India SaaS revenue hits $3.5 billion, growing at 30% annually - Times of India
India SaaS revenue hits $3.5 billion, growing at 30% annually – Times of India
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BENGALURU: India’s SaaS (software as a service) revenue touched $3.5 billion in 2019-20, growing at 30% annually. Three-quarters of that comes from global sales, showed a Nasscom study on SaaS released on Thursday.
The growth rate is 1.5 times faster than the global SaaS growth. Top Indian pure-play vendors dominate the SaaS market, with the top 5 players accounting for 33% of market…
HighRadius announced it has raised $125 Mn Series B funding for expansion. The company was valued at more than $1 billion with this & joins unicorn club.
How Suppliers Can Use AI To Immunize Against The Retail Apocalypse
By Pijush Gupta, HighRadius
More than 3,800 stores are expected to shutter their brick-and-mortar retail operations this year, most notably and recently the bankruptcies of Toys ‘R’ Us and Sears Holdings. But it’s not only stockholders and employees that are feeling the fallout. It’s also the suppliers — big and small — that rely on these retailers as a valuable sales channel.
What happens to suppliers when it’s time to collect past-due receivables from swiftly closing operations? The answer isn’t pretty, depending largely on how well suppliers have immunized their business. The distinction often lies within a supplier’s order to cash process and whether the supplier is actively deploying the right AI technology.
When done properly, order to cash and, more specifically, accounts receivable (AR) is integral to the success of a business, in that it enables cash forecasting and allows companies to optimize their working capital. There are three key areas where utilizing an order to cash solution can provide a competitive advantage for suppliers amid store closures:
1. Improve Credit Risk Management
When large companies like Toys ‘R’ Us and Sears head for bankruptcy, suppliers know. In these instances, equity analysts accurately predicted the closures several quarters before they actually happened. Combined with mandatory disclosure protocols for public companies, information about the impending bankruptcies were all over the news. Suppliers had time to prepare.
But this isn’t always the case. Because big buyers are just that — big — suppliers often mistakenly place the majority of their focus on their biggest partners, forgetting that in aggregate, smaller retail partners can be just as risky. When these smaller, private retail operations are struggling, oftentimes suppliers are left in the dark. These operations don’t have to follow the same public disclosure steps as their larger, publicly held peers, leaving suppliers unaware of potentially impending bankruptcies and closures. Without advance warning, suppliers are left to make assumptions about a private operation’s struggles, which can make it difficult to accurately judge credit risk. That’s where technology steps in.
With an AI-driven credit risk mitigation plan, all micro- and macroeconomic conditions, market sentiments and social media noise can be considered in order to arrive at a predictive and prescriptive plan. An AI-enabled order to cash solution works through all available data, both internal and external, to consolidate opinions on creditworthiness. Suppliers are then able to adjust risk based on the projected health of their partners — both large and small.
As the retail sector continues to witness a mass exodus where entire malls are failing, it’s becoming more important to carefully consider risk levels for those smaller partners. By automating ongoing credit assessments and scrutiny with an appropriate AI-based order to cash platform, it’s easier for suppliers to maintain a healthy awareness of risk exposure and adjust as necessary.
2. Better Predict Buyer Behavior
In practice, retail suppliers with the best processes get paid more often by making it quick and easy for their buyers. The best suppliers understand their customers, allowing them to optimize their interactions and even predict customer behavior.
AI is already being used by suppliers to predict customers’ payment dates and auto-prioritize their collectors’ activities accordingly. In the retail sector, similar to other industries, the ability to evaluate payment patterns and examine historical behavioral data to figure out the most effective methods and times to follow up with customers can keep suppliers more in tune with their buyer’s behavior.
AI can predict a late payment for a given customer before that customer ever goes delinquent. This enables the collector to send a proactive reminder to the customer with a link to a self-service payment portal — allowing the supplier and the buyer to avoid delinquency altogether.
AI can also track trends in payments, noting an unusual uptick in late payments that could foreshadow a buyer going out of business. At the end of the day, an AI-backed system can enable a frictionless and collaborative relationship.
3. Increase Recovery Rates
Invalid deductions are like highly valuable needles in a haystack. AI enables you to find those needles without sifting through the hay. With AI software, you can predict deduction validity or invalidity with 90%+ accuracy, and programmatically auto-clear valid deductions and trigger research workflows and customer correspondence for invalid deductions. This greatly accelerates resolution time and results in fewer write-offs and increased recovery rates for suppliers.
The Devil Is In The Details
With the effects of the “retail apocalypse” pervasive among smaller companies, micro-level troubles can add up to a macro-level problem. The best way to inoculate yourself as a supplier is to use AI to harness the incredible power of information. If a company is in trouble, you need to look at every index and every indicator to understand where to add additional layers of scrutiny.
The devil is in the details, but the use of an order to cash platform can allow you to properly track and analyze those details, giving you the ability to manage risk and ultimately helping you get better results.
Pijush Gupta is an AVP, Product Marketing at HighRadius. As part of HighRadius’ Marketing team, he is responsible for innovative and targeted content strategy to drive messaging for core products and new product initiatives. Previously, Gupta also provided strategic direction to evolve, grow and market SaaS software products in the Accounts Receivables and Revenue Management space.
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