Introduction 

In our connected and fast-paced world, people have come to expect smooth transactions. Think of a few successful companies right now; Amazon, Uber, AliExpress. For the most part, they have excelled in providing simple interactions to consumers. Enhancing their Order-to-Cash process has arguably been a key to their success.

As a result, people now expect seamless experiences, on both a personal and professional level.

Whether you are Business-to-Business (B2B) or Business-to-Consumer (B2C), you are ultimately interacting with individuals. For instance, people who order online and have their products delivered the next day will soon expect a similar level of efficiency in the workplace.

Establishing a smooth order-to-cash process should be a priority for all companies as they look towards the future.  

The Order-To-Cash process

Photo by Rupi Xen on Unsplash

The Order-To-Cash process, also known as O2C or OTC, is a process at the heart of all profit-making organizations. Regardless of the product or service provided, it has a direct influence on customer satisfaction and is central to whether a company succeeds or fails.

O2C can be divided into two-parts: Order Management and Invoice-to-Cash.

Order Management involves all the steps from order reception until delivery. Order delivery then triggers invoice creation. 

Invoice-to-Cash starts from the moment of invoice creation, until invoice settlement.

Despite (or because of) it’s importance, the O2C process often faces many issues. There are thousands or millions of transactions that cross over departments and multiple systems, making it nearly impossible to gain a clear overview of the entire process.  

Absence of an objective and clear overview 

With the O2C process, no single person is responsible for the entire process from start to finish. In fact, multiple people are usually responsible for different parts of the process.

For instance, it’s quite common to see in a company using SAP, that the inside sales department has different access rights than the finance or procurement departments. As a consequence, you end up with departmental silos and less than optimal process flows. 

Unfortunately, the number of departments and people involved in the O2C process means that it’s difficult to receive an unbiased explanation of how a certain process runs. In the same vein, it’s a natural response for a process owner to cover-up or protect their processes, regardless of how costly and inefficient they are.

Ultimately, the complexity and breadth of the O2C process makes it one of the hardest processes to track and optimize.

If your organization has an O2C process, chances are there is room for improvement.

O2C issues are quite obvious. Your organization spends too much time following up on isolated issues, such as individual orders and invoices. Customers call to complain about late or incomplete deliveries. Similarly, there is conflict between departments.

For instance, a production planner has to wait for raw material to be delivered from a supplier. The sales department has to wait for a product to be on stock. A finance manager has to nag an account manager about a customer’s unpaid invoice.

If you notice any of these examples in your organization, then you probably have an O2C issue.

Now that you have identified your company has an O2C issue, you’re probably wondering, how can it be solved?

Streamlining your O2C process might seem like a huge task. However, it’s much easier if we look at the process step-by-step. 

The path to a smooth Order-to-Cash process

The first step is looking at the entire process using a process mining tool. The process model derived from process mining will provide you with an objective, complete view of the O2C process.

The best part? There is no interference from personal views or workplace politics. You see exactly what happens in your process. 

How it works

Process Mining essentially uses the data from your existing systems and turns it into a complete process model. In practical terms, the data from your ERP, BPM or CRM system is extracted, transformed and loaded into a process mining platform. The result is a complete overview of your process, providing insights and highlighting deviations.

Once you see how the process actually runs, you are able to detect bottlenecks and unwanted process behavior. This is called process discovery.

Process discovery puts a spotlight on any needless steps in the O2C process. The ultimate goal is to remove these steps, save time and improve customer satisfaction. 

After process adjustments are carried out, and internal process owners are educated, further options such as Robotic Process Automation (RPA) can be explored. Ideally, you should make small adjustments, track results and move forward (or backward) from there.

In short, the insights gained from process mining will mean that all decision-making regarding O2C is grounded in data.

Continuous monitoring and improvement

Process mining doesn’t just stop there.

After adjusting your processes, process mining techniques can also be used to track results. As a result, you can continuously monitor and improve the process.

For instance, side-by-side process comparison, and across all components to identify variations and control issues. Furthermore, you can use conformance checking to identify which steps deviate from the selected reference model. 

To sum up, process mining provides a solid basis for change, which can turn into huge leaps in efficiency, cost savings and customer satisfaction. 

Conclusion

A smooth O2C process is crucial for business success. As our world becomes more connected and technology dependent, the margin for error gets smaller. Similarly, customers expect more than ever. Ensuring the O2C process runs smoothly puts your company in the best position to meet high customer expectations.

Moreover, using process mining can help enterprises visualize inefficient steps within their O2C process and optimize them using process automation.

Overall, process mining isn’t a one-time exercise, it sets the stage for continued monitoring and optimization. Ultimately, process mining empowers companies to take control of their O2C process, and improve customer satisfaction through better transactions. 

Grace Wang, Content Marketer @ProcessGold

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