Curated With Expert Input From:
1. Working in a siloed environment
Businesses have used Shared Service Centers (SSCs) to achieve cost and operational efficiencies for managing back-end F&A or O2C processes related to customer payment processing, billing, credits, and collections outsourced to process-specialized SSCs. Traditional F&A SSCs worked in a siloed environment with separate business objectives and processes, restricting the exchange of information.
2. More Focused On Standardization of Ongoing Process Than Process Innovation
O2C SSCs mainly handled targeted tasks and were not adding any value to the core business. There was less focus on process innovation, automation of workflows, and generating real-time insights. The main activities only included standardization of the ongoing processes, leading to the commoditization of business processes. This, in turn, impacted business growth because the focus remained on cost optimization rather than designing better products or increasing sales or exploring new markets.
GBS Model Acts as a Centralized Org Handling End-To-End Ops
In the SSC model, the Shared Services Center is a separate entity that has emerged from the core organization and is responsible for providing services to its local business units. The GBS model, however, consists of setting up a global, integrated and centralized organization that provides comprehensive and complex end-to-end processes. (In the case of SSC, local business units continue to participate in process execution, as only some of the clearly defined activities are transferred and consolidated in SSC).
1. GICs Enable Intercommunication Between Processes
Global business services are becoming more involved in strategic business functions such as customer, sales, and marketing support, thereby generating substantial business value. A GBS that could enable intercommunication between the processes could generate real-time insights for business leaders. This resulted in the adoption of Global Innovation Centers (GICs), providing an environment where processes no longer work in silos, and a workforce that is technologically advanced and answers business queries proactively.
This enables innovation teams to support their overall strategy, including new idea generation and execution, customer experience improvement, responses to immediate business requirements, real-time insights, and revenue generation.
2. Extensive Support to Decision Makers and Supports Overall Strategy
Decision-makers need support for tasks such as reducing process cost, managing cash flow, improving customer relationships, creating business value by generating leads for the sales team, improving visibility on payment disputes, and providing foresight on credit and payment risk customers. This becomes possible through centralized service delivery like GICs.
GICs provide an environment where processes no longer work in silos, and a workforce that is technologically advanced answers business queries proactively. This enables innovation teams to support their overall strategy, including new idea generation and execution, customer experience improvement, responses to immediate business requirements, real-time insights, and revenue generation.
1. Adopting Technology to Enable Innovation
Technology has the potential to offer customized solutions for specific processes or sub-processes. E.g., it can be used to run a real-time cash application process and bring the process at par with any other process in an organization.
“GBS centres have evolved over time to enable innovation with the help of adopting technology in the cash application process.”
– Moustapha Ould Ibn Mogdad, Market Focal Point Manager, GBFS Canada – OTC, at Bristol-Myers Squibb
GBS acts as a catalyst in the overall digital transformation of a business, assisting them in establishing new operations and enhancing existing ones. But the transformation also increases the interaction among the processes, both in volume and complexity. This is where automation techniques are needed to reduce the cost of labour and to make intelligent decisions.
2. AI-Driven Automation to Add Value to the Process45% of global GBS leaders foresee an increase in GBS focus on digital experience and AI-driven automation. In a shared accounting services framework, service delivery should be cost-effective, customer-focused, and efficient. It should also add value to the process. Innovative solutions adopted by shared services leverage technology to provide scalable and repeatable solutions.
“It is essential to have an automation approach to utilize resources effectively.”
– Tammy Lindorf, Director Shared Services, from Martin Marietta
Digitization of operations brings enhanced visibility across processes and contributes to their improvement by enabling continuous benchmarking needed for achieving best-in-class practices.
The accounting processes facilitate resource efficiencies that can be channeled toward business development initiatives. As more transactions are automated, GBS centres deal with limited service areas such as account payables and receivables.
Automating paper-based work such as invoices and purchase orders reduces the sheer volume of paper used. This reduces the overall cost when accompanied by reduced manual entry and reconciliation processes. In an accounts payable process, e-invoicing and automated matching of the purchase order, delivery confirmation, and vendor invoice eliminate the requirement of manual intervention. Key types of technologies being used for O2C processes are:
1. Artificial Intelligence (AI) and Machine Learning (ML): AI and ML techniques facilitate automated analysis and scanning of invoices, emails, and contracts, thereby reducing manual effort. However, the critical application and value addition comes from the insights that it can generate with its analysis, which supports decision-making or taking automated intelligent decisions. For example, self-learning algorithms predict payment dates and identify the risk of non-payment, and integrating this information across processes leads to relevant business insights.
Digitization of operations brings enhanced visibility across processes and contributes to their improvement by enabling the continuous benchmarking needed for achieving best-in-class practices.
Future-ready businesses adopt practices that combine human and machine intelligence, leveraging modular data and technology architecture with scalable processes, decision support teams, and agile front-end teams. Advanced technologies such as AI and ML could help build the O2C GBS of the future.
2. Cloud-based deployment provides scalability and an environment for better operational integration across processes and ensures business continuity.
It increases trust with business leaders and helps in business decisions by providing real-time data such as credit information, buyer credit score, buyer payment behavior, payment history, and validity of deductions claimed.
3. Business intelligence services for analyzing data and providing actionable insights affect strategic decisions
“Digital transformation brings in process effectiveness and efficiency and the ability to represent data to be analyzed. “
– Tammy Lindorf, Director Shared Services, from Martin Marietta
It is evident from the application of these emerging digital technologies that to adopt best-in-class practices and radically enhance the value generated from O2C processes, it is essential to follow a digital approach.
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