Data Integration: The Key to Optimized Order-to-Cash Outcomes

Why Data Integration for Order-to-Cash(O2C)?

In today’s landscape, the typical company employs around 130  business apps on average across Sales, Marketing, Finance, Inventory and other functions. But challenges emerge when teams, working with these siloed apps, rely on outdated data or resort to additional applications to bridge the integration gaps. These differences can frustrate staff, slow down work, and reduce profits.

“Over 30 years, many organizations have struggled to build an adequate application portfolio to support O2C. Most have implemented a base ERP or a core financial component and layered in operational applications to support O2C. These organizations often struggle with integration ” –  Gartner

Take the Order-to-Cash process as an example. If an order is logged in your CRM but needs to be manually updated in the ERP, it creates a ripple effect and significantly impacts your business in the following ways.

• Operational Lags: Manual data tasks between different systems can cause errors, leading to extended operating times and service costs. It can cause delays in order processing and deliver a subpar customer experience.
• Delays in order processing subsequently can lead to invoicing delays that affect Finance teams’ payment collections and the organization’s Day Sales Outstanding(DSO) taking a hit.
• Teams such as Sales and Finance spend much of their bandwidth on double data entry. They can only focus on their core activities with the no proper automation controls at the required steps in the O2C journey.

We will illustrate this with our virtual case study featuring Autoparts Ecommerce,a well-established company in the automobile gear industry, We analyzed the challenges they faced in their O2C process due to disconnected systems. The impact on their key O2C KPIs was evident. With the implementation of DBSync’s data integration solution, there was a marked improvement in these metrics at Autoparts Ecommerce. Let’s explore the pre-post changes in their O2C process below:

Autoparts E-commerce: Examining the Efficiency Gap

Autoparts Ecommerce, a respected name in the automobile gear industry, was hitting it out of the park with its sales figures. Their product quality and excellent service led to a solid annual revenue of $5 million. However, as the CFO Alan studied the financial statements, he noticed a worrying trend. Despite the impressive sales, the net profit margins – which should have been in the ballpark of 15% – were falling short.

Deep-diving into the business processes, Alan discovered the inefficiencies were primarily rooted in the company’s Order-to-Cash (O2C) process. The traditional, disjointed process was painstakingly manual, with considerable time and effort spent moving data from their CRM to their accounting systems. For Autoparts Ecommerce, the cost of this cumbersome O2C process, which involved 16 full-time employees (FTEs) across several stages, represented an alarming 2% of their total revenue.

It was revealed that an employee in the Finance team, on average, spent approximately 25 minutes manually transferring data for a single order from their CRM to the accounting system. Since Autoparts Ecommerce processes around 20 orders daily, this activity consumes roughly 8 hours of productive time daily, equating to over 40 hours every week translating to $40,000 Annually. This translated into one full-time employee focusing solely on this data transfer task.

This led to prolonged order fulfillment times, pushing the duration from receiving an order to its shipment to an extended 50 days, noticeably beyond industry benchmarks. Furthermore, their Days Sales Outstanding (DSO) surged to 50 days. A closer look revealed that a mere 20% of the Order-to-Cash Key Controls had been automated. Critical operational verifications were still being executed manually, such as ensuring order accuracy and reconciling inventory levels. These manual interventions increased the likelihood of errors and extended delivery times, compromising customer satisfaction.

Furthermore, the manual process delayed payment collection and led to Days Sales Outstanding (DSO) of 50 days, significantly higher than the industry average of 30 days. The high DSO and elongated operating cycle were troubling signs, holding up critical cash flows.

Embracing Integration: The DBSync Solution

Recognizing the pressing need for a more efficient system, Alan decided to leverage DBSync, to streamline and automate their O2C process. Autoparts Ecommerce was using Salesforce as their CRM and was using Dynamics GP for accounting and inventory management.  DBSync, known for its pre-built connectors for seamless integration between CRM/Inventory/Accounting systems proved to be the solution for Autoparts Ecommerce. Here is how the O2C process transformed with DBSync

 DBSync automated the data transfer process, eliminating manual data entry and considerably reducing the O2C process cost. With DBSync, Autoparts Ecommerce saw the total O2C process cost per FTE drop by 50% . Additionally, DBSync played a critical role in reducing the DSO. The previously high DSO of 50 days shrunk to a much more manageable 30 days, improving Autoparts Ecommerce’ cash flow.

Conclusion

The digital transformation at Autoparts Ecommerce went beyond just tangible savings. It was a journey towards elevated operational efficiency, streamlined cash flow, and a more empowered and strategically focused operations team.

Interested in refining your Order-to-Cash operations? Explore solutions like the one Autoparts Ecommerce adopted and take a step towards better business efficiency. Visit our Salesforce-Microsoft Dynamics GP workflow page and initiate your journey towards enhanced efficiency and optimized business processes.