Shared Service Operations (SSOs) were created to perform operations better than they could be performed in a decentralized environment while controlling costs. When properly designed and implemented, SSOs can leverage economies of scale, specialization of labor, higher levels of expertise, and technology to achieve improvements in cost and effectiveness in their digital order-to-cash strategies.
There is intense pressure on SSOs to deliver quality at low cost. They are expected to do more with less at the same time doing it better. Read on to learn more about how finance professionals can achieve digital order-to-cash transformation with tools and AI.
Challenges Facing F&A Shared Services Organizations & Competencies Required
While shared services have come a long way, they still face several demanding challenges that decentralized operations often do not. They include:
- Service Level Agreements (SLA’s). SLA’s define the output required, and its quality/accuracy and timeliness in a quantitative manner. Measurements are implemented to gauge their success in meeting the SLA’s. Often, SLA’s are quite elaborate and complex.
- A Productivity Annuity whereby performance (efficiency & effectiveness) is expected to improve every year.
- The need to accommodate multiple business units with widely varying business models, revenue streams, customer bases, ERP’s, etc.
An optimal mix of people, best practice process, technology, metrics, and analytics are required to bring in these improvements, but in reality that’s easier said than done. Also, once these are operating at a high level of effectiveness, it becomes increasingly difficult to deliver the improvements expected in the Productivity Annuity.
At this point, exponential increases in efficiency are required in some sub-processes to offset the meager increases achieved in other sub-processes. In our opinion, exponential increases are only obtainable through the deployment of digital-AI driven accounts receivable automation.
Process Automation and Digital Order-to-Cash is the Future of Finance
Digital finance automation, powered by Artificial Intelligence (AI), decreases manual labor by up to 85% in a number of Order to Cash (OTC) sub-processes. This is especially important in today’s pandemic economy where the workload in Credit Risk Management, Accounts Receivables Management, Collections, Disputes & Deductions and Cash Application is expected to at least double. Exponential increases in productivity in these sub-processes will enable SSOs to:
- Successfully cope with the threats of the COVID-19 economy
- Deliver significant productivity benefits in the coming years
Delivering annual productivity and effectiveness increases year after year is just not possible with semi-manual process improvements and modest ERP enhancements, especially in light of the COVID-19, which has greatly increased workloads in key OTC sub-processes. Digital with Automation, Analytics and AI, is the path to an SSO delivering new levels of performance in the digital age.
To learn more about the key elements of successful OTC operations at SSOs Click Here.