Heather King
Anyway, we’re gonna jump right in and get started with our next session on how Kellogg’s prioritizes customer experience as a key to cash excellence. Remember everybody, you’re gonna have polls, make sure you go into the Whova app to answer all those polls. And we will, you will have plenty of time for a Q & A. So make sure that you are asking those questions as I come around chasing you all with the microphones. So now I think it’s time that we get started on our session. So once again, our Kellogg’s case study we’re super excited about and we have two fabulous people Dee Costa. Yay. I see I was making the Kellogg’s people, Senior Director and GPO of O2C Kellogg’s with 25 years of experience as the director of order to cash she’s consistently involved in Cash Generation results while maintaining maximum customer service specializes in all aspects of order to cash credit collections, revenue recognition, cash applications, or validation and invoice processing. And here’s Tim Fogarty, he is the director of digital transformation HighRadius. He has over 15 years of experience leading large complex transformation engagements focused on process optimization, digital technology harmonization design and implementation of business operations. And now I will leave it to Tim and Dee.
Tim Fogarty
Alright,
Dee Costa
Alright. Thank you. So Tim and I wanted to start real quick because we just saw and had lunch. I ask all the veterans in the room, can you please stand up? All your veteran veterans, all the veterans? Okay, got one. So thank you. Thank you. So a quick question. Are you a Marine? Army? I’m sorry. So Marine Corps for anybody who has friends in the Marine Corps. Today’s Marine Corps birthday, please wish them a happy birthday and Semper Fi from me.
Tim Fogarty
Happy birthday.
Dee Costa
Thank you. All right, you’re ready. I’m ready. Okay, that first slide? Yeah. I’m like Michael Clicker. It’s not on. Okay. So I joined Kellogg’s about two years ago. And, as Heather mentioned, I’ve been invoiced to cash actually in order to cash the last 25 years. And people always ask me, Do you do anything else? And my answer is no, I have been in order to cash for this long. I plan to retire in order to cash because I love money. I love saving the company money and I love to make money. So that is the place. But Kellogg’s landscape. Just to give you a little bit, when I joined two years ago, we have over 200 HR team members across the globe 60,000 customers and we have three regional business centres. And when I joined Kellogg, in January of 2020, we were in the process of actually implementing HighRadius, we actually went from doing it in person to quickly moving to a remote environment, and we actually implemented it virtually. So for those who experience it, you can say thank you to Kellogg because we taught them how
Tim Fogarty
We did. And it was a global implementation.
Dee Costa
Correct
Tim Fogarty
North America, Latin America and Europe
Dee Costa
So all three regions, which has been amazing. So you’re welcome. Next slide you.
Tim Fogarty
Okay, I think we have our first poll question. Does everybody have their apps up? So what was your air team strategy to deal with the initial impact of COVID? I think we would all agree there’s been an impact on how we’ve run operations.
Dee Costa
Absolutely.
Tim Fogarty
And the requirement to leverage technology even more. So again, having stringent credit control and practising aggressive collections. The faster deduction, Dispute Resolution
Dee Costa
Number two,
Tim Fogarty
Yeah, focusing on strengthening your customer relationships. And we all know that’s been important thus far, or none of the above. So if you could just enter your vote in the app real quick. And Heather, I don’t know if you still have the results or if you’re starting to see the results yet. Okay,
Heather King
Okay. So out of oh, it’s still ticking. 41 responses 43 responses 18 have said having stringent credit control and practising aggressive collection to only 2 said faster deduction, dispute claims validation. 20 out of 47 said focusing on strengthening customer relationships, and six said none of the above. So basically, mostly a tie between credit control and strengthening customer relationships.
Tim Fogarty
And do I think it’s fair a lot of the conversations we’ve been having with the team is how are you aggressive with a customer without damaging their relationship?
Dee Costa
Correct. And it’s important because our customers are who we serve every single day. Without them. I’m not Kellogg.
Tim Fogarty
And at the same time remaining in compliance. That’s yeah, that component
Dee Costa
And protecting our receivables while we’re protecting our credit, and that’s what can be difficult. And that’s why, you know, faster deductions dispute and that’s what we want to talk about is our customer experience. Do you think our customers really like to deal with us when we call and collect cash? Let’s be honest. What did they do? They bought portals. So they didn’t have to talk to us. It’s not easy. So let’s go on here.
