The secret of automation success at The AA

Nikki Morris, head of finance systems, on driving change

Every organisation has them: those tasks that really should be automated but aren’t.

It's always someone else's problem, fraught with internal politics, or stymied by technical debt and over-optimistic solutionising. Sometimes it's just put on the back burner until the next big upgrade or organisational change.

Characterised by repetitive transfers between systems and hand-offs between departments, these tasks can occupy substantial chunks of the working day.

With a background taking in both accounting and implementing SAP and Oracle enterprise IT systems, Nikki Morris, head of finance systems at insurer The AA, has developed a keen eye for the fault lines and friction points that stand in the way of making processes more efficient.

Take bank statement reconciliation and cash allocation, for example - day-to-day tasks common to every organisation.

"These processes should be relatively simple," Morris told Computing. "However, it is often the case that due to complexities arising from multiple data sources, large number of interfaces and a range of different payment methods, these processes can be time-consuming and resource-heavy."

The AA had a total of 48 bank accounts, with 42 of them completely manual. Statements had to be downloaded into Excel then manually uploaded into the SAP ERP, involving "a large number of manual processes across multiple teams."

This was incredibly effortful and expensive in terms of person-hours. It also required numerous control accounts for accounting. "One of the objectives we had was to reduce the number of control accounts we used, thereby reducing the number of balance sheet reconciliations," Morris explained.

On time and on budget

First, subject matter experts (SMEs) within the affected teams in IT and finance had to be brought together to ensure the problem was being seen from all angles. A budget was drawn up and a 16-week timeline was set. The IT team got to work on creating code to move bank statements from manual output to electronic bank statements (EBS), and wrote rules for importing those into the general ledger. For the next stage, though, they needed outside help.

Experience caused Morris to be wary of chucking consultants at a problem, so she sought out assistance from specialist solution provider Seralla. Seralla's AutoBank software is embedded into SAP and processes the EBSs automatically according to the rules created by the IT team. The company supplied a dedicated operative to The AA to see the job through from start to finish, which provided much-needed consistency.

Sixteen weeks later the job was completed, on time and on budget.

"We now have an automated end-to-end solution which requires very little manual intervention other than error handling," said Morris. "As a result of the implementation of this tool together with the redesign of some of our internal processes, we have reached more than 90% automation."

Back to basics

Picking the right tools and suppliers is crucial for consistency, competency and cost control. But the real secret to a successful automation project is a proper understanding of the issue at hand. Focusing on fixing underlying data and systems first provides a critical foundation, Morris explained.

"I always say, can we go back to basics? Can we step back and take in the big picture? People are often scared about that, they see a problem and they want to throw a solution at it. Let's go fix the basics. Let's go and sort out the data quality, let's get the systems actually working, doing what they should be doing."

It's also very much about people management and team-building.

"Getting the right people in from across the end-to-end process, having the right SMEs in the team with you at the start really helps," she said. "It breaks down silos and it also builds relationships."

With the right people addressing the root causes of the issue, you can free up capacity and save money, she went on. Savings can then be invested into new automation projects sustainably. It also gives you a positive story when you need funds for a new IT system.

"You can start by tackling low-hanging fruit," Morris advised. "By doing that, you can start to self-fund improvements, because what you're doing is you're fixing it through your business-as-usual activity."