Streamlining the Quote-to-Cash process
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This document discusses optimizing the quote-to-cash process through business process outsourcing. It notes that consumer products companies face challenges managing order volumes and deductions. The first step described is getting order management under control by taking control of the entire quote-to-cash process and eliminating errors. Capgemini provides end-to-end solutions including establishing a centralized back office team with expertise across the process.
Streamlining the Quote-to-Cash process
- 1. Business Process Outsourcing the way we do it Streamlining the Quote-to-Cash process Realizing the potential of the Demand Driven Supply Chain through Quote-to-Cash Optimization
- 2. Introduction Risk management is also challenging, particularly in the current economic climate. In the case of credit risk, for example, it is hard to be confident that credit levels are right, even for long-established and trusted customers. Any Consumer products companies customer, including the largest brick-and-mortar entities, can pose risks that can only be understood with deep trending face increasing challenges around and analytics. management of the quote-to- It is therefore vital to ensure an efficient quote-to-cash process that aligns with your customers’ needs, but also cash process. These include incorporates the controls necessary to increase revenue and margins, reduce risk, and improve working capital for your the ability to effectively manage business. high order volumes and to deal To optimize the process, you need the right expertise in the right place (for example, some capabilities may need to be with a high level of deductions. near your customers, while others can be centralized in a global back office, perhaps in a lower-cost economy). You The challenges also include also need to have the right mix of tools: in particular, analytics that give you insight into the process. optimizing and understanding Capgemini provides end-to-end solutions to give you a full trade promotions spend that is view of the process so that you can start to improve it. Two major steps are required. The first is to get the whole order required for category success and management process under control and centrally managed. The second is to improve the bill-to-cash segment of the cycle. consumer adoption. This brochure describes how our quote-to-cash services can help you improve operational and financial performance. 2
- 3. Business Process Outsourcing the way we do it Step 1: Getting too late, or in the wrong quantity. These may seem to be small issues individually, but collectively they add up to chaos. They can cost millions and damage customer relationships. order management By taking control of the whole quote-to-cash process, you can eliminate this kind of problem. It starts by undertaking under control “order cleansing”, streamlining the workflow and eliminating duplicate orders and other errors. This will save you money, strengthen your business, and make sure you win at the shelf. You will be positioned to You’ll know if your order management is not working properly invest in the right trade promotions and to monitor the sales because there will be all sorts of day-to-day problems. channel effectively, even in vendor-managed inventory (VMI) Customers won’t get what they ordered, or they will get it environments. Order cleansing benefits for most major business areas Logistics Network Planning Postponement Strategy Master Data Management Distribution Strategy Procurement Transportation Trade-Offs Risk Management Financials Manufacturing Operations Deduction Management Order Current State Analysis Collections Cleansing Inventory and Capacity Cash Applications Production Planning Billing and Invoicing Supply Chain Design New Product Launches Network Optimization Design for “Supply Chain” Push vs. Pull (BTS vs. BTR) New Market Strategies 3rd Party Vendors Time to Market Reverse Logistics Network Interdependencies and Linkages are critical Successful order management depends on having the right That is what our BPO quote-to-cash service gives you. We organizational structure with the right capabilities in the right can help you establish a single, central back office team place and most importantly with the right people. Capgemini with expertise covering every aspect of order management, recognizes that effective order management is function of and also the wider drive to efficiency. Many clients choose both process and customer service. Our approach focuses to locate the central team offshore, but we also have local equally on driving projects effectively while simultaneously experts to work on the spot with you and your customers. strengthening customer relationships. 3
- 4. Capgemini’s “Select Care” service model delivers a better centric best-practice processes, and will help you get your quality of service in the right location mix to suite your processes up to that standard. organizational needs. The diagram below shows our approach to order Our team is equipped with the latest analytics tools and management, which is based on a foundation of sound techniques to help you understand your order process customer information, with control centralized in a single back thoroughly. Our experts have access to a library of customer office. Customers can interact with you through their choice of channel. Multi-Channel Order Order Lifecycle Management Comprehensive Placement Operational Analysis Transaction Sales Support Contract Entry Driven Based Voice Pricing Mobile Customer Order Analytics Order Entry Support Customer Surveys Product & Catalog Management Pricing Management Call Center Product Product Price Price Selection Configuration Administration Execution Industry Analysis Retail PO’s (EDI, manual) Process Define Price Price Grant Offerings Planning Enforcement TPM Systems Web Customer Information Account Master Account Level Primary Billing Data Exceptions Contact Systems Contracts Benefits of this approach include • Operational efficiencies • Improved quality –– Reduce costs by up to 35% through reductions in –– Create a consistent, repeatable set of business quote and order errors processes –– Increase orders processed per employee by 15% –– Deploy a low-touch, fully-integrated set so you need fewer staff of applications • Faster processes and reduced –– Increase accuracy and completeness of order turnaround times data by 45-50%, rising to 90% with maturity –– Reduce order cycle time by up to 35% –– Improve visibility of customer profile, buying –– Reduce customer inquiries and collections by patterns and promotional adoption 20-25% initially, rising to 50% or more later –– Identify up-sell and cross-sell opportunities 4
