Creating Value for Your Customer in the OTC Process

Transcription

1 Creating Value for Your Customer in the OTC Process May 25, 2016

2 Introduction Today s topics: Review the typical view of the OTC process Define excellent service to the customer Pinpoint how value is created for the customer at each step in the OTC process Explain how the customer experience can be enhanced

3 Typical Definition of OTC Process Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Converts orders into cash & satisfied customers Starts after sale is made (also note : Quote to Cash, Opportunity to Cash) Ends when order is fulfilled, invoiced & paid and customer accounts are updated Front End (gray chevrons) Screen orders for acceptability Gatekeeper. Release only perfect orders to fulfillment. Fulfill acceptable orders accurately, quickly, & efficiently Back End (green chevrons): Ensure uninterrupted flow of products/services to customers through maintenance of their account Execute billing and collect & apply cash quickly, accurately, and efficiently Benefits of improving the OTC process: Increased cash flow Reduction in SG & A cost Reduction in Revenue Dilution Enhanced customer service/satisfaction/retention Faster order fulfillment

4 Excellent Service to the Customer Fast and accurate services Invoice it accurately Correct errors promptly Excellent service to the customer Professional and helpful Process transactions accurately, quickly & efficiently with minimal backlogs Deliver what they ordered when they want it, in excellent condition

5 Excellent Service to the Customer

6 Creating Value for Your Customer Value Created Quotations and Tender Offers Customer Experience Conforms to a Master Contract, GPO Contract / RFP instructions Timely, accurate Quick answers to questions Key Metrics Cycle time to respond Conformance to authorized pricing and T&C's Value Creation Levers: Quotation tool with: a) Authorized options for price and terms b) Workflow to secure approvals c) Pre-approved legal clauses

7 Creating Value for Your Customer Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Value Created Customer Experience Key Metrics Customer Master Data Accurate ship-to address Accurate bill-to address Accurate sales tax status Accurate contact information Customer Master accuracy Cycle time to set up new account Element to input ratio Value Creation Levers: Master Data Strategy Restricted access Data cleansing tools

8 Creating Value for Your Customer Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Value Created Credit Check Customer Experience Accommodation of Credit needs Uninterrupted flow of products Key Metrics Bad debt as % of sales Cycle time to set credit limit Value Creation Levers: Automated credit scoring On-line access to credit bureaus Policy consistent with corporate strategy Sophisticated & automated order hold

9 Creating Value for Your Customer Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Value Created Customer Experience Key Metrics Contract Administration Accurate Price Accurate rebate volumes & rates Accurate eligible products Accurate T & C's Invoicing Accuracy Cycle time to input new or change existing contract Value Creation Levers: Minimal variation in T & C's, pricing schemes Contract management application Up-to-date contracts Automated QC of price and terms Quotation tool integrated with contract tool

10 Creating Value for Your Customer Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Value Created Customer Experience Order Management & Fulfillment Fast Correct, undamaged products and/or excellent services Low freight cost Key Metrics Perfect Order Index right product, right quantity, on time, invoiced accurately Value Creation Levers: Electronic order receipt (EDI, web portal) Robotic entry of orders 24/7/365 Automated QC of price, T&C's Automated order acknowledgement Real time inventory status

11 Overview: Analyzed 15 Orders to assess quote to invoice accuracy Documents used: Quote to Case Discrepancy Analysis Quote Customer PO Sales Order Invoice (Field Used: Quantity, Price, Freight, Sales Tax, Payment Terms, Customer PO#) Key Findings 67% of Orders had Errors Positives Unit prices are accurate Quantities accurate Challenges Only 33% of orders error free 60% Discrepancy in Payment Terms 20% Discrepancy in Freight Charges 14% Discrepancy in Price/Sales Tax

12 Robotic Entry: 24/7/365 Customers Purchase / Sales Orders FAX PDF XLS EDI Any Format Optimized Order Entry FAX PDF XLS EDI Keyed All transactional data input has to be in digital format The data can come in multiple formats viz., EDI, xls, pdf etc., as shown in the diagram Robotics can accommodate any number of variations in the inputs that vary by business division, region, country, or customer. It can also support data inputs from IVR facility and scanned images It cannot support hand written inputs

13 Creating Value for Your Customer Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Value Created Billing Customer Experience Key Metrics Accurate & clear Electronic or paper Invoice archive portal 100% timely delivery References PO #, dept. / cost center Invoicing Accuracy Cycle time: ship to bill Value Creation Levers: Electronic delivery of invoices Automated QC for price Vertex for sales tax Six Sigma program to increase accuracy

14 Creating Value for Your Customer Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Value Created Customer Experience Collections Accurate balance due Professional contact deliver on promises Ample contact / warning before order hold Easy Pay: ACH, credit card Key Metrics DSO gap: actual to Best Possible Past Due > 7 days % Value Creation Levers: State of art collection & dispute application Shared corporate vision of AR strategy Web portal to accept ACH, etc. payments

15 Creating Value for Your Customer Customer Master Setup Credit Check Contract Admin Order Billing Collection Cash Apps Deductions / Exception Value Created Customer Experience Cash Applications Accurate & Fast Accurate account status Use remit info provided Key Metrics Accuracy % applied same day Value Creation Levers High % of payments received electronically Sophisticated auto-cash algorithms Realistic automatic small balance write-offs varying by type Continuous customer education

16 Creating Value for Your Customer Customer Master Setup Credit Billing Creating Value for Your Customer Check Contract Admin Order Collection Cash Apps Deductions / Exception Value Created Dispute & Deduction Resolution Customer Experience Accurate & Fast resolution Research & present findings clearly Use the info provided on remittance (deductions reasons codes) don t ask me twice Key Metrics Resolution cycle time: from receipt to clearing from AR ledger Value Creation Levers: State of art collection & dispute application Shared corporate vision (not just Finance): a. Customer service issue first, AR issue second b. Resolved by dept. "best positioned" to resolve

17 The CSCR Framework enables companies to elevate the customer experience Customer, Sales, Complexity Risk (CSCR) The CSCR framework enables companies to score their customer experience and derive insights on where good customer service is lacking and why. Customer Experience Framework Perfect Order Index (POI) o Order Accuracy (SKU & Quantity) % o On Time Delivery % o Right Quality % o Invoiced Accuracy % Accurate & Timely Communication Dispute Resolution cycle time Sales Experience Framework Customer Service Performance error free orders Customer Feedback Voice of customer Promotion Management accurate & timely Sales Forecast Accuracy Risk Framework Customer revenue as % of total revenue Severity of impact if high value order is late Percentage of orders partially filled (with back order) Complexity Framework The elements that make the process inefficient, complicated or difficult to manage : Percentage of orders via EDI vs phone, , fax Orders that require special handling & exceptions Orders with high customer interaction

18 Q&A

19 Profile John G. Salek PROFILE John G. Salek is Vice President, of Genpact s Global Order to Cash Team. 25+ years experience in OTC solutions development working in a broad range of industries with over 150 clients. 10+ years experience in Finance (CFO, Controller, Credit Manager) in several manufacturing companies (medical devices and paper manufacturing) EDUCATION BS in Business Administration from the University of Connecticut (Dual National Basketball Champions 2014) MBA in Finance from The Amos Tuck School of Business Administration at Dartmouth College. OTHER Author of Accounts Receivable Management Best Practices published by John Wiley & Sons. Member of Advisory Board of The Accounts Receivable Network

20 Thank You!