Utilizing Technology to Maximize Efficiencies in Order-to-Cash (O2C)
It is no secret that extensive use of automation is one of the key success factors for any Order-to-Cash operation, regardless of the industry or geographic location. The challenge for many companies is developing a comprehensive strategy to identify and deploy the powerful technology options that are now available to companies across the globe. The variety of different approaches can be overwhelming, and not carrying out the proper due diligence in making these important technology decisions can be expensive and a major drain on what are often already scarce resources.
A recent Peeriosity Peercast featured a major manufacturing corporation with over $10B in revenue and operations spread across the globe. Relatively new to utilizing the Shared Services design, the first step in that transition was to create a service center based in Poland to support their EMEA operations. Specifically related to Order-to-Cash, this company had over 20 sales operations spread across the EMEA region, each with its own decentralized Accounts Receivable team. With 20+ JD Edwards Accounts Receivable environments that were not linked at the operating level, their O2C operation was too complex and difficult to maintain. The result was to make the strategic decision in 2014 to consolidate the Accounts Receivable function into a captive shared services center in Poland.
As is often the case with these types of transitions to Shared Services, the implementation of advanced Order-to-Cash technology was a key component of the overall project. After considering a variety of solutions, this company selected Cforia as their provider, which would act as a bolt-on to their ERP system, JD Edwards, and would be based in the cloud vs. an extensive IT implementation.
Some of the benefits of implementing this advanced technology solution included the following:
- Cash application automation
- Collection automation – no touch collections
- Dispute assignment workflows
- Regional visibility of AR within a single lens
- Parenting of accounts
- Real-time information
During their PeercastTM presentation, the company went on to share information about their strategic account management, how they manage their small to the mid-size customer base, the use of credit risk-driven collections, automated Dunning and customer contact management, and deductions and disputes best practices, all of which can be viewed in detail by members of Peeriosity.
Looking at the results of a recent poll for this topic administered using Peeriosity’s iPollingTM capabilities, the first poll question asked what the primary ERP system was for the companies participating in the research. Clearly dominant, SAP is being utilized at 67% of the companies, with Oracle at 14% and JD Edwards at 10%. The remaining 9% of the companies use another ERP solution.
The second iPollingTM question then addressed what technology the surveyed companies primarily utilize to manage their Accounts Receivable workflow as it relates to managing collector activities, priority task lists, aging reports, dashboards, notes, dunning letters, etc. For 52% of the companies, the standard version of their ERP system is utilized for this purpose, which can be a good solution depending on the complexity of their Order-to-Cash operation. At 24% of the companies, they have gone with additional ERP functionality, which is typically a specialized module from the ERP solution provider or custom programming. Just 10% indicated that they are utilizing a specialized 3rd-party provider, so it will be interesting to see if that adoption rate grows in the coming years as more companies consider that approach to automation.
How satisfied is your company with your current Order-to-Cash technology solution? Have you taken the opportunity to evaluate the advanced capabilities that are now available through 3rd-party solution providers or any advanced capabilities that might be available from your current ERP software provider?
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.