Collections Management is sometimes seen as the central module within SAP FSCM. It is not replacing an existing module however, it should be seen and used to replace some of the manual processes that Credit Collections teams currently implement. When planning for a successful SAP FSCM Collections Management implementation it's important to plan how, when and why the system will be used and consider the change implications of the process.
As per a previous blog that I have written (Three critical steps for a successful dispute management implementation) I will cover what I believe to be the three key principles of planning and scoping a FSCM implementation. These are:
It is important to define what a client current does. The business process map will more than likely show a number of manual steps such as downloading an aged debt report into Excel and passing out to the Credit Collection team. It is important to note the steps that are manual as this will enable the model phase. I also find that when you map out a process, the project team can quickly identify issues with the current process. This provides detail for potential benefits to be realised.
I find this the most interesting. If you look at the mapping phase, its more than likely that the current reporting is not very detailed. There may be some Aged Debt analysis, DSO per Credit Collector and debt over 90 days. However, there is no point just sticking with the level of reporting you already have. Reports that analyse the performance of the individual Credit Collector, the volume of calls made and the number of promise to pays kept and broken can now be achieved within SAP FSCM. The reports are not available as standard within ERP6 however, there is standard business content available within SAP BW to provide enhanced insight into the real performance of the Credit Collection team.
This is where there can be significant change to the current "as-is" process. The SAP FSCM Collections Management tool is an enhancer to optimise business process for the Credit Collection process. The Credit Collection team will have to change the way they work by using a Collections Worklist to prioritise their daily customer contact strategy. The tool does not collect the cash by itself, so the manual steps within the business process also need to be reviewed and optimised to satisfy the future business process. This is where the output of the measure process is important. If the new reporting focuses the volume of customer contacts a Credit Collector performs, the "to-be" process needs to ensure the final output of the future reports can be found within SAP.
The planning and scoping phase for SAP FSCM Collections Management is critical. If you don't perform these steps, you will more than likely mirror your current processes and merely record the actions in SAP rather than offline. By not performing these steps the true business benefits will be minor, so it is recommended that by investing the correct amount of time in the scoping and planning phase substantial benefits can be realised.
By changing how the Credit Collections process work will provide the Credit Collection Management team further insight into the performance of the team enabling the Management team to make better decisions to improve the efficiency of the full team. An example of this could be the identification that one Credit Collector was over-worked as they had a higher volume of customers to contact, leading to some customers never being contacted. This may result in the management team moving some customers to another Credit Collector, removing the pressure and ensuring all customers are being contacted. This removes the potential for bad debt and helps to ensure cash is collected in a more efficient manner.