5 Expectations of Tech from A/R Team

Speakers

Emanuel Fitolite

ITS CI2C – P2P Expert / Stream Lead, Sanofi

Transcript

Emanuel (Fito):

Can You hear me? Okay. Yes. I’m an IT guy. And the idea is to share with you, the expectations that we have from the IT department with the business people from A/R that are working in Sanofi for the last six years now, main customers to cash and purchase to pay. So I’m going to try to give you some tips about the experience of the Cash HighRadius app within our company and try to discuss best practices with you about best practices and so on and so forth.

So, the agenda that we’re going to go through. Basically, we’re going to talk about the need for collaboration between teams’ IT teams and the business team. Six expectations, specifically that we have from supposedly from the tech team from A/R teams, and some examples with what we have done in Sanofi in the last couple of years. Then, I am going to talk a little bit about some specific business that we have on the pharma business, that are all the integrations and the difficulties and challenges that we find as wholesalers, and then we’re going to talk about a little bit where we stand now in the implementation itself and what we have, ahead of us.

So the need for collaboration between IT and A/R team, basically the thing is key, that we work as a team. Mostly in some other projects that I have in IT, the team has all the knowledge and tries to move forward. But if we work in silos, we can have very difficult or challenging issues afterward. If we’re not really understanding the requirements that we have from the business team itself. On the other side, if the business team works in silos, what we will find is that they might or might not know what is the impact on the system and what is actually feasible or not feasible. Even though HighRadius is a cloud solution, what we need, I mean we integrate this with our ERP with SAP and sometimes there are some limitations in it that we need to work, and if they miss, they start defining rules. May might expect something that of course is not feasible.

Emanuel (Fito):

On the other side, if we do it by ourselves, Of course, we might do things that afterward, we raise the business and it’s not where they were expected to always have a huge impact that we’re gonna have here. In the best-case scenario, we found these issues were put to the test. The best case will be maybe in putting on the timelines of approaching that we realized where the business starting to test the solution we reach that is not actually what they were expecting or the other way around. I mean, yes they are, they were basically what they’re expecting is not feasible and the system will be tested. It’s actually nothing to do with what they wanted. So again in the best case scenario before in another in a test maybe it’s an impact on the timelines, we funded afterward in pre-production.

We are in huge trouble right so that’s why it’s key to work as a team to have a functional team, some people that work with each other and work on the collaboration between both teams. It’s a key factor for the successful implementation of HighRadius or any other implementation that we might have. What are the key expectations that we find? From a technical team from the IPS team, basically have clear functional requirements to understand exactly and have what the business is looking for. Sometimes it happens that they don’t really know what they want, so it’s key to have to go in details and what exactly they want to have in the system of what they expect in the system to do the integration that we might have with other different systems, they may or may not be aware. Sometimes you need to see the whole cash application or actually the whole A/R customers to cash process end to end. In order to understand a specific situation that the customer may need. A quarter batch allocation of resource requirements. Basically to have the necessary budget and the resources, the expertise in all the areas in order to be successful. The security and compliance requirements, be aware of what it’s what we can do or what we cannot do within the company, within the country where the company’s compliance requirements might change between different countries. I’m new in the US and I think that he may change us in different states here.

So it’s key to have very good knowledge of what is required. And then also to plan in future and have all the steps and all the phases very clear to plan exactly what needs to be done on when, and by who is starting from system test, continuity test, test planning all the hyper care time for supporting the whole life. I gotta go in detail now in each of these five and discuss with you some examples and some tips that I can share with you.

Emanuel (Fito):

So have a global view of the process of requirements. Basically it’s what I was talking about I mean have a clear and complete set of requirements of functionalities that businesses are expecting. Sometimes it happens as I was telling us that they didn’t really know what they wanted in one day. And when you try to explain something that you don’t really know what to know what you want. Afterward, it’s very difficult to put in the system when the requirement is not really clear. Another thing, keys to understanding the impact on all the other processes that are linked to the cash application, meaning that even though the process is thoughts, of course with a sense holder an invoice on that invoice that is paid and needs to apply the cash.