Okay. All right. That’s how you access it.
Tim Fogarty
So let’s talk about when we first started working together back in November.
Dee Costa
Okay, so truth be told, as I mentioned when I joined Kellogg, we were in the process of implementing HighRadius, and then boom, surprise, we got COVID. That was not expected. So we’re talking about IT environments, our financials, HighRadius, we all went remote at the same time, a new world for us. So here it is, we have our goals, we go live. I’m going to be honest, we failed. The minute we went live, our entire system failed. We thought we found out we made a big mistake. So let’s talk about some of those mistakes that we had. One of the things that you heard, and I think AJ mentioned it earlier as well, is we went straight into technology. We kind of skipped the optimization, and we skipped change management. Yeah. So when we went live all the automation that we thought we were going to get was gone. Yep, guess what I did?
Tim Fogarty
Yeah. So one of the things that we talked about was the why, but not necessarily Why did it happen? How do we correct the issue? And so one, how do we ensure that we’re optimizing the platform? Number one, number two, we found that when we talk about change management, how do you ensure that people are comfortable using the application itself? So there was a component of understanding the process. And I can tell you, Christy that’s sitting over there in the middle of raise your hand, Christy, we actually did a deep dive into the actual process, we looked at the volumes. And remember when we first started talking, the first thing you said to me is I love data?
Dee Costa
I do
Tim Fogarty
We need to remove emotional discussions and decisions from the equation, we need to look at how the data drives that customer experience whether it’s through improved communication with the customers, or even improving communication internally? Correct, right?
Dee Costa
Yep. If people don’t understand when it comes to disputes and understanding deductions is the sin of a company. That’s where it shows up in your A/R. Think about it, when a customer says, I didn’t get my product, you have a delivery problem. I got my product, I didn’t like it, you got a quality problem. The sales guy said I got a sales problem. And that’s what happens. I didn’t get a PO. You’re not meeting your terms, all of that translates in one place. In your A/R, it’s going to come back as a dispute stopping your cash. I don’t know if my friend Sean Ryan is out here. One of the things that we always talk about all the time, it’s not just stopping my cash. As I mentioned earlier, I love money. And I don’t like a waste. That is waste happening on my front end. So not only am I stopping my cash, and going to my CFO, because that was my conversation before my CFO asked me, where’s the cash? Where’s the cash? I couldn’t tell them, because I didn’t have the data. But now I do. And now I can also say not only do I know where your cash is, but I also know where your waste is. I also know where we’re having problems. We need to focus on the front end to get that invoice faster so we can get our cache faster. A happy customer is a paying customer.
Tim Fogarty
That’s right. That’s right.
Dee Costa
So what are the three things that I always look at when I look at the data that I get out of HighRadius? Because we have implemented all three cash applications. We’ve done our deduction management disputes, and we’re also doing the collections. So we do have all three modules. But the three things I’m always looking at as payment terms is how is my customer paying, I can see if a customer slips, I can see my higher customers because we have segmentation. Take a look, because I want to focus on my highly skilled customers. I want to look at my dispute trends. Is something popping, what are we, what are we dealing with right now? supply issues, right? It’s a big, big, big universe of supply. But where do I need to go? Where do I need to go in that supply chain? Where are my problems? Is it a plant? Is it a product line? I can take a look at where I am slowing down? Those are where my disputes can tell me where to look on the front end. And again aging the receivables has my customer changed their behaviours? I always say well oh, they paid five days late. That’s funny. Why did they pay five days late? You go in and you take a look. I’m paying by the time I get the invoice when I get your product. Wait a minute. I’m looking at the invoice and you didn’t get the product for five days. Oh, logistics. You told me you shipped it though. are all things that are stuck because I just lost my cash for five days, it was sitting at the customer’s bank, I want it in mind.
