Zoetis and Serrala Partner to Optimize Global O2C Process

⇨ Legacy or partially manual OTC operations are often inefficient, time-consuming, and error-prone.

⇨ Solutions providers like Serrala can provide automation and optimization to eliminate bottlenecks and inefficiencies.

⇨ When updating accounts receivable processes, organizations must balance priorities for immediate benefits and long-term strategies.

Optimizing AR Process to Support Growth Initiatives

As organizations expand into global markets and adapt their business models, finance leaders are confronted with increasingly complex challenges. This demands a reevaluation of core business processes such as end-to-end order-to-cash (OTC), which encompasses cash applications, credit applications, and collection activities.

Legacy or partially manual OTC operations are often inefficient, time-consuming, and error-prone, necessitating a transformation to streamline and automate these processes. In fact, recent findings from SAPinsider’s SAP S/4HANA Finance and Central Finance benchmark study revealed that insufficient automation and manual processes were the primary drivers of finance transformation for SAP organizations aiming to optimize their OTC cycles.

Zoetis, a global animal health company, faced this exact predicament. Amy Vaillant, Global Process Manager of Order to Cash at Zoetis, sought to automate the matching of electronic payments to remittance advices, improve credit approval, and enhance collections to align with their evolving business model.

Partnering for Success: Zoetis and Serrala

After an extensive RFP process involving five vendors, Zoetis chose to collaborate with Serrala to optimize their account receivables (AR) process. Serrala’s SAP-certified solutions provided Zoetis with the flexibility and capabilities necessary to support their growth initiatives. Vaillant stated, “Zoetis is a world leader in animal health, delivering innovative and high-quality solutions to advance animal care. To support our continued growth, we needed to optimize our account receivables process, and Serrala’s OTC solutions provided us with the flexibility and capabilities we needed.”

Serrala conducted a comprehensive analysis of Zoetis’ AR process, identifying inefficiencies, bottlenecks, and areas ripe for automation and optimization. Vaillant highlights some of the inefficiencies plaguing the company’s global order-to-cash process. “Our previous collection module was not really working for our team. We were constantly creating new invoices, while handling a high-volume of inbound and outbound payments. We required a solution that was real-time to avoid waiting for overnight system updates. From a credit perspective, based on a customer’s credit limit request or what they’ve ordered, we require senior manager level approval, so we wanted a workflow that would automatically send that to them versus having to create an email which could potentially get lost in their inbox. From a cash application perspective, there are a lot of payments that come in and already get automatically applied, but the ones that don’t get automatically applied were the biggest customers and the most line items. That resulted in a lot of manual effort for my team, sitting there with a piece of paper and a ruler. In 2023, that is just archaic!”

With Serrala’s SAP-built solution suite, Zoetis avoided the complexities of multi-layered solutions, ensuring seamless integration with their existing SAP landscape and adaptability for future transitions to SAP S/4HANA. For Vaillant, this proved to be a key differentiator. “We needed to do something to bridge those gaps, get us to where we need to be. Understanding some of this might be solved with a move to SAP S/4HANA, but at the time we started that, a transition was still years away with no date, no timeline, no budget approval. Our team decided we can’t wait and need to realize the benefits today.”

Tailoring Solutions for Maximum Impact

Zoetis’ AR optimization goals focused on cash application for all markets, credit application and risk for all markets excluding the US, and collections activities for six target markets (U.S., Australia, Germany, U.K., South Africa, and Brazil). Zoetis chose these strategic markets based on their complexity, volume, and claims and deductions. Vaillant provides additional insight for prioritizing these key areas, “The six markets we picked were strategic in the fact that they were uniquely complex like Brazil, they generated the highest volumes like the US, or produced a lot of claims and deductions like South Africa.”

Serrala’s configurable OTC automation solution suite is designed to meet the unique needs and challenges of global organizations, like Zoetis. This targeted and phased approach aimed to achieve measurable improvements in efficiency and visibility.

