1/2016 TRANSFORMING PURCHASE TO PAY AND CASH MANAGEMENT FOR THE DIGITAL AGE
JANEKA RAUVA, CFO, TALLINK SILJA:
STEERING THE FINANCE FUNCTION
FROM BACK TO FRONT 14
ECOSYSTEMS ARE THE NEW BLACK 6
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E UOT OT
RAALI PAIN UT
HÄMEEN KIRJAPAINO OY
TRANSFORMING PURCHASE TO PAY AND CASH MANAGEMENT FOR THE DIGITAL AGE
REAL-TIME VISIBILITY THROUGH EXTENDED PURCHASE TO PAY OpusCapita digitilizes and automates purchasing, invoice handling and payments, as well as cash management and supplier financing. With 200 million electronic transactions processed annually, and 8.000 customers in 54 countries, we have the expertise to make buying and paying easier and more cost effective. You get end-to-end visibility, control and compliance of your spend and cash flow.
JOURNAL / OPUSCAPITA CUSTOMER MAGAZINE / PUBLISHER OpusCapita / EDITOR IN CHIEF Ulla Kenttä / EDITORIAL TEAM Karoliina Haikonen, Kimmo Kauranen, Toni Paloheimo, Marketta Tammisto / EDITORS Communications Agency Effet Oy / TRANSLATIONS Bellcrest Translations / LAYOUT Milko Tarvainen, Tiina Lautamäki / COVER PHOTO Rami Lappalainen / PRINTED BY Hämeen Kirjapaino Oy, Finland, 2016 / ISSN 1458-0012 / ADDRESS SOURCE OpusCapita customer register / www.opuscapita.com
06 Ecosystems are the new black 09 Digital financial processes can point the way 10
Wanted: new talents and the cross-functional approach
12 Companies struggle to understand the phenomenon of networking 15 CFO Janeka Rauva, Tallink Silja: Steering the finance function from back to front 16 The two kings of order-to-cash 17 Ahlsell values the flexibility 18 Supporting key suppliers is a win-win strategy 20 News and events 22 Inside stories
Dear reader, when you read this magazine further, you will notice that topics like purchasing, procurement, supply chain and B2B purchasing are discussed frequently. This is not accidental, of course. We have a good reason for this. When we were renewing our strategy at the end of 2015, after having a careful look at the market needs and competitive situation, we realized that OpusCapita is in fact already one of the leading global players in the purchase-to-pay market. This is due to the strong volume of electronic transactions processed in our core market, the Nordic countries, where the penetration of electronic invoicing and digital processing is exceptionally high on the world scale. OpusCapita is currently actively engaging customers on many different fronts, from managing invoices to facilitating broader financial processes and document flows. With more than 30 years of experience of optimizing business for both buyer and seller organizations, processing everything from paper based solutions to fully digitized financial supply chain solutions, we are prepared for our next move. OpusCapita will now be pursuing a strategy to globalize its activities to the broader buyer-supplier ecosystem, combining the services it has in purchase-to-pay and order-to-cash, to offer a seamless solution to facilitate transactions between buyers and sellers across the world. The opportunity globally is huge. In B2B commerce, much of the interaction between companies is delivered on paper, while in B2C the market is far more digitized. This is the area where OpusCapita really aims to drive disruptive change to automate transactions between businesses. By doing this, we can not only help customers to increase the productivity of transaction processing, but also allow buyers to gain much greater cost savings by controlling the spend in a more transparent way. Interestingly, our discussions with CPOs revealed that compliancy and fraud are bigger priorities for most global organizations than pure cost-cutting. Automated solutions allow transparency, which provides better security, prevention of fraud and increased compliancy. Digitizing these purchasing and payment processes can bring benefits, both in cost savings and increased control. In the frame of the buyer-supplier ecosystem OpusCapita can use its cumulative experience to help its customers in very sophisticated markets and also in newer markets that are only beginning to digitize. We will be building on our physical document management business in the Nordics, and also strengthening the automation of finance and accounting management practices, with a particular focus on solutions for the buyer-supplier ecosystem. We look forward to working closely with many of our leading customers to bring the maximum benefits to their businesses on a global basis.
PATRIK SALLNER CEO, OPUSCAPITA
HOT TOPICS ABILITY TO ADAPT DETERMINES THE WINNERS IN THE FOURTH INDUSTRIAL REVOLUTION In its white paper for the World Economic Forum in 2016, UBS states that flexibility will be the key to success in the technology-driven Fourth Industrial Revolution. Economies with the most flexible labor markets, educational systems, infrastructure, and legal systems are likely to be able to capture the largest gains from automation and robotics. The growing role of robotics and artificial intelligence in business, government and private life emphasizes in particular the importance of responsive human capital and education level in the economy. Highlyskilled employees are likely to understand the new technology more effectively and to adapt to it. In addition, education that allows adaptive skills is valued, and being skilled in change is crucial as well.
Readiness to take advantage of automation and robotics 1
TECH SAVVY AND ANALYTIC CFOS ON THE RISE The role of CFOs is destined to increase in significance over the next 3 years, as compared with other C-suite roles. This is the outlook of CEOs of large companies across the globe, according to a survey by KPMG International and Forbes Insights. The CEOs surveyed believe that leveraging the latest technology should be a main focus for the CFOs, and that the CFOs’ ability to gather and analyze financial data, for instance, is a key value.
Source: Extreme automation and connectivity: The global, regional, and investment implications of the Fourth Industrial Revolution. UBS White Paper. 2016.
“The View from the Top” report commissioned by KPMG International. 2015.
KEY PRIORITIES IN THE FINANCE FUNCTION ADD VALUE THROUGH PARTNERSHIP:
FIX THE BASICS:
The role of the finance function is changing, step-by-step. First from facilitator taking care of traditional service functions to strategic partner offering a sounding board for business. Then onwards to initiator, driving value with proactive steering and performance management. The change calls for enhancement in several areas. Here are the top three priorities for development in the finance function, both for fixing the basics and gearing up for the valueadding partnership role.
