April 25, 2020 - 2010 views|
Investing in intelligent automation will help enterprises meet the business imperatives spurred by the pandemic and prepare for the "new normal."
The success of businesses the world over pivots around cash flow. Cash moves into and out of the business, which supports the movement of products across the supply chain, and eventually into consumers’ hands.
The COVID-19 pandemic has changed not only our basic understanding of Business 101 but also Life 101, from commuting to our jobs, to purchasing essential products. Take toilet paper. A sudden change in consumer behavior created an imbalance between supply and demand that has us worried about our personal hygiene should grocery store shelves remain empty for an extended time.
This scenario is playing out on a larger scale globally as our underlying fundamentals are challenged. The key to making it through the crisis is to find and apply new ways of operating and leading. This comes down to redefining what we call operational resilience.
Here are several examples from leading clients whose initiatives reflect the forward thinking needed to achieve key business imperatives and emerge stronger from the COVID-19 pandemic.
Imperative 1: Manage cash flow and liquidity
"Cash is king" aptly underscores the importance of cash flow and liquidity in the midst of the pandemic and the anticipated slow-growth environment of the weeks and months ahead. This is especially true as organizations look to short-term initiatives and push long-term plans and investments to the backburner until our collective path forward becomes more clear.
Optimizing finance and accounting (F&A) functions across the enterprise is the clearest way to meet this imperative. Businesses can improve working capital by applying intelligent automation to processes such as invoicing and collections, and using the AI-driven insights gleaned from analytics across functions such as order-to-cash and record-to-report.
One of our clients, a leading sports medicine provider of orthopedic-care products, needed to address a lingering problem with revenue collection. Patients received products during medical consultations, but the provider’s revenue was generated when the patient's insurer paid for their claim. In some cases, the insurer only paid a partial claim, leaving the patient to cover the difference. Unfortunately, the collection rate from patients was only 65%.
To close the gap, we suggested a prediction modeling system powered by Adaboost. The model used two years of patient collection data to predict which invoices were least likely to be paid within 90 days, based on variables including the product, price, patient service center, territory, patient age and patient state. The operations team could then prioritize these patients for follow-up. This proactive approach has already increased successful collections by 13%.
Imperative 2: Improve operational efficiency
Driving down costs through operational efficiency should always be top-of-mind, but it’s even more critical now as businesses face new challenges to staying afloat and remaining competitive. Enterprises should focus on three things: simplification, standardization and process improvement. Using intelligent automation and intelligent workflows, businesses can eliminate friction in these areas, which will reduce errors and hand-offs, lessen the burden on staff, improve operational performance and cut costs.
We worked with the small commercial business unit of a leading P&C insurer, which was receiving high volumes of email-based service requests from brokers, agents and insured customers. Eighty-two percent of these claims were processed manually by 15 full-time employees, with a turnaround time of roughly four hours per request.
With our help, the insurer implemented AI and natural language processing (NLP) to streamline this process and achieve zero-touch operations for over 2.5M requests. This freed up their full-time employees for more complex tasks, accelerated delivery by 96% to just 10 minutes per claim, and saved the organization $2 million over three years.
Imperative 3: Increase customer engagement to improve business agility
The same shock and awe your business is experiencing during this pandemic is impacting customers, too. Enterprises need to improve their ability to anticipate and deliver on customer expectations, which are changing in real-time. Sustaining hard-won relationships requires leveraging data in ways that give staff across the organization insights into improving their customer outreach.
A large technology company with which we work leveraged data-driven insights to combine customer footfall data with time spent by customers at specific businesses. WiFi scanners captured signals for tracking customer profiles and traffic. We then applied a machine-learning model to identify the businesses with a higher likelihood of store visits and conversions.
The company analyzed a wide array of data, such as dynamic impression changes, store type, photo impressions, business category, user density, location, etc. The result: a 15% reduction in acquisition cost through micro-targeting and a 30%-plus increase in conversions.
Imperative 4: Optimize risk management and the supply chain
The optimal risk management solution should already include regular collection of insights and threat assessment, but now is the time to crank up the frequency and awareness around these tasks. This is the key to better decision-making in this uncertain environment. A deeper focus on data collection and analysis will help enterprises assess and stabilize supply chain issues such as optimizing inventory, logistics management, supplier/sourcing diversity and order management.
For a Norwegian engineering company, keeping on top of changes made to project delivery dates and materials availability was time-consuming and costly. Every day, executives had to download purchase orders, check for date changes and communicate those changes to the appropriate staff member. However, the company was only able to process 300 of the total 2,500 changes on a daily basis, leading to financial penalties and customer dissatisfaction.
Using an intelligent automation solution that we designed and deployed, bots replaced the manual process of checking for date changes and material availability. These bots also sent alerts to relevant staff, which led to an 80% reduction in handling time, a 700% increase in POs processed per day and a cost savings of 2.5M Kroner (around $245,000 USD) per year.
Today's resilience is tomorrow's competitive advantage
Eventually, we will emerge from the current lockdowns, uncertainty and fear that fuel economic uncertainty and hardship. The solutions we put in place and the actions we take today will form the basis of competitive advantage tomorrow. Investing in intelligent automation technology that improves cash flow, efficiency, customer engagement and risk management will help enterprises not only survive but also prepare for the time when the "new normal" becomes simply "normal."
This post originally appeared on LinkedIn and has been revised for Digitally Cognizant.
Visit our COVID-19 resources page for additional insights and updates.