O2C Digital Transformation Guide: Benchmarking, Vendor Evaluation and Process Assessment Best Practices

[1:29] Kiran Rana:  

Sure. All right. Good afternoon, gentlemen. And thanks for your time. And thank you, everyone. Of course, just to set the context of the discussion. We all have been pounded by a lot of questions around transformation in general digital transformation and order to cash digital transformation, and what are the steps involved? So when we get into a lot of engagements with customers, we see a lot of questions around that. And since you guys are an expert, let’s break down the session into multiple steps that are involved in digital transformation, and then try and answer, you know, look at each of those phases and see what are the nuances involved? Right? So, I think the first thing that comes to my mind is that a lot of times I see our customers and when I see a lot of talk to a lot of clients, we realize that people get confused with digital transformation. And it is used, you know, incorrectly talked about as automation, when we all know that they’re probably not the same. And anyone, a few can pick this up and answer this question. What is digital transformation really? And how does it differ from just automation? And Saurabh, you want to take this?

[2:46] Saurabh Chopra:  

Okay. See, I think it’s always a combination of both. It’s a combination of the human plus machine. And a lot of the time what we end up doing is we hit technology transmission, but there are a lot of things that we need to fix from policy, processes perspective, which we kind of ignore at times, but those are key enablers for your business case realization. So at times, we are looking at the idea that this is the benefit that I’m going to get if I’m going to implement a technology. But behind it, you need to make sure that you have the right user cases, which has to come from people and leveraging those people in defining process standards. So I think it’s always a combination of both.

[3:32] Kiran Rana:   

Okay, anybody else wants to add to that?

[3:35] Ganadeep Rey Patlolla:   

I can. So the way I’ve been seeing the transformation happen is all of us in our companies, we always are doing process improvements, or we’re doing some kind of small projects. I think the big thing that we have to ask ourselves is, let’s step back. Let’s take a holistic view of the entire process from end to end. You have to start with from the cradle to grave, and then ask yourself, if we were to step back and do a full, thorough review. And then let’s take and tackle the big picture. I think that way, instead of your best resources being tied up doing small stuff means it’s not an evolution from one state to the next state, you have to kind of think of it as a revolution, you will have to change how you kind of build going to play this game. It’s not the same thing. So you have to ask the big questions and ask the uncomfortable questions. And we’ve heard from other speakers, Tony was saying that, if it didn’t meet his mark of like $50 million, he wouldn’t even touch it. Yes, that would be at a CTO or a CFO level now kind of stuck on in order to cash. We have to establish our own benchmark, maybe not a benchmark, but our own targets to say, process, if we touch it, what are we going to gain out of this? Small improvements add up to a big transformation?

[5:11] Kiran Rana: 

I think the key here as we’re finding out is step zero and how it involves getting into the drawing board and kind of almost having a blueprint in your mind, which nothing really is different than a strategy to be in place. Right. So I think we all agree and I’ve seen a lot of these transformation projects that when we are driving, the most important thing of the first step is to have the right strategy in place, right. So what are the steps involved there? When are you actually devising a strategy for the order to cash transformation?

[5:49] Kiran Rana:   

Anyone? Yeah, Jason, please go ahead.

[5:52] Jason Herrington:   

Really, just conducting an initial self-assessment of your organization. And as compared to your industry, wherever it lands, what is your current benchmark? And where do you want it to be? Then I mean, then you have to prepare a business case, really to rationalize whatever the expense is going to be to conduct this transformation. The vendor evaluation process can be extensive, conducting RFPs trying to figure out which solution providers best suit the needs to accomplish your digital transformation. And of course, the cost therein is always a material factor no matter how wonderful the solution may be. The process and the law of design can take months to really understand solution providers, you know, technology and how you’re going to configure it to accomplish your digital transformation objectives.

