In Focus Collections
Introducing business process re-engineering within credit
Making significant changes to your organisation will involve asking difficult questions about what is really needed
Gregory Demeyer Credit manager EMEAR, Lincoln Electric
Gdemeyer@lincolnelectric.eu
When striving to build long-term value creation across the order-to-cash workflow, looking for optimisation, efficiency, or productivity tends to fall short nowadays. As a result, one needs to think strategically and ponder how to be disruptive. How can we achieve that? By streamlining
the order-to-cash workflow, so we may achieve radical improvement in quality, time management, speed, and profitability.
Analysis and redesign Business process reengineering (BPR) is the analysis and redesign of workflows within, and between, departments in order to optimise end-to-end processes and automate non-added-value tasks. Intrinsically, it means starting over rather
than trying to fix anything. The concept has been widely promoted
by specialised consultants, as well as shared- service industry actors such as Xerox (namely by its BPO branch, now known as Conduent), Capgemini, Accenture, and IBM, to name a few. In the 1990s, Hammer and Champy´s
Reengineering The Corporation introduced the notion of BPR and advised firms to focus on seven principles:
l Organise around the outcome rather than the tasks. l Identify all the processes in an organisation and prioritise in order of redesign urgency. l Integrate information-processing work into the operations producing the information. l Treat geographically dispersed resources as though they were centralised. l Link parallel activities in the workflow instead of just integrating their results. l Put the decision point where the work is performed, and build control into the process. l Capture information once, at the source.
Go as far as to consider that current processes may be unnecessary! Ask yourself: ‘why do we do what we do?’ instead of ‘can we do what we are doing better, faster and cheaper?’
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Breaking open silos Restructuring the credit-and-collection function entails breaking open the various silos of order-to-cash activities and getting direct insights about order management, billing services, lockbox management (if any), cash application, deduction management, dispute management, reserves and write-offs, document management, and analytics, as well as reporting. You also need a very high mandate to succeed, as you have to
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redefine processes both across and beyond functional departments. You have to galvanise managers and
employees to action, and you need to fight off the lethargy of those on the sidelines while articulating a clear vision and a solid mission statement. Last, but by no means least, you can take
nothing for granted. Go as far as to consider that current processes may be unnecessary! Ask yourself: ‘why do we do what we do?’ instead of ‘can we do what we are doing better, faster and cheaper?’. The hardest part though is the transition
period. You will fail to implement BPR if you neglect either the human element or your organisational culture. Nevertheless, by adopting a long-term
mindset, you will be able to outperform yourself across several financial metrics and gain a competitive edge against your industry peers, as demonstrated by recent research led by McKinsey Global Institute which you can now find at the following link –
fcltglobal.org/insights/publications/ CCR
April 2017
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