While shared service centers have traditionally been focused on cost reduction, order-to-cash GPOs have been looking out for ways in which they could transform their shared service centers into high value-driving functions. Most A/R shared service leaders who had been focused on this objective before the onset of COVID, were forced to take a step back and reinvent the wheel as some of their existing process-gaps came to the surface in response to the crisis.
Throughout the past six months, order-to-cash GPOs across multiple sources agreed that their SLA delivery, team performance and collections efforts were all impacted as a result of the crisis. Many of them mentioned that reassessing their business continuity and disaster recovery plans against future crisis situations is one of their top priorities once things go back to normal.
In a survey with SSON, 37% GPOs also identified technology as the key to prepare their shared services organization for the future.
While that makes sense if you look at how technology has been creating positive value in finance in the recent past, many companies still struggle with a “digital dilemma” of whether or not to automate. Given the challenges and potential adverse outcomes and impact of the COVID-19, one might think that undertaking a new project would be out of the question. Digital transformation seems impossible with limited resources, budget cuts, and furloughs, etc.
But some thinking on this, and you would realize that digital transformation in this environment is not only possible but also very likely to be successful if planned in the right way. In an uncertain economy like the one we are in today, we can’t afford to make wrong decisions, and hence we advise that you use the below framework from Gartner to vet your decisions before finalizing them.
Gartner’s Framework For Better Business Decision Making
We are in an uncertain environment, and everything is changing by the minute. You can’t really say what is right and what is not just by looking at one or two factors. Thus, Gartner provides us with a comprehensive decision-making Cost Optimization Decision Framework
that would allow A/R teams to make the right choice in this tough economy and hence help them-
Sustain, Recover, Thrive.
Use this framework to evaluate how every decision you’d make would fare against what should be your top consideration right now.
The parameters against which you need to evaluate any new decision are- the potential financial benefits of the decision, overall business impact, the time requirement, degree of technical and operational risk, and the investment requirement.
There are multiple levels in which a decision would impact each one of these criteria, but the most ideal and optimum choice would be the one making way for large potential benefits, positive overall impact, has minimum time requirement, low technical risk, and operational risk and minimum investment requirement.
A decision that checks off as many green boxes as possible is more likely to deliver long-term value to the business.
How to Use this Framework While Making Decisions Around The Digital Transformation of Your A/R
Let us take the example of credit management automation.
Whether it's onboarding new customers or setting up periodic reviews or gathering data from credit agencies to assess credit risk, credit management if done manually is tedious and prone to errors. Automating credit management not only speeds up credit application processing, but it also provides real-time credit risk monitoring with simplified credit scoring, and segment the customers to automatically assign credit limits for low-risk, high-volume customers.
In order to better understand this, let us fare against this decision framework and see how it can improve the efficiency of your credit team.
Automating the credit cloud has medium finance benefits, as it does help in reducing the costs of paper applications. The overall business impact is positive, and the time taken to deploy is minimal. There is little to no operational and technical risk. Also, with HighRadius, you would be working with subscription-based modules, so there is no heavy licensing fee, but only an annually recurring subscription fee.
Transforming accounts receivable (A/R) is the key to making business move faster in this slow
economy. Digitizing your A/R process can not only save you money, but it can also speed up your collections, reduce late payments, and reduce 70% of the repetitive tasks taking up your team's time.
How automating credit management fits the bill of the right choice for a global credit leader today, is one example of the many quick-win deployment strategies for A/R shared service leaders that technology provides.
If you would want to learn more about how technology could create value for other areas of your order-to-cash, click on the link below to watch our detailed webinar on quick win deployment options for A/R Shared Service leaders, or get in touch with an expert
Click here to learn more about how the Gartner Framework Could Help Making Decisions For Digital Transformation In Other Areas Of Your Order-To-Cash