45 Increase Standardize forecasting finance and planning processes and efficiency information
Strengthen enterprise controls
Upgrade skills and competencies of finance staff
Improve support of line decisions
Improve accuracy of BU and portfolio management
Source: The Boston Consulting Group / CEB – Working Council for CFOs research. 2015.
We all know about ecosystems. Most of us, or the women at least, also know about the little black dress that was introduced by Coco Chanel in the late 1920s and that has been reinvented every decade ever since. Connecting these two is not as farfetched as you might first think. Chanel’s ‘Petite robe noir’ is the icon of Chanel’s disruptive clothing philosophy, which totally revolutionized women’s fashion and clothing industries. What the little black dress did for women’s clothing, the digital ecosystem will do for all of us: it will provide new business models and assist our daily lives. TEXT: MARKETTA TAMMISTO
ECOSYSTE ARE THE
Text: Marketta Tammisto Photos: Thinkstockphotos
The emerging of digital ecosystems is changing the world by blurring traditional business models and pushing businesses from their business-as-usual mode into new and uncharted roads. You just need to look at sectors such as computing, telecommuni cation and media. In the pressure of the evolving market, these once separate industries adapted the new co-operational philosophy, developed technical interoperability, and composed the ecosystem that we enjoy today when we watch the TV news on a smartphone, for example. “Modern industries are highly complex networks and each component is depen dent on other components. Collectively they behave like a natural ecosystem of interdependent species. Their success and survi val is highly dependent on how effectively they play their role within their supply chain, their industry and their wider economy – in other words, the B2B ecosystem,” says Pete Loughlin, Managing Director, Purchasing Insight.
LIVING IN THE REAL-TIME ECONOMY The world is changing faster than ever before, whether we like it or not. Digital business ecosystems form the operational and evolving model that allows businesses to adapt to the digital age and the global business environment. The long-term trends that are transforming the business landscape have been deployed by digital technology infrastructures and the global public policy trend to remove trade restrictions. SEPA, the Single Euro Payments Area, is a concrete result of both, and a huge payments ecosystem itself, too. Thanks to the recent developments, the one prerequisite of trade, the infrastructure for monetary transactions, is functioning and the invoicing and the management of receivables are now highly digital and automated.
Companies who use these opportunities benefit in full from the fruits of automation, such as efficiency, security, control and visibility of all transactions in the order-to-cash process. These companies don’t confine themselves to sitting in the audience – they are, actually, living in the real-time economy already. But when it comes to supplier-vendor relationships, we see a different landscape.
STICKY VS. SMOOTH Procurement and purchasing professionals have made good progress in their domain and enhanced operational performance when they developed the supply chains and networks. Yet, even if the procurement is well organized and the supply chains work well, a company seldom has a sufficient financial control over purchasing to enable it to forecast its impact on cash flow and liquidity. “There are two main reasons for sticky B2B purchasing and payments processes,” says Petri Karjalainen, Senior Vice President, OpusCapita. “Firstly, the silo effect. The various functions have separate issues and objectives instead of having a shared interest in ensuring a smooth process and achieving the best poss ible numbers on the bottom line.” “Secondly, in procurement, many phases of the process are manual. And where systems exist, they deal with one separate part of the supply chain, such as workflow or ordering. There is no solution to carry the process end-to-end, system-to-system, from procurement to the finance function and its processes.” OpusCapita has 30 years of experience helping companies to digitalize their information flows and optimize the way they do business transactions, including payments. As the expert in finance process automation, OpusCapita knows the finance and accounting processes inside and out. Thus, Karjalainen’s
EMS NEW BLACK
cure for sticky purchasing processes is not to name just a few of the topics of 2015,” says surprising: digitalization and automation by Daniel Weise, Procurement Expert and Partusing advanced technologies like machine ner at BCG, Boston Consulting Group. learning and artificial intelligence. This means that the CFO must be on top “We say that the B2B purchasing and of things and have an overall understanding payment process should and could be as of everything that could have a serious imsmooth as the automated O2C process alpact on the business. ready is. To realize our vision of a full end-to“The two most important themes that end financial supply chain, we will provide emerged from the global economic crisis in a unique buyer-supplier ecosystem for com2008/2009 and the more recent turbulences, panies to buy and pay, and, naturally, to aue.g. the slowing growth in China and the oil tomate related transactions.” price decline, were increasing the need for For companies, it is not only about getmore supplier collaboration and a stronger ting rid of the silos and the broken purchasfocus on cash and liquidity,” Weise says. ing processes. It is also about being ready “Communication, information exchange for the new B2B purchasing market, where and fast decision making is crucial in crisis heterogeneous digital supply chains and dymode. This is enabled by those trusting renamic ecosystems set the rules. lationships that evolve over time through “Today, to operate successfully with the intensive supplier collaboration programs.” n B2B ecosystem, it is critical that businesses engage effectively with the new digital infrastructure, that they are able to trade electronically, that their business processes are optimized and automated and that their view of the wider ecosystem is crystal clear so that they can better predict the effects of their business decisions,” Pete Loughlin states. RTE, REAL-TIME ECONOMY. RISKS AHEAD An environment where all the In many companies, transactions between business entities the prolonged recesare in digital format, increasingly sion has squeezed out automatically generated, and completed the economic leeway, as they occur (in real-time) without store and CFOs and CPOs and forward processing. The impacts are have increased collablower costs and improved operational oration to gain better performance, better fraud management, control over the cash and increased productivity. flow. In CFO surveys, CFOs identified several global and ECOSYSTEMS are dynamic and coregional risks that will darken evolving communities of diverse actors the skies in 2016. And for a good that create new value through increasingly reason: productive and sophisticated models “The world has been highly dynamic of both collaboration and competition. and volatile over the last decade. Recently it Though they are competing, participants seems as though crisis mode has gone from also have shared interests, such as to one country to the next almost overnight – collaborate in order to meet increasing just remember the financial crisis in Greece, customer demands and to keep the the Ukraine-Russia conflict and the resulting ecosystem compatible in the dynamic sanctions, and the slowing growth in China global business environment.