Tim Fogarty
And now you actually have data where you can start to drive more proactive communications with your customers, or it’s also helping the team identify the problems in advance. One of the things that we’re constantly looking to improve, how do we find these issues? Or how do we identify these trends earlier in the process, so you can start to mitigate the risk associated, especially as these customers start to change their payment behaviours, we have to use data. And again, when we start to talk about some of these trends, as we were analyzing the data, we were also able to put a story together. So when we’re talking to Deanna, and saying is okay, this is what’s changing in our performance. Let me tell you who the customers are, let me tell you who, what regions they are. And let me tell you what we’re doing to address it.
Dee Costa
And the one thing I will say because you probably must have seen my mask is I am a very proud Kellogg, my brand is important to me and important to my customer. So if they have a dispute up there, that’s my name. That’s my name, Kellogg that they’re like, there’s something wrong in our brand that is so important to us and our future. And our sales are also important. So that’s important, too.
Tim Fogarty
Absolutely.
Dee Costa
Road blockers, let’s talk about road blockers.
Tim Fogarty
We agreed that these are the three top right now.
Dee Costa
Being able to do credit collections, informed decisions when COVID hit especially we got very, very nervous. We didn’t know what type of world we’re going into. All of a sudden the world stopped. I got worried about extending too much credit, what’s happening to some of my big clients? Is everybody going to start ordering? I mean, you saw there was a toilet paper shortage. I’m thinking Oh, my God, what is happening, we don’t even know what’s happening. We were really concerned about our credit and collections. And I had to protect the receivables. And by having that data into the system, I was able to see slippage. I also from an again, when you talk to your CFOs, I was also seeing some patterns of customers who are pushing their cash. Did anybody see that last year, how many people are going to get the money that they didn’t expect? You’re like, whoa, what just happened? Because guess what they’re doing, they’re looking at their bottom line, and they’re going to push their payables. So when I had increasing cash, in some places, I was able to say, hey, look, we may need to make a decision on the back end from working capital, and I might need to push my payables out more. It all becomes connected when it comes to a CFO.
Tim Fogarty
That’s right. That’s right, there’s come a couple of the other areas of opportunity that we identified. Customers are still using the age-old excuse, we need invoice copies. Right? So how do you start to drive an automated process where you start to either push those invoices to those customers or enable a self-service type environment? And then lastly, customer master? Again, you notice there’s a common theme in everybody’s data. So one of the other areas that we identified is the inability to maintain current customer master data.
Dee Costa
Yes. Now the one thing I want to talk about is also managing electronic invoicing. So being with a couple companies, the one thing I do have to say, when I talk about portals is Reba, textura and all this EDI information that’s coming through. This is our payables from our customers actually shifting their costs. And it’s ending up in our receivables. Because now I need more billers. I need more collectors because now I have a system. I no longer have an AP person asking me. I have a portal yelling at me telling me that Nope. No pay Nope. You call payables? What do they tell you to go to my portal? Now imagine what the team is like when you have a customer like a Walmart in millions and invoices going through the system. And I got to go look up one by one. That’s where one of my values that I got, I was able to have a tool that helped me manage my portals,
Tim Fogarty
As well as using the invoice tracking functionality where you start to identify which invoices were not paid, let the system tell the collector what they need to chase versus the collector calling and trying to collect everything gets back to a very tactical approach in addressing your customers.
Dee Costa
So our approach to attack with the system, once we got the system fixed, is having a centralized view of incoming payments. For global companies that’s important because the markets are very different. I was able to see what was happening in my European business, my Latam business, in North America, I had one place to look at everything is something happening over in Europe that maybe in Italy that I wasn’t expecting or something happened in Brazil, as you know, COVID affected countries in different ways, which means it affected my cash in different ways. So that was one thing that I do enjoy is having that central view of all my payments in all my disputes in one area. The next one is causing, performing root cause analysis. This is very critical if you’re a CPG company when you’re looking at that front, front process, especially when it comes to the deduction space, it’s very important to see what customers are doing and be able to provide sales, that input.
Tim Fogarty
Again, also trying to solve the upfront processes. One of the things that the writer told us was competitive repetitive issues, same issue, same customer, it was like we’re funnelling water right now it’s off, toxins are coming in the teams just working to issue a credit right off or collect versus understanding what’s actually driving the issue upfront.
