Lessons From EmployBridge: Benchmarking A/R Shared Service ...

WEBINAR

Presenters

Jason Herrington Elaine Nowak

Senior Director of CollectionsDirector of

Product Management and Marketing

Sarah Fane

Head of Content

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Questions

Your copy of the slides

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after the webinar at

www.sharespace.digital

Order-to-cash and Accounts Receivable GPOs today are moving away from a simple cost-optimization

approach when managing their shared service centers.

To drive higher value, more and more Accounts Receivable leaders are focused on delivering better

customer service, with minimal touchpoints and seamless internal collaboration.

Shared service order-to-cash leaders are benchmarking their operations against their industry peers to

note how top-performing counterparts are managing disparate systems and customer relationships

differently from themselves.

Context

Agenda

1.

2.

3.

4.

5.

Evolution of the Role of an Order-To-Cash Global Process Owner

Benchmarking: The What and How

Digital Transformation For Order-To-Cash Shared Service Centres

Digital Transformation from the O2C Perspective: The EmployBridge Automation Story

Benchmarking Your Digital Transformation Project

6. About HighRadius

Agenda

Poll Question

01 What is your plan for your A/R Shared Services In 2021?

1. Leverage our current model to drive further cost optimization

2. Focus on recovery from COVID-19

3. Leverage our current model to provide higher value and

competitive edge

4. We are yet to create a fixed plan for 2021

Evolution of the Role of an Order-To-Cash

Global Process Owner

Top focus areas for every finance leader in 2021 is driving

working capital and improving cash flow

Expectations from Order-To-Cash is high

as it is an important strategic lever to achieve the said objectives

10

Today Order-To-Cash GPOs are Expected to Do Much More

2010+

GPOs had to ensure the survival and proper functioning of Order-

To-Cash in different Business Units

GPOs now need to take the lead to ensure the BUs are

driving working capital and cash flow improvement

2020+

11

Today Order-To-Cash GPOs are Expected to Do Much More

Global Process Owner

GPOs today face heightened expectations from across the chain of command

GPOs have tremendous pressure to perform

12

Most GPOs are Turning Towards Technology as a Result

● Would drive profit

● Would increase team productivity

● Would increase the efficiency

But Is Automation Enough?

90% of respondents in an SSON survey mentioned that Automation is the key to adapt their shared services operations to the current business climate

As per Gartner, 85% AI-Powered

Transformation Projects End In Failure!

14

Where Do Things Go Wrong

BAD APPROACHAutomation is not the end goal

It is a means to achieve the end business goal

Any Digital Transformation exercise needs to begin with

understanding the results that you need to drive

BENCHMARKING is the first step of any successful digital transformation project

15

Why Benchmarking

Benchmarking helps you make well-informed decisions from both business context as well as personal context

Clearly define the goals of your

digital transformation exercise

Manage the expectations from

across the chain of command

Business Context Personal Context

Benchmarking: The What and How

Defining Successful Benchmarking

The following are the three steps for an effective benchmarking

321

Identify what data

do you want to

measure

Determine if the

measures are actionable

and meaningful

Understand how

frequently you would

need to measure

Data Action Frequency

What to benchmark

Process Benchmarking:Perform detailed assessment of the current processes to identify maturity gaps. Track the key metrics such as:

Hit rate DSO Past-due invoicesUnapplied cash

People Benchmarking:Reassess the skillsets of your team while also critically evaluating yourself as an employer:

Average salary

costs

No. of accounts per

userCommunication skills Problem-solving skills

Benchmarking: The What

Benchmark to evaluate your processes against a best-in-class industry standard

Benchmarking: The How

The APQC framework for benchmarking end-to-end order-to-cash

Top performers’ O2C process costs are almost 2.5X less than bottom performers

N=598

The Cost of O2C Processes Between Different Tier Performers

Source: APQC

Likewise, top performers’ O2C FTE number is a little under half of that of bottom performers

N=1,983

The Number of FTEs in O2C Processes Between Different Tier Performers

Source: APQC

Process-specific KPIs

The productivity disparity between top and bottom performers for credit and receivables is dramatic

Number of Receipts Processed per A/R FTENumber of Credit Reviews per Credit FTE

N=241 N=2,467

The Productivity Disparity Across Different Tier Performers

Source: APQC

Process-specific KPIs

In addition, top performers receive the majority of receipts electronically, and report 18 days lower DSO

N=910 N=6,744

The Improvement in Efficiency Across Different Tier Performer

Source: APQC

94% 92%

75%

Treat all your lines of businesses differently

Compare against your own best numbers from the past as well as industry best-in-class

Evaluate how you are doing as an employer while performing people benchmarking

Plan future changes in accordance with the benchmarked results

Track and identify those KPIs that have a direct impact on your organizational goals

Best Practices To Keep In Mind While Benchmarking

1

2

3

4

5

Guidelines on how to benchmark your order-to-cash

Results of Order-To-Cash Benchmarking

Once you complete the benchmarking exercise successfully, you would identify the following:

