What a world that we’ve been plunged into! Organisations have been frantically deploying their BCPs and getting to grips with a new way of working – what will normal look like again we don’t yet know. However, one key business practice that remains high priority for everyone is ensuring a healthy cash flow and safeguarding the future of their businesses. SSON has recently surveyed shared services teams globally and gathered their initial responses to the crisis in this recent industry report: COVID-19 -Tip of the Iceberg for Tectonic Shifts in Shared Services Delivery Models. We’ve looked into the report and summarised it for you in a few paragraphs below.
Access to cash is vital!
There is no substitute for cash and in uncertain economic times, enterprises that survive and accelerate are those that generate cash to keep their operations running. As a result, SSC and GBS businesses are rethinking their financial strategies and turn their growing focus on cash flow, working capital and the largest asset in their businesses – debtors. The latest SSON’s report state that a few weeks into the ‘new normal’, 12% of respondents reported an increase in the cost of Shared Services operations and a decline in productivity of core Shared Services processes such as collections, where 6% reported declines leading to significant profit margin erosion and bad debt write-offs.
Therefore, focus and priority both in the current times and the months to follow will be placed upon turning invoices to customers into Cash from Customers.
Turn Lemons into Lemonade
SSON suggests now is a good time to review, reduce and even eliminate policies and procedures that create bottlenecks or just simply do not add value. because we have had to stop ‘doing what we have always done’ people and organisations are carrying out their roles and tasks in a different way. Indeed the survey suggests that the Shared Services Model will change in the times ahead and organisations are looking to recalibrate global service models.
The new order: Work from home
Working from Home (WFH) previously held many concerns for Shared Service Leaders but the report highlights that 75% of Service Level agreements are still being met. WFH also provides oganisations with flexibility not previously imagined prior to the crisis. As a result, SSC leaders are looking at ways to enhance operational agility and scalability. Also important is providing the team members with direction of which tasks are priority thus ensuring the outcomes needed are to be achieved. At the same time, the productivity can be measured and balanced against the results being achieved.
Cloud-based finance automation software can be accessed from anywhere in the world and therefore if remote working is necessary it gives SSC businesses the ability to ensure seamless operations at no extra cost when BCP triggers ensuring cash that businesses need is efficiently collected and allocated in real time.
Can automation unlock more cash?
With 52% of the respondents stating that GBS/SSO models will become increasingly digitized while 37% will accelerate their automation initiatives to reduce their dependency on physical locations/humans, it’s inevitable that COVID-19 will inspire change and trigger more investment in automation and cloud. With less commuting executives could have more time for reflection and planning, using this time fast track their automation initiatives and improve the operations of SSC centres. They also now have a precedence to eliminate and streamline processes that are error-prone, time-consuming and require much human intervention, justifying investment in smart intelligent tools that previously were low priority or constrained by budget.
Now is the time to create the ‘new normal’ and automate what can be, and allow human effort to focus on managing customer relationships to maximise cash collections and reduce risk of non-payment.
Whatever challenges lie ahead we are undoubtedly stronger together, and at Rimilia we are open for business and open-minded to help in any way we can! Contact us today for a free, no-obligation chat with Mark Harrison (Founder of ACCEE and a Shared Services Centre expert with over 30 years of operational experience) and Brian Morgan, former Head of Credit at Veolia, who guided his SSC team through the financial 2008 crisis – during this time he achieved the CICM Centre of Excellence award under his leadership in 2011. Having already successfully led finance teams through finance crisis and crashes. Brian and Mark know the implications it can have on finance functions, and how to overcome them. Get in touch today: firstname.lastname@example.org