TEXT: MARKETTA TAMMISTO
GOVERNMENTS TO REINVENT THEIR PUBLIC SERVICE DELIVERY MODEL
DIGITAL FINANCIAL PROCESSES CAN POINT THE WAY Governments have a crucial role in building the infrastructure for digital economy and speeding up its deployment. The main drivers for these activities are the diminishing resources – economic as well as human and environmental – and the increasing global competition. In Europe, the EU Commission is doing its best to encourage governments to take steps towards digitalization and the real-time economy, as well as reinventing their public services delivery model by using the opportunities that digital hyper-connectivity offers. One concrete and effective accelerator towards RTE is electronic invoicing, which opens up opportunities to digitize the financial processes on a large scale. To embrace these opportunities, governments and other public organizations must cooperate with innovative partners who can help the public sector take the lead, instead of sitting on the sidelines.
READ MORE AT opuscapita.com/ references
EFFECTIVE PURCHASE-TO-PAY IN FOCUS AT THE STATE TREASURY “The digital transformation of our financial management will play a major role in the digitalization of Finland’s public administration in general,” says Mikko Kangaspunta, Head of Division, Financial and Personnel Administration, State Treasury. OpusCapita has acted as partner to the State Treasury for well over ten years in building electronic invoicing processes, and it now transmits the purchase and sales invoices of the government’s agencies and depart-
ments. The collaboration with OpusCapita has broadened from an invoice transmission service to a development partnership. At the moment, the focus has been especially on improving efficiency in the purchase-to-pay process. In 2014, for example, Finnish government agencies and departments received a total of 1.2 million purchase invoices, almost 90% of which were e-invoices. “Together with OpusCapita, we have developed a purchase invoice handling process that includes automated posting and automatic reconciliation of invoices with orders and procurement contracts,” explains Kangaspunta. The aim is that in just a few years 90% of all invoices received will be processed auto matically. This will bring a productivity improvement of as much as 20–30%, according to Kangaspunta. Another development approach focuses on automating sales invoicing. “Electronic purchase and sales invoices and automation are part of the infrastructure needed for the digital transformation of society. The State Treasury, the Finnish Government Shared Services Centre for Finance and HR and OpusCapita are all working together to achieve this. “We have also talked about making use of software robotics, among other things. If we’re looking to achieve digitalization at a deeper level throughout public administration, then software robotics is an area of great interest,” says Kangaspunta. n
How did the global financial crisis affect supply chains? And what are the biggest challenges that the procurement functions of international corporations need to be prepared to mitigate in the future? OpusCapita Journal interviewed a specialist in this area, Daniel Weise, Procurement Expert, Partner & Managing Director at Boston Consulting Group, Düsseldorf.
WANTED: NEW TALENTS
AND THE CROSS-FUNCTIONAL APPROACH
About LESSONS LEARNT
FROM THE ECONOMIC CRISIS
“The big financial crisis of 2008/2009 was a real stress test for supply chains and the buyer-supplier relationships, specifically. Those companies with strong supplier collaboration handled the crisis much better. The crisis also brutally exposed risks and revealed many topics that CPOs still need to work on with regard to supplier collaboration. For e xample, working with unstable suppliers and the subsequent insolvencies revealed huge supply chain risks and sometimes contractual risks emerged, for instance from volume commitments that made procurement inflexible during the crisis. “Procurement has a very strong impact on liquidity and can thereby be a crucial cornerstone for survival in crisis. With flexible arrangements companies can call off supplier volumes on a ‘pay as you go basis’ and also by insourcing production and services back into the company. Furthermore, payment terms optimization, supply chain financing and lease-vs.-buy decisions can positively impact the working capital. Especially supply chain financing has been reconsidered in many European procurement organizations after the
Late Payments Directive was passed by many national parliaments, and procurement organizations find here a win-win strategy to gain liquidity for their corporations, whilst acknowledging the suppliers’ need for early payments.”
About TRENDS FOR GROWTH
“There are four main trends as the global economy is picking up: a shift of global trade, a need for more supplier collaboration, stronger investments into transparency and product cost optimization. “Firstly, global growth in the past years also led to a shift in global trade. Some former emerging markets are growing faster, creating significant domestic markets, but also facing inflation and cost increase, e.g. Latin America, Eastern Europe and the Asian ‘Tiger countries.’ The challenge for procurement is twofold: on the one hand, global procurement functions need to establish local teams to take care of the increasing procurement spend in those countries. On the other hand, those countries that were formerly attractive sources for labor arbitrage are
ecoming less and less attractive. Therefore b procurement needs to make tough decisions, whether to stay with the outsourced production or services in those emerging markets, move them back home or to look for new suppliers and opportunities in other areas of the world. “Secondly, there is a stronger need for supplier collaboration and risk management. Companies are becoming more and more interconnected and thereby procurement should take the role of building up and stress testing supply chains. Anticipating and mitigating potential disruptions and spotting new supply markets are sources of competi tive advantage and sometimes even survival. “A third trend that we see is that companies are investing more in transparency, i.e. real time information as well as analytical insight to manage complex internal and ex ternal stakeholder networks. “The fourth main trend is that product cost optimization for existing and new products will become more important. This means that product cost is optimized holistically in a cross-functional approach and continuously improved. It requires new capa bilities for procurement teams in terms of cross-functional collaboration and analytical rigor.”
