An insightful summary of how these GPOs made their A/R future-ready while reducing costs, improving metrics and keeping their customers happy!
In the last few years, we have been witnessing the emergence of a new role in many global multibillion and Fortune 500 organizations – that of the Global Process Owner or GPO, for enterprise processes.
From an Order to Cash (OTC) shared services perspective, the need is more intense. Generally, OTC SSOs are stuck in complex IT and ERP landscapes, intricate organization structures, multiple external agencies/ vendors and highly unstandardized processes with minimum visibility. This makes accountability a nightmare – add to it multiple regional silos across different geographical locations, business units with very different goals and processes, along with the M& As of the recent past – yes you get the picture.
Accounts Receivables and credit processes are stuck in the tempest and you need GPOs to navigate through.
Here are the most common challenges that make GPOs work terrifying:
Turn the page to know how OTC GPOs of world-class businesses like Cargill, Air Products, Keurig Dr. Pepper and Danone were able to solve these challenges.
Like many global giants, Cargill initially used to work out of decentralized business units having 50+ ERPs and no centralized customer master data. However, when they tried to “lift + shift” to a centralized shared service model, they realized that didn’t have any integrated model that could support their multifaceted IT landscape consisting of:
In order to tackle the complex IT landscape challenge, Cargill went with “lift + transform + shift” by understanding the maturity gaps in their process, implementing the simplest transformation first while leaving the global standardization task for post-migration.
This is how they deciphered the maturity gaps in their process:
After benchmarking against industry standards and setting external goals for key metrics that resonate with best-in-class standards, Cargill also evaluated the processes internally by diving them into different levels making it simpler to determine the maturity gaps in their A/R processes. Moreover, they set up internal goals based on internal best practices that could be implemented globally.
Best practices suggested by Gunther Smets, Order to Cash Global Process Owner at Cargill
• Set clearly defined goals for each of your A/R processes
• Choose a single integrated receivables management platform for easier implementation, management, and global standardization
• Implement in phases to continuously monitor results and avoid fallouts
In their zeal to globalize their credit risk operations using shared services across 3 continents, Air Products realized that they were going to face a number of challenges mainly:
• Limited capability to manage a large and complex global portfolio
o Lack of standard policies for credit risk analysis
o Inconsistent credit limits, last and next review dates
• Suspicion in Credit Data Quality
o No common nomenclature for risk categories across regions
o No single window view of credit limits for the same customer across BUs
• Manual efforts wasted in transactional tasks globally
o No workflow for streamlined communication with all stakeholders
o Multiple downloads of credit information for the same customer
The credit and A/R team at Air Products decided to set up these 5 pillars of global credit risk management as a basic requirement from any technology:
Best practices suggested by C.B.Ananthan, Manager, Air Products:
• Map existing credit process and Invest in detailed requirements gathering from different stakeholders
• Visit sites of early FSCM adopters
• ‘Own’ the project from start to finish
• Identify and train power users
• Pay attention to Reporting; this will pay rich dividends
The financial services team at Keurig Dr. Pepper relied on outsourcing Collections, Cash Application and other A/R functions to control costs. However, customer experience and receivables performance remained poor. Here is why:
• Degrading customer experience: Outsourced parties focussed on collecting dollars that led to multiple touchpoints and eventually unhappy customers.
• No standardization and transparency: Both these factors contributed to inconsistent processes and inability to even understand what was going wrong due to a lack of metrics.
• Increasing costs: With the increase in business, the costs kept increasing while the key metrics kept deteriorating.
In order to eliminate the increasing customer dissatisfaction as well as to improve the A/R performance while giving real-time visibility to all the stakeholders involved, Keurig Dr. Pepper opted to inhouse their collection, cash application, and deductions operations on a single integrated receivables platform.
Backed up by technology that standardizes your A/R processes, helps to track all metrics and reduces the customer touchpoints, the inhouse service model enabled Keurig, Dr. Pepper, to save $2.5M in annual savings while the volume, quality, and productivity have risen.
