Case Study

Global electronics firm reimagines order to cash by applying Systems of EngagementTM technology for intelligent operations

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Client:
TTI Inc., a global specialist in electronic component distribution

Industry:
Technology

Business need addressed:
Greater visibility of the global order to cash (O2C) process through technology adoption

Genpact solution:
Genpact Systems of EngagementTMAccounts Receivable Management Suite enabled collections automation and workflow, process improvement, and greater insight from data

Business impact:

  • Standardization and simplification
  • Access to technology
  • Adaptation and flexibility

Business challenge

Following significant growth, both organically and through acquisitions, TTI Inc., a specialist in electronic component distribution that serves industrial, military, aerospace, transportation, and consumer electronics manufacturers worldwide, had a decentralized organizational structure and many business units operating autonomously.

As a result, TTI’s head of global credit, Rick Smith, had limited visibility of the company’s order to cash process across its finance, compliance, supply chain, and sales functions, and no collaboration tools to support it.

The company faced multiple financial challenges from its sub-optimal collections operations, reporting, and strategy that prevented it from operating a best-in-class accounts receivable (AR) function (see Figure 1).

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To address these obstacles, Genpact focused on creating intelligent AR operations that leverage advanced operating models, technology, and analytics, and continually sense, act, and learn from relevant data and insight.

The solution

Genpact took an end-to-end approach to rethink TTI’s credit and AR process and applied its Systems of EngagementTM (SoE) AR Management Suite alongside the company’s ERP. The cloud-based suite delivers an automated collections workflow with built-in credit management, cash application, and dispute collaboration processes. It enables enhanced risk management and enterprise reporting.

To design a solution for TTI, we used our Smart Enterprise Processes (SEPTM) framework to determine the target business outcomes and metrics for the operation, and collected and analyzed AR data to identify the necessary actions for improvement (see Figure 2).

Genpact focused on creating intelligent AR operations that leverage advanced operating models, technology and analytics

The introduction of Genpact SoE for AR enhanced TTI’s execution of collections, risk assessment, credit dispute management, cash forecasting, reporting, and analytics. We also standardized processes globally and implemented collections automation.

With improved insight from increased visibility to process data, TTI can make rapid changes to its collections policies and approach, and test the response to create a continuous feedback loop.

Generating collections impact

By reimagining the O2C process and applying Systems of EngagementTM to TTI’s decentralized structure, the head of global credit can now act as a global process owner with increased visibility and control over the company’s receivables, and can manage a significant part of the company’s O2C process.

This resulted in:

  • A five-day reduction of average days’ pay (ADP) and a significant positive effect on cash flow
  • Bad debt reserve expense reduced by 30%
  • A 360-degree view of the customer between sales and finance, which enables better risk and profitability management, and improved auditability and compliance
  • More scalable and optimized use of credit resources to meet demand
  • The ability to proactively address region-specific issues, such as default risks around the world
With improved insight from increased visibility to process data, TTI can make rapid changes to its collections policies and approach

By applying Systems of EngagementTM, TTI can better manage its risk of loss, has lowered its ADP by five days, and now maintains industry-leading metrics for days’ sales outstanding.

For more information, contact, technology@genpact.com and visit, genpact.com/what-we-do/capabilities/digital/systems-of-engagement

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