The CSI solution generates reports that show a high-level view of the debt situation, enabling Arco to analyse trends year-on-year

Founded in 1884, Arco is the UK’s leading supplier of safety products and training services. With 48 branches across the UK and Ireland, 48,000 customers over 146,000 sites and providing over 22,000 products to the UK market.

Business challenge

Arco offers customers the option to purchase on credit, meaning each customer can accumulate signi cant levels of debt. Arco wanted to make smart decisions in order to reduce debt levels and have a better understanding of each customer’s debt.

Transformation

CSI proposed SAP Business Objects and SAP Business Warehouse on HANA with a sprint implementation process for fast turnaround. Arco’s new business intelligence solution was implanted and live within six weeks.

“Thanks to CSI, we were able to complete the project in just six weeks, which was a fantastic result for our business.”

Richard Martin, IT Director, Arco

Vision

Staying on top of finances

Like most business-to-business companies, Arco offers its clients the option of purchasing goods on account, rather than paying up front. This approach helps Arco sell more effectively, but it can also allow clients to accumulate significant levels of debt.

To safeguard its financial health, Arco wanted to make smarter decisions about how much credit to extend to its customers and where to focus its collection efforts. Additionally, the company aimed to boost the efficiency of its cash collection operations by streamlining its business processes. To meet these aims, the company needed a clearer view of its customers and their outstanding payments.

Karen Holdstock, Head of Cash Collection at Arco, explains: “On average, 66 percent of our customers don’t settle their invoices by the due date. Since late payments can create cash ow problems for us, we were keen to nd a way to encourage customers to pay on time. Speci cally, we wanted to halve our overdue debt and reduce the amount of time it takes us to collect cash from customers.”

“In the past, understanding each customer’s debt level was tricky, because a single customer‘s debt could be spread across multiple payer accounts. We did not have an easy way to nd out which customers had debt and exactly how overdue their payments were, so we couldn’t make informed decisions about how best to collect the money. We set out to build a system that could provide true clarity of our customer debt.”

Why CSI?

Finding the right partner

Keen to complete the implementation within a tight timeframe, Arco began searching for a partner experienced in fast deployments.

Richard Martin, IT and Change Director at Arco, comments: “CSI proposed a sprint methodology, which would allow us to zero in on the most critical functionalities, deliver them as quickly as possible, and then iterate to enhance them. This approach proved to be much more e ective than trying to achieve 100% functionality straight away, which often results in the project scope expanding beyond control.”

“In our previous work with CSI, the consultants had presented compelling arguments about agile business intelligence solutions, and it was great to see how they helped us deliver this in practice. Thanks to CSI, we were able to complete the project in just six weeks, which was a fantastic result for our business.”

Transforming data into insight

Close collaboration between CSI and Arco was key to the project’s success

Danea Chandler, Head of Business Intelligence at Arco, recalls: “Staff from Arco’s operational departments teamed up with CSI and the Business Intelligence team to set clear milestones for the implementation, while still giving us a lot of fexibility. CSI’s agile approach enabled us to make adjustments to the solution as we built it. In addition my own team we able to learn how to develop dashboards and undertook advanced knowledge transfer from the consultants. I also learnt how to implement their exceptional sprint methodology within our organisation, really bene ting from CSIs thousands of successful implementations in other business.”

CSI’s expertise helped Arco transfer data from its SAP ECC enterprise resource planning solution into SAP Business Warehouse. From there, the data is loaded into a powerful SAP HANA solution for lightning-speed analysis. Results are delivered via a user-friendly graphical dashboard, giving sta a clear overview of customer debt.

The dashboard offers insight into three types of debt: ‘debt in query’ (where the customer has questioned the amount charged or asked for further clarification on purchase order numbers), ‘debt overdue’, and ‘debt not overdue’. The solution enables Arco to easily view its ‘good’ and ‘bad’ debt to gain a better understanding of its debtor position.

Solution

Reducing late payments and increasing customer satisfaction

With the new solution, Arco can delve into the data and generate custom reports to match their requirements. For example, if Arco’s cash collection team is investigating one particular customer, they can pinpoint precisely how much money is owed, and how overdue the payments are.

Karen Holdstock remarks, “With the insights uncovered by the new solution, we can make smarter credit decisions. For example, if a customer consistently pays late, our sales teams can get in touch and discuss the situation with them to see if we can change the way we work together and decrease ineffciencies and misunderstandings.

Meanwhile, the solution enables the cash collection team to view day-by-day debt levels. Sta now automatically receive lists of customers with overdue payments, enabling them to adopt a more targeted approach to cash collection. In addition, senior managers can see which regions have the highest levels of overdue payments, and contact the appropriate sales managers to find a solution.

The solution also generates reports on debt in query that staff can work through to resolve customers’ issues more quickly and undertake root cause analysis. These reports can also be used as a training tool for customer service advisors, helping them understand what the most common types of queries are, why they happen, and how to reduce the risk of similar queries occurring again. Finally, the solution also generates management reports that o er a high-level view of the debt situation, enabling Arco’s senior management team to analyse trends year-on-year.

Benefits

Saving time and reducing debt

The CSI solution is already delivering benefits, as Richard Martin explains.

“Previously, gathering and analysing debt data was an arduous process that involved scrutinising individual payer accounts. The CSI solution has cut the time taken to generate a report on debt levels from 25 minutes to a few seconds. This gives our sta more time to spend on value-added activities.”

The reports generated by the solution are also more detailed and accurate than ever before, providing clear visibility of where debt lies within the customer base. Rapid access to this information enables Arco to reduce its overall debt levels and collect payments more quickly.
Karen Holdstock says, “Since we introduced the solution, we have succeeded in reducing our overall overdue debt burden significantly. What’s more, we have cut the amount of debt that is more than 90 days overdue by 35%. This has come from both collecting overdue debt and resolving outstanding queries that then allowed us to collect the related amount.

By analysing the root causes of customer payment queries, Arco has also been able to reduce the number of queries it receives from customers – removing one of the key roadblocks that obstruct timely payments. Since the launch of the Debt Dashboard the value of the overdue debt in query has dropped to 63% of prior year.

Having deployed the first iteration of the solution in just six weeks, Arco is now focused on adding new functionality to the existing dashboard, and adding further dashboards designed for different user groups.

Richard Martin concludes: “We’re delighted with the dashboard and reporting solution, and we have learned a lot from CSI over the course of the project. With the experience we’ve gained, we’re looking forward to delivering similar results for other areas of the business.”