Part 1 of the Payments and Cash Flow Series
The first topic we will address in this 12-part series is the importance of organizational will and alignment. Whether you are just starting a payment or cash-flow improvement initiative, in the middle of deployment, or scaling an existing program, organizational will and alignment are vital to success.
Organizational will can be summed up in three parts:
Commitment to success. Your leadership must never accept the status quo and must always be willing to collaborate with stakeholders from various lines of business to transform “old school” processes and thinking to promote better business outcomes. Effective collaboration requires enterprise-wide commitment across procurement, treasury, and shared services.
Defined goals. There needs to be a clear mandate of how success is measured over a specific period. This could mean an increase in the number of payments automated, suppliers participating, cash flow gained, discounts earned, or other quantitative metrics.
Clear prioritization. Your payments or cash flow initiative must rise above the fray as an umbrella priority that is not limited by competing objectives or hampered by disparate key performance indicators (KPIs).
Organizational alignment requires procurement, treasury, and shared services to break out of their silos. To be truly successful, you must:
Secure a CFO mandate. In most cases, the corporate functions mentioned above report to the CFO. While the best-case scenario is to have these leaders align, it may be necessary for the CFO to set and communicate clear business objectives for the company, and align leadership stakeholders when determining how objectives will be achieved.
Align KPIs across groups. If procurement is measured on price reduction, shared services are measured on efficiency, and treasury is measured on discounts earned, your organization is not working toward a cohesive payments and cash flow strategy. Moving these groups to common, shared metrics like economic value added (with price reductions and discounts earned given equal credit) will ensure that teams are aligned and your initiative is set up for success.
Identify a strong project lead. Your project can succeed or fail based on the person leading it. With that in mind, your project lead should have credibility within the organization, institutional knowledge of company operations, existing internal cross-functional relationships, and the ability to build relationships and trust.
Put it in writing
No matter where you are in your payment processing and cash-flow management journey, leaders in procurement, treasury, and shared services must write down their goals and timelines and compare them to the goals set out by your CFO. If they are aligned (or even close to it), you are on the right track. If not, everyone must immediately come to the table to understand where the groups differ and how they can support a common goal.
How we can help
To help you get started, we offer a meeting agenda and template that highlights the advantages of better payment processing and cash flow management for your company and each of its stakeholders. It also offers recommendations on how to get aligned. To request these resources, send an email to SAP_improveemail@example.com.
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