- 5. Business Process Outsourcing the way we do it Step 2: Improving You get not only a specialist team in charge of bill-to-cash, but also a team for each major customer, one that is familiar with that client’s way of doing business and their terms the bill-to-cash and conditions. This way, you can tailor your strategies to the individual process customer, adjusting credit limits in view of the customers financial circumstances. One of our clients avoided a loss of about $100m as a result of adjusting the credit limit of a customer who subsequently went bankrupt. Bill-to-cash is a particularly important aspect of order Our offer spans: management. Collecting money promptly and efficiently • Credit and master data management improves cashflow and reduces risk. • Collections, disallowed deduction resolutions, cash, and queries Deductions are a particular problem area for many consumer • Cash application – all deductions enter the cycle here products companies. Customers often take unauthorized • Reporting and document management deductions – for example, by extending trade promotions (funded, of course, by you) beyond the agreed period. Other Benefits include: deductions – for example, those relating to damaged goods – • Automatic reconciliation of large numbers of credits and can also be contentious. All of these can lead to discussions debits using custom algorithms to match partial and varied that at best take up a lot of your time and at worst can lose reference numbers you customers. • Analytics to forecast results, and the ability to manage against those forecasts • Drill-down reporting at both the enterprise level for the CFO Capgemini’s bill-to-cash approach and at the functional level for customer and department Drawing on years of experience and feedback from our performance management customers, Capgemini offers a comprehensive bill-to-cash • Electronic receipt and logging of debit notes at article process as an outsourced service. It covers process analysis, level, with automatic creation of summarized or detailed implementation, daily operation, and, if required, state-of-the- document management system (DMS) queries art software which can be used in conjunction with your own. • Exception reporting across remittances and deductions • Alignment of customer and article details with customer Capgemini’s offering delivers a competitive advantage by reporting systems improving cash flow, driving significant cost savings, enabling sustainable revenue assurance, and reducing Days Sales Outstanding (DSO). Invoice Delivery A/R Collect Query Management POD & Document Retrieval Conveyance EIPP Web Collect VWA’s DMS – Deduction VWA Fetch Technology Auto Electronic Invoice and A/R platform Management System Payment Presentation Document Retrieval System Front End – New Customer BPO Management Risk Mitigation Recovery Past Due Bad Debt Transaction Transaction Charge Off Billing Credit Credit Credit Line Payment Risk Request Granted Usage Processing Mitigation Cash Applied Account Brought Current Write-Off Recovery Credit reports Order Entry Cash application and auto processing Credit analysis Billing Accuracy Applications Deduction and claims management Portfolio scoring and monitoring Customer invoicing & EIPP Dispute reconciliation Custom risk mitigation Risk mitigation Collection Strategies Applications 5
- 6. Global Enterprise Model (GEM) is Capgemini’s unique GEM complements Capgemini’s consulting activities in transformation approach that allows for: this area. It draws on our long BPO experience across the consumer products industry to provide a baseline for • A comprehensive evaluation of the finance function against operational improvement. Using GEM, we can quickly help Capgemini standards, which are based on many years of you compare your quote-to-cash process with best practice, financial operations in a multi-client environment and then decide what changes you would like to make. • Acceleration of benefits by deploying transformational methodologies (high quality processes, improved controls, reduced cost of operations) We can align your quote-to-cash process with best practice Technology Market leading Grade Mix technologies and tools defined per Glo b Optimized team each sub-process l de structures for En al o Y each process t e r p ri s e M G LO LEADING EDGE y og Gra NO ol e h n d Mi x Te c TECH THRESHOLD PERFORMANCE PEOPLE Governance Competency Model Finance Control and Capabilities and Function performance proficiency levels Model measurement Co structure ce defined for each pe e an m l process te n c y M od G o ver n Lo g cat io n Mix P ri ci n Location Mix Pricing el Optimized split of Gl od processes among different ba o l Pr M Process assigned locations all over the world ocess optimum pricing models PROCESS Global Process Model Best practice processes, internal control and process measures 6
- 7. Business Process Outsourcing the way we do it Why use Capgemini’s BPO services for quote-to-cash? We have experts all around the world – in your country Our clients’ experience shows that our approach can and also offshore – who are ready to transform your yield short-term benefits that include a reduction of up quote-to-cash process into a best-in-class one. to 30% in delinquent receivables, 20% savings through operational efficiency improvements, and 20% savings We can use your IT systems or ours, or a combination. on infrastructure investments. Either way, we align your process with best practices and apply industry-leading analytic techniques to tell In the longer term, the Capgemini approach can you everything you need to know. We work improve your overall financial position. It yields enhanced closely with your retained organization to ensure a investment growth, flexibility and scalability to support smoothly integrated process, as our many satisfied business cycles. customers confirm. 7
- 8. Business Process Outsourcing the way we do it About Capgemini With 120,000 people in 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2011 global revenues of EUR 9.7 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience™, and draws on Rightshore®, its worldwide delivery model. Learn more about us at www.capgemini.com The information contained in this document is proprietary. ©2012 Capgemini. All rights reserved. Rightshore® is a trademark belonging to Capgemini.