[6:58] Jason Herrington:   

And another step would be, of course, once you’re at that level is execution and implementation that can involve taxing the dietary sources internally, which is always a challenge for most organizations to get those valuable resources to commit and to see a project completely through implementation. And then well you know, looking back once you’ve done your implementation, your post-go-live, your post mortem, you know, did you achieve your digital transformation? How did that compare to your return on investment? And are you in the red? Are you in black?

[7:38] Kiran Rana:   

Great, and probably thanks for that. Jason sets the tone for the rest of the discussions. So if I get the steps, right. So I think the first step as you pointed out, once you have the right strategy in place is to kind of go about to do quick due diligence to figure things out whether it makes sense to go ahead with the next steps or not and I have seen this query coming up a lot of times. Is benchmarking really a necessary step as a part of this transformation process? Or do you think the benchmark is optional and it comes in specific phases during the order to cash transformation? So how do you think benchmarking plays a role in the overall journey? And again, I open it to anyone. Tony, you want to take that?

[8:26] Tony Hiatt:   

I mean, I don’t really per se benchmark when I’m doing a project or transformation or process, I put it in phases. To me, it seems you could have 9/10 phases to complete the whole project or complete it all. I think benchmarking kind of sets a tone as it’s completed at a certain point. I think doing things in phases helps break it out more and helps you dig into the details a little bit better for a successful roadmap. That’s my opinion.

[9:03] Kiran Rana:   

Okay, Ganadeep, you agree?

[9:06] Ganadeep Rey Patlolla:   

I think benchmarking sometimes can throw us off the game. Because most times when we are trying to start a digital transformation journey, not always do we know the end goal. It’s almost like a self-discovery journey. It all starts with just asking the uncomfortable question if you have to change the underlying assumptions. So at that point, you don’t even know what you want to benchmark yourself against. You could still be the industry on par with the industry, but still, you want to do better. So I think benchmarking at the start is not always equal. It could be argued either way, but I think other panelists may have other ideas, but I feel like you want to know your questions that you want to ask and in the journey, you will find the answers. And yes, you want to have the KPIs to mark yourself against towards the end of the journey. But my answer would be, in my opinion, benchmarking is not as important as you begin the journey.

[10:19] Kiran Rana:   

Okay, and Saurabh, we’ve done so many of these transformations.

[10:21] Saurabh Chopra:   

So I think, for me, I’m a big fan of the benchmark, you know because when I look at benchmarking, I look at three or four factors. So one is like, take a view on the external benchmarking, so you know, how your competitors are performing in terms of the outcome metrics, cost to serve, empty per billion of revenue, we all know that these are like, you know, good to look at. But when you’re looking at metrics, you need to make sure that you’re looking at industry-specific benchmarking model and in Honeywell, you know, that was one of the stepping stone for us to get started and then we have a very robust model in place where we have defined the maturity assessment model, which helps you give a data where you stand compared to the best practices. So there is a scoring tool that we have created, like, if you go to any of the consulting organizations or service providers, they have something similar to that. So, it’s very helpful because it helps you define based on the responses you get from each of the regions, each of the SBGs or Strategic Business Groups, like where do you exactly stand?

[11:38] Saurabh Chopra:   

And where is the need, do you need to fix your policy? Do you need to fix your process? Do you need to manage certain exceptions? Or do you need to fix your technology? So it is very important that you tap on each of these important elements because these all go hand in hand? Like you can’t hit for a transformation if you’re not hitting transformation on all these pieces, but one of the things like people forget about is the organization structure, how you structured as an organization to run your processes, do you have people defined based on competency? Do you have people who are into roles within order to cash? What is the growth path for them? So, you have to even think about from an organization structure standpoint, location standpoint, how you’re making sure when you’re looking at those outcome metrics of cost to serve 50 billion of revenue, how those are looking at from a market standpoint? So you have to make sure that it’s a combination of internal benchmarking and external benchmarking. So that you don’t miss any key opportunity that can take you to the vision that you’re trying to achieve. So I think it’s always important. That’s my view, as I say, you know that I’m a big fan of benchmarking and it kind of works for us. I would say that HighRadius wouldn’t have got into our business if we would have not done benchmarking. So, that was one of the key areas that helped us identify who’s the right supply to go after? So, yeah, it really helped.

