Implementing Global Process Ownership in the Order to Cash (O2C) Process
Coordination of end-to-end work processes can be complex as activities cross geographic, functional, and reporting lines. Managing the organizational matrix of process efficiency has been compared to “herding cats”. However, many companies that have taken on this challenge have been greatly rewarded with reduced costs, improved timeliness, and quality.
Implementing global process ownership is often pursued in the more mature stages of a Shared Services or Global Business Services – typically after transactional and expert services are stable and delivering value A typical journey starts with regional consolidations into Shared Services along process lines, and then transitioning to a global design by major functions as a next step (for example, Global Financial Shared Services), with some moving beyond a global functional orientation to defining a global process design model for key components of end-to-end processes. The most advanced will extend the concept to include identifying single global process owners for the entire end-to-end process. Getting to this level isn’t easy; it requires a formalized governance structure that clearly states the roles and responsibilities across the various business units and across multiple functional areas. In many instances, the implementation expands on existing Shared Services by incrementally adding new services.
In a recent Peeriosity iPoll, for the 72% of companies who have identified an Order-to-Cash global process owner, only 46% include each of the four key processes (Order Processing, Billing, Credit & Collections, and Cash Applications) within scope. Of the remaining 54% of companies who have an identified global owner, 31% included three of the four key processes, 15% include two processes, and 8% included only Cash Applications. 28% of all companies participating in the iPoll do not use a company-wide global process owner. Here are the details:
According to the companies who use a company-wide global process owner, the reason cited as the primary benefit by 54% of respondents is the positive impact of increased process standardization, which is likely a key contributor to the secondary benefits reported, including improved quality, better alignment of goal and objectives, and reduced cost.
Here are some of the comments from iPoll respondents:
- At our company, we really have two process streams. One for Order Processing and Billing, and the other for Credit & Collections and Cash. Although there is some local autonomy, there are global process owners for each to try and achieve consistency across geographies.
- We are in the process of implementing a global process for O2C and will be moving toward having a global process owner. Processes will remain regional, and will not be managed from a central location.
A recent PeercastTM in the Accounts Receivable (O2C) research area featured a global $10B retail company that recently implemented global O2C process ownership as part of a broader set of improvement initiatives that had the support of the highest levels of company management. In describing their journey, they identified three key strategies:
1. Simplify and Standardize Global Processes
- Eliminate unnecessary complexity
- Standardize core processes
- Eliminate low-value work
- Establish global process ownership with clearly defined decision rights
2. Organize and Source for Performance and Scale
- Develop a clear delivery model
- Align responsibility, accountability, and reward performance
- Leverage global capabilities
3. Leverage Technology
- Utilize ERP and integrate the application portfolio
- Deploy common data standards
- Extend functionality via self-service
- Create next-generation analytics and reporting
To support the ongoing administration of the new global processes, they created a transformation office that included project management, six sigma, a document library, and change management resources. They have been extremely pleased with the results to date and have been given the go-ahead to expand the model to additional processes.
What is your approach to designing and implementing global process ownership for the end-to-end O2C process?
Who are your peers and how are you collaborating with them?
1 “PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.
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