The project kicked off in February 2022, with Zoetis and Serrala defining objectives, identifying stakeholders, and establishing an implementation roadmap. The solution went live in October 2022, quickly realizing a return on investment (ROI) of over 30%. Hypercare support was provided for a month following the launch, ensuring a smooth transition and addressing any post-go-live issues.

Overcoming Global Challenges and Adapting to Change

Managing change within a global organization was a primary challenge for the project. Zoetis and Serrala had to ensure stakeholder buy-in and overcome resistance to change. Vaillant emphasized the importance of a strong communication strategy and demonstrating the benefits of the new solution to all stakeholders.

Vaillant shared her perspective on this challenge: “Managing change on a global scale required a strong communication strategy and a focus on demonstrating the benefits of the new solution to all stakeholders.” That was an opportunity afforded to Vaillant with the decision to use a phased approach in targeted markets to prove the value of enhanced automation.

Adapting to a configurable, business-driven solution required training business users and establishing a strong governance framework. Zoetis and Serrala collaborated to develop training programs and support structures, ensuring the effective adoption of the new system. Vaillant emphasized the importance of this aspect, saying, “Investing in training and support for our business users was essential to ensure their success in using the new solution and realizing its full potential.” Involving project members from the start helped build expertise and create a sense of ownership for automation gains.

Efficiency Gains and Future-Proof OTC Solutions

The implementation of Serrala’s SAP-certified OTC solution led to notable visibility improvements in Zoetis’ AR process. The business-driven configuration of Serrala’s solution empowered Zoetis stakeholders to lead the implementation process, reducing dependency on IT and ensuring better alignment with business needs. New automation capabilities also enabled staff to handle increasing transaction volumes and strategic rule building.

“The business-driven approach was key to our success. It allowed us to make better, faster decisions. If we consider customer markets like Brazil, for example, anybody who does business in Brazil knows how complex it is. The team put a lot of effort into creating rules based on how customers pay, and we literally went from 0% to 60% within three months,” Vaillant explained.

As a result, Zoetis experienced reduced manual work, improved cash application accuracy, faster credit application processing, and streamlined collections activities. Vaillant remarked, “We have seen significant time savings in our credit application and collections processes, which has allowed our teams to focus on more value-added activities.”

Serrala’s SAP-certified solutions were designed to be both compatible with Zoetis’ existing SAP infrastructure and adaptable for a future transition to SAP S/4HANA. This forward-thinking approach ensured that the solution would remain relevant and effective as the organization’s needs evolved over time. Vaillant noted, “The solution’s scalability and adaptability for future SAP S/4HANA transition were crucial in our decision-making process, as they ensured our investment would continue to deliver value in the long term.”

Serrala’s solutions are also embedded directly with SAP itself, allowing payments to be updated in real time. This gives users access to key insights, allowing decision-makers to steer their organizations with maximum visibility.

Achieving Harmony Between Short-Term Goals and Long-Term Strategy

The partnership between Zoetis and Serrala facilitated the alignment of immediate AR needs with long-term plans for a future transition to SAP S/4HANA. This balance required careful consideration and incorporation of both short-term objectives and long-term strategies into the solution. “Balancing our immediate needs with our long-term vision was a critical aspect of this project, and Serrala’s expertise and guidance were invaluable in helping us achieve that balance,” said Vaillant.

The successful implementation of Serrala’s SAP-certified OTC solution enabled Zoetis to streamline and automate AR processes, resulting in significant efficiency improvements, empowered business stakeholders, and a scalable and future-proofed global OTC process. The collaboration between Zoetis and Serrala produced a solution tailored to Zoetis’ unique needs and objectives while preparing the team for future growth and technological advancements.

The project’s success has paved the way for further optimization and automation opportunities across the remaining markets of operation. By leveraging the lessons learned and best practices established during the AR optimization project, Zoetis can continue to drive innovation and improve efficiency across the global OTC process.