Genpact Roundtable Part 3: Technology
As part of the SSON online Order to Cash Series, Genpact recently held a roundtable to assess current developments in the Order to Cash space. Part 1 looked at Recovery in the Post Great Recession, while Part 2 explored the value of benchmarking. This final installment considers investment around technology
MA: The next topic is technology and investments being made. Clive, let’s start with you. What are the business insights you gain from any technology investments you’ve made recently? Or if you haven’t invested anything lately, what are your current needs as it relates to OTC?
CL: In terms of technology, we currently take over 85% of our orders by fax, email, telephone, you name it and it’s not automated so we are starting to explore efficient ways for taking order entry. What we’re finding is that EDI connections are very expensive and most of our customers have different ERP platforms requiring bespoke solutions. Additionally, achieving EDI with a customer on SAP is very costly. We’re looking to find a standard platform that can align between customers and manufacturers, ideally a Pan-European or global platform that will enable us to do the EDI exchange of invoices and orders in a cost effective way across different ERP platforms. We haven’t found the answer yet but that’s the one area where we are very keen to find a solution.
FR: EDI connectors are a big challenge here in the US as well; some look at these as the Holy Grail, ie, if it is EDI it will be problem free, which I doubt. We’ve been trying to take a low end or low-tech approach on some of this stuff. A lot of customers say they want EDI, and in many cases we’ve been able to serve them with a flat file that they can upload which works fine. So in a lot of cases I think we’ve found customers talk EDI, but it isn’t necessarily that they want this full EDI connection, as much as something they can just upload in their systems.
MA: I want to stay on technology and on the order management side since that seems to be underserved. Hernan, perhaps you could share some of the experience you have globally on the technology front?
HE: Absolutely, on the order management front, something that we’re doing is EOE, electronic order entry. We have different businesses with a wide spectrum of manual to automated order management processes. We’ve got to go from one that is completely self sufficient where the customer can go online and put the order in, pay it, and so on, to the ones where the customer must call or fax in an order and we input the information in the system. So what we’re doing this year, as part of the integration with Microsoft is to rollout electronic order entries across the board.
We’re also building new portals where customers can go online and see their invoice or credit card customers can go online and pay by credit card. We’re actually exploring the direct debit solution where they can go online and put their details in and every month we just go and take their money. These are the two main areas of focus on technology for us right now.
MA: I want to stay on the self-serve topic because obviously there’s a self-serve topic. I’m curious for those of you who have businesses that have moved from manual to self serve, or who are planning to move to self serve. What are the best practices? What’s the adoption rate that you’re seeing? What are customers asking for?
Maybe, Hernan, you could stay on with that since you have some of that business already, and then we can move to Clive and Frank.
HE: It depends who you ask – some of them are asking us to send all the information electronically, and allow them to see invoices, statements and make payments on our portal. Others ask just to send that information in hard copy because their accounts payable departments really work well, and when we send invoices by email they need to put someone in there to unload the file, print it and then put it into the system. So surprisingly our electronic invoices are not priority; they prioritize the ones that are sent by hard copy.
Mark, unfortunately not every company evolves at the same time, so even though we’re developing great self-serve technology, our customers might not be evolving at the same pace and some prefer to keep doing things in the traditional way.
MA: Clive, I’m interested in the European perspective. Are you seeing a move towards self serve with your customers?
CL: Similar to Hernan – our customers basically cover the full spectrum from small independent hotels or restaurants, somewhat unsophisticated, to blue chip multinationals. The request for self serve is becoming more prevalent, particularly at that more sophisticated end of the customer spectrum, and there’s clearly growing awareness out there. As I said before, we haven’t found a cost effective way to respond adequately yet but we are looking for that solution today.
What we’re also noticing is it’s going beyond order entry and invoicing, and into areas such as requests for product safety data sheets, frequently asked question arenas, customer dashboards where a customer can go and look at their order history and order pattern and so forth, even through to requests for e-shop functionality. So at the more sophisticated end of our customer spectrum there certainly is this growing momentum out there, and it’s our challenge to find a simple and cost effective way to provide it. It’s more push than pull, but once we’ve got the solution I think we’ll start attempting to pull ourselves.
DA: Just to piggyback on Clive and Hernan – the AP people are going through the same process – they’d like to get it electronically and get an automated match. But there are certain companies that are ready to do that and others that aren’t so it’s all over the spectrum in terms of what you can do right now. I think it comes down to what both of these gentlemen mentioned – you need to take a look at specifically your top customers and find out what their capabilities are and a way to match those to yours.
One roadblock we see on the order side is specifically related to the approval process. We just did a survey on this with Credit Today and people are having a lot of trouble with approvals because, either their technology can’t handle it or their algorithms are too simple or too straightforward, and they just can’t account for all the different contingencies. As a result, a lot of time is being spent on manual order approval when it’s not really necessary.
In summary there’s going to be no one solution to this, at least not for a long time. You’re going to need multiple solutions. With your biggest trading partners EDI can make sense but then as you move below you will need to find other ways to do the data capture and exchange. There are tools out there but it’s not a simple equation.