16 April 2010

Trouble in Service Land (You Make the Call)

This is another entry in our occasional series, You Make the Call. We will present a scenario from our past BA work, with the names changed to protect the guilty, and ask you to tell us in the comments what you would have done in the situation. The resolution to the issue may contain a system change recommendation, but the solution will be primarily concerned with the underlying business process.

The Setup

You are a BA for a multi-national service company operating in Europe. You are headquartered in France, but have local offices in most countries in western Europe. Your company is in the business of selling service contracts for computer equipment. Each country has its own sales and service team, along with its own internal systems for financials, billing and service tracking. Your company has grown its service arm organically over the years and thus none of the in country systems are integrated. Each country has a sales manager who focuses on bringing in revenue as service contracts and a service manager who controls the fulfillment of the contract through call centers and field technicians.

When a new service contract is signed in a country, the sales manager forwards a copy of the contract to the service manager, who enters the contract in the service system and a copy to the AR department who bills the customer. If the customer fails to pay their bill, the AR department contacts the sales manager who collaborates with the service manager to stop all service of the customer's account until the bill is paid.

All countries, save one, have a very similar revenue to cost ratio. After an internal audit, it was discovered that the sales manager for this one country had been receiving off the books payments from customers for service contacts that were never billed through AR, but which were serviced by the service team.

The Question

The sales manager was dismissed from the company, but the executive team is now wondering if the same behavior is happening on a smaller scale in all of the countries. The audit team is currently undertaking a company-wide review of all contracts to ensure they were paid for by the customer.

You, as a senior BA, have been called in to assist in designing a new billing and service execution process. What changes do you make to the current process to ensure that all contracts sold are properly accounted for by both the service and the AR teams?


  1. Anonymous6:01 am

    Hi Ted,

    An interesting scenario highlighting the creativity of those determined to commit fraud. I'm anxious to learn of the solution to prevent phony invoices from being presented to the customer for service contracts. I suspect the solution involved imposing a control that requires an invoice number prior to creation of the service contract which eliminates the possibility of a contract being serviced without an invoice being generated. The sales manager must have had access to the same application as the service manager for creating the service contract opening the door for fraud. The only thing left to due is to generate a phony invoice.

  2. I am seeing a solution that attaches work done to work invoiced. Somehow you need to reconcile worker's time sheets to the invoice.

    Doesn't really sound that hard... Am I missing something?

  3. Craig and Michael, you're both very close to what I call the Short Walk solution. There are some downsides to those options though, especially if you only implement that as a small process change. The answer post in a couple days outlines the problem as well as the answer to how we solved the issue.