Optimizing Order to Cash Model leads to 15% improvement in cash flow
A holistic machine learning tool turns around the inefficiencies of an O2C model to optimize and improve working capital management and decision-making.
Big Picture
A Fortune 500 CPG giant approached Fractal with an Order to Cash problem. A close analysis opened multiple problems leading to a train of operational inefficiencies leading to sub-optimal decisions making. The Order to Cash model was directly impacting working capital, and the task at hand was to figure out the specific problem areas before deep diving into a solution.
Challenges faced by the business:
- High amount of leakage and invalid deductions
- Inefficient collections
- high cycle time resulting in delayed collections
- Non-standardized data through multiple systems
- Lack of unified global and regional insights
The Solution
The requirement was a unique analytics solution for “Intelligent Order to Cash” using ML for improved collections, reduced leakages, and invalid deductions to solve these problems.
Based on this need, Fractal created a real-time strategic decision support system for OTC analytics by transforming collections, leveraging KPIs cross three main pillars of the OTC process, namely – Payments, Leakages, and Deductions.
It developed through a framework of diagnostic, analytical, and predictive insights. The solution included multiple user-centric, illustrative, insightful, prescriptive, and easy-to-understand dashboards created on Tableau and React, with drill-downs at different hierarchies.
The Big Business Impact
- Futuristic view of payment, leakage and deduction with an accuracy of ~90% .
- Cash flow improvement of 15% of the average daily overdue value
- Optimization of the collections processes.
- significantly improved productivity through tailored collection actions for each customer/invoice delivering Increased process efficiency of 10% across collections team
Provides insights into135 key performance indicators around descriptive, diagnostic and predictive analytics for end-to-end transformation of the cash collection process. FP&A operation is one of the key management systems of any organization. In a rapidly changing world, inefficiency gaps will affect the overall health and cripple decision-making. Investing in AI, ML, and cloud-based engineering that are tailor-made to address specific problem areas go a long way in bridging these gaps and augmenting productivity, efficiency, and overall profit.