Dee Costa
And I’m not finding out months later, I’m finding out the same day, because the tool is actually going into my customer portals today, getting that dispute data, the minute a customer disputes it. So I know today, not 45 days from now, when a collector calls. That’s right. And the other one is presenting data to my executive management, because you know, we’re all TC leaders, all of us here. And one of the things we’re always talking about is we’re gonna look at savings, right? We’re gonna make our processes faster, quicker. But some of the spendings isn’t just in our GBS, but some of that spending is actually on that front end. So imagine being able to tell our leadership and how many times we’re billing, how many times we’re shipping incorrectly, we have a problem fixing that. You fix the issues on the backend, that is type of tools
Tim Fogarty
Which is change management, change management,
Dee Costa
Yes, Which is very important, again, in regards to implementation. Okay, the role of technology and elevating the HR team. So a couple of things, I’d like to give some advice. When it comes to implementing a tool, I’m able to open up the bandwidth and be able to actually load shift the work against the people. And I’m also again, able to handle more of the customer portals. But the one thing I do have to and I’d recommend anybody going into a tool is that change management in the right skills. We came from a very manual type environment, we did everything one invoice at a time, one deduction at a time. That was a big change for our organization. And it’s very important to find the right talent and to upskill our teams, they want this they have they’re excited about it. But it’s getting them to understand THE WHY
Tim Fogarty
That’s right.
Dee Costa
We’re moving to a tool.
Tim Fogarty
Exactly. Okay. So I see we blurred the numbers here for a reason.
Dee Costa
There’s a reason.
Tim Fogarty
But just I think to add some scale to this conversation, it’s fair to say the number that was on this chart was $65 million in deductions. I mean, that’s cash flow. And if we think of that $65 million in deductions, 11 million of that is greater than 90 days. And I think we would all agree that once aging goes beyond 60 days, and you start to dovetail into the 90 days, the opportunity to collect the cash goes away. So it’s lost, it’s lost mine.
Dee Costa
Right.
Tim Fogarty
So again, getting back to some of the things that we talked about earlier, how do you expedite the process of validating a deduction? How do you communicate with your customers sooner? And as well as how do you stop the bleeding and identify the root cause? And you address the issue? So you’re starting to see the team focusing more on strategic discussions with your customers versus constantly dealing with transactions?
Dee Costa
And also looking at some of the reasons No, no, you’re fine. Even looking at some of the reasons so here we take a look at the root cause: Am I having a freight problem? Am I having a shortage problem? If I’m having a pricing problem? You know, we’ve all had to increase our prices over the past year to keep up with the demand and supply. How is that really translating? Is it training to dispute? Or is it translated to cash? That is the information that a CFO wants to know? Or is my sales team doing things that are going to be advantageous for my customer to continue to come back, or am I damaging my relationship with my customer by putting bad invoices or bad products out in the street? Those are the things you want to take a look at. The aging bucket. to Tim’s point when you start looking at stuff and you all of a sudden, which was a surprise. Be surprised, don’t be surprised it is when you first see the data. It’s a little shocking. I remember saying to myself, how do we have an invoice that’s over three years old. So sitting in the book, yes, we think we’re going to collect it. No, we’re not. But that’s what you end up seeing. You have this extended aging and the longer you take and our customers are smart too. Don’t let them fool you. They’re putting it in our contracts. Now you don’t collect it in 90 days or dispute it off the table. I just got a free box of Kellogg’s.
Tim Fogarty
But I think the benefit of the application, in this case, having all the information account notes in one location so to your point is something that is aging greater than 90 days, understanding why has the collector made enough contact with their customer toward to address it, or is it just sitting? You make a quick business decision. So you focus on the receivables that you know you can collect.
Dee Costa
And what’s great is that I want to focus on the customers that mean the most to me, who are my revenue generating customers, I’m not looking at every single customer and I do every customer means the world to me. But if I’m going to need some money, or real fast, I want to focus on certain segments of my customer base and look at the aging because the longer that aging, the less likely I’m gonna get the cash.
