Analytics at ITV – What Is the Opportunity for Shared Services and Where Does the Business Case Lie?

Deloitte Shared Services, GBS & BPO Conference Analytics at ITV – what is the opportunity for shared services and where does the business case lie? Ian Butterworth & Amanda Coad, Berlin, Germany 22 – 23 September 2015 Ian Butterworth, Head of Purchase to Pay Amanda Coad, Finance Manager Group & Services Financial Analytics What is the opportunity for Shared Services? Introduction to ITV Number of Employees – c5,000 Group External Revenue - £2,590m EBITA (before exceptionals) - £730m Invest £1bn in programming for our family of channels Share of Broadcast c45% in the UK Producer 5,700 hours of original programme content Grown the international business through acquisitions Our Background About us BSC Structure Group Head of BSC Talent & Order to Purchase Record to Change Payroll Royalty Cash to Pay Report Payments About us A lean ITV that can create world class content, executed across multiple platforms and sold around the world Maximise audience and revenue share Grow Build a global pay 1 from free-to-air 2 international 3 and distribution broadcast and VOD content business business business Over time as we continue to rebalance the business and grow new revenue streams, both organically and through acquisition, there will be an increasing emphasis on international content creation and distribution ITV’s International Growth over last 5 Years 2010 2015 CONTINUOUS Scripted SCRIPTED DRAMA SCRIPTED DAYTIME DAYTIME mediacircus Entertainment & Fact/Ent formats Fact/Ent & Entertainment Business Processes RTR (25) AX Core Client Workflow Control Analytic OTC Assess Work Resolve (7) Load Reconcile Analyse Dashboard Dashboard Visualisation PTP Analytic (64) NON Monitor Analyse Act ORACLE UK Businesses • Addison Lee ACL Gateway PYRL • HR Data (21) • Bottom Line Adhoc Analytics • NGA ‘Resourcelink’ Ad hoc Analytic FS (12) Current Position of Analytics Our History About us Amanda Coad 2002 - 2008 Record to Report Group Finance Manager Tour Operations Finance - Cost Control 2008 2015 - Balance Sheet Risk - Forecasting & Budgeting - Process Improvement Treasury Reporting Financial Analytics Process Improvement - FX & Interco Acquisition Accounting Record to Report – Group Finance Lead in Change Management transition Automation of Royalty Statement Solution Change Manager – Talent & Royalties Finance Manager – ITV Studios Divisional Management Accountant – ITV Studios Roles @ ITV and Key achievements include: About us Ian Butterworth 2005 Project Team Head of Purchase to Pay Group ‘pushing the 2015 Accountant boundaries of PTP’ 2008 AP Team of the Year Standardise Invoice Discounting Simplify CPI Embedded Automate Instant Issue Cards Control & Compliance Master Data Team Vanilla ERP (Oracle) No Receipt No Pay Financial Analytics Self settle cards Auto close PO’s Outsource Invoice Scanning Online training tools How to Guides produced Corporate Cards (centrally settled) iProcurement & iExpenses Initiatives introduced into ITV via PTP include: “Your Life.....But Easier” I wish I had data to prove there I wish I could was no fraud in confirm all my my organisation payments were accurate I wish I could prove all my processes work I wish I had a I wish that data way to ensure could drive the risk was right behaviour in reduced my organisation I wish I had a way of making my org more credible “....well Sepp..... Analytics won’t fix your processes, but it will help you identify where your risk is!....” About us Is it worth it, Benefits for you could be... • Reduce risk • Highlight potential fraud • Confirm your processes work • Engaged team who own Analytics • Rapid move up the value chain • Entrusted business partner • Change in business behaviour • Deliver opportunities for change • Be proactive and ahead of audit findings • Upskilled team • Reduced audit time What do we mean by ‘Analytics’? About us What do we mean by Analytics? ITV uses analytics to: - Monitor risk - Test variation from norm - Reduce process bottlenecks - Eliminate duplicate payments - Ensure 100% of transactions are reviewed - Drive business behaviour - Drive engagement and ownership within teams Mr Selfridge About us What do we mean by Analytics? We think of an Analytic like a Jack in the Box..... About us What do we mean by Analytics? There are many more opportunities for Analytics - Control SLA’s on outsourcers - Working Capital Management - Revenue leakage - SOX compliance - Financial planning - Business performance - Targeted marketing The Mafia with Trevor McDonald About us What do we mean by Analytics? ITV utilises 3 types of Reports - Workflow - Dashboard - Ad hoc Ninja Warrior UK About us What do we mean by Analytics? What Financial Analytics has delivered New Fraud Detection • PTP Purchase requisition approvals Capabilities • Insights into employee expense outliers through clustering • Identification of duplicate split expense claims About us What do we mean by Analytics? What Financial Analytics has delivered New Monitoring • Segregation of Duties exceptions where employees have Capability for High updated master data tables and posted related transaction Risk Exceptions • Identification of inappropriate accounting transactions About us What do we mean by Analytics? What Financial Analytics has delivered Automation of • Programme balance sheet classification Balance Sheet Control Activities • Aged programme stock and creditor analysis • Identification of fixed assets inappropriately not being capitalised About us What do we mean by Analytics? What Financial Analytics has delivered Timely Resolution of • Identify manual journals posted to sub-ledger control GL Posting Errors and accounts in error Insight • Quantify number of correction journals in the general ledger and help identify root cause analysis What is the impact on the SSC? About us What do we mean The Impact on the by Analytics? SSC How does it affect the team? - Gives you data to influence - Gets you a seat at the table - You enhance your reputation - You become a proactive business partner - Your team become really engaged with clearing exceptions - Lots of ownership in teams Britain’s Got Talent About us What do we mean The Impact on the by Analytics? SSC It’s not all plain sailing... - It is more work in the team - They take time to embed - You need to establish good governance around changes - You need technical resource to support BAU - You need to agree times and formats to receive data from 3rd parties - Analytics can be seen as silver bullets, not everything needs an analytic Safehouse About us What do we mean The Impact on the by Analytics? SSC The results make it worthwhile - Reduced both internal and external audit costs - Happy Audit Committee - Zero duplicate payments since Analytics introduced (verified via 3rd party) - More proactive, much better informing audit than being informed by them - Extra channel to drive continuous process improvement - Our thinking around controls have changed, we now build Analytics into new project - Rapid rise up the maturity curve Black Work Building your Business Case About us What do we mean The Impact on the Building your by Analytics? SSC Business Case Considerations for your Business Case • Control is more effective and timely • Improved audit focus and efficiency • Ability to provide proactive fraud monitoring • KPI improvements • Efficiency savings in SSC • Start small and grow • Deliver Analytics in clusters • Use experienced practioners to lead Judge Rinder Governance: Set up then and now About us What do we mean The Impact on the Building your Governance: Set by Analytics? SSC Business Case Up then and Now Project Set Up – The Key Project Planning • New area for ITV so we really had to think about what we wanted from analytics before green light • Large time spent upfront debating and agreeing the scope and purpose of each analytic • Do we really need it, what is it going to add or what risk is it controlling • Produced detailed list of analytics reduced any expectation gap – we knew what we were getting before we started design • Strong focus on ‘so what’ actions during requirements capture – ‘how would this change my day job”? • Had the list of circa 115 analytics once we started and had clear CR process About us What do we mean The Impact on the Building your Governance: Set by Analytics? SSC Business Case Up then and Now By exception only X 2 External Audit Board Monthly • Key decisions • Change requests • Challenge of design / Group X 3 X 3 Steering Steering specification Weekly • Project Management • Communications • Offshore Management • Timetable • Risks and Issues Internal Auditors External Auditors Finance BI BSC Technology • Owner of IA “tests” • Owner of EA “tests” • Owner post implementation • Point contact for test • Governance • Accenture management • • Testing of ACL • • Working Party Working Testing of ACL Support and build • Specification • Architecture iBusiness interface • BSC text management • Procurement of servers About us What do we mean The Impact on the Building your Governance: Set by Analytics? SSC Business Case Up then and Now Where will I be in 12 months after Go Live? Financial Analytics established in BAU A Governance Board that meets once a month for 30 mins • Log any changes • Prioritise development • Track progress A team that use Analytics to drive behavourial change Top Takeaways About us What do we mean The Impact on the Building your Governance: Set Top Takeaways by Analytics? SSC Business Case Up then and Now Reminder of the Risks • Initially more work in SSC • You will struggle to deliver without senior

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