Digital World Class Performance of O2C Shared Services | Order To Cash (O2C) Automation https://www.emagia.com/resources/ebooks/digital-world-class-performance-of-o2c-shared-services/

1. Digital World Class
Performance of O2C
Shared Services

2. • Introduction
• Shared Service Organizations’ Delivery Challenges
• World Class Performance Benchmarks
• Capabilities Required
• Case Study
• Benefits
• Conclusion
• Questions
Agenda

3. 3
Introduction
• Shared Services Organizations (SSOs) exist to
provide back office services better and cheaper
than they would be performed in a decentralized
environment
• The performance demanded of SSOs is rigorous,
and closely measured & monitored. For third-party
providers, there are financial penalties for shortfalls
• An optimal mix of Process, Metrics and Technology
is required to meet the demanding requirements

4. 4
SSO Delivery Challenges
• Existential Challenge:
• operating divisions (internal customers), biased toward
decentralized operations (control)
• Unrelenting Cost Pressure
• higher productivity, lower unit cost expected every
year
• Service Level Agreements (SLAs) for Performance
• escalate every year
• are detailed
• shortfalls punished

5. 5
SSO Delivery Challenges
• Accommodate all Divisions and Business Models
Wide variation in revenue streams, customers, markets, ERPs
• Onboard New Divisions Quickly & Seamlessly
• Deliver Excellent Customer Experience
• Accommodate Work-from-Home

6. 6
Hackett Benchmarks:
• Credit Vetting Decision (elapsed time): 2 days
• Average Days Delinquent (collections): 4 days
beyond payment terms due date. Not affected by granting
extended terms
• Cash Application Auto-Cash Hit Rate: 75%
We have clients with hit rates > 90%
• Deduction Resolution Cycle Time: 7 days
• Credit-to-Cash Process Cost as % of Revenue:
0.04%
World Class Performance Benchmarks

7. Capabilities Required
Policy
• Documented policies with clear exception protocols
• Work reduction policies (e.g.: contractual allowance for
shortages & damages, automatic small balance write-off)
• Process: Best Practice process adapted to businesses served
• Metrics: the “right” ones; fewer vs more
• Analytics: insight
• Governance
These elements provide the foundation for success

8. 8
Hyper-Automation is the confluence of Intelligent Document Processing (IDP),
Robotic Process Automation (RPA), and AI Powered Digital Assistants working with
the ERP. It can deliver automated processing of 70-90% of transactions in an
operation
If an Operation:
• has a high volume of transactions, and
• is performed manually
• labor savings of 70 – 90% is feasible vs 10-25% of other productivity
enhancing methods
Accuracy and Speed is improved:
• Rework reduced
Capabilities Required – Hyper-automation

9. • Vendor Portals
• EIPP Portals
• Excel files
• PDF/tiff/gif files
• E-mail
• Fax
• Paper/hard copy
• Lockbox data & files
• MT940, EDI 820, BAI2
Trans.
• Bank Statements
• Credit Applications
• Orders, Remits, Deductions
CUSTOMERS, BANKS,
CREDIT BUREAUS, ETC.
Extracts & Converts
unstructured data into
structured data in a
CVS File
IDP
• Accepts data.
• Basic processing with ERP
• Emulates human interaction with ERP.
• Best with simple, repetitive, high
volume operations
RPA
• Retrieve Credit info
• Compute credit score and limit
• Collections emails with dialogue
• Auto-cash & small balance W/O
• Routes deductions, etc., etc.
AI DIGITAL ASSISTANTS
(As needed)
FURTHER
PROCESSING
As needed)
FURTHER
PROCESSING
90 + % Automation
90 + % Automation
70 - 90 % Automation
Hyperautomation: IDP Feeds RPA & AI

10. • Customizable, online credit application with digital signature
• Automated customizable credit scoring – with real time import
of credit bureau data and payment history
• Automated AI-powered credit decisions based on pre-defined
rules to assign credit limits
• Full featured Approval Workflow guided by Delegation of
Authority policy
• Automatic order hold integrated with Collections
Digital Credit Risk Management

11. • Configurable Collections Strategy – multiple parameters
• Prioritized Task List
• Collector Workbench with all required information
• Automated Interactive Dunning - 100% customer touch
Digital “Low Touch” Collections

12. • IDP extracts remittance data from multiple customer
sources/documents in multiple formats
• Remittance data automatically applied to open invoices by
Auto-Cash engine at 85% - 90% hit rate
• Automatic creation of deductions to be routed for resolution
• Automatic execution of small balance write-offs and matching
debits to corresponding credits
Digital AI Powered Cash Application

13. • AI-assisted dispute reason code assignment
• Full featured Workflow to route deductions to assigned Resolver, with
audit trail, internal dunning, & robust reporting of status & results
• Automatic credit to debit matching & clearing
• Root cause Analytics to fuel process improvement efforts
Digitally Assisted Deduction/Dispute Resolution

14. 14
Problem Overview
AHA launched eCommerce site ShopCPR to sell CPR equipment and classes
online. Credit Processing cycle time was over 2 weeks. They needed B2B
digital credit solution to accept more customers and do more business.
Customer Value
• Deployed Emagia Digital Credit Solution - Mobile and ADA compliant
• Digital signatures, digital trade and business reference checks
• Integrated with Experian, AHA custom score-card, automatic credit limit
decisions enabled.
• AHA reduced B2B credit approval process from 2 weeks to 1 to 2 days
• Now processing over 200 -300 credit applications per month
• Scalable foundation for digital ecommerce growth
Case Study

15. 15
Challenge:
AR management needed overall improvement.
SAP deployed in 30 countries, multiple languages
Solution:
Emagia AI-powered Hyper-Automation Digital Assistants for Deductions,
Cash Application, Collections and Analytics modules
Customer Value Achieved:
• Deduction resolution cycle time reduced to 5 days
• Auto-cash hit rate increased from 50 to 80%
• DSO reduced 7% in 6 months
Customer Success Story –
Global Medical Products Supplier

16. Enhanced Customer Experience
Cost Savings: staff cost, bad debt expense, funding of AR
Improved Service to Internal Customers
Data Repository to guide Operational Improvements
Higher Revenue & Cash &
Lower Cost over the Long Term
Improved Customer
Experience/Satisfaction
Controlled
Credit Risk
Greater
Cash Flow
Increased Revenue
& Profit
Benefits of Efficient & Effective SSO

17. Conclusion
• SSOs have an unrelenting demand to deliver
excellence at lower cost every year
• Many factors influence an SSO’s ability to
meet that demand - Process, Policy,
Governance, Technology, etc.
• It is unlikely that an SSO can meet its
demands on a sustained basis without
Hyper-Automation

18. Questions

19. If you have any questions or comments
about this session, please let us know
in the chat box or write to us at
info@emagia.com
Next Emagia Master Class Session:
Topic: Reducing Complexity of Cash
Application in Europe with AI
Orders
Credit
Cash
Application
Collections
Deductions
Payments
Invoicing