Order-to-Cash Paradigm Shift

The Order To Cash Paradigm Shift

The pandemic brought a reckoning to businesses, abruptly pointing up the value of process digitalization and the criticality of cash flow in the Order-to-Cash process. As the U.S. Postal Service delivered checks to empty offices, companies recalled the fundamental criticality of cash flow as some customers paused. The year threw into sharp relief the need for visibility into receivables and the value of an efficient and digital order-to-cash (O2C) process.

Accounts receivable (AR) involves a complex collection of interdependent activities. If one is inefficient or broken, it impacts the others. Yet, the individual functions and associated information are siloed. In the last several years, full technological solutions, including big data management and automation incorporating artificial intelligence, have become available. But few organizations saw the wisdom in early adoption.

Transforming Order to Cash

The year 2020 brought many enterprises to the realization that they should no longer delay digital transformation. With a renewed focus on cash flow, many recognized the shortcomings of their systems and processes. Some successfully undertook transformation even amid the pandemic. Others are now looking for ways to transform their O2C process. Immediate and shorter-term concerns include:

  • Remote workforce connection
  • Minimizing manual activity in credit, collections, and cash application
  • Mitigating risk through a data-driven approach to decision making
  • Maximizing cash flow from receivables
  • Tightening upstream processes like order processing and invoicing
  • Overcoming inefficiencies to expedite cash application
  • Sharpening accuracy of cash flow projections
  • Partnering across finance and the enterprise with visible and accessible information

Beyond specific short-term objectives, a paradigm shift is underway in the accounts receivable space. Digital transformation is very different from implementing incremental automation tools as in the past. Many businesses have succeeded in or are wading into e-commerce, but their supporting operations lag. Leaders recognize the need to step these up. Beyond the more immediate concerns is the vision for how businesses are going to run.

Interoperability for greater efficiency is the salient need. But as with customer-facing digitalization, back-office digitalization will also markedly improve customer experience. And that’s the greater importance in the future. Customers are changing. They have rapidly become accustomed to a self-service digital age supported by “smart” digital assistants in their personal lives. They are bringing those expectations to business customer-to-supplier relations.

The future of work includes businesses running truly automated back-office operations, in which “bots” take over day-to-day repetitive and process activities. Human workers must shift focus to managing operations and interpreting and understanding the resultant information. Order-to-cash leaders must consider how to direct staff to upskill for this.

Shifting the O2C (Order to Cash) Paradigm

There is a new automation paradigm. The first two decades of the 21st century saw efforts to digitize data and incrementally automate discrete activities to support daily work. The focus was on people, who did 80 percent of the work while technology handled 20 percent. But integrating and applying artificial intelligence (AI), robotic process automation, and analytics is flipping that. These combined technologies will make 80 percent of the work touchless, freeing humans to do the 20 percent higher-value work.

True automation technology is here. Leaders must look at how to reorient staff through the transition. AR will not require manual and disconnected efforts of the past. A digital Order-To-Cash (O2C) system will handle that while humans focus on exceptions, outcomes, performance monitoring and data-driven strategic decision-making.

Emagia has applied intelligent technology to the O2C process and brings tremendous levels of automation to streamline processes and create exponential impact. The power of the combined technologies—AI, automation, analytics—is that they take clients through the journey to transform O2C operations from manual processes to digital, which yields data-driven intelligence to personalize everything: credit, collections, cash application, deductions management.

Human staff no longer have to do the repetitive work. Instead, bots handle the bulk, providing intelligent data the humans can use to improve and innovate. Emagia takes customers to another level, the cognitive. Emagia has developed a specialized digital assistant, Gia, trained in more than 100 specific AR and O2C tasks. Gia provides powerful support to customer interactions.

Emagia’s sophisticated O2C system already powers AR and O2C operations for pharmaceutical, building product, healthcare, and information technology companies, to name a few examples.

A Positive Customer Experience

Customer experience is paramount. In many cases it is the key differentiator and is critical to customer acquisition, retention and lifetime value. Most O2C operations have not been conducive to providing positive encounters, but that is changing. Customers want information at their fingertips, enabled on mobile devices, with real-time payment access. They want to be empowered by self-service.

Emagia’s O2C intelligent automation system focuses on enabling clients to deliver that experience to their customers. Control, compliance, cash flow acceleration and cost management all come together in an AI environment to promote better internal decision-making and external customer experience.

Companies realize things have changed. They are awakening to the idea that back-office operations cannot continue as usual. They must advance. Comprehensive intelligent systems enable them to do so.


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