The term Digital Transformation has become the go-to word for most GPOs, especially in the “new normal.” However, it has been a common misconception that Digital Transformation means automation. Let us set the context for further discussion on this chapter by saying that:

Digital Transformation ≠ Automation

Digital Transformation is more than just automating current processes. According to Forbes, some of the critical reasons which forced a rethinking of this concept are outlined below.

• The increased complexity of business processes is dependent on coordination between
  multiple siloed departments.
• The amount of unstructured data that flows into the business needs to be reconstructed
  into a more meaningful and actionable format.
• The customer demands a more multichannel experience that has to be more contextual.

If not just automation, then what is Digital Transformation?

Gartner defines digital business transformation as “the process of exploiting digital technologies and supporting capabilities to create a robust new digital business model.”

Digital Transformation is a crucial step in future-proofing your SSC business operations in the new normal, focusing on enhancing agility and efficacy using technology and data as the enablers. It marks a radical re-thinking of how an organization uses people, processes, and technology to fundamentally change business performance.

Digital transformation in A/R

Transforming accounts receivable (A/R) is the key to making business move faster in this slow economy.

• Digitizing your A/R process not only saves you money but also speeds up your collections, reduces late payments, and greatly reduces the volume of repetitive tasks taking up your team’s time.
• Customized enterprise resource planning (ERP) systems and manual, paper-based processes cost millions in-process waste. These broken processes hold your team back by limiting capital efficiency and liquidity and decreasing your time, revenue, and efficiency.

Even though “Digital Transformation” has become the buzzword, many such projects tend to fail. When you deep dive into the ‘why,’ it becomes evident that significant factors were overlooked, which led to unfavorable results. Let us try to understand some of those factors that need to be addressed before kickstarting the project.

Lack of a sound strategy for Digital Transformation

Digital Transformation is much more than just revamping existing technology. It fundamentally changes the way specific processes function. Hence, it’s of utmost importance to set a clear strategy aligned with the organization’s growth objectives.

Lack of stakeholder buy-in before initiating the project

Stakeholder buy-in is one of the most important factors determining the success of the project. A strong vision has to be communicated to the leaders and their team members who will participate in this project.

Lack of willingness to adapt

This is a common trait that is not unique to Digital Transformation alone. Be it any business process transformation, how employees react to the same has to be studied in depth before initiating the same. Setting up a very robust, scalable solution that can evolve with people is very important.

Lack of proper data management

They say, “Data is the new oil.” However, data is fragmented across various places like the cloud, machines, or other devices. The availability of the right data at the right time will make all the difference in a Digital Transformation project. Hence, having a proper data management system is very important.

Lack of an extensive cost-benefit analysis exercise

This issue stems from misalignment and miscommunication of the goals or strategy to the leadership team. One of the major problems of not performing a proper cost-benefit analysis is that the business might not achieve the expected ROI.

Now that some of the critical reasons for Digital Transformation projects to fail have been discussed, it’s time to understand the steps to help achieve a successful Digital Transformation of your order to cash process.

This ebook provides you with five key steps to help you plan your Digital Transformation journey and future-proof your A/R shared services.

1. Setting Up For Scalability

A good shared services organization helps the business run efficiently. A great shared services organization supports the business to remain agile and launch into new markets.

In the globalization paradigm shift, SSCs must expand the geographical coverage and/or increase the functional scope to offer a more complete and scalable service portfolio.

An important principle of this paradigm shift is that by increasing the scale of services offered (both geographically and functionally), an SSC can create fewer dependencies on external service providers and more effectively consolidate technology, processes, and analytics. In addition to cost savings, doing so can deliver added value through, for example, agility and a more uniform way of interacting with users.

Leveraging Technology as Globalization Accelerator

1. One platform acts as a single source of truth for an SSC and thus provides an integrated order to cash system
2. Provides higher operational efficiency and improved communication for internal team
3. Analytics improves visibility and transparency with KPI tracking

2. Benchmarking and Assessment

Benchmarking is an important part of a continuous learning cycle for organizations to determine the areas of the biggest gap and prioritize those for process improvement. It is necessary to evaluate- How are you doing today against your industry peers? Is there a scope for improvement?

Most immediately, the A/R shared-services organizations can work with IT and the business to designate specific areas in which to incorporate automation into their existing manual workflows.

