To isolate and assess the impact of automation on customer-to-cash process performance, The Hackett Group developed a model that considers 40 proxy metrics for automation. We then applied this model to our benchmarking population to identify performance differences between organizations with low technology enablement and those that are highly technology-enabled ? what we call ?digital leaders.? Our analysis produced some striking results. Digital leaders have customer-to-cash process costs that are one-half of those of the peer group (Fig. B). At the sub-process level, e.g., customer billing and cash application, the differences between the two groups are even greater ? 58% and 61%, respectively. The higher level of automation and the growing use of digital technologies like robotic process automation (RPA) and artificial intelligence (AI) also affect the number of FTEs required to execute the customer-to-cash process. Our analysis found that digital leaders have 54% fewer FTEs per $1 billion of revenue (Fig. C). In addition to running more efficiently, digital leaders operate more effectively. They experience 37% fewer errors in invoicing and are 17% more likely to collect credit sales on time. Because they get paid faster and within terms, digital leaders are optimizing the company?s working capital (Fig. D). By applying process analytics, customer-to-cash executives can integrate data from different source systems and identify patterns such as increases in delinquent payments or decreases in timeliness of billing, so they can proactively address the issue. Our research has shown that finance?s adoption of advanced analytics tools ? big data analytics, artificial intelligence, and machine learning ? will grow substantially during the next two to three years. More than 80% of finance executives surveyed expect to use advanced analytics tools on either a mainstream (i.e., used broadly across the enterprise) or a limited basis within that time frame.

Action Item #3: Establish End-to-End Process Ownership

An end-to-end process view drives complexity out of the customer-to-cash process. Because the process involves so many different activities, without a holistic view and greater accountability it?s very difficult to identify bottlenecks and sources of inefficiency that affect the cost, quality, and service. It is imperative that finance leaders assign a single process owner to ensure comprehensive insight into process performance. End-to-end process ownership also permits more collaboration among sub-process owners so that the hand-offs between different elements of the process ? for example, credit management and customer billing ? are seamless. Our research found a correlation between end-to-end process ownership and process performance. For example, finance organizations with formal, end-to-end customer-to-cash process ownership have a 55% lower process cost (labor plus outsourcing) than the peer group (Fig. 5). In particular, customer billing cost is 75% lower than the average, dispute management is 64% lower, and collections are 58% lower. The impact of end-to-end process ownership goes beyond cost. Finance organizations with a high degree of end-to-end process ownership are 25% more likely to collect credit sales on time, compared to those with a low degree of process ownership. They also have 78% fewer invoices that require corrections. Plus, the streamlined process allows them to spend 27% less time collecting and compiling data, freeing up staff to work on more knowledge-based activities (Fig. 6)

Action Item #4: Improve Finance Talent Skills

According to our 2018 Key Issues Study, access to talent is one of the top three business risks that companies face (Fig. 7). While 43% of finance executives surveyed considered it a ?high? current risk to the business in 2017, 74% see it as a high risk in 2018 ? a 31% jump, greater than for any other risk driver measured. As the finance function?s role changes, so does its talent profile. The combination of digital transformation, decreased emphasis on transaction/administrative work, and greater focus on working closely with business partners is elevating the importance of skills such as analytics, technology and communication. Yet finance, which reports large gaps in several critical skill sets, is not ready for this new challenge (Fig. 8).