Management Takes New Turn
A.T. Kearney Inc.s business is management, but it needed help when it came to managing the day-to-day business of time and expense accounting.
The Chicago-based management consulting company has 71 offices in 37 countries, with close to 5,000 employees, according to Jim Haddow, A.T. Kearneys director of global procurement, in Alexandria, Va. A.T. Kearney works with companies in industries ranging from aerospace defense to retail to health care to transportation, on everything from high-level corporate strategy to shop-floor optimization.
Most of A.T. Kearneys employees are consultants who are more often than not on the road or working at a client site. Their time is money, but, until October 2000, consultants billable hours, expense reports and travel requests were entered manually into the companys finance system.
"Historically, we were doing everything manually, and it was controlled locally within all our offices," said Haddow. "Consequently, we did not get information on a timely basis."
A.T. Kearney evaluated several systems that could help to automate and regulate these processes, but Extensity Inc.s namesake ERM (employee relationship management) system stood out for its ability to accommodate the many countries, cultures and currencies of a global organization.
"I can be anywhere in the world, and I can dial in and access this system," said Haddow. "It knows that my local currency is this, my local office is thisit doesnt matter where I am."
Also important was Extensitys ability to integrate with A.T. Kearneys human resources and financial applications. Information from A.T. Kearneys PeopleSoft HR system is now imported nightly into Extensity, and information from Extensity is exported to an Oracle-based financial system twice a week. This is all automated, and Haddow said the downloads can be performed more frequently on an ad hoc basis.
The Extensity system also interfaces with an American Express Co. system, with employees credit card charges downloaded nightly. "When we turned on the Amex data feed, it took about one day to get it set up and make sure it was working correctly," Haddow said. "Thats one of the nice featuresstandard input and export tables so that you can easily set up a system."
Extensity offers a hosted version of its ERM system, but A.T. Kearney decided to host it on its own servers for security reasons.
"We were toying with the idea of Extensity hosting it, but we have a small group of IT people who control all systems and applications in the organization for security purposes," Haddow said.
The companys main data center is in Chicago, with backup sites in Europe and Asia.
Since deploying Extensity 4 last year, Haddow said A.T. Kearney has greatly improved the efficiency of the companys employees and has better control over spending and time.
"All employees are required to document their time on a weekly basis, which is done through the system; all employees are required to file expense reports to be reimbursed, and they must do it through the Extensity system; travel plans must get approved through the application, or employees do not get reimbursed," Haddow said. "Extensity helps us manage these activities. Weve established guidelines, and the system flags things that are unusual. We can then investigate and find out if theyre unreasonable or not."
Resistance may be futile when an employee is required to use a system to get reimbursed for expenses, but getting early buy-in can smooth the process.
Haddow said Extensity was introduced to employees in stages: "The first was a communications program that we set up about a month before we turned everything on, letting folks know what was coming and what their responsibilities were," he said.
After the system was turned on, a dedicated help desk was set up, manned by technical and accounting staffers.
Haddow said the cost of the system was recovered in six months "through a number of waysone of which was deploying resources to other activitiesand we were able to manage expenses more efficiently and stop some expenses from being incurred."
Extensity released the newest version of the platform, Extensity 6, in June. (The company subsequently was acquired by Geac Computer Corp. Ltd., of Toronto.) A.T. Kearney said it expects to be up and running on Version 6 this month.
The cost of the Extensity Advantage implementationwhich includes profit improvement analysis, standard implementation services, and benchmarks and analyticstypically ranges from $50,000 to $100,000, according to Extensity officials.
Haddow said one of the new versions biggest benefits is the expanded search and customization functionality.
Executive Editor Debra Donston can be reached at email@example.com.