CASH CYCLE VELOCITY ACCELERATOR

• Do you have visibility into cash cycle trends and analysis? Do you look at actuals vs. forecast vs. benchmarks?
• Are you actually measuring your order-to-cash and procure-to-pay process times?
• Do you know the optimal internal and external benchmark times?
• Do your cash cycle models include payment delays due to product and service quality issues as well as invoice accuracy issues?

With the current volatility in capital flows and spending patterns, it’s never been more important to focus on the levers that drive your cash cycle. From the obvious (DII, DPO, DSO) to the efficiency drivers (logistics, procurement, sales operations) to the not-so-obvious drivers of the drivers (demand forecast accuracy, service quality, employee satisfaction).

As one of our favorite consultants says “everyone in a company must be aware that his actions use cash or generate cash (and that) things must move through a business to a customer: the faster the better.*”

In the Business Foundation Cash Cycle Velocity Accelerator, we work hands-on with you to uncover, visualize, and document the complete cash cycle ecosystem – financial and operational value drivers that impact cash cycle velocity – from the obvious to the not so obvious.

We start with those top value drivers related to your industry (contained in the Periodic Table of Business™), organized by business function (Sales, Operations, Manufacturing, etc.) and layer in the business (Strategic, Operational, and Execution). In a focused two-hour conversation with each of your senior business leaders we quickly reveal the value map specific to your cash cycle.

The Accelerator then helps you to do two things quickly:

1. FOCUS on those measures that impact the speed of your cash cycle so that you can take fact-based decisions to improve velocity (and volume!)

2. ALIGN all the pertinent parts of the business on what matters most around your cash cycle.

To give you an idea of the potential ROI of using our accelerator, take Dell Inc, one of the innovators of the high cash cycle business model. Compared to their peers (Apple, Gateway, Lenovo, and the top 25% of the Electronic Computers industry), they are the benchmark in Days In Inventory. If, by focusing and aligning on improving visibility into their cash cycle drivers, they could improve DSO and DPO each by only 1%, there is USD 149 million in cash as well as USD 11 million in recurring benefits available to them. That’s probably worth a few days of their time!

* Ram Charan, “What the CEO Wants You to Know: How your Company Really Works.” Crown Business, 2001