Five Steps For Driving Successful Digital Transformation in A/R Shared Services


A guide to scoping out an efficient digital A/R operation to deliver increased business value

Contents

Chapter 01

FOREWORD

Chapter 02

The Future Of Shared Service Operations

Chapter 03

Five Steps to Help You on Your Digital Transformation Journey

Chapter 04

Conclusion

Chapter 05

About HighRadius
Chapter 01

FOREWORD


More than 90% of Finance executives believe that digital transformation will fundamentally change the way business services are delivered over the next 3-5 years


Source: Finance Leaders See Unprecedented Digital Transformation Opportunity

Before driving a digital transformation project, let’s first define its scope.

Digital Transformation ≠ Automation

  • Automation is just one part of your transformation journey. Albeit critical, its success is dependent on everything that comes before and after it
  • Your operations today need to be in a place where automation is feasible. Automating a bad process would just give you a badly automated process
  • Keep your expectations from an automation system realistic. Be in the know of
    what it can and cannot do.

If not just automation, then what is Digital Transformation?

Digital transformation is the next wave of disruption that could fundamentally change the way shared services operate.

It is defined as “the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers” or in simpler words, it is driving the evolution from “cost killers” to “value drivers”.

Digital transformation marks a radical re-thinking of how an organization uses people, processes, and technology to fundamentally change business performance.

Digital transformation in A/R

Transforming accounts receivable (A/R) is the key to making business move faster in this slow economy.

  • Digitizing your A/R process can 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.
  • Customized enterprise resource planning (ERP) systems, manual, paper-based processes (that are slow, inflexible) cost millions in-process waste. These broken processes hold your team back by limiting capital efficiency and liquidity and decrease your time, revenue, and efficiency.
Chapter 02

The Future Of Shared Service Operations


Digital Transformation In The Times Of Coronavirus: Yes Or No?

Given the challenges and potential negative outcomes and impact of the COVID-19, you might think that undertaking a new project would be out of the question. Digital transformation is just not possible with limited resources, budget cuts, and furloughs, it feels like it would be too hard to execute.

But, a recent SSON survey indicated that despite the chaos, 37% of GPOs will accelerate their automation initiatives to reduce the dependency on physical locations/humans.

The true reality is that digital transformation is the new means by which businesses could better adapt and cope with COVID-19. The Shared Services Operations have already gone beyond the primary objective of reducing costs to creating value by leveraging up-to-date technology. Yet, we believe there is still scope for improvement. Let us go through the evolution of shared services over the years and what we can expect next. However, today many companies struggle with a “digital dilemma” of whether or not to automate.

Cost Reduction

Value Creation

Competitive Edge

Chapter 03

Five Steps to Help You on Your Digital Transformation Journey


This white paper provides you with five key steps to help you plan your digital transformation journey and future-proof your A/R shared services.

1. Set Up For Scalability

A good shared services organization department helps the business run efficiently. A great shared services organization supports the business to remain agile and launch in new markets.
In the globalization paradigm shift, SSCs must expand the geographical coverage and/or increase the functional scope to more services to offer a more complete and scalable service portfolio.

An important principle of this paradigm shift is that by increasing the scale of services offered (both geographically and functionally), an SSC can create fewer dependencies on external service providers and more effectively consolidate technology, processes,
and analytics. In addition to cost savings, doing so can deliver added value through, for example, agility and a more uniform way of interacting with users.

Leveraging Technology as Globalization Accelerator

1. One platform acts as a single source of truth for an SSC and thus provides an integrated order to cash system
2. Provides higher operational efficiency and improved communication for internal team
3. Analytics improves visibility and transparency with KPI tracking

2. Benchmarking and Assessment

Benchmarking is an important part of a continuous learning cycle for organizations to determine the areas of the biggest gap and prioritize those for process improvement. It is necessary to evaluate- How are you doing today against your industry peers? Is there a scope for improvement?

Most immediately, the A/R shared-services organizations can work with IT and the business to designate specific areas in which to incorporate automation and point robotics into their existing manual workflows.

  1. A typical starting point would be to perform a detailed assessment of the current order to cash processes to identify maturity gaps. Track the key metrics such as hit rate, DSO, past-due invoices, etc.
  2. Next, the SSC organizations must decide which processes should be automated (either fully or partially) and define the TO-BE state while involving all key stakeholders.
    • The answer to the following questions would help you in identifying these processes

      Is it a transactional/rule-driven process?
      Is there a high volume of action items?
      Is it a labor heavy process?
      How are other companies in the market going about it?
      Is there a likelihood of a system change shortly?

  3. Furthermore, the A/R leader must get down to the process level to define what exact numbers and metrics should change and by how much
  4. A collaborative approach to get approval from the executives involved across the globe through continuous feedback
  5. The future change should be planned in accordance with the benchmarked results

3. Evaluating the Options and Leveraging Technology

While leveraging technology to digitally transform may sound obvious, what’s not obvious is how to integrate advanced technologies into your shared services organization.