Daniel Weise, Procurement Expert, Partner & Managing Director at Boston Consulting Group.
About THE AGE OF
This period of time has been described as ‘the age of the customer.’ How does this trend reflect in the B2B environment? Let’s hear Daniel Weise: “It does impact the whole chain from supplier to procurement, procurement to its internal customer and then the internal customer to its external customer, who could be a business customer or an end-consumer. It becomes more important for stake holders in this chain to not only understand the immediate next process step, but to also grasp the full complexity of the complete process. “This implies that procurement must be able to bring suppliers, internal customers and potentially even external customers around the table and moderate a process to create solutions for complex problems. It also means that procurement is more than just a ‘cost savings machine,’ but can also trigger innovation, improve market share and impact revenues.”
About FUTURE CHALLENGES
“There are three main challenges that procurement needs to keep an eye on: corporate social responsibility, maintaining high financial impact and up-skilling of the procurement teams. “Corporate social responsibility (CSR) has become more important over the past years. The cost of neglecting CSR topics can quickly add up to millions and billions of dollars. This also means that procurement has to play a role in mitigating the risk that is arising from the supplier interface. “The second big challenge for procurement organizations these days is to maintain a strong savings pipeline. This is challenging after the same spend has been tendered several times – sometimes with declining success. Sometimes, there is the opportunity to expand procurement services further into new categories and add further value. Procurement can implement already existing success models to indirect categories such as marketing and consulting services. “Thirdly, procurement departments will need to bring new talents into their teams. This becomes especially visible in complex projects like the cross-functional product cost optimization, where team members need deep technical category expertise and analytical skills alike.” n
FIND MORE of Daniel Weise’s answers at opuscapita.com/journal | 11
Esko Kilpi is an internationally renowned expert in knowledge work and digital transformation.
Degree in hand and a whole career ahead? For sure, but graduates today will most probably end up working in new ways and in job types and specialties that didn’t even exist when they entered the lecture halls for the first time. Esko Kilpi believes it is likely that the current industrial age ideal where people are experts in one field will be replaced by expertise in two or three fields. In any case, it’s about time that we started making the lifelong learning mantra, which we have been repeating for a long time, into a reality. “This will be a challenge for our educational systems as well as companies’ skills development. We need to be able to access education quickly and easily, and at any time of our lives.” Esko Kilpi has worked at several universities, participated in an EU knowledge work think tank and is a founding member of US-based Entovation Group, which is a global network of experts in knowledge work. Currently, Kilpi is affiliated with the Adianta School for Leadership and Innovation in New Delhi, India. “EVERYONE NEEDS to become their own HRD professionals,” says Esko Kilpi. Read more about his insights on the transformation of work at opuscapita.com/journal.
COMPANIES STRUGGLE TO UNDERSTAND
THE PHENOMENON OF NETWORKING “The democratization of technological opportunities means that we are entering an era of unprecedented possibilities. Ideas matter more than money, and as there are more people with good ideas than there are people with money, new opportunity spaces are being created. To succeed in the new, networked economy, corporations need to expand their view outside their own walls – to interaction and above all to high-quality relations.” TEXT: RIIKKA TIETÄVÄINEN-AROLA
These are the words of Esko Kilpi, who studies the current transformation of work from three angles: as a researcher, a teacher and an executive adviser. He has decades of international experience as an expert in knowledge work and digital transformation. “Those companies that are able to adapt their processes now will gain a significant competitive advantage. I believe many companies have a vast amount of learning debt. The gap between those companies that are already utilizing the new opportunities and those that are only thinking about their digi tal strategies is growing all the time in leaps and bounds.” Kilpi emphasizes that the ongoing transformation is not in essence about the technological innovations but about the opportunity spaces it creates for new social practices. To benefit from these opportunities, both individuals and companies need to break the so-called functional fixedness that prevents them from seeing nothing but the most obvious uses for the new tools. The same goes for our idea of work. “Work is no longer about having a fixed role in a company nor is it about the tasks given to you. The future of work is in solving problems and spotting opportunities in crea-
tive interaction with other people. Individual skills will not suffice, as both work and learning, creating value and knowledge, happen in networks.” In the mass-market economy, the focus has been on creating a quality product, and then scaling up the business volume for larger profits. Esko Kilpi points out that in the new economy, enterprises need to integrate their entire network around the needs of each individual customer context. With the disruptive technologies and the fact that small actors can now orchestrate very large networks of assets, it is possible to provide solutions for very specific needs. “Also the resources, or the excess capacity, can be used in a much more sustainable and flexible way than before. Accommodation-sharing service Airbnb and taxi company Uber are prime examples.” Kilpi believes that in the coming years the change will become obvious also in the more traditional, manufacturing industry sectors. “With 3D printing technology and a skilled network anyone can set up a factory, for example. We are entering an on-demand world also in this area.” “Adapting the interactive model is not
as easy as identifying customer segments or a niche market, and then passing on the dialogue with the customer to the sales and marketing department. The on-demand chain means continuous on-demand learning and continuous change.” What is fundamental in this transform ation is that in the make-and-sell model, the key to success was the individual assets and skills of a company or an entrepreneur, whereas now it is the high-quality relationships and the network they work from. “Imagine an organization that would make it possible for 10 million people from all over the world to work together for 10 minutes.” This experiment proves that the nature of organizations is changing. And this idea has not been plucked out of thin air: for example, the photographs sent from NASA’s Mars rover were processed using this kind of project. According to Kilpi, company managers struggle to understand this phenomenon of networking. A world where the current hierarchical organizational structure is the solution will no longer exist soon, and the skills needed to own and manage physical assets and subordinates are no longer valid. “To put it bluntly, industrial workers used | 13
