Changing the face of O2C

Focus is a factor that is always important, whether you wish to stay on a course or veer off it. Organizations that are in any of these phases of stay or change, frequently lose momentum. Those that seek to maintain their leadership positions and seize new markets, must first define their focus.

?The phrase "process transformation" has become overused recently. It suggests a SILO-based working style whenever there are discussions which materialise. ?Killing the "low hanging fruits" first is not the right course of action. It's a mindset, or even a choice, where organisations have already decided not to invest in change, since it is time-consuming and requires focus. Those who see the bigger picture and define focus to understand that it’s required to deeply dive in the complex Order-to-Cash process, win the race and stay relevant for a longer period.

?CFOs and key decision makers can achieve significant savings by clearly defining their focus. They would realise that O2C is not only about metrics such as AR outstanding, DSO or even bad debt. By engaging the teams that are the sources of your input and the objects of your output, you can define focus and take a more holistic approach to it. Understanding the evolving customer expectations can have an impact on cost savings, as it will require the decision makers to consider the metrics which can or are impacting the ones being tracked. Let’s understand this with an example. Some of the metrics which must be tracked include promise to pays, cash received, bad debt, customer segmentation, high value customers, number of calls, etc. But what about the metrics that could be having an impact on these? Let's explore these more in detail:

?1.??????Call durations and the number of emails or calls made at various times of the day can give clues about the knowledge, interpersonal skills, and the will to gather from the collector or agent. It’s important to dig deep into the data. Don't only "analyse the data," but rather "have a perspective to interpret the right set of information."

?2.??????Efficiency could be improved by percentage of calls recorded for review & calls collectors listen after getting recorded. This is done constantly, but still a bias exists. All calls that are picked up and audited by an individual, are recorded by the system. You'll never receive its proper value.

?3.??????Benchmarking that measures the amount of time between a first touch and the opening of a second request, may demonstrate productivity as well as the complexity of lost or untracked requests. A transaction's journey is complete, but we still need to comprehend that the journeys can be read more clearly. So, for this purpose grids are created for different sets.

?4.??????Analysis of the number of bills sent back for corrections at the customer level is good, but analysis at the source or during the process is crucial to understand the entire cycle. Don't leave the corrections solely in the hands of the operations or front-end teams. Hold the concerned departments accountable and try to understand why the errors occurred.

?Even while organisations have key decision-makers and leaders who have years of experience, change is necessary to allow the teams operating on the ground to understand more. More than just team meetings, these need to be workshops run by coaches who can foster a culture of trust where the entire team can think and work together.

Untapped opportunities:

?1.??????Definitely automation

Everything that is repetitively and manually done, needs to be automated. Like the items arriving faster, invoices being sent out quicker, prints being avoided, integrated systems, real-time alerts of any changes to the order, invoice, shipment or delivery, or any customer inquiry. It is necessary to visualize, create, and implement an order's complete lifecycle. This also calls for a better departmental coordination, the one that is seamless. But this is not always possible. There are knowledge gaps, time zones, cultural norms, communication issues, understanding problems, that need to be filled which is why we need coaches.

2.??????Definitely people

People were, are, and will continue to be an asset that strong organizations nurture for growth, while weak organizations constantly view as a liability. Many of you would be from the same generation as me and might have heard about Fun Friday. When you say that as an organization you should focus on people, there are several factors to consider. Some of them are:

?a) Mix of the generations – You work with a variety of generations rather than just Gen Z, millennials, or baby boomers. Avoid making the error of assuming that inexperienced workers won't want to have fun or be interested. They want it too, but perhaps not in the same way that others do.

b)?????How will I grow?

c)??????Why should I stay here?

d)?????What about my freedom?

3.??????Definitely process

?Both conventional methods of working and modern tools that empower us are available. But let's not rely solely on them. We have a procedure. You need to recruit individuals that are knowledgeable and well skilled in the procedure. Keep them at the forefront of COE creation, along with the process groups, functions, and value chains, and let them be the ones to lead and operate it. Establish process value chains. Although it's crucial to understand how to connect the support functions, supply chain, finance, marketing, and sales together and communicate effectively, so you can view the situation from the PoV of the process. It’s important to remember that engaging these teams takes a lot of time and effort.

O2C has changed significantly over time, evolving from a transactional to a strategic process. Without a strong strategy, organizations are unable to realize their maximum potential. A clear vision of the process must be defined, and then different teams must be brought on board to align with that vision. This way they’ll be able to make significant contributions, that will contribute to overall success.

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Disclaimer: The views expressed represent my personal opinions and do not necessarily represent the position of EY.