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Auxis Helps Global Media Giant Reduce Costs by Over 40% to Focus on Digital Growth Strategy

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Client

The Client is an industry-leading global media company known for its premier print, digital and video brands.

Business Challenge

With a corporate mandate to reduce its Back Office Shared Service Center by one-third, client needed to focus their key people on performing higher value strategic work while identifying, redefining and restructuring transactional roles at the lowest possible cost.

The Client was seeking a collaborative business partner that could help strategize, architect and efficiently and seamlessly support the implementation of its business transformation agenda.

The Client’s back office operations included more than 150 people in a U.S.-based SSC, supporting a full range of functions for multiple divisions, including Finance and Accounting, Order Processing, Billing, Editorial Accounting, Credit and Collections, Accounts Payable, TE Processing, Customer Service and Payroll.

Overall, the operating environment was one of high volume and high complexity, with many manual processes and a significant opportunity for process simplification, including reducing organizational silos and operating redundancy, eliminating paper, revamping control policies and automating the processing of vendor invoices.

The SSC had already significantly reduced its organizational headcount, decreasing its staff by 40%. In addition, the company had greatly lowered its IT costs through a combination of outsourcing and a migration to cloud infrastructure.

The Client previously had mixed results with outsourcing, and felt strongly that an Asia-based outsourcing model, with its distance and time zone challenges, would not align well with its corporate culture. The Client sought out a nearshore alternative, as well as one that would minimize organizational disruption by incorporating existing processes and systems into its operating model, while also providing process improvement and additional automation capabilities.

Solution

Auxis Nearshore Outsourcing Model in Costa Rica was the perfect solution for the client, as it not only provided significant labor arbitrage compared to a U.S.-based model, but it also provided access to best practices, technologies and process automation opportunities.

Auxis began the process by conducting a thorough operational assessment and identified a number of potential areas of efficiency through the introduction of automation, process and organizational redesign – all with an aim toward increasing efficiencies and lowering operating costs.

These efficiencies included the implementation of document management, indexing and workflow automation measures to eliminate all paper throughout the Back Office operation. The automation of more than 150 unique manual reconciliations performed monthly, for example, would reduce the time it would take to process these transactions.

As part of the migration process, the Auxis team was cross-trained in a number of different client-specific back office processes, allowing for greater flexibility in transaction handling as resources are shifted across multiple functions depending on volumes and timing.

The BPO operation included the Disbursements (Accounts Payable and TE), General Accounting and Cash Application functions. The process migration occurred over a four-month period, concluding with a “soft go-live” of two months with full production at the six-month mark.

Results

projection icon.png 44% projected client cost savings in the first year
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Auxis’ gain share model is focused on additional cost savings through ongoing process improvement and organizational restructuring, guaranteed to yield an additional 15% in cost savings to the client within six months of go-live

decrease graph icon.png   Total expected labor cost reductions realized will be at least 50% over the current cost model
saving money icon.png   With the inclusion of additional functions in a second phase, the client is projected to reduce its current cost structure by more than $33,000 per FTE