Integrating operations – and transforming reporting
Our client is the owner of, and the driving force behind, some of the world’s biggest and best-known brands. It sells packaged food products, personal care goods, household cleaning items, and boasts a turnover of over €1.5 billion. It’s no surprise that integrating operations across finance and the supply chain is a major undertaking.
The challenge – making things less manual
As the size and scope of the supply chain has grown, so too has the complexity of the organization’s processes. Too many people have been involved, in too many teams, and at too many points in individual routines.
The company realized that roles were being duplicated, processes had to be tracked manually, and it was often the case that multiple follow-ups were needed before approvals were given. Reporting was a particular problem: it was being managed in seven non-standard Excel-based macro clusters covering over 150 different markets, with the need to validate high-volume data from multiple data warehouse tools.
But it wasn’t just internal teams that faced challenges. Suppliers and customers were also finding they had to interact with a number of different functions within the organization.
The solution – unifying processes end-to-end
The first stage in assessing a challenge as complex as this is to conduct an audit of current conditions, and that’s what our team did. We took time to identify, map, and mine all current processes, and to devise a means of load balancing that would scale with need.
Once the scope was established, we created a solutions architecture that took advantage of a suite of powerful tools, enabling us to create a unified and comprehensive approach to everything, from master data creation, through planning, order management, fulfillment, invoicing, shipments, marketing activity, claims processes, and collections.
The solution went all the way to reporting, where manual steps were eliminated, and simplified and standardized templates were introduced across all landscapes. Alteryx workflow routines were used to allocate and validate data, and powerful visualization and analytics tools were introduced.
The outcomes – going frictionless
Tackling competing and laborious manual processes wasn’t only a challenge. It was also an opportunity to introduce digital transformation to a key part of our client’s organization in a way that would enable:
- Frictionless and consistent data handling
- Satisfying flexible and high-growth business requirements
- Technology-driven, hands-free data management to generate reports
- The measurement of actual performance.
Ravikumar M is responsible for integrating supply chain and finance operations leading to digital delivery for global clients.
Murali Narayanappa helps client transform their traditional reporting into data-driven analytics using best-in-class of visualization reporting tools.
Invoice query handling delivers a win-win-win
This particular franchisee business serves over 18 million consumers in one of the most populous states in the US. Employing well over 4,000 people, it sells, manufactures, and distributes over 600 products owned by the main brand and its partner companies – all of which means that the organization’s finance function is big, busy, and complex.
The challenge – addressing volume and throughput
In 2019, the company sought to address the high number of invoice queries it was receiving. Queries were being handled via an email process that did not have an in-built facility to track their volume. The process involved several different solutions and email addresses.
These queries were creating a lot of work for internal teams and also for external service providers, and in addition, were occasionally causing delays to vendor payments.
The solution – holistic thinking
A long-term improvement is always better than a quick fix, which is why Capgemini brought together an international team to design and develop an end-to-end solution that would deliver continuing value.
An entire new set of enterprise-wide processes was created, overseen by a central command center that could provide real-time visibility of operations.
A workflow tool was introduced, to track inbound and outbound queries and to identify frequently occurring issues that were used to updated standard operating procedures.
Several generic mailboxes were replaced with one Pipefy pipeline for end-to-end purchase-to-pay (P2P) queries, while several other such mailboxes were replaced with a further single Pipefy pipeline for end-to-end order-to-cash (O2C) queries. These pipelines track patterns in queries, and use preset rules to assign them automatically to appropriate process handlers.
Additional automated implementations included Webcollect, for cash flow improvement; Inspect, for elimination of overpayments; Phyton and power BI, for digital and real-time visibility; and Command Center 3.0, providing the centralized operational visibility referred to above.
The transformation that took place over the course of the project was delivered seamlessly and on time. Our client organization wasn’t the only party to benefit. Capgemini did too, because the reorganized, streamlined, and automated processes made things easier for us to manage and support. Even more importantly, our client’s own customers and suppliers now enjoy a billing experience in which almost all the hassle has been removed.
The metrics are impressive:
- In just two months, the value of duplicate invoices that were identified and prevented totaled $2.8 million
- Remittance Missing Clearing Transactions (RMT) value reduced from $1 million to $300,000
- Not due receivables improved from $74 million to $85 million
- Ability to track all emails
- Customer satisfaction has improved significantly
- Business intelligence delivers visibility of 100% of sales and cash forecast for the next 52 weeks, updated weekly.
Luis Miguel Flores works with Capgemini’s clients to help identify their needs, oversee service delivery for processes delivered from Guatemala, and maintain positive relationship. He supports and leads the service delivery team, managing conflict, and ensuring the team’s processes and tasks are carried out efficiently.
Balu Vijayakumar ensures that the client’s expectations are managed efficiently and effectively, taking into consideration the need for business requirement changes, evaluating customer satisfaction, and managing Capgemini’s best-in-class service delivery.
Transforming collections and cash applications
This was the scenario for which a client of ours sought help. The business is one of the world’s leading companies in industrial and medical gases, and its invoicing operations across Europe, Asia, South America, and Oceania were large, complex, and in need of attention.
The challenge – addressing people, processes, and technology issues
The organization was struggling with a large number of past-due invoices, a significant volume of unapplied cash, and high DSO levels. These were the result of underlying problems in three main areas.
First, a great deal of pressure was being placed on people, because they had insufficient tools and inappropriate skills. As a result, there was much emphasis on working overtime to get things done.
Second, credit-to-cash (C2C) processes were largely manual and therefore risky. Desktop procedures weren’t properly updated, and follow-ups and controls were managed via Excel spreadsheets, without any database or other supporting system: for instance, credit limits and credit notes had no consistent approval flow. Also, there was insufficient interaction between the finance and sales functions.
Third, tools and technologies were insufficient. There was no automated collection mechanism, nor any automation of cash applications; there was no workflow for service desk activities; and, overall, there was no technological consistency.
The solution – bringing out the best in teams, tools, and processes
Working closely with the client team, we undertook an analysis and overhaul of current processes. This included making credit note approval CFO-only, the introduction of a dedicated resource to handle backlogs, the elimination of forced cash applications, and the logging and tracking until closure of all cases of unapplied cash or unidentified cash. A further process improvement was the creation of a C2C service desk, making use of a workflow tool and CISCO Finesse, enabling a direct interface with the sales team and facilitating more productive and frictionless dispute management processes, as well as quality monitoring.
As a result of this assessment, three robotic routines were introduced to increase productivity in cash clearance. These comprised automated credit notes creation, automated reconciliation payments for the day, and an automated match of credits generated against open invoices. An automated ticketing system was also introduced.
Webcollect was used to automate communication workflows, reporting, account statements, and follow-up reminders, and to increase the number of automatic dunning letters. All of this helped to redefine the rules of collections by sales manager and type of business.
In addition, a skills matrix was established, ensuring the right people were engaged in the right place according to their competencies, and creating active backups for all activities.
The outcomes – going frictionless
Many of the benefits that accrued from the changes that were introduced are measurable, and they are significant:
- 40% reduction in accumulated past due
- 20% reduction in days sales outstanding
- 30% increase in cash flow
- 72% reduction in unapplied cash.
Other benefits, while less measurable, are no less tangible. These include the stability and peace of mind that are the result of consistent, frictionless processes, and a more contented, more highly motivated team. Our client now has a much stronger base on which to build.
Carolina Rodrigues is an expert in R2R and C2C, and responsible for delivering operational excellence for her clients.
Murilo Bonfante Michetti is a service delivery manager responsible for delivering transformative F&A solutions and operation, delivery approaches, and operational excellence for his clients.