Identify gaps in your AR

processes

Compare your team performance to others

in the industry

Identify areas where you need to deploy

technology

1 2 3

Digital transformation is the key to fill the gaps identified on benchmarking your order-to-cash processes

Digital Transformation is Not Just Automation

26

Automation = Digital Transformation

Automation is just one part of the Digital transformation

Automation:

✔ Focused on process-metrics improvement

✔Cost optimization through positive ROI

✔Data security and integrity

✔ Seamless internal collaboration

Digital Transformation:

✔Highly focused on end customer experience

✔ Increased employee engagement

✔Promotes a culture of continuous improvement

✔ Leveraging Humans + Machines for business

Digital Transformation For Order-To-

Cash Shared Service Centres

Poll Question

02What stage of A/R digital transformation is your organization currently in?

1. Planning Stage - Deciding product and vendor

2. Deployment Stage - Fixing integrations and testing the system

3. Post-Go Live Stage - Evaluating the new system

4. Have not automated yet

5. Automated a very long time ago

GPOs Course of Action After a Successful Benchmarking Exercise

1. Standardize Process through Centralized Platform and Shift from On-premise to Cloud solution

2. Upskill Employees to Partner Effectively with AI Tools to Improve Performance KPIs

3. Optimize Customer Experience With Technology

How Digital transformation helps in positioning your SSC in the best-in-class status


Standardize Process through Centralized Platform and Shift from

On-premise to Cloud solution


65% respondents said that Cloud-based technologies either form or

are actively in the process of forming most of their tech stack

SSO Global Report 2020 Survey


1. Standardize Process through Centralized Platform and shift from On-premise to Cloud solution

On Premise Cloud

Needs Regular Maintenance Minimal Maintenance Requirements

Regular Data Backups

IT Resources redirected towards product

Adjustable according to budget

Cloud is built to Scale!

Risk of Data Loss is High

Requires additional IT Support

High capital expenses

Limitations on Scaling services


Upskill Employees to Partner Effectively with AI Tools to

Improve Performance KPIs



2. Upskill Employees to Partner Effectively with AI aids to improve performance KPIs

Comparing skills demand, today v/s tomorrow

Current

Critical thinking &

analysis

Complex problem

solving

Attention to details,

trustworthiness

Leadership & social

influence

Trending

Creativity, originality &

initiative

Active learning &

strategies

Emotional

intelligence

System analysis &

evaluation

Declining

Management of financial,

material resources

Memory, verbal, auditory

& spatial abilities

Technology and

maintenance

Quality control & safety

awareness

Source: Future of Job Surveys, World Economic Forum

2020 2022

Six Steps to Upskill the Workforce

1 Recognize and re-assess existing roles in the workforce

2 Understand skills demand

3 Hire and nurture the right talent

4 Build employee skills critical to the new business model

5 Start now, test rapidly, and iterate

6 Act like a small company to have big impact

35


Optimize Customer Experience With Technology



3. Optimize Customer Experience With Technology

Cloud-based, end-to-end automation

platform

Self-service customer portals

Out-of-the-box reporting

dashboards

The EmployBridge Automation Story

Digital Transformation from the O2C Perspective:

Our Benchmarking Journey

1 2 3

Gained visibility intoStaffing Industry KPIs

Right-sized teams for Cash App, Collections, Credit

Developed Standard Operating Procedures

1. Cloud-Based Platform

2. Integration with our Financial

Institutions

3. No ERP Customization to

Implement Solution

4. 75% Zero-touch cash-application

AutomatedCash Application

CollectionsSystem

1. Electronically capture check

images using mobile phone

devices

2. Same-day deposit of customer

checks

1. Tier-based collection strategy

configuration

2. Customizable collections

automation

3. Upgradeable to AI functionality

Mobile Remote Deposit Capture

Electronic Presentment and Payment Portal

1. Fully hosted customer portal for

payment processing

a. Level 2 & 3 credit card

data interchange

b. Credit card surcharging

c. ACH debit

2. Customer invoice presentment,

statements, payment history

reporting

Solutions and Features Desired for the Focus Areas

The Highradius PlatformPioneering the Technology Landscape of Cloud-Based Systems, HRC is the only truly Integrated Receivables Solution for -

CASH APPLICATION

CREDIT COLLECTIONS EIPP

Why did we Choose

CASH APPLICATION

MOBILE REMOTE DEPOSIT CAPTURE CREDITRADIUS ONE COLLECTIONS

2017JANUARY

2019JUNE

2019SEPTEMBER

2020OCTOBER

2020NOVEMBER

Implementation Journey with Highradius

Results Achieved

Cash Application

47% Reduction in Team Size (34 to 16)

