Process Management with Bottom Line Impact
A private educational institution had been successful both as a university and as a business; but in late 1998, problems in its accounts receivable process were becoming apparent. The two primary measures of success of this process are total accounts receivables (AR) and the percentage of total AR that is over 90 days old. Both of these measures had been trending upwards substantially disproportionate to growth in university enrollment, and the university felt that something needed to be done to get AR back in control.
A large (process clarification) meeting was held to understand how all the different functions at the university could support or hinder accounts receivables. Then, with coaching, a smaller representative group was tasked with identifying process indicators that would show if each function was performing in a way that supported the overall process. Once the indicators were agreed to and in place, this team monitored them on a weekly basis to look for “bottlenecks” in performance. One at a time, the bottlenecks that were hindering overall process success (and hence accounts receivables) were identified and removed. Although it took about a year to achieve this, the results were significant and permanent. The team has moved on to address other performance issues and Total AR has remained in control. See the trend in total AR before and after the intervention below.
Total AR Before and After Intervention(from Esque’s Making an Impact, CEP Press, 2001)