{"id":4392,"date":"2021-08-19T17:28:40","date_gmt":"2021-08-19T17:28:40","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=4392"},"modified":"2022-08-23T16:12:25","modified_gmt":"2022-08-23T16:12:25","slug":"using-global-process-owners-for-order-to-cash","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2021\/08\/using-global-process-owners-for-order-to-cash\/","title":{"rendered":"Using Global Process Owners for Order to Cash"},"content":{"rendered":"\r\n

Introduction<\/strong><\/p>\r\n\r\n\r\n\r\n

The Order-to-Cash process is often one of the last process areas that transition to a Shared Services or a Business Services delivery model.\u00a0 The reason O2C processes are usually last is that these processes are closer to the customer, resulting in significant influence and oversight being required by individual business units and geographies.\u00a0 Since company revenues and profitability are tightly linked with customer experience<\/a>, there is often hesitancy from business owners to relinquish control of the underlying work processes that are a part of Order-to-Cash. \u00a0<\/p>\r\n\r\n\r\n\r\n

The results for many companies from this tight control of O2C include non-standard business processes, unnecessary complexity, and decentralized work activities in local geographies.\u00a0 While decentralized processes can create high-touch delivery for customers, maintaining processes that are of the highest quality requires significant staffing and often re-work when work steps are frequently inconsistent or broken and transitions between work activities are not standardized or clearly defined.<\/p>\r\n\r\n\r\n\r\n

Utilizing a GPO model<\/a> eliminates barriers to achieving standard processes and results in greater centralization of work activities based on the underlying requirements to complete the work, instead of being based on the needs of a divergent set of business owners with limited experience in O2C and conflicting approaches for how work should be performed. While regional and local differences are possible, starting with a position that processes should be standard globally and across all lines of business with deviations only when necessary, can be a very powerful approach.\u00a0 This design is even more effective when individual processes are closely managed by a single Global Process Owner.<\/p>\r\n\r\n\r\n\r\n

Company Experience<\/strong><\/p>\r\n\r\n\r\n\r\n

A PeercastTM<\/sup> discussion in our Accounts Receivable (O2C) research area<\/a> featured a large global company with over $70B in annual revenue discussing their approach to implementing and utilizing Global Process Owners (GPOs) for the end-to-end Order-to-Cash process<\/a>. \u00a0With the transition to GPO\u2019s as part of a multi-year improvement project, they were able to reduce headcount from 350 FTEs to 250 FTEs with a cost savings of USD $8M per year.\u00a0 In the new design, the company has separated GPO responsibilities for the Collections, Claims, and Cash Application processes.\u00a0<\/p>\r\n\r\n\r\n\r\n

For details, Peeriosity members are encouraged to sign into the members\u2019 area to view the complete presentation and listen to the recorded Peercast.<\/p>\r\n\r\n\r\n\r\n

iPollingTM<\/sup> Results Review<\/strong><\/p>\r\n\r\n\r\n\r\n

Peeriosity\u2019s iPollingTM<\/sup> was used to provide supporting data for the Peercast.\u00a0 The first question asked members to identify the most significant benefit of having a GPO for Order-to-Cash.\u00a0 The results indicate that 62% of Peeriosity member companies are using a GPO model for Order-to-Cash.\u00a0 Of the 62% who have implemented GPO\u2019s, 40% indicated that leadership in bringing O2C areas together with a common set of aligned goals has been the greatest benefit, and 20% indicated that leadership in increasing standardization and improving quality has been the greatest benefit, 20% cited leadership in setting the overall strategy for O2C was greatest, with 20% citing some other option including \u201call of the above\u201d.\u00a0<\/p>\r\n\r\n\r\n\r\n

\"results<\/figure>\r\n\r\n\r\n\r\n

The second question asked about the scope of responsibilities for the O2C Global Process Owner, and specifically the mix for which the GPO has ownership for strategy, policy, and operations.\u00a0 In other words, what roles does the GPO have in determining the strategy?\u00a0 Once the strategy has been defined, what role does the GPO have in determining policies?\u00a0 And finally, what role does the GPO have for operations, which is defined as the actual people and resources who complete the work activities?<\/p>\r\n\r\n\r\n\r\n

While the mix of responses indicates a wide range of approaches by Peeriosity member companies, 55% of the companies use a model where the GPOs have responsibility for the people in addition to responsibilities for some mix of process and strategy.\u00a0 Here are the details:<\/p>\r\n\r\n\r\n\r\n

\"poll<\/figure>\r\n\r\n\r\n\r\n

Here are some of the comments from members:<\/p>\r\n\r\n\r\n\r\n