to do what they were told to, while knowledge workers create solutions in active interaction with their peers. Management needs to focus on facilitating these interactions. Individual workers’ careers will outreach the boundaries of organizations, and this will profoundly change our way of thinking. People come first, creating a revolution in work-related social structures.” Whenever the transformation of knowledge work is discussed, threats and the fear of jobs disappearing hit the headlines. And it’s no wonder that the figures frighten us. A new report by the World Economy Forum predicts that 7.1 million jobs will disappear by 2020, while only 2 million new jobs will be created to replace these. “The fact is that we are in a situation in which old jobs disappear faster than new ones are created. And this is undoubtedly a mammoth problem for individuals and society. We do not have the full mental capacity to deal with this change and society is unable to offer the necessary safety nets,” says Esko Kilpi. Technological development pre viously replaced physical strength. Now, in the current transformation, it is replacing cognitive strength, human thought. Tasks which are defined as repetitive, algorithm chains of actions can be automated and given to computers – and there is no question, computers do the job much faster and more accurately than humans. “These algorithmic tasks were not meant for people in the first place,” says Kilpi who would like discussions to emphasize the way in which the developing technology and equipment could, in fact, support a genuinely human-centered way of working. “This is not a zero-sum game or an either/or situation. Human beings have since time immemorial invented and used tools, which is the basis for the collective intelligence of our societies today. As technology changes, so do people and what people do. When it comes down to it, work is always based on the interaction of people who need each other.” n
Janeka Rauva, CFO of Tallink Silja Oy, explains that the transformation of knowledge work equips the finance department with improved tools that truly support business operations, which has always been the role that modern financial management has wanted to achieve. The CFO has become a manager of change. TEXT: RIIKKA TIETÄVÄINEN-AROLA
PHOTO: RAMI LAPPALAINEN
STEERING THE FINANCE FUNCTION FROM BACK TO FRONT
AHOY! CHANGE AHEAD! The entire finance department needs a change of attitude in order to shake off the traditional back office role. “Technology alone is not enough – in the end it is just a tool. The finance function needs to change from being a collector of numbers to an active producer and interpreter of information that reaches out to business functions and lets them know that this is exactly the information they need right at this moment,” says Janeka Rauva. She explains that the information handled by the finance team is so important that everyone in the company should know where to find them. However, three years ago when Rauva stepped into the lift at the headquarters of Tallink Silja Oy on her first day at work and asked for directions to the department, not one person in the lift could help her. “I don’t want the finance function to hide away behind rules and regulations and to just focus on numbers. Of course, the CFO sometimes needs to take charge, to stop things before they go too far and provide a reminder of the risks and limitations.” “However, I want to start with the fact that we provide support, we work out whether it is possible to implement something and we know how to solve things in other ways within the limits of the rules and regulations. We can offer business functions ways of making decisions that are more justified, more well-timed and more effective.”
TIME TO STEP UP AND BE COUNTED “One of the greatest challenges regarding expertise is achieving a sufficiently exten-
sive overall understanding of your own company’s business and challenges in the operating environment, and also from another perspective than that of the financial administration, regulations and laws,” says Rauva. “Business is more than just numbers, and the same numbers may even mean different things for different functions. That’s why it is important to have a skilled interpreter to explain financial information to the business functions.” Tallink Silja is part of the AS Tallink Grupp, which is listed on the Tallinn Stock Exchange and is one of the largest passenger and freight shipping companies in the Baltic Sea region. Every year the Group’s 18 vessels transport around 8.9 million passengers and 310,000 cargo units. An extensive system renewal enabled the 42 companies in the Group to transfer to the same accounting system. The company’s sales systems on land and in the vessels, and also OpusCapita’s solution for managing bank account transactions and balances, for example, were also integrated into the accounting system. The project also transformed the processes in the 30-strong finance department of Tallink Silja. Janeka Rauva sees the increased automation, system integration and access to real-time information as the first steps towards the finance department of the future where routine work will only take up a fraction of the day. “Changing operating methods can, of course, be painful, but it is necessary. There are often phases that no longer serve a pur-
pose but have become hidden in the processes over the years.” “In the change there could also be an inspiring chance for the experts in the finance team to step up: the opportunity to highlight personal accumulated expertise and to find ways of using this in a new way to benefit the company,” says Rauva.
PERFECTING THE TRIPLE SALCHOW Now she urges the finance function to discover its service spirit and to serve the company’s internal customers. It is important to identify your own role in the chain that ends with providing a service to the final cus tomer. “Our vessels are not only competing with other shipping company vessels, they are also competing for the leisure time of the customers. Passengers want amazing experiences. The type of service experienced by a customer receiving a refund at a cash desk on a ferry, for example, also depends on the type of processes that have been created by the finance department.” “Processes easily become awkward if their purpose is to achieve other targets in addition to serving the final customer. It is important to find ways to perform challenging processes effortlessly – exactly the same way that a champion figure skater makes a triple Salchow look easy,” says Rauva. n
In order-to-cash, cash is king. The faster a company can turn a customer’s order into cash on customer supposed to be king? Delivering a superior customer experience along the order the good customer relationship, to generate new sales and to gain a good reputation. TEXT: RIIKKA TIETÄVÄINEN-AROLA
Roughly put, these represent the different standpoints of a company’s finance function and marketing and sales department. From the customer experience perspective, every touchpoint in the customer life cycle is important, but often especially the ones concerning invoicing and most of all collection of overdue receivables are left unnoticed – and the potential of them unused. OpusCapita has expanded its cash and receivables management services all the way to the collection service in order to support its customers’ order-to-cash process seamlessly, making it truly end-to-end and helping look after the customer’s customers in the process, too.