[13:22] Jason Herrington:   

It makes sense. I agree as well. It’s a key factor that allows a business case to be made, at least in my case, as a change leader within my organization. You know, benchmarking, helped me understand what is usual for my industry? And where are we ranking? And are we delivering as an organization in a particular segment of the business? The benchmark evaluation helps me establish to my CFO, we need to go do this because here’s where our ranking is within our industry. And that really helps, it is a catalyst to rationalize the change.

[14:06] Kiran Rana:   

Right, great. I think what just came out from this discussion is that of course, it’s a divided house when it comes to benchmarking, but it depends on the kind of journey you set up. And what success criteria are put in, you may or may not use benchmarking, whether it’s a best practice or not still debatable.

 [14:26] Kiran Rana:

Our stand has been with the launch of Dot One performance as a tool. Our stand has been that metrics are important. And it’s important that even the organizations within our customers, so like a collections organization or credit organization, they should also have a view of how they’re performing within the organization and as a benchmark in the industry. So that’s our position but you know, let’s see how it evolves right.

[14:55] Saurabh Chopra:   

Dot One is also going to have external benchmarking that-

[15:00] Kiran Rana:   

That’s the North Star that we’re working towards where you can look at a collector in your organization and you can see how the collected is performing across companies in the same industry, for example. Okay, I mean, we don’t have that in the product. But that’s the vision that we’re looking towards. So yeah, great. So I think that’s due diligence and benchmarking we have, we just have it out of our way that is sort of out of the way. The next step is looking into your processes, the existing ones, the current processes. Somebody map it out.

[15:33] Kiran Rana: 

And then you have your zero levels, one level two processes mapped out. Do a blueprinting and process design and the most difficult thing comes at this point, I think Ganadeep, I think you do a lot of these, it is asking the difficult questions. What is the right kind of question to be asked when you get into a phase when you decide on blueprinting and design, right? So a lot of times we have seen that there is a certain amount of rigidity with the current processes, so most of our clients would like to lift and shift, versus lift, modernize, and shift. Right? So asking the right questions becomes handy. So what do you think are those questions?

[16:13] Ganadeep Rey Patlolla:   

I think, in the finance, supply chain finance sector, industry, everybody, all companies have a very mature model. That doesn’t mean that maturity is the best model. So they have been doing this either by spreadsheets or low tech processes. They have been doing this for a while, they get it done. So I think then as an external consultant I go in, I think I’m going to ask them- where are you seeing your non-value added activities? How can you improve your process, not by the system, but as you mentioned, is it the problem of the people, is that the problem of the culture is a problem of the tools? So, I think transformation itself has to stand on four pillars, it was mentioned even in other sessions, organizations, people, tools and all like process. So, I think we start there. And sometimes you have to bring in as an external consultant because the company itself gets stuck in their existing processes, they can’t think or they are hesitant or reluctant to change. So, we have to push the envelope and do a thorough assessment of the state. So we are asking questions about where can you improve value, efficiency, and accuracy. So RPA tools, AI-driven solutions are just standard microsystems, that I think would be the starting point.

[18:03] Kiran Rana:   

And that’s a great external view and Tony will give an internal view of how things might as well.

[18:11] Tony Hiatt:   

I think people are a big factor, the staff you have when doing any change or putting anything in, you kind of go with what you have, and not what you wish you have, and trying to get the training the way that they need to learn. Yeah, more people are resistant to change. That’s always going to happen. But also looking at the whole factor of- you’re streamlining or making this new process. But also the question is, how are the questions I like to ask is, how is this going to affect other departments because if you change something, and it could change, they would need to change as well as what I found and change the process of how they’re interacting with you. So, I think a lot of questions to ask is how does this affect them? How does this affect you?