Sometimes you have a lot of discrepancies within the payment and the invoice. So you need to understand all the process on how you continue following up on those discrepancies between the payment and the cash application and how you process afterward, with all the deductions, partial payments overpayments and so on and so forth. So it’s key to understand the whole process that the company has not only on the cash application but on the deduction management dispute management, and how you close disputes, when you recognize something so this period or not. If it is going to be part of it or not have the great exposure so there are a lot of things he’s good to understand the whole process before you, you really go in detail for what we need at least in Sanofi on the, on the cash application itself, meaning all the important all the other tools that you might or might not have its key also to understand how they’re working now, meaning that they might be using the cloud tool like HighRadius or them may not be using maybe it’s everything in any A/R in SAP maybe using another tool.

So it’s key to understand the essential process in order to identify any area that we can, that we can enhance how we can improve. And actually, we can leverage, maybe partially what they are doing now in order to have the best tool of solution that they are that they’re looking for. So then it’s key to, to go in detail as one of the first steps to understand the end to end process, assess, check on where we can improve. What we can change and try to share with them they would practice this and maybe a provider so in order to come, provider. So as I was telling, clear business rules in SAP as well, specifically from my IT. I’m a huge fan of SAP. SAP consultant, since several years ago. So it’s key to have what needs to happen in SAP, meaning that. Mainly, when the cash application doesn’t mainly only happen in HighRadius but at the end. If you’re integrating this with SAP, you will have to build some interfaces on something that has to be posted, or cleared, in SAP. If you’re using needless on a Sunday or be. So it’s key to understand what exactly needs to happen in SAP and what the users are going to do in SAPif they need to do something or not.

Mainly all of the work of the cache analyst is going to be in HighRadius. But again, you might have, depending on the rules, put in place to do some things in SAP or not but it’s key to understand that. And this is actually what I was telling about all the process and how it continues afterward. If you’re using only the cash application in HighRadius and all the other processes that happen afterward, introductions to dispute and so on. If you’re using sap for it is totally linked, so, I insist that if you want to maintain and process all that within the outside HighRadius. The whole integration is key to understanding what is the best functionality that we can give to the cash application tool itself. Ensure minimal disruptions on the current process from a technical point of view it’s key to understand how the data flows between the actual system if it’s not an ERP, or SAP for instance, or if it’s everything in SAP. An example I can share with you even though I’m going to go in the interest of towards. When we implement this in, you know a company in 10 different A/R and each A/R has a different way of working with cash obligations. some up in some ERPs we’re working with within everything in SAP, some other regions we’re working in different tools. Outside SAP.

Emanuel (Fito):

And the timing between the bank statements, going from the bank to the company might have a huge impact so this does not disrupt what they have in now, meaning that the different events in A/R or finance are facing us or Canada. But what happens sometimes, let’s say that the process of the file once a day is not the same. So it’s key to understand how they’re working today and how the data flows between SAP and HighRadius customers on the banks in order to not have any impact on timing that might have a huge impact afterward. And then analyze the relationship that you have with the banks, basically. An example of this is, for instance, the lockboxes and when you receive checks if the keying of those checks happens actually in the bank or can have any HighRadius as well. So it’s key to understand how you work with the bank in order to see what needs to be put in place in HighRadius or in SAP or leave it up to the banks. So it depends on the business depending on the process itself. And also learn how the technology works.

Explaining to the final users how the technology works and what we expect from them. Because a lot of issues can be solved. A lot of the cash application itself can be solved, despite the reporting feature, if you teach and you educate your customers on what needs to happen, what they need to send you and in what format they need to send it. If that’s an option it’s also good for the final user to understand how the technology works to see what we can ask or we can try to change from the behavior: the customer has to send all the remittances and all the information we need to apply the cash. Afterward, again using HighRadius you’re going to see afterward in detail and what it provides that helps us a lot. But anyway, it’s always good to see if you can change your way to get customers to have a harmonious way of receiving data that also helps a lot, on the tool itself and afterward on the final postings in SAP.

