Cash used to be King but due to COVID-19 has been promoted to Emperor
In today’s world of Order to Cash, companies are increasingly looking for a new kind of security in continuous delivery. A new emerging need is risk-mitigation in geography and captive or outsourced business solutions. Yet, when we look ahead, industry trends point to solutions focused on domains, and order to cash outsourcing particularly is continuing to be in high demand. We see these trends occur around such times of disruption but as with all things related to this pandemic, this time is different. The differentiator now is, not a spot solution or an augmentation for waiting out a recession, but a hybrid and long term solution for the business continuity, flexibility, and access to on-demand resources, expertise + platforms.
Financially of course some trends are occurring and risk mitigation this time VS. the Great Recession is not showing immediate cash fatigue rather a steady trend of pocket issues.
Here are the high level analytics of risk assessment on commercial business by industry, state, and size as impacted by COVID-19:
A couple of observations occurring today beyond experts and automation which are at the top of the CFO agenda:
• Innovators in Predictive & Prescriptive Analytics Accelerate: Moving quickly, predictive and prescriptive analytics became a need not a want. Rapidly evolving and high impact on business and are sophisticated solutions to allow companies to react in real-time to market conditions. While analytics drive the strategy, it’s imperative that we also focus on enabling technology and the automation of managing real-time risk – the main drivers to preserve working capital as a connection of an operating model. This includes global risks to customer credit as well as facilities, people, technology itself, governance, and compliance in real-world events.
• Location Matters Today But In a Different Way: Location is now about diversity from global mobility and infrastructure risk. The ability to load balance resources by location and continue a strong delivery to keep the enterprise from the risk of cash fatigue is of high importance. The blended model of offshore and onshore for strategic portfolios continues to grow in demand and provides a blend of reduced risk, improved protection of major customers, solutions to scale as needed to protect revenue and domain experts for complexity.
• O2C Outsourcing is More than Just Transactions: As companies, ranging from mid-sized businesses to the global enterprise, realize risk prevention in delivery, system, remote workforce, and pivot to higher-value solutions, are focusing on a diverse network of business services, technology, and analytics, to deliver stability. While managing risk effectively during this event, cash stabilization is occurring, and aging is being controlled in a wide area of industries. This is a big change compared to other times of disruption or even growing economic times as now, it’s not a single strategy deployed, it’s a stack of corporate strategies with layers of options to keep working capital optimized.
Throughout the 2008 recession and anemic recovery that followed, successful companies in any sector - and especially in ours, the services sector - embraced innovation to thrive in a new economic reality. This time around with a very different disruption, innovation is not enough. Architecting a complete solution for each enterprise to protect from the unpredictable is the challenge.
Tony Dilernia – Engagement Manager, VWi Robert Sherman – Chief Revenue Officer, VWi