GUEST VIEWPOINT: Reducing Revenue Leakage

By Martin Schmid, SAP

Order-to-cash is one of the key processes that port terminal operators are working to improve. They need an integrated and financially traceable order-to-cash platform, from terminal operation systems to financial systems.

Revenue leakage presents a major challenge to the port management industry, where some port terminal operators face leakage values of up to 10% of their revenues.

However, technology can be used to reduce revenue leakage considerably, and it is one of the greatest growth opportunities for the industry.

Q. Which are the main causes of revenue leakage in this industry?

Based on our extensive work around this topic, we can safely say that revenue leakage is caused by the same culprits across all enterprise organizations:

1. Lack of automation, where a lot of integration and transaction handling is done manually by people. Human error is a major contributor to revenue leakage.

2. Lack of a fully integrated order-to-cash process.

From a technology perspective, we need to remember that this industry includes many privately owned businesses that have been running on legacy systems for a very long time. These systems don’t have the flexibility to help businesses evolve and launch new business models. In addition, this industry has seen a lot of consolidation through mergers and acquisitions in recent years. This has resulted in a large stack of siloed IT applications that present major challenges for the finance organizations trying to manage the business in a consolidated manner.

The complexities introduced by the integration of these multiple silos of operational and business applications, plus their inflexibility, has led to inaccuracy, inconsistency and lack of real-time financial visibility and traceability of the ship service lifecycle.

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