[19:09] Kiran Rana: 

Makes sense, okay. So, and the next stage of this entire transformation journey is what is critical for us as technology providers. So, that’s when you bring in us and decide on technology. There are various ways of how companies decide on choosing the right technology partner. So, there are RFPs floated, there are no existing consulting units or consulting services, which the company actually hired to kind of go about recruiting a technology partner. What do you think this could, you know, differ from company to company and the processes to processes but what are those necessary steps that one should keep in view when looking for the right technology partner? An important question for us, right? As HighRadius, we have the technology provider. So what are those things that you think are very important, and one should not miss when coming to deciding on a technology partner? Saurabh, you’re gonna take that?

[20:12] Saurabh Chopra: 

Yeah, I think I’ll take a combination of what we’ve gathered from this discussion. So for example, what I heard is, from the CFOs perspective, it is important to look at from a business case, whether it makes a value, right? Whether you have an ROI, whether you have a good payback for the investment that you’re going for. So that’s step one. So even before we think of doing an RFP, it is important to look at the business case, right? So to get to a business case level, you need to make sure that you have data to support the need of what exactly you’re going for. So let’s say if you are looking at a cash application solution. For a cash application solution, you need to take what is your automatic hit rate? What is that you trying to achieve?

[21:02] Saurabh Chopra:

And if you’re trying to achieve, then what is the benefit that you’re looking at? So once you have those needs defined, that’s step one. From an objective perspective that this is the objective that as an organization that you want to achieve, then the second part of the critical evaluation processes is to create a wish list. What is your wish list from technology enhancements that you’re trying to achieve? What is it that you don’t have right now? So that comes out of the data information that when you do a benchmarking exercise when I say benchmarking, it’s more like a maturity assessment model. Where you look at- what are the key best practices from technology perspective exists and how that can be leveraged and that can benefit us.

[21:48] Saurabh Chopra:   

Then you also need to look at what are the realistic projects, there is always a very thin line between what can be achieved and what is your wish list. So you have to define what is a checklist for your suppliers when you’re looking at like good supplier fits the need, look at the checklist, what do you have, make sure that you have that checklist validated from not only from leaders, because leaders they know the vision, they know the big picture, but you need to check the ground reality. So you need to gather that wish list from people. So that was the way like, you know, we approached about the supplier evaluation process. And then obviously, as part of the next tab, we had a scorecard model. We had a very robust scorecard model when we were looking into suppliers. And don’t think that you scored the highest scoring. We had a scoring guard, scorecard which was based on criteria, weightage. And when people were coming from different supply groups and giving presentations for the RFP response. There was a scorecard that was getting populated for each of the suppliers by 15 to 20 people who are part of the steering committee to make a decision. So that was one of the very strong mechanisms for us to get consensus. And, from a change management perspective, it is easier to get people on board. So, we had gone through a step by step approach and obviously, like E-auction is something that’s part of the RFP process, and plays a very vital role. But again, I think it’s a combination of what we have heard from each one of us, it plays a very important role.

[23:45] Kiran Rana:  

Okay, yeah. Tony, what went behind the scenes before it was HighRadius?

 [23:49] Tony Hiatt: 

Honestly, when I was looking at all these tools out there, I looked at from a user standpoint, if I was someone coming in, can I use this? What training would be needed? That was one aspect that I looked at. Number two, I did the case analysis, how is this going to save? And then choosing a partner? Are you going to learn about my business? Are you going to ask the right questions? Are you going to ask a lot of questions and that’s what we want, a lot of questions? With choosing HighRadius, you came in, looked at our business, they went through it all, they gave us the cost analysis, and told us they broke down everything we did and was able to put the value of that. So with us, it was efficient, effective and user-friendly.

[24:51] Kiran Rana:  

Great. Does anyone want to add? Jason or Ganadeep? Are you going to add to this?

