When you consider the types of processes that are most commonly found in Shared Services, it is only within the past decade that companies seriously considered moving external customer-facing processes to a Shared Services model. In fact, today Accounts Payable is still twice as likely to be in Shared Services than the Order-to-Cash processes of Order Processing, Billing, Cash Application, or Credit. While being closely aligned to separate businesses does help ensure customer focus, the downside is the difficulty that exists for individual improvement projects to reach the scale required to be viable. As a result, automation in Order-to-Cash often lags behind automation in other areas, including Purchase-to-Pay, Record-to-Report, and Hire-to-Retire, which have been historically more likely to be in Shared Services.
A PeercastTM featured a $20B+ global company in the Consumer Products industry that created a separate Customer Financial Services organization, allowing them to include many of the components of Order-to-Cash in a single organization. The mission of the organization is to “deliver superior order settlement performance, optimized working capital, and insightful reporting so the businesses served can focus on driving sales and other strategic opportunities”.
For our feature company, automation opportunities in Order-to-Cash were largely in the Order Settlement processes and, specifically, in the areas of Collections Management, Dispute & Claims Management, and Cash Application. The project selected was in the Collections Management area, with the implementation of the “Advanced Correspondence Automation for SAP” developed by HighRadius. The solution supports the automation of all credit, collections, and dispute correspondence using data from multiple SAP modules and a rules engine to manage the correspondence process, including collating backup documentation that can be sent by email, fax, or mail. The new processes have eliminated large volumes of paperwork, with over a 90% efficiency improvement in the correspondence process and a 30% reduction in the volume of past due invoices.
A related iPollingTM question asked member companies to identify where the most significant opportunities existed for increased automation in the Order-to-Cash process. The two top picks, “All Areas” and “Cash Application”, were both selected by 29% of the respondents, followed by “Order Management” at 18%. Collections were next at 6% and no one selected the Credit or Billing processes. Finally, 18% indicated that there were limited opportunities for additional automation.
The biggest challenge cited by members to automation is the lack of standardization that exists within processes (36% of responses), followed closely by a lack of resources (29%). As illustrated below, the problems are largely within the company, with no one citing difficulty with getting customer buy-in as a significant challenge. Here are the details:
The following are a few of the comments from iPolling participants:
· We have already automated the Collection process and are in the process of automating our Billing and Cash Application, with Cash Application as our biggest opportunity. Our biggest obstacle is the ability to standardize globally.
· For the most part, Cash Application is automated. It is the deduction transaction posting that occurs during cash application and the follow-up on those deductions that could benefit from further automation.
· All areas offer opportunities, but we are currently focusing on Cash Application and reducing paper across all areas.
What parts of the Order-to-Cash process does your company include in Shared Services? What are your priorities for automation in Order-to-Cash?
Who are your peers and how are you collaborating with them?
“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.
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.