To date, the majority of order-to-cash (OTC) outsourcing deals have been focused on outsourcing from a tactical perspective, such as invoicing, accounts receivables, and collections. We believe this trend is not only beginning to shift, it already has. Today CFOs and Vice President’s of Finance are exploring how they can become more transformative in their outsourcing approach. Specifically they are looking to make a transition from the purely tactical and deeper into the back office functions. It’s no longer about outsourcing tactical functions, but about true process optimization from the front to the back office.
But it doesn’t stop with transition. CFOs are evaluating new ways to become transformative – more forward thinking and valuable vs. simply looking at operational cost-cutting. No longer is it about outsourcing to the least expensive provider overseas. In fact, the cost differentials are closing very rapidly. Many are transforming by moving their outsourcing back onshore or nearshore to maintain better control and reap the value-add that can only be delivered by innovative and continuous process improvements.
Taking it a step further, transformative finance executives are exploring broader ways to become more strategic in their roles, and analytics has become a hot topic amongst CFOs. The ability to analyze mounds of financial data and derive insights into the entire Order-to-Cash process is more of a transformational initiative compared to ensuring days sales outstanding DSO is optimized creating a gain on working capital initiatives. This is especially true in certain industries. We’ve seen the Healthcare, Manufacturing, and global Media enterprise realize the potential value of analyzing the mounds of data at their fingertips to improve decision making across their organizations.
Let’s also look at technology. It’s great to have bigger picture ideas on how to transition from tactical to strategy. It’s great to have lofty goals of becoming a truly transformative part of the enterprise. However, without the proper technology in place, those ideas really can’t come to fruition. For example SaaS and, or, cloud-based applications are being examined to replace older legacy systems that no longer support the transition from tactical to strategic. In fact, SaaS applications are being deployed to help centralize what can be very disparate operations. Ultimately this helps finance transition from becoming highly dependent on IT to a more self-sufficient function. With these new levels of control come the ability to transition and transform more easily.