Order to Cash BPO: Looking Ahead to 2014, What’s the Right Strategy to Reduce Costs and Increase Efficiencies?

In today’s world of Order to Cash, companies are increasingly looking to outside providers to realize baseline savings, cut costs, and eliminate redundancies. Yet, when we look ahead to 2014, industry trends point to market saturation as services and order to cash outsourcing are rapidly maturing. This means that the relevant outside service providers must look beyond just accounts receivables. Transformative technologies, focusing on the process, implementing visibility into the data and communications, and most importantly, labor arbitrage in O2C do not match the value unlocked in driving cash through the door faster.
In fact, the 7 key areas of growth and change we are facing in 2014 include:

  • Innovators in Predictive & Prescriptive Analytics: Moving forward, the industry’s innovators will move into predictive and prescriptive analytics, which have a high impact on the business and are sophisticated solutions to allow companies to react in real time to market conditions. While analytics drive the strategy, it’s imperative that providers also focus on enabling technology and the automation of manual processes – the main drivers to cut costs – and connection of an operating model.
  • Sharing Resources, Breaking Down Silos: As more O2C providers focus on end-to-end processes and work in global environments, there is an amplified need to share resources across silos to achieve long-term performance levels, improve process flow, and increase productivity. 
  • A Blending of Nearshore and Offshore:  As O2C analytics move beyond just accounts receivables, and with the continued rise of mobile, social and web – more and more organizations are bringing production closer to home to gain strategic leverage and respond to immediate market needs and future growth. However, for a number of companies, offshore still makes sense due to factors like labor arbitrage and fewer strategy requirements. Relevant outsourcing providers must provide a blend of both nearshore and offshore to capture the needs of both strategic and nonstrategic customers.
  • Focusing on End-to-End F&A Capabilities: As more companies move to F&A outsourcing, outsourcing providers will need to reduce costs, deliver tools utilizing finance and accounting predictive analysis, and move up the value chain in strategic functions such as budgets, forecasts, and internal audits. More companies want end-to-end F&A capabilities from outsourced providers to gain a better understanding of organizational spend, control budgets, and standardized procedures.
  • Reevaluating the Supply Chain in Times of Global Uncertainty: From global economic pressures to environmental factors, companies are looking to outsourcing providers for an end-to-end agile, sustainable supply chain solution that delivers enabling technology and best practices in global models to drive down costs, increase efficiencies, and enable effectual responses to changing marketing conditions.
  • Visibility in the Supply Chain: The traditional supply chain model of simple shipping and receiving no longer applies. With Big Data and improved analytics available to better understand consumer behavior, companies are looking to outsourcing vendors who can provide visibility and deliver on specific business outcomes, such as targeting new customer base, gauging customer sentiment and responding in real time to consumer needs.
  • O2C Outsourcing is More than Just Transactions: As companies, ranging from small businesses to large, global organizations, realize baseline savings in order to cash outsourcing, outsourcing providers are facing an increasingly competitive marketplace where focusing on transactional activities alone is not enough. In 2014, companies will be investing in a provider’s people, technology, and analytics, and expect higher value services.

As we move into 2014, we need to think about the bigger picture, which means providing the right combination of technology, strategy, and people to provide customers with visibility and increased efficiencies so the value inherent within your portfolio is truly unlocked. Every day in DSO when compared with the cost of capital is revenue waiting to be realized.

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