Automating the activities involved in creating an invoice and its supporting documentation helped solve this firm’s cash flow problems.
A global engineering and construction firm was experiencing cash flow problems resulting from Days Sales Outstanding (DSO) delays. These delays, in turn, were caused by difficulty in efficiently generating accurate invoices. Each invoice required, on average, more than 150 pages of back-up data that had to be pulled from five-to-ten different systems, including ERP and homegrown legacy platforms, time and expense systems and vendor portals.
Compiling supporting documentation for a single invoice required four to five hours of manual effort—and the company was issuing thousands of invoices per month, with a range of different business rules for different business units in multiple geographies. In trying to resolve the problem, the company’s IT department confronted technical challenges and resource constraints, while the F&A unit was mired in a lengthy business process reengineering study.
Imagining IT Differently
Advisors from ISG were engaged by the firm’s IT department to develop a Robotic Process Automation (RPA) solution to streamline the activities involved in creating an invoice and providing supporting documentation. Working in collaboration with the billing department, advisors began the project by conducting in-depth interviews with process subject matter experts to analyze and document the specific steps involved in creating an invoice.
This information was then applied to the next phase of the project, which involved designing how the RPA solution would work. Key issues here included defining how the robots would access systems in terms of triggers and sequencing, how exceptions would be handled and how hand-offs between humans and robots would occur. Subsequently, the RPA software was installed on virtual machines, subjected to rigorous testing and deployed into production.
Future Made Possible
The resulting RPA solution—designed and implemented over the course of eight weeks—has reduced the average time to create an invoice from 4.5 hours to 11 minutes. With a total annual cost of $150K, the digital robots are doing the work of an equivalent of 20 FTEs who were processing the thousands of invoices each month. Staff who remain are now able to focus on managing exceptions and on customer-facing billing activities. In addition to the cost savings, the solution has reduced DSO and accelerated daily cash flow by eight figures.