75% Remittance to Invoice Match Rate

Unapplied Cash at Period Closed Reduced to 0.34% of AR Balance

Collections

Seamless Integration with Cash Application System

Additional Functionality to Cloud Platform

Tier-Based Dunning Strategy

Seamless Integration with Credit Management System

Mobile Remote Deposit Capture

Eliminated Mail and Express Delivery Lag Time

Eliminated Bank Float to Accelerate Availability to Cash

Same-Day Cash Deposits

RadiusOne Network

$350k reduction of credit card fees

Level II and Level III Data Interchange

Additional Payment Method of ACH Debit

Seamless and Cost-Effective Interaction with Customers

Benchmarking Your Digital Transformation Project

Benchmarking Framework to Track your Digital Transformation End-to-End

Cost calculation of a Digital Transformation undertaking

Product usage metrics

Customer performance metrics

Analyst usage metrics

Key Performance Indicators

Business Value Metrics

Bottom-up

approach

The HighRadius framework to benchmark your Order-To-Cash digital transformation

HighRadius Value Realization Framework for O2C Processes

CREDIT EIPP CASH APP DEDUCTIONS COLLECTIONS

VALUE METRICS (VM)

Percentage Current ■ Days Sales Outstanding ■ Analyst Productivity ■ Net Recovery Rate ■ Percentage Current ■

Credit Analyst Productivity ▲ Interchange Fee Reduction ▲ Reduce Bank Fee ▲ Analyst Productivity ▲ Average Days Delinquent ▲

Reduce Bad Debt ♦ Cost of Invoice Delivery ♦ Reduce Write-off ♦ Collector Productivity ♦

Increase Sales ● Cost of Payment Processing ●KEY PERFORMANCE INDICATORS (KPI)

Number of Risk Class

Changes from Credit

Reviews■ ♦

% Customers with

Confirmed Delivery of

Electronic Invoices■ ♦ Item Level Hit Rate ■ % Invalid Deductions ■

Number of Outbound

Collections Calls ■ ▲ ♦

Average Time to

Review New

Applications▲ ●

Clickthrough Rate of

Dunning ■ ♦Check Character Capture

Value▲

% Invalid Deductions

Collected ■Amount of Promise to Pays

Created ■ ▲

% of New Applications

Auto Approved▲

% of Customers Paying

Electronically ■ ● % of Deductions Auto Coded ■Average Days to Resolve

a Deduction as Valid or

Invalid■ ▲

Number of Manual Email

Correspondences ■ ▲ ♦

Average Time to

Review Blocked Orders▲ ●

% of Payments

Converted to Level III

Processing▲

% of Deductions

Accurately Predicted as

Valid or Invalid▲

Number of Automated

Email Correspondences ■ ▲ ♦

Number of Credit Limit

Increase Reviews ■ ●% of Deductions Coded

Automatically▲

% of Past Due Amount

Untouched in a Two Week

Period■ ▲

Average Time to

Review Existing

Customers▲

% of Invalid Deductions

Written-off ♦

% of Existing Customer

Auto Reviewed ■ ▲ ♦

Note : Colored shapes next to the VMs in each product area match the KPIs on the list below them, indicating which KPIs directly contribute to improving that specific Value Metric.

About HighRadius

2006

On-PremiseSolutions

2010

CloudSolutions

2014

Artificial

Intelligence

2019

Autonomous

Systems

2017

StrategicInvestments

Trusted By

200+ Fortune 1000Companies

$ 1 Trillion +transactions processed annually

2020

PERFORMANCE

A/R Suite for Mid-Size Businesses

Series B | $1b+ Valuation

New Products & IP

Credit EIPP Cash App Deductions Collections

Integrated Receivables

Treasury Management

Cash Forecasting

Cash Management

Bank Reconciliation

Partial List of Customers

1000+Finance Transformation Projects

6 continents | 45 countries

53

Serving 500+ Industry Leading Customers

54

CONSUMERGOODS

MANUFACTURINGAPPAREL

& FOOTWEARFOOD

& BEVERAGETECHNOLOGY

TRANSPORTATION& LOGISTICS

Ireland

SwedenNetherlands

Luxembourg

Thailand

China

South Korea

Canada

United

States

Mexico

Costa Rica

Brazil

Argentina

Russia

Japan

South Africa

Malaysia

Singapore

Philippines

Taiwan

Indonesia

Australia

New Zealand

Finland

United Kingdom

Norway

Denmark

PolandGermany

Czech Republic

RomaniaSwitzerland

Italy

France

Portugal

Spain

HEADQUARTER

Houston

India

Amsterdam

London

Frankfurt

Global Footprint

Regional Offices

● Houston, TX (Global Headquated)

● London, UK

Frankfurt, DE

● Amsterdam, NL

● Hyderabad, India

1000+ Implementations6 continents | 45 countries

55

Implementations

Amsterdam

London

Frankfurt

EMEA Regional Offices

Poll Question

03Would you like to know more about AI-powered automation solutions from HighRadius?

A. Yes, connect me to an expert

B. Yes, send me some material for research

C. Yes, but not at the moment

D. No, I am not interested

Thank you!

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Lessons From EmployBridge: Benchmarking A/R Shared Service ...

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