[24:58] Jason Herrington:

Yeah. Looking back in 2015, when I first was introduced to HighRadius, I was literally shopping the industry for automated cash absolution. And I didn’t even, at that time, know who was in the space? Narrowed it down in our RFP process to about four to two. Obviously, HighRadius was running there. And did proof of concepts with each provider. And that set the expectation for a level of automation, actually, at a level, far below what the salespeople were offering was achievable, but at a level that allowed us to have a very significant return on the investment. So I wanted to aim high enough to have a favorable ROI, but not beyond where we would not achieve that ROI. And actually, we didn’t pick the most economic solution. But in my opinion, we picked the most technologically advanced solution that allowed us to scale well beyond the initial product implementation. And took advantage of that time to actually look forward even years in advance to say, what can we do now, to add on these other components in the future, even though presently, we’re not doing that. And the other solutions did allow us to scale that way. You know, they did have a solution that could accommodate the specific need at that time. But that was sort of the end of it. Like how do we go further if we can, again, build the business case for these other pieces, and then later on, without having to go through the same exercise again and find a completely different technology partner?

[26:55] Kiran Rana:

Yeah, I think that’s a great point. I remember and thanks to EmployBridge that now we have so many other customers from the same industry. I remember fitting the product directly into your industry was not that easy, right? It’s also important that technology providers understand. And then they’re able to bend the rules and make few changes to the timesheets, for example, in your industry is not something which is very usual in the cash application world. So I think that’s important from a technology provider standpoint as well.

[27:28] Kiran Rana:

And I think both Tony and Saurabh brought up an important point which is about the business case which is important that you have the buying of the senior leadership that nothing but it translates to dollars and the savings. And sometimes we see that we have a lot of our customers who want us to come in and provide a kind of a value assessment of what a transformation project is going to bring in. A lot of time it is done in house right. And it moves from soft savings to hard savings and different people look at it in different ways. So what do you think are some of the key things that one should look at when you’re looking at savings, because a lot of the savings are also intangible, right? It’s not easy for you to kind of visualize and think of, you can’t put $1 value to that. So sometimes we get into a territory where it’s very difficult to kind of convert all these values into dollars. So how do you go about doing your assessments of the business cases for these transformation projects? Anyone? Jason, yeah, go ahead.

[28:37] Jason Herrington:

You know, for well, being candid, my CFO is very much more concerned with hard costs. And soft costs are real, but the hard costs are financial statement entries. And that’s what determines whether or not in his mind you know, it makes it a good decision. It’s difficult to actualize soft costs, and then, you know, monetize those into a financial statement entry. They do exist. So, taking a hard look at it, is it purely FTP reductions? Is it, you know that that can be a big component of it or a portion of it. You know, as you build into your business case, I mean, admittedly, that wasn’t our primary objective just to eliminate jobs. It was really to deliver a product from our shared services group that serves our stakeholders at a much greater level than we were operating. An ancillary benefit of that solution was admittedly an empty reduction. But again, that wasn’t the primary objective. We were able to streamline treasury services and banking services and eliminate additional hard costs that were very intentional. Just streamlining automation. Once you scope through an entire business process, you know things just beyond the technology solution flush out and you re-engineer how you’re doing things and utilize a technology solution to augment what would otherwise be done by a human being that’s maybe reporting repetitive tasks, rather than being reallocated to more critical tasks.

[30:35] Kiran Rana: 

Yeah, that’s great. I think a lot of times we also see that the savings really come in consecutive years. And it does not show up in the first six or eight months or one year of timeframe. So I think the next important phase when we’re discussing the different phases of the transformation journey is the actual deployment of the solution right and what we have seen is that a lot of times, most of the bigger customers that we have, have struggled with the fact that whether I should do with a big bank or should I go to phase, and this varies from customers to customers, industry to industry? Is there really one size that fits all? Do you think you should take it based on your current people, processes, and technologies that should guide you to do that? Is that the way forward, anyone?

[31:30] Ganadeep Rey Patlolla:

I don’t think one size can fit all. You could have the same strategy, but the culture of the company will eat strategy for breakfast. And also the key important thing is the appetite for change. We are not talking about just replacing one system with another, things we are asking or we are forcing the company to rethink how they do business. How can they bring better value to their daily job, day in the life of their job? So I think asking that kind of big change is not easy for the community, be the analyst and up to the senior management also. You have to take it by the solution, the offering, the scope, and also geographical complexities.