With more and more information at shared services’ fingertips, the real value lies in transforming it into actionable intelligence. Delivering value-adding data can be the differentiating factor that takes shared services from ‘cost killers ’ to ‘value drivers’.

Choosing the Right Vendor

Before you move ahead with the automation, it is necessary that the A/R shared services leaders assess their vendors and understand if they are able to understand your requirements or not.

The answer to the following questions would help you in creating a perfect checklist for your vendor

  • What value would they add to your current operations?
  • What is the pricing model?
  • How do they rank in terms of customer service?
  • What is the adaptability of the solution with new technology: Is it system agnostic?
  • Would the vendor help us with our future business requirements?

Create Value With Technology

  1. Value:What would be the value-addition? Is the ROI justifiable?
  2. Scope: Which part of the process should be automated to derive maximum benefits?
  3. Feasibility: Can you automate right now, with your data, resources, and timeline constraints?

4. The Execution Phase

Key To Stakeholder Alignment

The timelines for delivering this level of change can be long, which all adds up to a significant investment in time and money. To add to the complexity, shared services organizations span over multiple business stakeholders.

Now given this amount of effort and inevitable risk, how do you go about getting buy-in from business stakeholders to approve the digital transformation, and the budget needed to achieve it?

  1. Productivity Improvement: Reallocation of resources to more strategic job roles is better
  2. Cost-Savings: Perform a payback analysis while considering total costs vs. expected benefits
  3. End-Goal Alignment: How would this project directly improve the metrics that impact your desired TO-BE state

Pilot Deployment Strategy

  1. Determine the order of implementation across different business units: from beginning till the end
  2. Keep an eye for anything that could go wrong and have a backup plan in place to address it
  3. Decide whether you want to implement across multiple geographies at once, or one at a time

5. The End-Phase Of Your Transformation Journey

Change Management

Under a digital model, the shared-services group will need to establish domains of expertise for specific processes, and, within each domain, task small teams of technology and user-experience experts to work together.

Some shared-services groups may need to hire, train, and retain employees differently under this model.

  1. Rollout the plan across all BUs with provided timelines
  2. Conduct internal training sessions and identify the change champions to support the execution

Implementation and Tracking

Once you are all set with what your system to go-live, what next? What should be the next steps once you are live? What should be the future expectations?

  1. Check program readiness, system readiness, workforce readiness, and operational readiness and develop a contingency plan
  2. During go-live, to capture end-user feedback
  3. Tracking the overall performance and the partnership with the vendor
  4. How would you like to improve your process further?
Chapter 04

Conclusion


Digital Transformation is happening, and it’s important to prepare for a digital future.

For business leaders and CFOs – more than ever before – cash is king. Order-to-cash shared services leaders today are expected to rise to the occasion and start reviewing their current strategies with greater urgency.

From scalability to cost optimization and re-thinking their digital transformation plan – GPOs are being tasked with driving working capital impact.

Therefore, shared services leaders have an important opportunity here to ‘manage up’ and drive digital transformation in their departments.

You are the change agent

It is up to Shared Services leaders to be the digital transformation change agents and bridge the gap between the executive leadership and the finance teams on the ground.

It is important to start planning how you can manage your team through the change. Yes, there may be a fear of job loss or fear of change. Some may prefer the old way of working. But the digital transformation will keep your department relevant. The changes you can make now, even if they are relatively small, maybe what keeps you relevant a decade from now.

Understand and Adopt

Keep your finger on the pulse of what companies are using. Don’t be afraid to talk to technology providers. And above all, don’t have the fear of technology.

Chapter 05

About HighRadius


HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company that leverages Artificial Intelligence-based Autonomous Systems to help companies automate and improve Accounts Receivables and Treasury processes beyond best-in-class industry benchmarks. To learn more, please visit www.highradius.com

Chapter 01

FOREWORD


More than 90% of Finance executives believe that digital transformation will fundamentally change the way business services are delivered over the next 3-5 years


Source: Finance Leaders See Unprecedented Digital Transformation Opportunity

Before driving a digital transformation project, let’s first define its scope.

Digital Transformation ≠ Automation

  • Automation is just one part of your transformation journey. Albeit critical, its success is dependent on everything that comes before and after it
  • Your operations today need to be in a place where automation is feasible. Automating a bad process would just give you a badly automated process
  • Keep your expectations from an automation system realistic. Be in the know of
    what it can and cannot do.

If not just automation, then what is Digital Transformation?

Digital transformation is the next wave of disruption that could fundamentally change the way shared services operate.

It is defined as “the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers” or in simpler words, it is driving the evolution from “cost killers” to “value drivers”.

Digital transformation marks a radical re-thinking of how an organization uses people, processes, and technology to fundamentally change business performance.

Digital transformation in A/R

Transforming accounts receivable (A/R) is the key to making business move faster in this slow economy.

  • Digitizing your A/R process can 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.
  • Customized enterprise resource planning (ERP) systems, manual, paper-based processes (that are slow, inflexible) cost millions in-process waste. These broken processes hold your team back by limiting capital efficiency and liquidity and decrease your time, revenue, and efficiency.

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HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM 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 and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.