The Lead to Cash business process encompasses a series of steps and activities that take a potential customer from the initial lead through to a completed sale and, eventually, cash in the bank.
However, there are several different process variants within this overall framework that can be applied to different types of business models and customer needs.
These variants are:
- Network-based Sales Processing which involves using a network of sales channels, such as resellers or distributors, to manage the sales process and drive revenue.
- Customer Service to Field Service focuses on delivering exceptional customer service and support, including dispatching field service technicians when needed.
- Subscription and Usage Business centers around providing customers with ongoing access to products or services through a subscription-based or pay-as-you-go model.
- Solution Business variant involves delivering highly customized or complex solutions to customers, which may involve a combination of products, services, and expertise.
The Lead to Cash process variants can be deployed in two different ways: Cloud-based and hybrid deployments. Cloud deployment means the utilization of software and services hosted and accessed over the internet, typically through a third-party provider. On the other hand, hybrid deployment refers to a combination of on-premises and cloud-based solutions.
In the context of Lead to Cash process variants, the choice between cloud and hybrid deployments can impact several aspects of the business process, including accessibility, scalability, security, and integration.
Cloud deployments offer greater accessibility, allowing users to access the Lead to Cash system from anywhere with an internet connection. This can lead to improved collaboration and responsiveness, particularly in Lead to Cash variants where real-time access to data and customer information is crucial. Furthermore, cloud deployments often provide scalability, enabling organizations to easily expand or contract their usage of resources based on demand.
In terms of security, both cloud and hybrid deployments require robust measures to protect sensitive customer data and financial information. However, hybrid deployments offer more control over the security of on-premises data while still using the advantages of cloud-based services for other aspects of the Lead to Cash process.
Integration is another key consideration. Cloud deployments typically require integration with other cloud-based systems, while hybrid deployments involve integrating on-premises systems with cloud-based applications.
Ultimately, the choice between cloud and hybrid deployments for lead to cash process variants depends on factors such as organizational needs, existing infrastructure, data sensitivity, and scalability requirements. By carefully evaluating these considerations, organizations can select the deployment approach that best supports their specific Lead to Cash business process variant.
With all these process variants and deployment options, we can define several solution variants as you see in the following image:
Let's look at each variant of the Lead-to-Cash business process.
Network-Based Sales Processing
In this Lead-to-Cash variant, the focus is on using a network of sales partners, distributors, or resellers to expand sales reach. It involves lead distribution, partner relationship management, and deal registration to effectively manage the sales network.
The process typically needs channel enablement, partner incentives, and sales collaboration to ensure synchronized efforts and revenue generation through the network.
The automation of Order to Invoice seamlessly connects SAP S/4HANA Cloud with SAP Business Network for Suppliers and trading partners, and automates the sales processing from creating sales orders to sending customer invoices.
When a purchase order is generated for you as a supplier in SAP Business Network, a sales order is created or updated in SAP S/4HANA Cloud. Your SAP S/4HANA Cloud system also sends order confirmations, advanced shipping notifications, and customer invoices to SAP Business Network in electronic forms when you complete the preceding steps.
All data is routed through SAP Integration Suite, Managed Gateway for Spend Management, and SAP Business Network.
The following figure shows an overview of the process and the documents exchanged between SAP S/4HANA Cloud and SAP Business Network:
Customer Service to Field Service
This variant includes customer service operations at call centers, creating service orders including warranty and contract entitlement check, dispatching service activities to technicians, and processing service confirmations for cost and revenue reporting. It often involves a robust customer support process, including case management, issue resolution, and service requests, and extends to field service operations such as on-site maintenance, installations, or repairs.
The coordination and integration between customer service and field service teams are essential for delivering consistent and high-quality customer experiences.
Subscription and Usage Business
This variant revolves around the management of subscription-based products or services and metered usage models. The focus is on customer acquisition, engagement, and subscription lifecycle management, including billing, invoicing, and recurring revenue optimization.
It requires proactive usage monitoring, customer retention strategies, and flexibility in pricing and packaging offerings to align with varied customer needs and usage patterns.
Solution Business
Many companies across industries are undergoing a digital business transformation, evolving their business from just selling single products or services to offering holistic solutions of bundled items. Solution Business for Cloud Deployment provides an end-to-end process for managing all aspects of a solution offering. It considers the overall experience, from the initial quoting, over fulfillment to billing, accounting, controlling, and revenue recognition. A corner stone of this sales scenario is the solution order, which allows the bundling of physical goods along with services, projects, and subscriptions in one integrated order.
In this variant, the emphasis is on delivering comprehensive solutions rather than standalone products or services. The process involves solution design, proposal development, and complex deal structuring to address customer-specific challenges or opportunities.
Collaboration among sales, product, and technical teams is crucial to formulating and delivering tailored solutions that meet customer requirements.
Summary
The Lead to Cash business process encompasses various solution variants tailored to different business models and customer needs.
The four main variants we have covered include:
- Network-Based Sales Processing: This variant involves coordinating with a network of sales channels, such as resellers or distributors, to manage the sales processes efficiently.
- Customer Service to Field Service: This variant focuses on delivering outstanding customer service and support, including dispatching field service technicians when needed, requiring a robust and efficient service management system.
- Subscription and Usage Business: This model revolves around providing ongoing access to products or services through a subscription-based or pay-as-you-go model, demanding agile billing and invoicing, and effective management of customer usage.
- Solution Business: This variant centers on delivering highly customized or complex solutions to customers, needing a deep understanding of customer needs and expertise to design and deliver customized solutions effectively.
Understanding and effectively managing these process variants enable organizations to optimize their lead to cash process, drive revenue, and ensure customer satisfaction.
Further Reading
For additional information on this topic, refer to: Lead to Cash Solutions Variants.