Optimizing Essential ERP
Processes with Pega BPM
Business Issue
Manual processes, multiple systems and tools
for managing traditional ERP functions were
driving up costs and errors, prohibiting a major
insurance company from achieving the level of
financial control, efficiency and compliance it
required.
Solution
Using Pega BPM, the company has extended
and enhanced its ERP capabilities; optimizing
performance in the monthly accounting close,
supplemental financial reporting and external
auditing processes with intelligent business
processes. Pega BPM consolidates data,
automatically tracks and manages thousands
of tasks and guides users through complex
processes and systems.
Benefits
� Monthly accounting close cycle reduced by
64% from 28 to 10 days.
� Savings over of 9,000 labor hours per
month.
� Supplemental state financial reporting is
virtually 100% on time.
� Better communication and task
accountability has eliminated churn
and frustration in the external auditing
process.
For one of the largest diversified insurance and financial services
organizations in the U.S., applying Pega BPM to traditional ERP
functions has produced new levels of financial control, efficiency and
timeliness.
Like many large firms, this insurance company faced a challenge in a critical ERP
function – the monthly accounting close process. Poorly supported by the existing
PeopleSoft ERP system, the manual process offered limited coordination across
many departments; issues could only be addressed reactively; and resources were
applied unevenly. Closing the books had become a “perpetual close” process of
taking 28 days to finish one month’s close just before starting the next – a situation
that company executives viewed as a hindrance to effective internal control.
The Challenge
A team within the finance shared services center set the goal to complete the
monthly close in just 10 days each month using business process automation to
manage the process. Because Pega BPM was already used as the driver for the
company’s insurance underwriting activities, the team quickly realized that Pega’s
proven reliability, flexibility and rapid deployment capabilities were exactly what they
needed to streamline the close process.
The team started by documenting the many predecessor-successor relationships
among subsidiaries, systems and organizations that were required to close the
books, which amounted to coordinating inputs from several thousand separate
items. Next came establishing the network of dependencies in order to understand
what information was needed, where it came from and its status. Finally, the team
automated capturing required data from multiple locations and recorded the
updates across the existing ERP systems using Pega BPM.
In use for more than two years now and with more than 300 users, the Pegadriven application manages nearly 1,500 close tasks and 2,500 manual journal
entries, interfaces and allocations. What was once many hours of overtime and
lost productivity is now a simple status call to check progress within the automated
system. Issues are flagged early with little impact on other processes in the
accounting cycle and are quickly resolved based on best practices.
The company now effectively controls and coordinates initiation
and execution of the monthly accounting close activities across
its diverse collection of ERP processes and systems, yielding
measurable business benefits:
� The 28-day cycle is down to 10 days, for a 64% reduction in time
and savings of over 9,000 labor hours each month.
� Significant overtime costs have been eliminated.
� Management has tremendous visibility into the entire process
from security, control, auditability and fraud perspectives.
� Existing corporate ERP and accounting systems are reused and
leveraged.
Building on Success
The finance team quickly realized Pega BPM could provide value
in other manual ERP areas. A supplemental reporting application
now streamlines all report filings, including statistical, statutory
and tax reporting. Pega BPM manages nearly 15,000 items and
automates a multi-step review and approval process.
Pega BPM provides a one-source data repository and realtime workflow tracking, which includes approximately 12,000
insurance filings for more than 30 companies across 50 states
and territories. Guiding users through the process, Pega BPM
helps employees make timely decisions while keeping business
outcomes front and center. It provides multi-user access, tracks
updates and permits bulk processing.
Applying Pega BPM to this financial process has resulted in far
more timely reporting as the company has achieved a 99.3%
on-time rating for supplemental state reporting, and fines for late
reporting have been reduced.
Auditing Made Easy
The team then turned to Pega BPM to streamline the external
auditing process that used multiple, separately managed lists
submitted via many different channels. This fragmented process
significantly impacted communication about where audits stood
at any given time because employees and auditors did not know
what was needed for submission, what was missing and when
deadlines were approaching.
Pega has improved communication and accountability by tracking
the entire process and alerting employees and auditors about
outstanding items for which they are responsible. The solution
has streamlined management of more than 1,000 tasks for nearly
100 users. On-demand reporting also monitors progress of audits,
providing immediate insight into issues or where SLAs are not
being met.
Future of Continuously Optimized Operations
Thanks to Pega BPM, the company has optimized ERP functions
to drive substantial cost savings, productivity and compliance
improvements while eliminating errors, duplication, time delays
and overtime.
While the company has reaped substantial benefits from Pega
BPM, it has no intention of resting on its laurels. It is looking at
applying BPM to manual journal entry approval, financial controls
management (SOX), bank and account reconciliation and policy
management to tie relevant policies to processes and manage
them more efficiently. With Pega BPM, the company now has the
tools and confidence to continue to enhance and expand it’s core
ERP sytems and processes for improved business outcomes.
For more information, please contact your Pegasystems representative, visit us on the Web at www.pega.com, or email us at
[email protected]. © Copyright 2011 Pegasystems. All rights reserved.
2011-7