Okay. So, what I was saying working with banks and customers understand how the data flows, if the customer sends the remittance to the bank if the customers’ send wherever the remittance to the company, if it’s a mixed thing, partially to the one person today the company. If the bank sends keys, the key will check the information and then send it my way as the customer sends everything to us. So what we need to understand is what we’ll do, what in the process will be working, when we are implementing something. To get the best benefit, of all the participants. So I was mentioning before a good example of this is SAP and the notebooks are not sure if you’re aware of the space itself. A/R way of working with meaningful direct debit. Normally customers pay us in either credit card or checks, and maybe a wire transfer but, credit cards or l checks, say before direct debit when they just give you the money from your account straight forward so we do the money from the customer account. And for doing that we need to have a contract or an agreement with the customer that they allow us to do that payment method. The easiest way of applying the cash afterward is because it’s a payment that is initiated by us and obeys the customer so we know what the customer is paying in advance. By working with this method, you receive only the normal bank statement from the bank. And it’s pretty much easy to apply the cash with it. Well, on the other hand, Lockboxes, at least in a pharmaceutical business, which means it’s everywhere the same.

Emanuel (Fito):

We receive a different type of file from the customer: names placed with EDI in the beginning, which is not a bank statement per se but it’s a remittance file, then you receive it before actually, you receive the EBS. And the key difference here is that we work with this type of file. You work with several files, so we don’t, it’s not like the normal bank statement that you receive only one file. When you receive several files a day. HighRadius has the functionality to process several files a day. So it’s a matter to understand what is, what is your business and what is best. What is the assist that you’re working, and HighRadius has the tools and has the powerful engine intelligence okay?

To process both ways. So that’s me. So going back to the first lights that are showing that’s why it’s key to understand how the business works, what is the essence, and how we can put the magic in HighRadius either in SAP afterward. Concrete project plan about budget and resources as well. It’s key to understand the very beginning. What is the plan in any other project, I mean, from the moment that we kick off the project and we go live and care afterward? In my experience from the ITs, the site is to understand the different test phases that we have to put in place, mean functional testing system testings user acceptance tests? Pre-production test if you want a simulation test and sometimes it’s good to have them or not. And understand when we need the expertise from a HighRadius in place, and what is the expertise of the other resources that we need. Again, in our example, we integrate higher wages, with sap actually with one of the newest versions of SAP resource for HANA. So in order to integrate this, we need persons with specific expertise in the AI model in SAP. On the other side, we need the expertise of HighRadius. And of course the expertise of the business, and when I’ve seen domains. This is the final useful actually so the person that is actually applying cash.

Now maybe the manager or the boss is also on a, and to have the availability of the different test phases means to have a technical guy from HighRadius coming on some specific test phases. It helps a lot. Having the user, there’s going to be the key used for the project 100% dedicated will reach the test phases which sometimes is very challenging because normally the person has to do the normal job. That’s one of the tips that I can give at least that it helped us a lot to understand exactly who will be available, and what is the time that I’m going to be available on the project on the projects of thinking that’s what I say is will be the project plan. That’s what he was mentioning, get executive buy-in property. Basically what I was telling. Consist a little bit, maybe a second topic the last we market here, the user. Then, the user, the HighRadius person, and the SAP persons are key participants key players, if you want to, if you want to be successful, SAP you know that he has different complexities when it comes to finance and how to apply the cash and how to how to post and all the different roles that we have to put in place. So it’s key to understand what exactly can do in the system and how we can help you.

