The Insider’s Guide To Improving Payments And Cash Flow: Executive Sponsorship And Project Resources

Alan Cohen and Scott Pezza

Part 3 of the Payments and Cash Flow Series

Imagine that you’ve developed a fantastic program to improve payments and cash flow, but you’ve neglected one key component: You haven’t gained executive support.

Your program may never get off the ground.

Executive support is crucial for many aspects of a successful program: goal setting, investment approval, resources allocation, meeting deadlines, and achieving goals. Cash flow initiatives are typically sponsored by the CFO with a combined focus on metrics (such as a $100 million cash flow improvement) and outcomes.

The value of outcomes can’t be overestimated. Here’s a partial list of investing options for this free cash flow:

  • Build a new plant
  • Open a new store
  • Refurbish an existing store
  • Invest in research and development
  • Pursue merger and acquisitions

There are other stakeholders who must be consulted. Payment and cash flow/discount initiatives are often supported by leadership in procurement, treasury, and accounts payable. Procurement owns supplier relationships and should be involved early as a collaborative partner in these initiatives.

Day-to-day responsibility: Successful programs require accountable leaders. Choosing the right person to lead the initiative is critical for achieving the desired goals. Focus more on their skill set than on the functional group they support.

The ideal candidate will have existing relationships within the company, can sell the program internally, be innovative and results-oriented, act as a change agent, and work as the trusted link between executive leadership and the project team.

Project team: A cross-functional team is required to execute a payment and/or cash flow initiative. Each person is vital to the overall success of the initiative:

  • Executive sponsor. Executive leadership, governance, goal setting, and resourcing
  • Program manager. Strategy definition and execution, ongoing program support, program growth plan, and executive readouts
  • Procurement lead. Supplier communications and payment terms negotiations (when appropriate)
  • Accounts payable lead: Support for supplier outreach and vendor master updates
  • Treasury lead. Payment type and terms strategy, hurdle rate or cash flow goal setting
  • IT: Connectivity, integration, data uploads, and setup of payment terms/types

Call to action At this stage, you need to identify and formalize two key stakeholders:

  1. Your champion – executive sponsor. Ensure that there is a clear executive sponsor who is committed to the initiative’s success. (Note: Estimating value to help gain executive support is the focus of the next blog in this series.)
  2. Your day-to-day lead – program manager. Identify a list of candidates who can take ownership of and lead the initiative. Ideal candidate characteristics are referenced above under “day-to-day responsibility.”

How we can help

To help you implement the call to action, we have a Project Team Overview that highlights the team structure, skill sets, and time commitment required. To request it, email SAP_improve-cashflow@sap.com.

If you could benefit from a working capital management improvement program or have one underway, consider attending the Treasury & Risk complimentary webinar on August 30. You will hear a panel of analysts and experts share best practices, KPIs, and key strategies for managing working capital in a rising interest-rate environment.

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Alan Cohen

About Alan Cohen

Alan Cohen is VP Payments & Financing Strategy, SAP Ariba. Alan has over 20 years of payments and working capital experience as a practitioner, consultant, and banker. In his current role, he leads the payments and financing strategy for SAP Ariba to help clients achieve improved business outcomes. Previously, at Coca-Cola Enterprises, Alan led the procure-to-pay transformation that encompassed sourcing, procurement, and payables automation, and the company became one of the first to benefit from dynamic discounting. Alan holds a supply chain management degree from Arizona State University. In 2015, he was part of a team that won SAP’s Hasso Plattner Founders Award for an innovative approach to B2B payments. Alan lives in Atlanta with his wife and 2 daughters. He has served on the board of the Weinstein School since 2007 and actively participates in 2nd Helpings, a nonprofit to rescue and deliver surplus food.

Scott Pezza

About Scott Pezza

As part of SAP Ariba's Digital Transformation Organization's Center of Excellence, Scott researches, compiles, and shares best-practice information to help SAP Ariba's customers get the most out of their investments. He has a dual focus on the emerging technologies (AI/ML, IoT, Blockchain, etc.) across the source-to-settle cycle, as well as a specific interest in the financial supply chain (invoice management, payments, discounting, and supply chain finance). His research helps inform strategic planning, performance measurement, and program execution. He has spent the past 17 years in the B2B technology space, in roles ranging from software development and support to research and consulting. Scott earned his BA in English and Philosophy from Clark University, his MBA from Boston University Graduate School of Management, and his JD from Boston University School of Law, where he served on the Executive Board of the Annual Review of Banking and Financial Law.