Capgemini makes every effort to minimize financial risks. New clients and prospects are screened at an early stage. How healthy are these organizations?
If we go into business with a company, we want to know just where we stand. This requires being able to determine objectively what the organization’s attitude is to paying its bills – using data that are up to date, complete, and accurate.”
'If we go into business with a company, we want to know just where we stand. This requires being able to determine objectively what the organization’s attitude is to paying its bills – using data that are up to date, complete, and accurate.'
Erik Prins’s responsibilities include the entire order-to-cash process for the Dutch operations of Capgemini and its subsidiary Sogeti. As Credit Manager and Cash Officer, he is part of the management team of the Financial Shared Services Center, with some 150 staff and offshore teams in India and Poland. As a publicly traded company, Capgemini needs to keep a tight grip and a close eye on its invoicing and debt collection process: cash is a key indicator of the Group’s financial health, given that it has direct bearing on the stock price. The right stock price is a vital requirement for securing the Group’s independence and realizing further growth. Automation, including robotic process automation, is therefore used in many of the processes. A further issue for Capgemini, and one that always carries extra risk, is that it does not receive payment for a large part of its revenue until after the services have been provided and delivered.
'We achieve this on the one hand by automating and streamlining processes, and on the other by making every effort to map out and monitor the payment patterns of clients, and in particular of prospects. If we go into business with a company, we want to know just where we stand. This requires being able to determine objectively what the organization’s attitude is to paying its bills – using data that are up to date, complete, and accurate,' explains Prins.
To obtain those data, Capgemini set out to find a solution provider that could supply data that offered a greater understanding of organizations’ payment patterns. They eventually decided on the Credit Risk Management solutions of Altares Dun & Bradstreet.
Prins continues. 'Not long ago, we implemented a series of measures to realize a foolproof system that would make it possible for us to identify upfront what a particular organization’s payment patterns are. Drawing on Altares Dun & Bradstreet’s Global Decision Maker, we custom-designed a functionality that shows the user at a glance whether a client or prospect has a sufficiently healthy cash flow. It works like a set of traffic lights,' explains Prins. 'Green means no problems, we can move forward with this client. Red means that we should turn down that particular business relationship; amber means that we need to conduct further due diligence of our own, which we do using Dun & Bradstreet’s detailed reports. We then share those public reports with the client, who can contact Dun & Bradstreet to submit new documentation and numbers, if they have any available, to improve their rating. In all other situations, we apply additional terms, for example a guarantee from the client’s parent company and/or shorter payment deadlines.'
In 80-90% of the cases, the result is a green light, and the client can be registered in the CRM system Salesforce, for which Altares Dun & Bradstreet offers a standardized API. As Prins highlights, this approach adds structure to the client acceptance policy, which helps with sales. The criteria for establishing how reliable a client’s payment patterns are is now subject to general consensus without no room for discussion. If the market subsequently changes, the criteria are reviewed, with Altares Dun & Bradstreet’s input. For example, major retailers are currently struggling; those data are translated directly into the Global Decision Maker and the “Capgemini traffic light”. Prins explains, 'We check this at the front end, so it’s clear for the whole company. We now have a transparent and professional client acceptance policy, which matches what Capgemini stands for.' Besides being used for checking client data when the business relationship first starts, the solutions provided by Altares Dun & Bradstreet then continue to run in the background to monitor the data quality. If a client’s status undergoes any change, Capgemini will be alerted straight away.
Thanks in part to Altares Dun & Bradstreet and the solutions that it provides, Capgemini can strike a balance between realizing growth and avoiding risks. With access to a database containing reliable information about more than 400 million companies, Capgemini can make the right decisions every day.
'Just as importantly, if not more, pretty much the entire process is automated. Screening business relations takes relatively little time, and that’s boosted our results considerably: it means that we can start working for the client right away,' Prins explains. However, it would be a mistake to assume that this approach leaves more clients disappointed. 'In practice, we’ve noticed that our clients in fact appreciate it that our client acceptance policy is transparent and that we share the public information that we obtain from D&B. It means that we can work together to find a solution that allows us to move forward with the relationship despite any issues.'
"We check this at the front end, so it’s clear for the whole company. We now have a transparent and professional client acceptance policy, which matches what Capgemini stands for."
The partnership with Altares Dun & Bradstreet has become almost effortless, Prins emphasizes. 'At the time, we chose this partnership because of the input that Altares Dun & Bradstreet provides. They understand our market, they know exactly how our business processes are organized, and that means that they’re able also to identify the potential risks that we encounter. On top of this, Altares Dun & Bradstreet always respond swiftly whenever we ask for more information, if the traffic light turns amber. They actually did this proactively, for example not long ago when the impact of COVID-19 became clear. The data from Altares Dun & Bradstreet are an extension of Capgemini, as are the people behind those data. That’s what you want from a partnership.'
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