Outsourcing the Order-to-Cash Process
The past decade of Business Process Outsourcing (BPO) has seen the growth of a multi-billion dollar industry that has its share of successes, notable failures, and many experiences that fall somewhere in between. Outsource provider employees can be “offshore”, “near-shore”, or “onshore”, using either new staff or, in some cases, re-badging the existing workforce. Interestingly, the growth and acceptance of BPO follow many of the same patterns that were true for Shared Services, including a reluctance to transfer customer-facing work processes. As one example, Order-to-Cash processes have only recently gained widespread acceptance in Shared Services; a possible future trend for what is acceptable for outsourcing.
A Peeriosity PeercastTM featured a $50B+ global company in the Consumer Packaged Goods industry and examined their experiences with a global initiative to outsource broadly, with the discussion specifically focused on the topic of outsourcing Order-to-Cash processes. The company carefully segmented work processes based on their relative complexity and need for expert judgment, and the inherent risk outsourcing a process might have on sales growth or profitability. While this particular company’s experience included re-badging of current staff, much attention was focused on clearly defining the process components that were retained, and the detailed service level agreements and BPO vendor management processes that were required.
A supporting iPollingTM question for the Peercast explored the frequency of outsourcing Order-to-Cash processes and the overall strategy for outsourcing customer-facing work activities. The results show that only 6% of member companies have a moderate or significant level of outsourcing in Order-to-Cash, with 38% that have a limited scope and 56% that have not outsourced. Here are the details:
A follow-up question explored the current status of outsourcing customer-facing processes within Order-to-Cash, with only 10% having implemented and 21% deciding against outsourcing. The remaining 48% of companies have not considered the possibility.
Here are examples of comments from iPolling participants:
· We have an active project to consider moving cash application to a SaaS provider.
· Most of our Accounts Receivable processing has been outsourced.
· While cash application is outsourced, along with portal entry work and limited full invoice past due analysis, we were unsuccessful in our attempts to outsource on-hold analysis, past due invoice follow up, deduction analysis, credit analysis, and claims processing.
How aggressively has your company pursued outsourcing as part of your Shared Services strategy? How carefully do you protect customer-facing processes, and do you expect your approach to change over the next few years?
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.
Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultants or vendors permitted. To learn more about Peeriosity, click here.