Emanuel (Fito):

Regarding the security and compliance requirements. The user access of course to Highradius has to be with different rules, HighRadius has the functionality to actually isolate different roles within who will, who will have access to what. So who will have access to apply the cash, who will have access only as a user who will have access to different reports? So, that’s also key to understanding from the very beginning how we’re going to configure it and coordinate and implement and and and implement all the different roles that we’re going to put in HighRadius. The same thing happens from the SAP side, and then who will run the lockbox transactions in SAP. Who will run different dashboards that I have in SAP with a different dashboard? So that we can have any HighRadius users to ensure the data that comes from our system SAP to a HighRadius, in order to make sure that the integration between defiance it’s secure enough in order to no one outside to be able to take that information and to steal that information so it’s key to work also with the architectural teams in our company to understand the flow? So the data flows in a secure way within the different entities. Understand also depending on, on the area that we understand, and maybe the rules of the company might have, where the data, actually, is stored afterward. In order for HighRadius to apply for the cash, we have to share it with him, not the customer. So the opening of the customer is the master data of the customer. So it’s key to understand if there’s some rule that the company has in order to where this data is is is told, sometimes happens that, for instance, I think, at least in the US, part of a company the data cannot be stored outside us, so the servers should have to be in us, well maybe in other countries inA/R. The data can be stored. Some places sell, but they are not in A/R, so the server itself can be in different locations in that town from where I can think that it cannot be stored in A/R the data. So, you have to be different, at least in our company.

So literally if it’s something national or not but it’s key to understand what are the legal requirements behind in order to don’t mess it up there. And the same thing with the local regulations of the company might have its key to improve the security teams on the project itself, and identify may be other features that each company might have about what needs to happen what cannot be done in the system work or have to be done outside, and so on and so forth, implementation of Operations up to something. So it’s also interesting to understand that.

Emanuel (Fito):

Regarding the remittances. What we have done, in our companies. Teaching the customers to send all the remittance information actually we did in Europe is not actually a play a lot in the US, but it will get the customers to send all the remittance to a specific email address. In order to forward to HighRadius, in order to make it available for them to for the email parsing solution that they have, that they can read whatever is written in the body of the email, or actually open the file. If the email has a file and the OCR functionality. So it’s good to have from the very beginning a specific email, so we can have all the emails that are related to remittances sent to avenues if you have a mixing lever that we can refer to, and a single sign-on is also always recommended, meaning that once you sign on into Windows or whatever tool you’re using is good to have already access to everything they have so don’t manage different passwords different users which is always more complex than proven always and so it’s good to have a single sign-on which has the functionality to do that. So once you sign-in, it is a single sign-on in all the other systems. And again on the future requirements and how we’re going to organize the post-implementation support, I mean, again it’s linked to what I was discussing at the very beginning that if everything happens in HighRadius, you will need all the support from HighRadius, you need to have the expertise of HighRadius.

It’s good to have the support of both parts. Because afterward when we reach production, you can have different defects or issues, there is a link to the cloud solution some other ones are linked to the SAP itself might fail something within the interface of the effect change of data. So it’s good to understand I have a clear role in how the app upgrades are going to work not only for the support of defects or issues that I always up in the air but also the process. Whenever I update my happenings within the cloud or within SAP as well. And also always have in mind, whatever we can increase the scope of the project of what the tool can provide so always thinking that we can always leverage existing functionalities that HighRadius might have on the cloud, even though we’re not using it now might be useful in the future if we realize again when we reach the whole entire process if it makes sense to start adding things into the cloud or into the Highradius tool. What I was saying I mean the hyper care support it’s key to understand who will do what for whatever issue we may have. An interesting story about wholesalers, we’re going to try to do first because I don’t have a lot of minutes. Basically, what we did, on the wholesale business is that they deduct a lot. So they normally because a lot of research happened behind, meaning charge work returns pricing issues, tax issues. They normally the customer, what it does is, it says to you, their meetings so they’re paying moving invoices, but they are tracking these things and that in us specifically it just was really challenging because actually, we might have, depending on what the customer is saying on the rebuttal file we can have. I think we build a matrix of something about 300 different reasons, or actually 300 reasons why the customers detected something, and we have to link all that to a fixed list of recent goals. It is not also to have an enormous list of recent goals but to try to harmonize and put everything as much as possible. For the same reason code. And the good thing that we found about how HighRadius is that they have the functionality or they are the intelligence in the tool.