DON’T TURN A BLIND EYE TO OVERDUE INVOICES The quality, control and visibility of the various phases related to the invoicing process reflect on the customer satisfaction – for instance invoice disputes can often be traced back to misinformation and errors in the order-tocash process. Companies have also realized the value of the invoice as a channel for marketing and messages that support the customer relationships. “But when it comes to collecting overdue receivables, companies tend to hesitate. In these financially testing times, companies need to collect their money as quickly and as effectively as possible, but on the other hand they just can’t afford to risk losing a customer over a harsh collection process,” says Andreas Wallin, Director, Debt Collection, OpusCapita. There’s no need to be overly tolerant towards overdue invoices in the name of customer experience. When done in the right way, the collection activities can increase customer loyalty and even strengthen the company’s brand – and also decrease the likelihood of an overdue receivable turning into a bad debt.
DON’T LOOSE A GOOD CUSTOMER
OpusCapita’s receivables collection service is based on a segment model and targeted communications, where
the actual reminders and collection activities can be adjusted according to the customer segment and the individual situations of each customer company. The acclaimed approach was developed by Swedish company Kredithanterarna, which OpusCapita acquired in 2015. Incorporating collection into the order-to-cash service chain and utilizing the existing customer data in the process makes it possible to take into account the different reasons for the delayed payment, customer profiles and also the customer’s lifetime value to the company. Excessively harsh reminder and collection activities in a case where an otherwise valuable customer is having temporary difficult ies in payments, for instance, can alter the customer’s image of the company. “This can lead to loss of new sales, or the company might even end up losing the customer entirely. The goal is of course to efficiently collect the receivable, but to do it in a manner that doesn’t disrupt the customer relationship and cause harm in the long run,” says Wallin. n
hand, the better. But wait – isn’t the -to-cash chain is crucial to maintain
AHLSELL VALUES THE FLEXIBILITY The possibility to adjust the collection activities to each customer’s individual situation was a decisive factor when Ahlsell, the Nordic region’s leading technical trading company, chose its new debt collection service provider in Sweden. OpusCapita has been the company’s longtime partner, and provides services and software to Ahlsell in relation to both accounts payables and receivables processes. Now the collaboration has expanded to cover the collection process as well. Operating in diverse business areas in installation products, and tools and machinery, Ahlsell values the close and timely communication with the collection service provider as it enables a caseby-case approach that is both efficient and builds customer value. “I can immediately assess individual cases, access the relative information and get quick answers on the phase of the process, for instance. With OpusCapita, we are experiencing a flexibility in service that is rare with traditional collection companies,” says Anders Kvarnmyr, Credit Manager at Ahlsell. Ahlsell has relatively few collection cases in contrast to its large volumes of invoices. Kvarnmyr states that this only further emphasizes the need to discuss and deal with separate claims individually. In addition, in the rare case that an error results in an unfounded claim, a swift and customized response is crucial in resolving the matter without causing damage to the customer relationship. n
WO KINGS OF ORDER-TO-CASH | 17
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IS A WIN-WIN STRATEGY The lack of low cost working capital, lengthening payment terms, pressure to raise procurement prices – all make it difficult for the wheels of the supply chain to run smoothly. To decrease the friction, the postal and logistics services provider Posti Group launched a supply chain finance program in cooperation with OpusCapita. TEXT: RIIKKA TIETÄVÄINEN-AROLA
Ville Vasunta, Sourcing Manager, Transportation, Posti Oy, explains that Posti’s aim is to build strong cooperation relationships with suppliers. Posti has over 7,000 active suppliers in Finland, the majority of which are small and medium-sized companies. “We want to be known as a good purchaser, customer and partner for suppliers, which will give us access to the best solutions and services. We are also seeking ways of reducing supplier risk and of supporting transport companies in particular as we know times are hard for them.” Posti’s Sourcing unit offered transport companies a supplier package with tire, fuel and insurance policy contracts with benefits based on the purchasing volumes of a large company and also a supply chain finance program launched with OpusCapita. “As a large company we are able to negotiate financing, on average, more easily and more cheaply than small companies. The supply chain finance program allows us to share this benefit with our supply chain and also reduce the pressure on suppliers to raise their prices,” says Vasunta. Suppliers joining the program can quickly receive finance for purchase invoices that have been approved by Posti in only a few days and at a low cost, as the finance is based on Posti’s credit rating. Posti will then provide the financer with payment for the invoice the supplier has traded on the original due date. The solution frees up operating cash flow in the supply chain and in this way improves the operating conditions of both parties. Ville Vasunta explains that supply chain finance helps Posti achieve its strategic target to improve its own working capital. “In terms of sourcing it means the standard ization of our payment practices. There has been a lot of variation in our payment terms. The rapid repatriation of receivables is important for many of our suppliers and the lengthening of payment terms would be problematic for them. Supply chain finance allows us to offer a helping hand to our suppliers.” “The benefit is genuinely mutual,” says Jukka Pöytä laakso, director of one of Posti’s suppliers, Kuljetusliike Pöytälaakso Oy. The haulage company that specializes in contract and food deliveries was one of the first companies to join Posti’s supply chain finance program. Posti’s deliveries make up a considerable share of Kuljetusliike Pöytälaakso’s annual turnover of around EUR 7 million. Pöytälaakso considers supply chain finance to be a cost-efficient alternative to other finance options. Supply chain finance does not tie up collateral or have an effect on the company’s balance sheet, which is a huge benefit. “The chance to finance sales invoices strengthens and balances our liquidity at a time when payment terms are generally getting longer in the sector. However, we have the freedom to choose, based on the situation, whether to wait until the receivable’s due date or whether to take early payment.” “I consider supply chain finance to be part of our close cooperation, which helps to develop our operations and service to the purchaser and our common customers,” says Pöytälaakso. n
“KEEP THE CASH MOVING.” Read more on supply chain finance at opuscapita.com/supply-chain-finance
3+1 REASONS WHY POSTI GROUP CHOSE OPUSCAPITA’S SUPPLY CHAIN FINANCE SOLUTION
