Even with the highly-advanced and functionally-rich ERP systems utilized by most major corporations today, the need for better technology capabilities continues to be filled by approved partners of such giants as SAP and Oracle. These “bolt-ons”, as they are often referred to, can provide improved functionality and efficiency without the need for companies to invest in their own customization of the ERP system, which can often be prohibitively expensive to develop and quite complex to maintain.
One of the most common challenges for companies in the area of Order-to-Cash is dealing with customer deductions and the related issues surrounding dispute resolution. Depending significantly on the type of industry the company is in and the manner in which its products are being distributed, dispute resolution can be a major headache for the Billing, Collections, and Customer Payment Processing organizations. As a result, several bolt-on solutions have been developed to help companies streamline the dispute resolution process.
During a recent PeercastTM in the Accounts Receivable (O2C) research area, a major consumer products company shared their experiences in implementing the HighRadius Collections & Dispute Accelerator. While Peeriosity doesn’t allow service providers or consultants to market to member companies, we do encourage our members to candidly share their experiences with different solutions, regardless of whether they are positive or negative.
In 2011, our feature company first implemented High Radius in the United States, Canada, and Puerto Rico. This was followed each year with subsequent accelerator upgrades, along with the concurrent implementation of Open Text Document Archiving. As a result of this multi-year effort, the rolling 12 month average deduction balance dropped from $28 million in March 2011 to $18 million in June of 2014, a 36% reduction.
The iPollingTM questions that were administered in support of this PeercastTM provide insight regarding the primary technologies used by companies to resolve disputes and the focus that they plan to place on improving this process in the next several years. Looking at the results of the first question, it is interesting to note that just 39% of the participating companies use the standard functionality of their ERP system as the primary technology to manage dispute resolution. Of the companies that have implemented an automated solution in addition to the ERP, 17% use an externally provided solution that is not attached to their ERP, 11% have developed an internal bolt-on solution, and 6% utilize an internally developed solution that is separate from their ERP. Of the remaining respondents, 22% utilize a fairly manual process (i.e. Excel, etc.) and 6% responded as having another type of approach.
These results show that there is not one obvious solution in the area of dispute resolution technology and that most companies are clearly not satisfied with the standard ERP functionality in this critical Order-to-Cash process.
The second question from this poll focused on how important of a priority improving the dispute management process will be for companies in the next one to three years. As the results show, for 33% of the companies participating in this research, it is a high priority, with an additional 50% indicating that it is a moderate priority. Of the remaining 17% of the responses, just 6% said that it was a low priority because they were happy with their current status in this area, while 11% responded that other priorities would be taking precedence over dispute resolution. Certainly, with 83% of the companies indicating that this is either a high or moderate priority for them over the next few years, there should be significant progress made in this challenging part of Order-to-Cash in the foreseeable future.
Some of the comments the member companies made in conjunction with this poll are as follows:
- We utilize SAP’s FSCM Dispute Management Tool enhanced with some High Radius accelerators. We also have specific objectives around deduction improvement.
- This will be a priority in some markets, but not all markets need a dispute management application.
- Multiple systems utilized, with some ERP and some Excel.
- We used to use DMS from IMany and removed it as we were not getting much benefit over legacy capability and it was more work to administer.
What is the status of dispute resolution at your company? As with 83% of the companies participating in our research, is improving the dispute resolution process a key priority in the next few years?
Who are your peers and how are you collaborating with them?
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to 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.