Emanuel (Fito):

In order to work with 300 different difficult work on a matrix so they have in order to assigned to think at least, oh finally the way we reach of 12 or 13 reason codes so we were able to link all these 300 specific codes to 13, and depending on which is the goal then we continue with the process of the production process itself. That probably will be seen in other sessions, HighRAdius has a solution there as well. In our case, we did when they were yet we’re still managing the goal reduction process in SAP. But again, it’s good. What they have the functionality of and the flexibility to work on the requirements that actually were really really challenging on our own or pharmaceutical businesses for where we are now in the company as I was telling you, how we started this was to transform 10 different ERPs that we have into. The only one is 400. We have implemented the pilots in A/R, specifically in Spain. We are rolling out now with us, we are not alive yet. And the idea is to move forward with 10 different major markets in the next couple of years. So it’s a very challenging thing but HighRadius is really good though, is really good on the cash application tool itself, it helps a lot.

And actually in Spain, for instance, we used to have a matching rate of about 60-65%. Now we work in a row now. I think that the last numbers are around 80 something, 80-89, so it’s really really good. So because we’re more or fewer expectations, we are where we are now. And what I can give you also serves as insight from my side of need from an IT person, a new user interface that they have in HighRadius material some of your work with SAP well even though I’m a huge fan of it. The user interface is not the best one. If you think about friendliness is not really friendly while having a user interface and the 25th Sunday was the very beginning in the morning it’s really intuitive, so it’s really easy to navigate within the OCR functionality that they have on the email parsing. It’s really good, so they can pretty much read whatever is either in a paper or in a PDF or only in the body of the email itself. So that’s also really good that SAP does not have that functionality. And, again, that helps a lot with the hit rate afterward. We increased from 67% to late week it was 80%. So that’s one of the feedback that I can give you, about the tool itself. And I think that’s it from my side. So we still have a couple of minutes. If you have any questions, doubts that I can answer.

Question:

I’m not sure if you’re familiar with alternate pair setups and things like that. I don’t quite understand how they work in the SAP world from HighRadius to SAP. Can you kind of explain what that is?

Emanuel (Fito):

Yes I mean, the alternating pay is when you have a customer on the master data. Who will pay for that customer from an SAP point of view, you can apply on Maintain it in the system data itself, what we need in our experience actually we did that so women they need within. One of the things that I read is that in order to apply for the cash, you need to send the master data to HighRadius. So we have an interface where we send all the details if something changes so HighRadius will have this functionality, or will have, this information in their system in order to know when someone is paying on behalf of. The other option that HighRadius offers. If you don’t want to maintain it in SAP. They can do the same thing here so you can tell them, okay all these customers are going to be paid by this other one, and you can maintain high wages as well, which in our case was not the case where they needed to switch forward and swap. Because we have a specific platform to maintain all the systems.

Question:

My question is about these A/R items. So, you said like a lockbox, and also like we can get lockbox files from the bank. So then, when you’re talking about these, there are two different files, one is a lockbox file. What is the other file that you are talking about?

Emanuel (Fito):

The format of the lockbox file is in ADI. In your case, when I mean lockbox, okay and basically it’s not a payment file, per se, so it’s a remittance file that actually is sent by the bank. Normally when you work with low prices, from my understanding, and work with the EDI payment file itself. So you treat it as if it was the real bank statement. So you don’t need to wait until the other day, to apply the cash in A/R on the other side. There is a different type of file. And that’s the electronic payment, per se. So that’s one 1-5 per se so we will continue until the day afterward. When we receive that we upgrade the cash then those are the differences.

Question:

So, HighRadius will be working with EDI 820. with both.

Emanuel (Fito):

HighRadius will be working with both 820, 823 and MTN and 14 if needed at a school, I don’t think you really work without hearing us with A/R monitoring. We work with MTN. So HighRadius can work with pretty much all the different format files. So you need to have an EDI 820 and 823.

