Is your Order to Cash (O2C) process a joke?
Keith Bestwick
Published at
The hard truths about (in)effective Order to Cash processes
The Order to Cash Joke
A man walks into a bar…(puts on a hazmat suit, and finds a socially distanced spot at the bar)
…Waits…
…Waits a little longer…
…Orders a beer…
…Waits…
…Receives the wrong beer…
…Waits again…
…Gets the right beer…
…Attempts to pay but his credit card is declined; limit reached…
…Hands over a £50 note and waits for the change; The Landlord struggles to change £50
…The Landlord cleans out the 3 cash registers for his change…the man drinks his beer and leaves.
…A Frustrated customer, A frustrated landlord
…Enter next customer, fingers crossed, repeat
Irrelevant pre-amble, right?… but the brutal reality is that, this happens every day, in (almost) every organisation – those who have got it right are masters of the Order to Cash process – those who haven’t, often fail in 3 key elements.
3 Truths and a Lie…. The Order to Cash Reality
Truth 1 – “Touchless Order Entry makes for a great Customer Experience”
For the customer, order entry should be seamless, and for the business, order entry should be touchless…..at least this should be the aspiration and the business needs to lead towards it, make sure you can see the experience of every customer at an order level.
Truth 2 – “Cash is (still) King”
An effectively managed Order to Cash process will improve the cash cycle, free up cash, and therefore maintain the liquidity of the business. Know the process lead time of all transactions, as slow processing will result in weaker liquidity.
Truth 3 – “Give them what they want, when they want it – On Time Delivery”
If it is important to you as a consumer, it is important to your customers as your consumers. By definition, every transaction has a desired delivery date, not a “1st, 2nd or 3rd Promise Date” and not with a delivery range of -1 or +3 days….but a Requested Delivery Date – in terms of timing, there is a difference for every transaction, between what was requested and what was actually delivered.
The Lie – “Business leaders, know the experience they deliver to their customers”
Beautiful dashboards and average measures give a sense of how you are doing as a business, they may be able to tell you whether you are trending up or down on such measures, over time. However, if you really want to unlock that next level of value and experience for your customers, then connect the transactional data (that is locked away) and really begin to see your process, and start to fix your performance, every day.
So what?
Read more about R&Gs view on real time measures of On Time Delivery, Process Mining, P2P Health and Data Driven Leadership.
Keith Bestwick is Partner at R&G Global Consultants in the United Kingdom.
