COVID-19 response: Protecting cash through Cash War Room analytics and process insight

The full range of impacts from COVID-19 on business sectors and individual businesses will continue to take shape and evolve over the coming months.  It is clear though that the truism “cash is king” has never been more applicable for most organisations in the short and medium term.  Businesses are facing a variety of challenges:

• Drop in demand, therefore causing a drop in revenue , raising need to manage immediate liquidity
• Key performance measure reporting is generally too infrequent and out of date to help manage the current situation
• Customer risk profiling may not be appropriate in the current situation
• Existing collection strategies may need to change; new short term, and evolving, strategies may be required based on as close-to-real-time views of strategy effectiveness
• Lack of understanding of payment history trends and limited predictive
  modelling capability on payment dates or likely defaulters

A lot of businesses, however, lack the important ingredients to bring the Cash War Room to life: quality analytics, process insight and the internal capabilities to deliver these elements quickly and efficiently.

Capgemini’s Cash War Room analytics and process insight solution aims to bridge this gap, giving customers a working solution quickly within 5 days.

 A renewed focus on cash flow

In normal times, the levels of focus and attention on cash collection, cash/sales reconciliation, and payment of suppliers may not have been particularly high: the activities are generally considered to be ‘meat and potatoes’ back-office activity.

Consequently, the analytics capability for tracking key performance indicators is often poor and subject to data latency and delay.  Issues in processes, such as delays in billing may not be fully understood or not sufficiently addressed.

Businesses now need to get to grips with this and do so quickly.

Cash War Room solution in a nutshell

The Cash War Room solution gets an organisation up and running quickly – within 5 days – with performance indicator analysis and process insight to better understand performance and to gain a high-level understanding of underlying process delays and deviations.

Cash war room performance indicator analysis is delivered using SAP Analytics Cloud (SAC) through Capgemini’s pre-configured dashboards of cash flow KPIs using standard SAP business content, coupled with additional customized analysis.

Cash war room process insight is delivered using our business process insight approach, underpinned by myInvenio™ process mining capabilities using pre-configured process insight solutions for Order to Cash and Purchase to Pay.

The elements of the solution are optional and can be implemented individually, in parallel or sequentially.

Let’s focus on each element in more detail.

Cash War Room analytics with SAP Analytics Cloud

The Cash War Room analytics dashboard is pre-configured and consequently can be deployed very quickly on a customer SAP Analytics Cloud (SAC) tenant.

The dashboard is pre-configured and comprised of standard KPIs from SAP business content and Capgemini customized analysis.  The solution works with SAP S/4HANA using import connection or using our pre-built data extract routines from SAP ECC with subsequent upload into SAC.

The diagram below outlines the high-level solution components.

The analytics solution supports the shaping of different cash collection strategies to drive better collection rates, exploit or help support payment term renegotiation, and use intelligent technologies such as machine learning to understand payment predictions.

Our customers with this level of insight typically see a reduction in report generation cycle times, take more informed decisions and drive improvements in key measures in respect of cash and collections.

The KPIs are organised in ‘stories’ in the SAC dashboard covering receivables, payables, cash and general ledger analysis to drive greater understanding of business performance and shape the right actions and interventions in the period of an uncertainty

Example content shown below.

Root cause analysis using Business Process Insights with myInvenio™ Process Mining

Process mining helps organisations to discover, monitor, analyse and then optimise business processes.

Using our Process Mining approach with myInvenio™, we can first discover the process model and their variants, to uncover process behavior, bottlenecks, reworks and gain insights to support informed decision-making for process improvement. We can also uncover compliance issues subject to data provision.

In summary, we can start to understand the process delays and deviations behind identified poor performance and shape the right changes to improve.  That might be process standardisation or optimisation, upstream improvements, different collection strategies or quick-fix automation solutions.

Feedback from early adopters shows that previously unknown root causes of performance issues have been identified and resolved, based on facts not conjecture.

Data is extracted from the ERP, either SAP ECC or SAP S/4HANA and loaded into myInvenio™.  Using our tools extracted data can be deployed quickly.

The diagram below outlines the high-level solution components.

Our pre-configured myInvenio™ process insight solution for Order to Cash and Purchase to Pay provides insight into several variations of business processes, with RAG statuses underpinned by customer specific KPI’s, for those variants in which significant bottlenecks and delays exist and dashboards for further insight.

An example of some of the analysis is shown below.

Summing up

The COVID-19 pandemic is an unprecedented time for businesses and their operations.

Understanding cash flow challenges and sub-optimal processes gives the right insight to create revised strategies and interventions to shape the new precedent.

For more information please contact : Alex Bennell,  Sue Kirby

Author

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Alex Bennell