Digitization in WCM

How digitization is impacting WCM in Swiss companies

What is the current position of Swiss companies regarding digitization in WCM? The Working Capital Management Study 2017 carried out by the University of St. Gallen provides three key insights.

1. High expectations, low degree of implementation

Swiss companies have very high expectations in all sub-categories of WCM as far as digitization is concerned. They want to see full or partial automation of processes in the areas of accounts receivable, accounts payable, inventories and liquidity. However, the degree of implementation of digital methods generally remains low. Highly progressive approaches are still rarely used.

2. Major differences in investment volume

There are clear differences amongst the participating companies in terms of investment volume. While the top fifth of these companies invest 1.8% of their revenues in WCM digitization projects, the figure stands at just 0.1% for the remaining 80%. Most companies appear to be initially watching and waiting in view of the wide range of approaches.

3. Focus on process efficiency, but not exclusively

The study also looked at where investments are being made in digitization in the individual categories of WCM. In accounts receivable, for example, 41% of investments are accounted for by order processing alone, a further 22% by e-billing and 19% by e-payment. In the category of accounts payable, software-based accounts payable management systems made up the highest proportion at 30%, followed by the implementation of e-billing systems at 26% and e-payment solutions at 24%. In summary, it is evident that the emphasis is being placed on process efficiency in all categories. However, more progressive digitization approaches are also increasingly being pursued in the top 20% companies. For example, big data analytics or smart contracts based on blockchain technology in the area of accounts receivable, and cash pooling in the category of liquidity, are of major importance for large companies in particular.

This might interest you too