Tim Fogarty
Okay, so again, this was blurred out for a reason. But I just didn’t want to get things in perspective. $65 million in deductions of which 11 million of that was greater than 90 days.
Dee Costa
It was a bank. Okay, so this one’s my favourite,
Tim Fogarty
I want to ask everybody to take your cell phone out for a second. So when we talk about aggregating documents from a portal.
Dee Costa
I’m gonna sit down for this one.
Tim Fogarty
Okay, I want you to imagine you’re a deduction analyst, you’re accessing a customer portal. you’re logging in with your credentials. Now you’re trying to find the folder where the documentation is housed. Still waiting.
Dee Costa
Still waiting.
Tim Fogarty
You’ve now identified the documentation. You’re now waiting for it to upload on your PC.
Dee Costa
My CFO needs to know why he wants to know why I’m not collecting cash.
Tim Fogarty
Exactly. So now it’s still spinning, or we’re still waiting. We’re still waiting. Now it’s uploaded. Now you have to download it into a central location where the team can access it, and actually use it. So we’re still waiting. Right? Now you’re at a point where the documentation is in a centralized location and may not be indexed correctly. Actually, it may even be on somebody’s laptop. So you’re not even sure it’s in a central location at this point. So when we talk about the benefits of portals and aggregating documentation, did we want to talk about the time savings,
Dee Costa
Oh, my God. So imagine how many deductions people I needed, and how long it would take to pull 3700 documents. Imagine that. That’s just a couple of my customers. And if you remember earlier, I have over 60,000 customers globally. That’s under 10 customers right there. That’s one day. That is the type of work and the type of leverage I have now. We had a signal. And I admit, we had significant savings as a result of what we did, because we had over 50 people that were actually doing this day in and day out one invoice at a time, one invoice at a time.
Tim Fogarty
And there’s another benefit, right, which is the fact that it’s now uploaded into a central repository, you always have access to it. It’s indexed, it’s easy to identify and locate. It meets your compliance and audit requirements. So you’re retaining it for a minimum of seven years. Again, the idea is you’re saving time, you’re enabling your team to focus their energies on more relevant activities, whether it’s again, addressing these recurring issues. But again, if I think about some of the challenges we’ve had in the past, where maybe a portal fails, because of a password, even in those types of a situation, we can address that within hours, sometimes minutes. Versus if you think about it, people. Sure. Thank you for that. Note, I’m gonna go to the next slide. Everybody has corn flakes this morning. But the reason why I think that DNI wanted to call that out, obviously, with technology things happen.
Dee Costa
Yes.
Tim Fogarty
And one of the things that I think we would agree the lesson learned is having the right governance model in place. So when things break or something happens, that we were aware of it, we made it, communicated it, people are accountable to address it. And we’re following through to ensure that it is indeed addressed. And the team can now recover.
Dee Costa
Yes, I do agree.
Tim Fogarty
Okay. Anything else you’d like to add? No, I’m the cornflakes
Dee Costa
And my cornflakes. Okay. Okay, so we have five minutes. Any questions for Dee at this point?.
Tim Fogarty
Yeah. There’s a question in the backend.
Audience
How many of the $65 million worth of deductions were valid?
Dee Costa
Oh, I’m not telling.
Audience-1
Come on. We’re living in a nightmare now.
Dee Costa
Well, here’s my question: trade or non-trade. Ah, yeah. Non-trade Yeah, yeah. But you know what was great about understanding what’s happening in my non trade I can work with my sales. That’s where the value is. And that’s what we want to talk about. I’m no longer spending 3700 invoices on a customer, what I am doing now is taking my leadership to go in front of a sales team and start talking about those nine non-trade deductions because you know, that is the pain point trades, not the issue. It’s a non-trade.
Tim Fogarty
Well, that’s right. But since you opened the door, let’s walk through it. So there’s another component of this. Where what about the valid deductions? What about our ability to automate?
Dee Costa
Yes
Tim Fogarty
The clearing?
Dee Costa
So if it is valid?
Tim Fogarty
Yes.
Dee Costa
Yeah, So I mean, if it’s valid, great, let’s get it cleared. Get off the books, I want to focus on the No, I want to focus on invalids. And I want to focus on my non-trade.