When Posti Group made the decision to launch the supply chain finance program it also looked into the traditional supply chain finance solutions offered by banks. After comparing the options, Posti chose OpusCapita as its partner for many reasons. “Firstly, OpusCapita’s service solution and trading platform is highly automated. This makes it possible to easily include a large number of suppliers in the finance program, and also those SME suppliers that are typically left out of other supply chain finance programs,” says Ville Vasunta, Sourcing Manager, Posti Oy. OpusCapita’s Supply Chain Finance service uses the trading platform of world market leader PrimeRevenue. OpusCapita has developed a digital service model and a digital registry process especially for suppliers which lowers the threshold to participate in the program. “Another considerable benefit is that we are not tied to any banks, which guarantees competitive financing. Our current financer is a European bank and we are currently requesting tenders from Nordic financial institutions.” Thirdly, Ville Vasunta mentions OpusCapita’s service which allows the purchasing organization to launch the financing program in an agile way. “We received a comprehensive analysis of our suppliers and a ready proposal stating who to offer the financing program to in the first stage. OpusCapita’s experts also take care of the system integration, the connections with financial institutions and contacting suppliers and connecting them to the program.” Ville Vasunta and Jukka Pöytälaakso both feel it is important for the service to be easy for suppliers to use. “The browser-based trading platform is incredibly easy to use and required no investment from us. Financing of sales receivables is enabled with just three clicks, and OpusCapita’s expert support services are just a phone call away,” says Pöytälaakso. n
DID YOU MISS OUT on our popular series of webinars on supply chain finance? Don’t worry, the webinars are still available at opuscapita.com/webinars
Global reach to 10,000 banks through the cloud
OPUSCAPITA RECEIVES SWIFT CERTIFIED APPLICATION LABEL OpusCapita has been awarded the 2015 SWIFT Certified Application Corporate Cash Management label. The certification has been granted to OpusCapita’s cloud-based cash management solution that is integrated with the SWIFT Alliance Lite2 service. Alliance Lite2 is SWIFT’s cloud-based solution for connecting to the SWIFT network of more than 10,000 banks and financial institution in over 200 countries. OpusCapita is the leading provider of the Lite2 service in the Nordics and was among the first providers in business to integrate the service into its cash management solution offered as SaaS. SWIFT Certified Application labels are awarded exclusively to providers that offer services and solutions in their field
that fully comply with SWIFT’s strict technical and functional requirements. “We have partnered with SWIFT in order to deliver to our customers cash management solutions that truly have global reach and that can meet the versatile needs of their international business. By being one of the few providers delivering cash management solutions that carry the SWIFT certification, OpusCapita shows commitment to continuous development according to the highest level of professional standards,” says Markus Makkonen, Product Manager, OpusCapita. Since 2013, several international corporations have chosen OpusCapita’s cloud-based cash management solution with SWIFT Alliance Lite2 for internat
ional payment and message traffic to centralize and harmonize their groupwide finance and accounting processes. In addition to the Lite2 service, OpusCapita has its own extensive network of almost 100 readymade direct banking connections covering Nordic and European banks. “Maintaining a multitude of banking connections is a real challenge for companies aiming for transparency and transactional efficiency. With the SWIFT network integrated and securely connected to our cloud services, alongside our tested direct connections, we can offer a genuine single-point-of-entry for easy and flexible bank connectivity to companies of all sizes and needs,” says Makkonen.
JOIN OUR WEBINARS – your colleagues are already there! OpusCapita has again lined up a versatile list of webinars for you. We discuss the topical themes concerning financial professionals. This spring we deal with fraud and risk management and financial supply chain optimization, for instance. Our experts share best practices, survey results and, most of all, their valuable insight into building world-class processes for both purchase-to-pay and order-to-cash. The interaction during the webinars enables you to participate, for example via taking polls, while finding out where your colleagues stand regarding the topics at hand. At the end of each webinar our experts also dedicate some time to answering questions – a chance that has always been very popular with the participants. You can join all of our webinars conveniently and timeefficiently, either live or on-demand, free of charge. Keep track of upcoming webinars at our website and find the ones that you have missed in our Knowledge Center.
NEWS AND EVENTS NEW FACES AT OPUSCAPITA OpusCapita is pleased to welcome new professionals to the company. All three are members of OpusCapita’s newly established Leadership team.
OPUSCAPITA WORKS FOR INTEROPERABILITY OF E-INVOICING
Sari Mononen has been appointed Senior Vice President, Human Resources. Before OpusCapita Mononen worked for Posti Group, where she was responsible for HR in the Logistics business. Earlier she served as Business HR responsible for various businesses at Nokia and Nokia Siemens Networks, including Managed Services and Network Outsourcing business.
Richard Humbach has been appointed Vice President, Corporate Development. Humbach joins OpusCapita from Nokia and Microsoft, where he has held leadership roles in strategy and has been leading transformation programs over the past years. Most recently Humbach led the integration of Nokia’s mobile phone business into Microsoft.
OpusCapita participates actively in developing the interoperability of e-invoicing ecosystem and driving the implementation of compliant public policies and harmonized standards. On the European level, one such forum is EESPA, the European E-invoicing Service Providers Association. EESPA members process and deliver over half of all B2B, B2G and B2C electronic invoices in Europe, and OpusCapita’s volume of this is over 10%. With 200 million transactions in total annually, OpusCapita operates one of the leading electronic invoicing networks in the world. “Ensuring common interoperability plays a significant part in the widespread adoption of electronic invoicing in Europe. Open, easy to access networks of service providers are a key to truly functioning financial supply chains and crucial especially for supplier activation,” says Ahti Allikas, Director, OpusCapita. Allikas is a member of the EESPA executive committee. Electronic invoices become mandatory in B2G invoicing both in the European Union and in the United States in 2018, paving the way towards a real-time economy. It’s a step in the right direction, says Allikas, but believes that the progress in the B2B market will still mainly be driven by cost efficiency and evolving supply chain collaboration. “The Nordic region has been and still is the forerunner in electronic invoicing. We have an exceptionally strong foothold in the Nordics, which gives our voice certain prominence in Europe and gives us a chance to influence the market.” B2B, business-to-business • B2C, business-to-consumer • B2G, business-to-government
15 YEARS OF OPUSCAPITA JOURNAL Journal, OpusCapita’s international cus tomer magazine that you are reading right now, has been published continuously for 15 years. When OpusCapita and Itella Information merged a few years ago, the magazine gained new readers and its themes were broadened, but the focus of the biannual publication has remained unchanged. OpusCapita Journal aims to always inform its readers about the topical issues and interesting trends in financial processes, to discuss the future challenges and possibilities for companies and to share the insights of renowned visionaries and experienced experts with its customers.
