Is Cash King Again When it Comes to Automation?

An Interview with Christoph Dubies, Chief Strategy & Transformation Officer, Serrala

By Rizal Ahmed, Chief Content Officer, SAPinsider

When it comes to automation, organizations are balancing a list of priorities. Where does cash fit in the overall automation landscape, and what does that mean for finance teams?

Cash in the Automation Landscape

According to findings from SAPinsider research on financial automation due to be published in December 2020, finance and accounting teams are embracing automation in waves with most of the early activity focusing on invoicing procurement, and accounts receivable. End-to-end Cash focused automation, however, is starting to climb the list of priorities, with 39% of respondents from our survey saying that they are in the process of evaluating cash-focused automation technology.

In order to further understand this trend and where cash fits in the hierarchy of automation projects SAPinsider sat down with Christoph Dubies, Chief Strategy & Transformation Officer at Serrala.

Why Focus on Cash Now?

The recent economic disruption has elevated the focus on cash automation, efficiency, and visibility, reports Dubies. Many organizations have seen declines in revenues and need to preserve capital to pivot strategy and continue operations. “We are seeing the return of this notion of cash is king. The past years have been more focused on innovation or cost savings. Now working capital is the priority, and finance leaders want to get control over DSO and DPO. Cash will become a huge priority over the next two years to fund growth,” predicts Dubies.

One of the keys to getting started with any cash automation project, advises Dubies, is taking a more holistic view of cash related processes and the goals that you want to achieve. “The priority is to peel back the onion and understand your objectives and desired outcomes and consider the best levers to get you where you want to go. You have to measure tangibly where is AR, where is AP and DSO, and what are your goals,” he says.

Order-to-Cash and Procure-to-Pay represent two important end-to-end process anchors of cash management. Before thinking about automation. It is important to define your strategy and ensure you understand the fundamental structure around these processes and how you want them to change before undertaking your automation journey “It’s not just going after one part of the process and starting to automate. You must think hard about questions like how do you plan to go after open items? How do you want to structure collections? How will you modify and prioritize supplier payments?” he advises.  The pandemic has also raised awareness around risks to cash flow. That is why more attention is now focusing on credit management as well as credit and customer risk analysis as part of your overall cash related processes.

Building the Business Case for Cash Automation

Building a case for cash automation has similarities to other IT and business projects, says Dubies. He outlines three key dimensions to serve as a potential roadmap.

ROI: By automating, are you able to generate cost savings or reallocate resources and focus to higher-impact activities? Our current SAPinsider research shows that the number one driver for automation in finance is the company’s desire to redeploy finance and accounting resources to more strategic initiatives. Overall cost savings was the next most pressing objective and reason they were investing in automation.

Process Control: “Do your current processes meet your business needs? Are you able to handle all the incoming invoices? Are you able to get all these invoices out? Can your teams execute and manage these processes remotely? The latter question has become more critical in this pandemic,” observers Dubies. New digital technology can make it much easier to process customer, supplier or treasury payments, control processes across a distributed team and generate accurate forecasts. Going touchless and eliminating paper will make these processes faster and more accurate.

Working Capital: This is where the rubber meets the proverbial road in funding both business operations and future growth. Taking a hard look at KPIs such as DSO and DPG, will give you an idea on what kind of pressures are currently being exerted on working capital and what your organization needs to do to improve.

Keys to Success

Serrala has overseen hundreds of automation projects and Dubies discussed several lessons that you should consider. Management buy in and support are important to start the journey especially given that process automation represents a significant change management journey. “Without the support of top management, when results do not appear as quickly as planned, there needs to be organizational discipline to stay the course,” says Dubies,

A solid understanding of KPIs for the project and expected results are also key. Without these measures, it becomes difficult to judge success and impact. Serrala looks to typical measures such as Days Sales Outstanding (DSO), Days Payable Outstanding (DPO), or percentage of inbound payments that have been automatically applied. “We have seen customers achieve greater than 95% on day 1 and that has an enormous impact on employee morale and confidence in this project. Even if you do not get there on day 1, having a concept of what success looks like and where you are against this picture is critical,” states Dubies.

Every automation project carries with it inherent complexity that should not be underestimated, warns Dubies. Most organizations face a hodge-podge of applications, interfaces, and dirty data. You need to take careful inventory or your landscape, potential impacts, and have a long-term strategy for centralizing and cleaning your data. Having clarity and documentation around your existing processes is also important so you know where automation can be applied for optimal gain.

What Does This Mean for SAPinsiders?

Whether you have already taken the plunge on your cash automation journey or are just getting started, here are some important takeaways to consider:

  • Organize your goals and create transparency for your entire project and business team. There are many potential outcomes from applying automation to your cash processes. It is important that you create and communicate goals that reflect both the pains and priorities of your organization. That way your team can identify with project objectives and contribute to the shaping of the project and next step. This collaboration will enable finance and treasury to gain a larger voice in advocating and influencing change not just for one project but for the longer term.
  • Start small to win quickly: Automation is a journey. Momentum and credibility are as important for success as having the right technical architecture and project plan, That is why it is important to have clear, realistic, and measurable goals when it comes to your first few projects. “You cannot automate everything under the sun on your first project. Start with something that creates immediate ROI, celebrate, and communicate. This will help you secure buy in from both management and staff,” says Dubies.
  • Match your partners and skillsets to your long-term strategy. Depending on whether you are focused on one process or have a long-term plan to automate quickly across end-to-end processes, you need to make sure that your partners and internal skillsets are a good fit. This is harder to put into practice though as over half the early respondents in our finance automation study say they are dissatisfied with their solutions and level of automation. “Part of why companies aren’t further in their automation journey is that they have to find a new vendor for every step. Our knowledge and experience across the end-to-end processes are what sets us apart,” asserts Dubies.
  • Set up ownership from beginning to end and post go-live. Process automation projects are never over. Securing executive sponsorship and establishing a strong project manager who can navigate the internal complexity of the organization and appropriately prioritize requirements, says Dubies. It is also important to document your current state and provide transparency for the potential impact and results as the project progresses. Even after go-live there may be issues and learnings that will inspire further automation and improvements.

Additional Resources

If you want to delve deeper into this topic, here are some other resources to explore:

ABOUT Serrala

For more than thirty years Serrala has created enterprise solutions to help companies have more efficient and secure payment processes and capabilities while providing central visibility into cash flow. Serrala serves over 2,800 global customers representing 25% of the global 100.