Tim Fogarty
That’s right. Hmm.
Dee Costa
I can go into a portal missing POS or any information I maybe forgot on the front end, I can go and get that resolved. So it actually auto resolves the dispute. We also if for those who are in the CPG, we also have a lot of deductions in place with the contract claims as contract terms, I can go into the contract, I can go into our trade agreement. And I can actually go to the deductions if the three-match. This is going to resolve and clear it off my A/R. If it doesn’t, then now I have an analyst at that point, there’s now I’m going to go and get the issue resolved, whether it’s with the buyer with the customer, or within our turn turtle sales
Dee Costa
No, that was just going to get the documentation. So I go see if I even have one because we had to go in one at a time to go look at a document for a contract to go get a proof of delivery of one document. Now I don’t have it there for the agent. So the agent can be making decisions versus going to pull an invoice, pull an invoice, pull a backup.
Tim Fogarty
But I think it is with regard to the valid deductions. I think we have a 92% confidence level, including,
Dee Costa
I would ask Aaron, I don’t do any data validation without error.
Tim Fogarty
I think it’s close to 90% error and not to put you on the spot. But again, it gets back to the volume of deductions that the system validates where it’s touchless. It’s cleared without anybody having to if you tell the truth. I’m close, I believe. Okay, another question.
Audience
So what was your adoption rate for the portal from your customers? And how did you go about getting their adoption rates or adoption?
Dee Costa
Well, we had to use our own logins. So we bought the bottom user on logins, I will say the industry is changing. And we are seeing customers who are pushing back on the bots. And we have teamed up with HighRadius on a regular basis and asked for that information. But we do see it and you have to be prepared. And if you need to make sure you know that the mid-mid, the customer shuts your bot off, or kicks you out of the system, you have to find out why you gotta worry about security, because they want you to know, they want us to validate your user. You know, we’re using our own IDs, our own catalogue IDs. But it is becoming a problem.
Tim Fogarty
Yeah, and I think the benefit is as well, we aggregate with so many different portals across multiple clients, we leverage that experience. So we try to minimize the disruption in setting it up. And as we identify like, for those of you who are aware of the Kroger website changing earlier this year, a number of us, right, have had some challenges with that. The fact that we became aware of the answer to communicating that across our customers, it helped in our ability to accelerate the resolution of that issue.
Dee Costa
And that continues to be an issue with some of our clients. All they have to do is just you know, we’re going, to be honest, all you need to do is just change one thing on their own site and not inform us. And your bot stops working
Tim Fogarty
Or change to dual authentication, which we’ve been dealing with this week.
Dee Costa
Yeah, yep.
Heather King
All right, one more question. We have time for one more question.
Audience
Hi, how did you get your team, your internal team to buy into the transaction?
Dee Costa
That was tough. I admit as I said, when we first went in, we actually learned right into technology. We didn’t do the change management. We went back. I was very fortunate. In fact, she’s here, Patricia O’Shea, who runs It, you know, helps me with it. She had a lot of experience in change management. So I actually reached out to her and she did some sessions with the team. And then I had to get my leadership behind it. It did affect some leadership. Some might leadership did leave. I will admit some of my team members did leave because they didn’t want that. But this is the future. We got to take a look but I did have some people that just shocked me at the adoption. And the more they adopted the more other people adopted it but it is tough. Because the first thing they say is, Oh, you got a bot, it’s going to replace me. But the people who wanted to do those insights were the ones who grew. And now you all of a sudden, no, not no longer managing transactions, you’re now actually managing insights. And that was really cool to watch people like that grow.
Tim Fogarty
I also say the other component was sharing success. So once they saw the benefit of automation and how it made their jobs easier, that was a great way to build those champions. Once you had those champions, they started to tell others, hey, this actually works. You should learn to log into the system, you should be using the strategies. It really helped change the narrative. Once we started to see success.
Dee Costa
Yeah, optimize your processes.
Tim Fogarty
That’s right.
Dee Costa
Optimize your processes, focus on that change management, then go tech.
Tim Fogarty
Alright.
Heather King
Okay, let’s give Dee and Tim our superstar duo. A big round of applause.