06 DO YOU KNOW WHERE YOUR MONEY IS? 12 ELKJØP AUTOMATED HUGE VOLUMES of cash flow data
Tuomas Itkonen has joined OpusCapita as Senior Vice President and he will head the Finance and Accounting Outsourcing (FAO) Business Unit. Itkonen has previously worked as CFO for various organizations, including Altia, Alma Media and Oriola-KD, and brings with him two decades of financial and accounting experience and deep expertise in the field.
16 SEPA IS HERE – AT LAST
When liquidity is at risk, how do you ensure business continuity?
INSIDE STORIES OpusCapita’s skilled employees at your service. Meet some of us! CONTACTS firstname.lastname(at)opuscapita.com
I am Marja Romann Aas, Operations Manager for Debt Collection service in Oslo, Norway. I’m currently responsible for setting up and launching debt collection services for Norwegian customers. I just recently joined OpusCapita in December 2015. My first impression is that the company is well established, but doesn’t shy away from looking for new opportunities. The people here are positive and skilled. In my work I’m inspired by the fact that we can constantly find ways to improve our customers’ average credit days, for instance by making small adjustments to the technology or to the working methods. Outside the office I spend as much of my free time as possible at the stables where my horse is. I love to compete in show jumping and other horse events. n Feel free to contact me if you want to discuss issues related to the Order-to-Cash process or Debt Collection.
My name is Dennis Jahn. I work as a team leader at OpusCapita’s Hannover site. My team is responsible for the F&A services of one of the largest telecom companies in Germany, including AP and AR pro cesses, general ledger and asset accounting. My team of 28 professionals works in Hannover and Halle. I have worked for OpusCapita for 9 years in FAO projects for our customers in Central Europe, and also providing support in new project implementations. In my work I am driven by customer satisfaction and always aim to provide customers with a top-notch service. In my private life I’m currently learning how to change a diaper and how to cope with too little sleep. If I have the time, I like to play football and squash. In the summertime you will most probably find me at the beach. n Feel free to contact me if you have questions about the FAO production control or want to discuss ERP applications.
I am Martin Casserdahl, from Solna, Sweden. I have worked for OpusCapita since August 2015. At the moment I am very exited about my new position in the Services unit as Director in charge of Consulting and Training. It is a natural step from my previous role as the Director of the Purchase-to-Pay Presales and Consultancy team that supports our sales with pricing, solutioning and pre-studies. What drives me in my work is customer interaction. It’s rewarding to help customers to overcome the pain points in their purchase-to-pay process, and to propose solutions to solve the pains, both from the technical and process perspective. In my free time I have decided to start playing golf again after taking a short break while the kids were young. If I want to relax, I go to the sea and go boating. I enjoy sailing and fishing. n Feel free to contact me if you need help in relation to the buyersupplier ecosystem offering.
DON’T MISS OUT!
We have many interesting SEMINARS, interactive WEBINARS and other inspiring EVENTS lined up for you. Keep track of upcoming events at opuscapita.com
OPUSCAPITA PROVIDES FINANCIAL PROCESS AUTOMATION – EITHER OUTSOURCED OR AS A SERVICE – TO MORE THAN 8,000 CUSTOMERS IN OVER 50 COUNTRIES.
OPUSCAPITA SOFTWARE USERS WORLDWIDE
HEAD OFFICE OpusCapita Group Oy, Keilaranta 13, FI-02150 ESPOO, FINLAND, Tel. +358 29 156 5000 firstname.lastname@example.org, www.opuscapita.com ESTONIA OpusCapita AS, Tartu mnt. 43, 10128 Tallinn, Tel. +372 6519 000 FINLAND OpusCapita Group Oy, Keilaranta 13, 02150 ESPOO, Tel. +358 29 156 5000 GERMANY OpusCapita GmbH, Büttnerstr. 21, D-30165 Hannover, Tel. +49 511 336 30 2777 LATVIA SIA OpusCapita Competence Center, Mūkusalas iela 41b-8, Rīga, LV-1004, Tel. +371 6 706 6505 LITHUANIA OpusCapita Accounting UAB, Gedimino pr. 35, 01109 Vilnius, Lietuva, Tel. +370 5 233 9007 NORWAY OpusCapita AS, Rosenkrantzgate 16, 0157 Oslo, Tel. +47 22 72 84 70 POLAND OpusCapita Sp. z o.o., ul. Poleczki 35, Poleczki Business Park, Building A1, 02-822 Warszawa, Tel. + 48 22 461 25 00 SWEDEN OpusCapita AB, Englundavägen 7, 171 23 Solna, Tel. +46 8 475 28 00 | 23
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opuscapita .com/ webinars
FRAUD AND RISK MANAGEMENT IN CASH MANAGEMENT
We have many interesting and interactive WEBINARS lined up for you. Check the dates, join in and find more upcoming webinars at opuscapita.com/webinars
Published on Mar 22, 2016
The fresh number of our customer magazine. Journal, OpusCapita’s international customer magazine aims to always inform its readers about the...