1. A typical starting point would be to perform a detailed assessment of the current order to cash processes to identify maturity gaps. Track the key metrics such as hit rate, DSO, past-due invoices, etc.

2. Next, the SSC organizations must decide which processes should be automated (either fully or partially) and define the ‘to-be’ state while involving all key stakeholders.

The answer to the following questions would help you in identifying these processes.

• Is it a transactional/rule-driven process?
• Is there a high volume of action items?
• Is it a laborious process?
• How are other companies in the market going about it?
• Is there a likelihood of a system change shortly?

3. Furthermore, the A/R leader must get down to the process level to define what exact numbers and metrics should change and by how much.

4. Adopt a collaborative approach to get approval from the executives involved across the globe through continuous feedback.

5. The future change should be planned in accordance with the benchmarked results.

3. Evaluating the Options and Leveraging Technology

While leveraging technology to digitally transform may sound obvious, what’s not obvious is how to integrate advanced technologies into your shared services organization.

With SSCs having enhanced data accessibility, the real value lies in transforming it into actionable intelligence. Delivering the same depends on a reliable partner who can bring in additional value with robust

Choosing the Right Vendor

On a battlefield, the General plays an important role, not only by being an enabler of success but also by being the right partner for the leader. The vendor for a Digital Transformation project plays a similar role by being the right partner to accelerate the desired outcome. Hence, the A/R shared services leaders must do a detailed assessment of the vendors by analyzing their technical capabilities, their ability to understand the business requirements, and their commitment to deliver expected results.

The answer to the following questions would help you in creating a perfect checklist for your vendor.

• What value would they add to your current operations?
• What is the pricing model?
• How do they rank in terms of customer service?
• Is the new solution system agnostic and scalable?
• Would the vendor help us with our future business requirements?

Read this blog to know more about vendor evaluation.

Understanding the Value-Technology Matrix

4. The Execution Phase

Key To Stakeholder Alignment

The timelines for delivering this level of change can be long, which all adds up to significant investment in time and money. To add to the complexity, shared services organizations span over multiple business stakeholders.

Now given this amount of effort and inevitable risk, how do you go about getting buy-in from business stakeholders to approve the Digital Transformation and the budget needed to achieve it?

Pilot Deployment Strategy

1. Determine the order of implementation across different business units: from beginning till the end.
2. Keep an eye for anything that could go wrong and have a backup plan in place to address it.
3. Decide whether you want to implement across multiple geographies at once or one at a time.

5. The End-Phase of Your Transformation Journey

Change Management

Under a digital model, the shared-services group will need to establish domain expertise in specific processes and, within each domain, task small teams of technology and user-experience experts to work together.

Some shared-services groups may need to hire, train, and retain employees differently under this model.

1. Roll out the plan across all business units (BUs) within the provided timelines.
2. Conduct internal training sessions and identify the change champions to support the execution.

Implementation and Tracking

Once you are all set with your system to go-live, what next? What should be the next steps once you are live? What should be the future expectations?

1. Check program readiness, system readiness, workforce readiness, and operational readiness and develop a contingency plan.
2. During go-live, capture end-user feedback.
3. Track the overall performance and the partnership with the vendor.
4. The measures to improve the process further need to be in place.

Digital Transformation is already here, and it’s imperative that you are prepared! Order to cash shared services leaders today are expected to rise to the occasion and start reviewing their current strategies with greater urgency.

From scalability to cost optimization and re-thinking their Digital Transformation plan – O2C Global Process Owners (GPOs) have an important opportunity here to ‘manage up’ and drive Digital Transformation across their shared services.

You are the change agent

It is up to Shared Services leaders to be the digital transformation change agents and bridge the gap between the executive leadership and the finance teams on the ground.

It is important to start planning how you can manage your team through the change. Yes, there may be a fear of job loss or fear of change. Some may prefer the old way of working. However, Digital Transformation will pave the way for a collaborative future where humans and machines work together to solve complex problems in an agile and efficient way.

Understand and Adopt

Keep your finger on the pulse of what your competitors are using. The market is streaming with new innovations daily. SSCs can also partner with innovative organizations to unlock new AI-powered possibilities for the shared service A/R department. It’s indeed the right time to future-proof shared service centers with a forward-looking attitude.