[32:26] Kiran Rana:

Anyone disagreeing?

[32:28] Tony Hiatt:

I agree there is no one size fits all for this. I think it’s going to vary by company and the size of your organization. I think it’s going to be customary for every company. I don’t think there’s one glove fits all.

[32:45] Kiran Rana:

Right. Okay, great. I think the most underrated phase of any transformation journey is what happens post-implementation, right. So I think we all plan and I’ve seen this go wrong with a lot of implementation is that there’s a great plan for implementation but there is not something which is carved out of what needs to be the next steps for post-implementation. So what are the thoughts there? What should somebody really think about when they’re looking at a post-implementation strategy?

[33:15] Saurabh Chopra: 

I think change management, that’s a critical thing to look at, and the adoption. So how do you bring adoption of a new tool technology that is implemented, so it is important that you should have a continuous training learning program, a specialized team deployed on the ground to make sure that you’re watching people if they’re using technology the way it has to be? And then also looking at, normal time, what happens there features and functionalities enabled, but people don’t even know how to use it. And there’s always a thing like- you know that this is not working, but probably they don’t know how to use that particular feature or functionality.

[34:02] Saurabh Chopra:

So I think it’s very important that you need to have super SMEs within your organization at a regional level to drive that adoption at the ground level, to make sure that there’s a continuous learning platform for people to understand and make sure that you interact with your suppliers, you make sure that you bring them in whenever there is a need. May you think there is a gap that you’ve identified, always make sure that your scope of work the SOW that you have defined you know, keep checking, whether all the scope that has been defined has been deployed or not, because a lot of time we end up missing on pieces, which kind of at times like be a very critical part to process like, you know, simple thing like a penny bad solution, it can be a very critical thing to look at it can be you know, so I think those are the critical aspect that has to be looked upon. So you need to have a team deployed on the ground to drive training and change management. That’s very important post-deployment, if you really want to have a continuous improvement to continue and deliver the needs, I think that’s where people should head for.

[35:14] Ganadeep Rey Patlolla:   

Yeah. So I want to add to what you’re mentioning, I think that is very essential. I think the other thing that I have noticed in many projects is we think about a project as a finite start and the finite endpoint, right? We go live, we have over two weeks or whatever, one month of hyper care. But that’s not the end of the journey. What I believe is, that’s almost the beginning of your real life. I think once the users start on the product after change management is done, you will realize there are so many improvements scope, so it is key for the stakeholders, the management, the users to understand that it’s the world of one big bang, and then you are having a perfect world, that’s not going to happen. So you want to kind of continue having a constant feedback structure and improving on that. So I think you have to plan for that. You have to work with your management to kind of get a budget upfront to have a long term growth plan where you are doing constant improvement processes and finding better ways to kind of use the tool or expand the tools. So I just think that kind of gets missed when you are thinking about the project as a kickoff.

[36:38] Kiran Rana:

Yeah. And I can assure you, as technology providers, we are listening. And I would request even our audience today and the panelists to go and look at the performance dashboards. The Dot One performance dashboard of the product that we launched, basically starts with usage metrics, right. So basically says- can you go and track what we implemented? Are you guys really using it like that? Like Saurabh said, right? So, and there is a hierarchy of metrics, which it tracks. And it goes up to kind of management level metrics where you can see the performance of the implementation being tracked. So I think it’s been a great conversation, gentlemen. And with this, we come to the end of this. Thank you for ventilating thoughts on this transformation journey. And thank you for listening in.

[37:31] Anchor:  

Yeah, thank you all so much for coming out to this session. Remember that if you have any additional questions, we have our demo booths down on the field. And you can also connect with any of the speakers on the app. So here is a list of the sessions coming up following this one and the location. So feel free to ask any HighRadian or AT&T staff if you need help with directions. So thank you all again, and enjoy your afternoon.