Question:

So because downstairs like when I was talking to one of those representatives and he said like, I can get a file like we don’t need to get a is an 820 or an 823

Emanuel (Fito):

EDI it is one of the files that they support, I mean if you work with any other file, they support this work. I mean, my suggestion. It always works with a file so the bank works. So you want to make the whole process easier. That doesn’t mean that if they won’t work, you can work with 20,23, and maybe they send another type of file, and one XML or something like that. HighRadius can manage it as well. I mean the tip from a technical part I mean world with normal files with accepted files. Everywhere I get 820 at 823. EDI. So not mess it up with a specific file type. But that’s the case in your business, high wages can support that as well.

Question:

So, how do you take short payments?

Emanuel (Fito):

Short payments. It depends on how you want to treat that short by minutes. Normally the rules that we put in place. We treat HighRadius as residual items, meaning that you clear the original invoice, you have RSL item you assign original corporate and you to work on it afterward, that’s one way of doing it, the other way of doing it if you just apply that partial payment or payment to the customer account and you follow it right.

Question:

My question is about how do you recognize the short payment like sometimes it’s not like, Okay, so then, there might be like as we are expecting a check for $1,000, but if you get $950 and that can be a short payment or that can be the residual item.

Emanuel (Fito):

For me, short payment and residual items are linked. As you said, right from a short payment that the link actually showed payment you can treat it in two ways right after the sale or as a customer in posting it into the customer account. How HighRadius identifies these normally is based on the remittance of the customers’ pain, so basically in your example, if you have an emotional 1000 customer base and 950 let’s say. Normally what will happen is customers saying I’m paying invoice number 123, and nothing else so they may say and barely with 123 I’m sure then because these things are that. So, when I say these things are that you can send this logic to HighRadius and then kind of code it, depending on what the customer is saying so you can treat it afterward. So that’s the way HighRadius recognizes a short payment. If we cannot recognize your customer, it’s only been 950, and it only forms an invoice, a high wages will be put into the screen as, as a suggestion, and what do you have to do with that with a payment you can treat it as a short payment or treat it as like just putting into the customer account because you don’t really know what it is, or give it to them to call the customer and ask queries.

Question:

So, HighRadius will be sending a file to SAP. Is it the same file as which we are getting it from the bank?

Emanuel (Fito):

No. The type of funds that were recently received from HighRadius was big, there is a lockbox file per se. So basically what it does it receive whatever file from the bank or from us if it sometimes happens that the bank sends the files to us, to the company, and we send it to various directions from the bank to HighRadius, but once you apply the cash, the cash analyst works during the day in applying the cash. At the end of the day generates a file, and that file is the one that we produce in, in SAP, that at the end that’s the posting It wouldn’t have to be.

Emanuel (Fito):

This is not a manual process, it’s not an automatic process that you can manage it both ways. You can say to HighRadius, I want to do it. Every time that I want to send a file I can say the question is how to send it, or you can put automation there and, at the end of the day, that’s something that you can discuss what is the end requirement and you can play with it.

Emanuel (Fito): Can You hear me? Okay. Yes. I'm an IT guy. And the idea is to share with you, the expectations that we have from the IT department with the business people from A/R that are working in Sanofi for the last six years now, main customers to cash and purchase to pay. So I'm going to try to give you some tips about the experience of the Cash HighRadius app within our company and try to discuss best practices with you about best practices and so on and so forth. So, the agenda that we're going to go through. Basically, we're going to talk about the need for collaboration between teams’ IT teams and the business team. Six expectations, specifically that we have from supposedly from the tech team from A/R teams, and some examples with what we have done in Sanofi in the last couple of years. Then, I am going to talk a little bit about some specific business that we have on the pharma business, that are all the integrations and the difficulties and challenges that we find as wholesalers, and then we're going to talk about a little bit where we stand now in…

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