What Is Postmodern ERP?
Your ERP is a jack of all trades. However, the question daunting the minds of many world leaders today is this—is your ERP sufficient to optimize your business to the next level?
Probably not. Especially with the rising demands for flexibility and agility to suit the needs of customers.
However, Gartner has introduced an interesting concept coined Postmodern ERP.
“The main goal of a postmodern ERP strategy is to have the freedom to use the best applications for each function, while ensuring they adequately integrate with each other when necessary.”
Put simply, a traditional ERP system is like buying a new car every 10 years while paying for maintenance.
A postmodern ERP is like owning the same car indefinitely while replacing various components with better ones as they become available.
O2C in Postmodern Environment: Key Concerns
Order-to-cash is one of the most essential functions that works in tandem with ERP. With the flexibility offered by postmodern strategy, O2C leaders have an opening for optimization.
By 2020, Gartner predicts that most companies will already have a hybrid ERP architecture of loosely coupled cloud and on-premise solutions
The journey, however, starts with a complicated first step of selecting solutions that integrate seamlessly and work in synergy.
Here are the top concerns or risks involved in selecting the right solutions:
Three Must-Haves in AI Driven Best-in-Class Solutions
Instead of investing in antiquated on-premise systems, leading businesses have turned to SaaS and cloud-enabled solutions that are easy to implement, configure, and update.
Moreover, in the last decade, artificial intelligence or AI has evolved from a far-fetched fantasy to practical reality, boosting operational efficiency and reducing costs beyond belief.
Now, with the agility and flexibility offered by this strategy to select, integrate, and implement the best solutions without putting additional load on the IT and business side, it’s time for O2C leaders to leverage the latest technologies like AI in cloud solutions that are deployed through SaaS.
Here’s how AI could significantly help you rudder your A/R in the right direction:
1. Eliminate the Cost Leaks of Deductions
Most A/R teams spend more time gathering documents, researching, and collaborating than validating deductions. Consequently, they don’t have bandwidth to focus on identifying and recovering high dollar invalid deductions which end up being written off.
However, the latest application of AI in deductions management enables you to predict if a deduction is valid before you start working on it.
- Eliminates time lost on valid deductions – prioritize invalid ones
- Identify and control inaccurate write-offs
- Familiarize your employees with the concept of automation by implementing some form of the technology within the next 18 months
- Gain a deeper understanding of AI by kickstarting initiatives within the next two years
- Draw on your early successes to build a foundation for progress
- Determine in the next two to five years the practical benefits and opportunities of AI for you
2. Predict Customer Behavior While Collecting
More than 70% of all collections correspondence is directed at customers who would have paid even without the dunning email or reminders. Even the static prioritization of worklists does not empower analysts to identify customers or accounts which do not require any dunning v/s those that need additional focus.
The latest application of AI in collections enables you to predict your customers’ payment date and shape the collection strategy needed.
- Focus collectors’ efforts on accounts with high delinquent probability
- Automated correspondence for others thereby increasing the total value/number of accounts managed
3. Proactively Manage Credit Risks
The credit limit tug-of-war between the credit and sales teams is quite common for most of the companies across the globe, with increasing credit limits or releasing blocked orders being the top two issues. It not only impacts the business’s cost, but also impacts the risks involved.
- Approval-ready credit review for large customers while automating for small customers
- Get sales to negotiate early payments vs. blocking orders due to low credit
Even if the solutions selected are best-in-class and are set to yield over-the-top results, the O2C team would still have to do a lot of manual work if the systems do not integrate and communicate.
Turn the page to find out how top companies use the latest technology driven software seamlessly and in synergy.
Single Integrated Cloud Platform
A solution that integrates seamlessly while enabling cross-functional collaboration and providing a single source of truth for maintaining data security and integrity – all while automating significant number of manual tasks.
Seems impossible, right? No, it’s not.
Integrated Receivables or IR is a solution platform to optimize accounts receivable operations by combining all receivable and payment modules into a unified business process. It addresses the challenges of O2C executives adapting to the postmodern ERP environment.
Frictionless integration with all major ERPs including SAP, Oracle, Microsoft Dynamics, as well as other systems such as CRM
Single Source-of- Truth
Cloud platform to secure data integrity across different processes and solutions No need to manually update across different spreadsheets
Interconnected solutions that allow for inter-solution collaboration between different O2C processes
AI-based solutions to drive benefits beyond simple cost reduction and increased productivity including customer satisfaction and metrics improvement
Questions to Ask Your Vendor
Some common concerns around using IR that you need to ask your vendor about include:
- Are the individual solutions mutually exclusive?
- Could I choose the combination of solutions that I actually want or do I need to invest in the entire suite?
- What cost vs. long-term value benefit will I achieve?
The postmodern ERP represents a fundamental shift away from a monolithic ERP platform toward an environment that combines existing ERP investments with new technologies. Moreover, it promises more agility and flexibility – which has been a long-time need for many businesses.
Here is a quick overview of what this e-book talks about:
- Key concerns for O2C in postmodern environment: We identified three major challenges or concerns that come to any executive’s mind while choosing frictionless solutions that could work in synergy:
- Finding the best-in-class right fit
- System integrity and data security
- Cross-functional collaboration
- Three best-in-class must-haves: Most of the best-in-class companies are leaning on AI-based solutions to drive improvements. However, what are some of the best use cases of AI in O2C that could be a starting point for beginners?
- Predict the validity of deductions to eliminate cost leaks
- Predict payment dates to collect faster and more efficiently
- Proactively predict blocked orders to manage credit risks
- Single Integrated Cloud Platform: Use best-in-class solutions on a single integrated cloud platform to avoid the additional manual effort and costs involved in integration, maintaining data integrity, and communicating between different solutions.
The journey, however, still begins at finding the right solution for your business and the obvious first step in this process is an AS-IS assessment.
Fortunately, IDC, most of the CFO’s go-to technology vendor guide on accounts receivable recently conducted a “Worldwide SaaS and Cloud-Enabled Accounts Receivable Applications 2019 Vendor Assessment”
Click to read the full report on the latest dynamics and functionalities of best-in-class solutions.
HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company. The HighRadius™ Integrated Receivables platform optimizes cash flow through automation of receivables and payments processes across credit, collections, cash application, deductions, electronic billing and payment processing.
Powered by Rivana™ Artificial Intelligence Engine and Freda™ Virtual Assistant for Credit-to-Cash, HighRadius Integrated Receivables enables teams to leverage machine learning for accurate decision making and future outcomes. The radiusOne™ B2B payment network allows suppliers to digitally connect with buyers, closing the loop from supplier receivable processes to buyer payable processes.
HighRadius solutions have a proven track record of optimizing cash flow, reducing days sales outstanding (DSO) and bad debt, and increasing operational efficiency so that companies may achieve strong ROI in just a few months. To learn more, please visit www.highradius.com