Three Signs You Have an O2C Process Problem

Awareness is the First Step to Recovery

November 30, 2017

In this multi-part Blog Series, we’ll look at how companies can transform their O2C operations from a back office function to a strategic asset that can boost productivity, profitability and innovation beyond O2C and Finance.

Our first blog in this series explores the typical pains companies experience that lead them to looking for a better way to do things.

For industrial supply company Herrick, it was a lack of insight about customer purchase trends. For Caleffi, a hydronics and plumbing supply manufacturer, it was concerns over keeping up with customer orders during peak seasonal business cycles. In each case, sales order processing was identified as an obstacle to achieving business goals for revenue growth, profitability and customer satisfaction.

Process automation for sales orders can transform O2C from an obstacle, into a solution that supports strategic business goals. The first step to getting there is realizing that you have a problem.

Identifying the Symptoms of Sales Order Process Problems


If you sense that your organization has O2C process issues, but need to define them to make a business case for change, here are some pain points to consider and quantify as part of making your case.

1. Days Sales Outstanding are Too Long

For companies relying on manual O2C processes, days sales outstanding average 58 days; companies relying on automation are able to get close to cutting that number in half (33 days). Companies relying on manual processes complete orders and ship on time 83% of the time, compared to 97% for those relying on automation.

2. High error and exception rates

Invoices with errors and exceptions are the most costly orders to process. For companies that handle orders manually, nearly 80% of invoices require manual intervention, compared to 16% where automation is involved. Manual processing inevitably introduces errors and exceptions into the process.

3. Lack of Timely / Detailed Customer Purchase Data

Because of the time and effort involved in captured information from customer orders and populating business systems with those details, many companies lack timely, complete data on buying behaviors and market trends. Often, companies only capture order header/footer information in their business systems - leaving behind valuable data and line item details. With automation, all of this information can be captured automatically.

How Does Your Organization Compare?

How many of these symptoms plague your organization? In reality, applying sales order automation to relieve even ONE of these symptoms can produce a significant return on investment while having broader and deeper impact on the performance and profitability of your organization.

In our NEXT O2C Automation Blog, we’ll explore tips for taking ownership of an O2C process automation initiative and getting buy-in from an executive sponsor.

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