A guide to scoping out an efficient digital A/R operation to deliver increased business value
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
Before driving a digital transformation project, let’s first define its scope.
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.
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.
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.
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
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.
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?
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
Create Value With Technology
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?
Pilot Deployment Strategy
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.
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?
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.
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.
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.
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
The Subtle Art of Reducing A/R Operating…
The Truth About A/R Operating Costs: Why Is It Important? In this uncertain…
A Must Have Cheatsheet for O2C Automation:…
Order to Cash automation in shared services has been on the rise in…
Achieving Process Excellence in SSC through E2E…
This marcus evans online event created in collaboration with HighRadius will gather passionate…
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.