White paper

In a recent survey conducted by CFO.com, eight leading economists were asked what they think the recovery would be like. The answers varied from V, W, or L-shaped to other creative shapes and letters1. Clearly, what emerges is that there is still just too much uncertainty about the future and that preserving cash must be a priority. On the flip side of this dilemma, in the CFO survey conducted by Equaterra last winter, “Preparing for the upturn” was ranked third amongst a set of 12 key goals2 (the topmost goal was “Improving the Internal Controls environment”, followed by “Achieving overall F&A functional transformation”). Organizations which are not prepared to take advantage of this growth phase might see themselves forced out of the business. The CFO’s dilemma can be summed up in one simple question: “Do you preserve cash flow or invest and prepare for the upturn?” The approaches and solutions of the past will not work in these uncertain and unprecedented times. To address the “Preserve vs. Invest” dilemma, CFOs must respond with innovation and challenge the status quo both in their own departments and in those which they support. ORDER TO CASH: A DIFFICULT-TO-TRANSFORM NTERPRISE BUSINESS PROCESS A key lever CFOs can pull to resolve their dilemma resides in the Order-to- Cash (OTC) process. Transforming the OTC process can have a significant effect on the following five business outcomes: DSO: The traditional Working Capital metric Revenue Dilution: The percentage of your potential sales converted to cash Order to Invoice Cycle Time: The measurement of time between when the order is placed and the invoice delivered Cost: The traditional efficiency measurement Customer Satisfaction: The “Growth” metric supported by OTC. What has traditionally been seen as a back-office process, when transformed properly, can actually increase sales and profits in addition to strengthening a company’s cash position. However, OTC is a fairly complex business process chain and organizations face a myriad of challenges when setting out to transform it. Many of the key business outcomes above are generally either not measured or not looked at from an enterprise-level perspective.