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celonis study process mining [shutterstock: 688899694, Besjunior]
[shutterstock: 688899694, Besjunior]
Digital Transformation Press Release

Rigid Systems Hamper Business Execution

Business leaders blame rigid systems and technologies as well as broken or inefficient processes for creating execution gaps that damage their business performance, according to the “2021 State of Business Execution Benchmark Report” by Celonis.

The report, based on an independent survey of 2,000 business leaders commissioned by Celonis, found significant execution gaps between average and best-in-class performance in core business functions of accounts payable (AP), accounts receivable (AR), procurement, and order management that can cost companies hundreds of millions of dollars in missed opportunities.

In accounts payable and accounts receivable, respondents cited rigid systems and technologies as their biggest obstacle to performing at their full execution capacity. Execution capacity is the maximum level of performance a company can achieve with its available time and resources. Those surveyed called out broken or inefficient processes as a top 3 obstacle for accounts payable, accounts receivable, and procurement.

The other root causes of execution barriers identified in the research include a fragmented data landscape, lack of executive sponsorship, and lack of visibility into processes. Despite making massive digital investments to transform their business operations, companies continue to face costly execution barriers. By identifying and fixing these problems, they have the opportunity to reach the execution capacity levels of the top-performing companies.

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The financial benefits of fixing execution problems can be substantial, freeing up as much as $567 million in working capital and $105 million in cost savings for an average company, according to the report’s analysis. Costs savings can come from reducing the cost to process a purchase order in procurement or reducing the cost of a sales order in order management to the best-in-class performance found in the research survey. Working capital can be maximized both by improving days payable outstanding in AP and by shifting days sales outstanding in AR to best-in-class performance, which the report benchmarked from non-survey sources.

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