRESIDENT Member of the Executive Team SEK 630m of accounts receivable reduction achieved in one pilot The valuable support provided by you and country in North East Asia your team has clearly been instrumental in helping plan and implement the next IMPACT steps. I am happy to see the strong drive made by the colleagues who owned the Credit awareness and cash mindset process, as this is the only sustainable developed, working with integrated teams way going forward.” at management and operational levels GROUP SENIOR VICE PRESIDENT End-to-end processes aligned, and full Head of Next Level Program Management plan of action agreed for priority business units in EMEA CHF 300–500m of accounts receivable reduction achieved in EMEA pilot countries IMPACT I really appreciated Kinetic’s work with us. Practical and useful Credit and cash awareness significantly recommendations which we can improved within the business use for the implementation of next steps.” Detailed analysis and trending of debtors with ‘Value Leaks’ identified across the CHIEF FINANCIAL OFFICER organization for order to cash issues 13 Significantly improved resilience in the clients management of credit & cash as the industry firstly suffered dramatic market changes, followed by the impacts of pandemic ensuring working capital performance was maintained

Our Team We are a team of highly experienced Credit Management professionals with hands-on operational experience in managing Order to Cash / Credit. We are different from other consulting firms, in that we work with your operational teams and your processes to improve cash in your business through short and long-term process improvements, organisational alignment and cash visibility. Our proven approach delivers the most sustainable results and ensures that knowledge is retained in your organisation. 14 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

Joris Kniep MCICM Chris Sanders FCICM EXPERTISE EXPERTISE Joris leads the Credit Management Chris is a fellow of the Chartered area at Kinetic. His extended Institute of Credit Management (CICM) expertise in commercial finance, credit and sits on their Advisory Council in and Offer-to-Cash management the UK. A Credit Professional with enables him to generate real value extensive international cross industry to clients’ businesses. experience of best practice in Credit Management systems, processes and BACKGROUND operational management. Joris is a Dutch national who brings with him 35 years of diverse international experience BACKGROUND gained at Shell. During this time he held a Chris is a British national with over 30 years number of senior finance positions from international credit management and billing country and regional businesses through to experience. This was gained during his role global functions. He has broad experience as Director of Billing Operations for Cable in business and finance functional & Wireless and as principal of his own niche restructuring, including shared service consulting firm with a number of UK and operations around the world. international client consulting assignments. He is also responsible for having developed, Before joining Kinetic he was Global and now manages, the Best Practice Credit Manager for Shell’s downstream Accreditation Programme for the CICM. business and a member of the Offer-to- Cash Council, covering operations in over Chris has extensive expertise in improving 40 countries. Under his leadership, an order to cash performance for clients innovative approach to credit management delivering these improvements through created significant value for the Shell Group hands on people and process lead solutions and his team received international acclaim. delivering significant value to clients. His innovative and enthusiastic approach to +44 (0)7767 322 189 operational management makes him a sought after speaker and writer and he was awarded [email protected] ‘Contribution to Credit Management’ Award in 2015 by CCRi Magazine. +44 (0)7747 761641 [email protected] 15

Kinetic Credit Management Practice Consultants Jenny Strickland MCICM Pam Thomas FCICM Jenny is an award-winning, high performing Pam is a fellow of the Chartered Institute and commercially astute Learning & (CICM) and a training and development Development Consultant specialising in specialist within the Credit Management Credit Management. An enthusiastic and Practice of Kinetic Consulting. She enables confident facilitator and trainer, skilled in organisations to raise knowledge, skills developing and delivering workshops focused and performance by development of latest on the learning needs of participants across best practice techniques in the credit and all levels of the organisation. collections industry. Michael Jan-Janin Michael is an experienced Programme and Project Manager, working to bring structure and governance to client initiatives. He has extensive experience in running large Change programmes, including product and systems deployments. 16 INTRODUCTION TO KINETIC CREDIT MANAGEMENT

Jetsupa Thiengtham Jet is a Thai national with an Accounting degree from Chulalongkorn University and an MBA from London Business School. Her experience includes 17 years in Shell, 4 years in banking and finance, manufacturing and e- commerce. Jet provides financial analysis support to the Credit Management Practice. Contact Kinetic Consulting 8 Quai du Rhône 1205 Geneva Switzerland +41 22 321 1900 kineticconsulting.com 17