Best practices suggested by Colleen Zdrojewski, VP, Financial Services, Keurig Dr. Pepper:
• Foster the culture of continuous improvement
• Optimize the use of technology
• Prepare a strong leadership team that is ready to embrace the new technology
The credit and A/R team at Danone wanted to transform their A/R operations using technology.
The first step they used was to define what they expect from automation based on their unique business requirements. Here is what they expected from automation:
• Single source of truth
• Easy to deploy and flexible
• Easy to train resources
• Scalable Across Business Units
In order to find the perfect vendor, Michael suggests you should check if the vendor:
• Asks the right questions
o Has strong experience from past implementations
o Collects mission-critical information in a timely manner
• Explains the impact of business decisions
o Develops a deep understanding of our business
o In-depth understanding of technology decisions
o Helps see impact/consequence at each step
• Offers a tailor-made approach
o Implementation suited to ensure no business disruption
o Standardization for processes, but flexibility to accommodate local BUs
Best practices suggested by Michael Pettyjohn, Director, Customer Financial Services, Danone:
• Plan in detail – What features are required in the product application
• Plan for the future – Choose a solution which will scale as the business grows
• Internal stakeholder alignment – Ensure that all stakeholders are kept in the loop
• Frequent interaction with vendor – Onsite blueprinting and weekly project status meetings
Yes. Those are the things on the horizon that are going to completely change the outlook
of accounts receivable in shared services within the next two years!
Here is a quick overview of how 4 world-class GPOs prepared their A/R for the future:
• Cargill: Perform exhaustive process evaluation and benchmarking to find maturity gaps in your process before looking for any new technology
• Air Products: Standardization, Objectivity, transparency, compliance, and productivity are the five pillars of global credit risk management. Any technology that you choose must support all the five points
• Keurig Dr. Pepper: Go for a single integrated receivables platform that supports all your A/R processes to improve your A/R performance at low cost while keeping customers happy.
• Danone: Choose the right technology by clearly defining what you want from the technology and select the right vendor that can understand your business, tailor their solution to your unique requirements and deliver on time.
Following the footsteps of these pioneers can enable businesses to tackle some of their most common challenges specific to shared services and help them on their journey for an optimized A/R transformation.
However, in any transformation, technology is an essential part and selecting the right technology is also a big challenge.
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
Integrated Receivables optimizes accounts receivable operations by combining all
receivable and payment modules into a unified business process. The Integrated
Receivables platform provides solutions for credit, collections, deductions,
cash application, electronic billing, and payment processing – covering the
entire gamut from credit-to-cash.
The HighRadius™ Integrated Receivables platform stands out by enabling every credit and A/R operation to execute real-time from a unified platform with an end goal of lower DSO, reduced bad-debt, and faster dispute resolution while improving efficiency and accuracy
for cash application, billing, and payment processing.
HighRadius™ Integrated Receivables leverages Rivana™ Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes. The Integrated Receivables platform also enables suppliers to digitally connect with buyers via the radiusOne™ network, closing the loop from the supplier Accounts Receivable process to the buyer Accounts Payable process.
Ride Out the ‘Economic Roller Coaster’ Leveraging…
A recent survey by the National Association for Business Economics(NABE) revealed that 38%…
Digital First: The ABInBev Story of Achieving…
Process complexity and system intricacy are key challenges for companies as they manage…
11 Credit & Collections Leading Indicators to…
The Coronavirus outbreak has suddenly emerged as one of the biggest global crises…
HighRadius Credit Software automates the credit management process, enabling credit managers to make highly-accurate credit decisions 2X faster and enable faster customer onboarding with 4 primary components: configurable online credit application, customizable credit scoring engines, credit agency data aggregation engine, and collaborative credit management workflow. Along with that, there are a lot of key features that should definitely be explored some of which are online credit application, credit information aggregation, automated credit scoring & risk assessment, credit management workflows, approval workflows, and automated bank & trade reference checks. The result is faster customer onboarding, better internal collaboration, higher customer satisfaction, more targeted periodic reviews, and lower credit risk across the company’s customer portfolio.