CASE STUDY: Atlas Copco Improves Internal Communication and Lowers DSO with Receivables Technology provided by SunGard's AvantGard
October 2009
John Davis, business controller, Atlas Copco Australia
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Atlas Copco, a leading provider of industrial productivity solutions, set out to locate credit and collections technology for its Australian shared service center (SSC) that could help the company to better connect employees and information throughout the organization, as well as lower days sales outstanding (DSO). Read on to learn the company's results. Background:
Atlas Copco is a world leading provider of industrial productivity solutions. Headquartered in Stockholm, Sweden, the organization develops and manufactures industrial tools, compressed air equipment, construction and mining equipment, assembly systems, and offers related services and rentals. Atlas Copco's products are sold and rented under different brands through a worldwide sales and service network reaching 160 countries, half of which are served bywholly or partly owned customer centers. Atlas Copco was seeking robust accounts receivable technology that could be implemented in the shared service center in Australia, as the deployment of AvantGard Receivables in its United Kingdom location proved to be a success in automating processes, increasing collaboration and introducing a more strategic approach to collections and disputes.
Challenges:
John Davis, business controller at Atlas Copco's Australian business, recalls the collections environment prior to implementing AvantGard technology, "I was fairly new to the organization and could see the need for change. Our current technology was restrictive and we were using many sub-systems that were creating a great deal of manual work and hindering the collectors' productivity." The main priority for the company was reducing its DSO. Atlas Copco has multiple business units and divisions, and this introduced the reality of a high number of disputes. Unfortunately, employees had neither adequate visibility into business units, nor a controlled mechanism to manage disputes effectively. Additionally, the primary enterprise resource processing (ERP) system provided limited functionality. Atlas Copco, therefore, wanted to both rectify the inefficiencies of its systems in order to improve dispute management -- and perhaps more importantly streamline processes and outcomes to help identify and eliminate disputes as quickly as possible. Automation was lacking and another key driver in choosing AvantGard Receivables was to help in the reduction of headcount. Upper management thought that automation would be a key component in stabilizing staff size. Davis commented, "We understood as a group that we needed to be more particular about the tasks we took on and how we could eliminate manual processing to improve our ability to manage risk and collect outstanding invoices faster."
 Our current technology was restrictive and we were using many sub-systems that were creating a great deal of manual work and hindering the collectors' productivity. 
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-- John Davis, business controller, Atlas Copco Australia
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With a lack of visibility and collaboration between business units, Atlas Copco found it difficult to implement and enforce compliance policies. The company realized that this was an important issue to resolve if they were to achieve the goals of gaining visibility and determining accountability for dispute resolution. Reporting was another area that required improvement, as there were limited resources to perform this task and facilitate the correction of outstanding invoices. Utilizing spreadsheets for reporting was proving to be inefficient and was causing duplication of work in many instances. Upper management reasoned that receivables technology would help to rectify these issues. Solution:
When SunGard presented Atlas Copco with the results that its European operations had achieved, such as lowered DSO and significant dispute reduction, management was determined to replicate that same success in the Australian shared service center. Furthermore, it was beneficial that the Australian operations could leverage their European colleagues' first hand experience with the solution. AvantGard Receivables was therefore a natural choice. Atlas Copco was pleased that SunGard provided a technical consultant on site and also allocated resources focused on performing some of the work remotely. This made for a clean and successful project deployment. "SunGard was patient throughout the implementation and stayed in regular contact as changes within the business occurred. While change is constant in any organization, SunGard supported our objectives and helped us to stay focused on our goals," said Davis. Results:
An immediate benefit of AvantGard Receivables has been the single, unified technology that has been established for all of Atlas Copco's receivables activities, regardless of whether merges occur or new businesses are acquired. This offers the company standardization of information, as well as a better way of communicating this information throughout the organization. "The elimination of our disparate sub-systems has facilitated us in improving the behavior of our clients externally and our people internally. Furthermore, Atlas Copco has been experiencing considerable growth so we were looking to consolidate our receivables team in order to maintain headcount as our workload increases. We are confident that AvantGard Receivables will play an important part in helping us to maintain staff size in the face of a growing business."
SunGard was patient throughout the implementation and stayed in regular contact as changes within the business occurred.
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-- John Davis, business controller, Atlas Copco Australia
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Automation is another essential ingredient that is assisting Atlas Copo in increasing focus on strategic goals and also improving customer service levels. The automation of communication provided by AvantGard means that employees can relinquish manual processes, such as sending emails to customers about their individual accounts, and hone in on more goal-driven tasks that really add value for the customers and the business. Accountability has helped greatly in the identification and tracking of disputed invoices, as the AvantGard solution provides staff with automation for assignment of work queues, reminders and dispute routing. Members of the collection team now have a clear picture of what their workload should be for the day. Additionally, Atlas Copco is also beginning to better understand why specific problems occur in the collections department and how best to go about solving them. Return on Investment (ROI):
Lowered DSO
DSO is the primary measurement upon which Atlas Copco bases its ROI. Management reasons that the lower this number is the better off they we will be in terms of optimizing working capital management. AvantGard Receivables has provided greater visibility into Atlas Copco's disputes, helping the company to apply fitting strategies and policies to effectively manage them. Visibility into the success of policies surrounding compliance has also improved. Reduction in Disputes
Dispute reduction is another important metric that Atlas Copco measures, which will remain a standard metric moving forward. In fact, quantitative results on dispute reduction are providing valuable insight into the critical role that dispute resolution plays in relation to lowering overall DSO. Atlas Copco was pleased to discover that by driving down disputed invoices, customers were beginning to pay their bills faster and in effect DSO fell by 8 days in just 4 months. "The state of the economy has played a large part in our decision to implement AvantGard in our Australian operations, as the current crisis has reinforced the importance of cash flow in ensuring that we have strong liquidity and optimal working capital at our disposal. Even now, as we have moved forward in our collections department, we are still uncovering new challenges. We are confident that AvantGard Receivables will help us to effectively face these challenges and address them confidently both today and in the future," commented Davis. About AvantGardreceivables
AvantGard Receivables helps companies manage strategic and major accounts as well as the order-to-cash life cycle, credit risk, collections, dispute resolution, cash application, dashboards and reporting for all accounts. Additionally, AvantGard Receivables provides collaborative solutions for sales and customers. AboutAvantGard
SunGard's AvantGard is a leading liquidity management solution for corporations, financial institutions and the public sector. AvantGard provides chief financial officers and treasurers with real-time visibility into cash flows and increased operational controls around treasury, receivables and payments management. The solution aggregates data for a single view of cash, drives productivity through automation, and fosters collaboration between trading partners. For more information, visit www.sungard.com/avantgard. AboutSunGard
With annual revenue of $5 billion, SunGard is a global leader in software and processing solutions for financial services, higher education and the public sector. SunGard also helps information dependent enterprises of all types to ensure the continuity of their business. SunGard serves more than 25,000 customers in more than 50 countries, including the world's 50 largest financial services companies. Visit SunGard at www.sungard.com. ©2009 SunGard. Trademark Information: SunGard, the SunGard logo and AvantGard are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.
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