INFOSYS WORKING CAPITAL ANALYTICS POWERED BY INFOSYS GENOME SOLUTIONEnabling working capital management with a data-driven analytical approach

Working capital management is one of the most critical focus areas for enterprises to manage the disruptions across supply / demand value chains and stay healthy. Unprecedented crises disrupt cash flow by manifolds pressuring the finance departments to align with data in near real-time and keep up with emerging situations to dynamically manage their cash positions, payables and receivables.

The office of CFO needs to continuously monitor the trends of DSO/DPO/DIO and optimize the cash conversion cycle. They need to work with lenders to identify appropriate funding at right points in the supply chain and invest excess capital to maximize returns.

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Fragmented and siloed data and formatsIn large enterprises, system landscape is quite diverse with many ERP products and capital management solutions. The teams perform analysis in silos, on different platforms and in different formats. In some enterprises, even payment terms are negotiated in silos. In small and medium enterprises, most working capital analysis is done on excel sheets for each metric. This results in sub-optimal decisions on investments and borrowings, impacting

Infosys Genome Solution with near real-time data integration/transformation and with a library of powerful AI models provides actionable insights for optimally managing working capital. The solution can integrate with the existing systems of record for financial data (Oracle, SAP or any other) and can be implemented on-premises or on cloud-based data-lake to provide the recommendations for actionable insights. For a large business, this can positively augment the functions of ERP systems and, for small and medium businesses it can be a quick means to optimize the payables and receivables.

Technology Features:

• End-to-end automation pipeline from data ingestion to transformation to consumption with components deployable on need basis

• A deep domain data model for one-stop data shop

• Self-service analytical data aggregating facility for scalability and reusability

• API based integration capabilities for actionizing recommendations

Functional Features

• Insights on working capital position & trends of factors such as cash position, accounts payable , account receivable, funding and costs

Key challenges in working capital management

Infosys Working Capital Analytics powered by Infosys Genome Solution

the working capital. This ad-hoc approach and reliance on manual ways limits the organization to effectively manage working capital.

Use case based approach for AnalyticsDifferent teams in an enterprise leverage analytics on a use case basis to address challenges on working capital management. This use case based approach calls for huge cost and effort for every data science life cycle. The data

• DSO Optimization – Recommendation on the order and date of collection to achieve the target DSO using a scalable analytical model without need for exploratory analysis, training and testing. Ability to exclude customers, customer industry segments or regions from optimization

• DPO Optimization - Recommendation on the order of payment of purchase invoices based on heuristic reinforcement learning techniques that is scalable without need for exploratory analysis, training and testing

Features of Infosys Genome Solution

discovery and data preparation cycles are extremely cumbersome to manage thus affecting the time to market significantly. The insights are also sub-optimal as enterprises are blind-sighted on sources of data across their enterprise.

Enterprises need to have an agile data management and integration solution to create a strong 360-degree data foundation and a library of AI/ML models to ensure efficient working capital management.

• Account level balance forecast using composite ML based modelling (requires exploratory analysis, training and testing for new segments of data)

• Maximize returns on idle cash with Smart Sweep Advice, an element of the solution

• Observe from the CFO office, the changes & trends of DSO, DPO, DIO & CCC on strategic decisions

• An ever expanding library of designs for insights & analytical models

Foundation Canonical Model

Framework

Gene blocks and GenomeMulti dimensional behavioral

analytics

Library : Dashboards &

Analytical Models

360 views, segmentation, propensity…

Graph Engine

Visual representation of data relationships

Intelligence Grid

Ingestion framework for (semi) structured and

unstructured data

Genome Cockpit

Enables Enterprises To Be Cognitive

APIs

Rest APIs for downstream consumption needs

Entity Resolution

Framework for creating golden record of customer(s)…

Transformation Framework

Management Console, Transaction Engine & Query

Engine

Integrated Market Place

Facilitates & promotes enterprise collaboration

1 2 3

8 4

7 6 5

Enterprise Com

munity

Reporting + Analytics M

aturity

High

Business Value

Low

Data Scientists & Analysts

Business Users

IT Data Engineers

Technology Agnostic

Domain Centric

Boundaryless

Customizable/Configurable

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While the solution has a wide range of features, some of the most critical use cases that can be prioritized by Treasury management department for immediate actions are:

• Accounts Receivable Analytics

o User Story: As the Treasury Manager of my organization, I need insights on my receivables and recommendations to achieve a target days sales

Prioritized execution approach

outstanding, in order to focus my collection efforts efficiently to improve the cash flow.

• Accounts Payable Analytics

o User Story: As the Treasury Manager of my organization, I need insights & recommendations on my payables beyond the capabilities of my ERP, in order to organize my payments for optimum cash flow.

• Cash Balance Forecasting and Smart Sweeps

o User Story: As the Treasury Manager of my organization, I need a reliable forecast of the balances in the accounts, in order to optimize the sweep strategy with the bank and reduce idle capital.

DSO Opt imizat ion M odel Input

R ecommended Invoices

Cus . . Invoic. . Cus to. . Cus tomer r . . Is s ue Date Amou. . Pred Pa. . Target d. .

1248 2293 M edium NewYork 1/13/2018 45,300 4/2/2018 2/28/2018

1363 2310 Low W as hington 1/10/2018 46,290 3/12/2018 2/7/2018

1505 2257 M edium California 1/8/2018 46,900 5/21/2018 4/18/2018

1669 2031 M edium NewYork 1/23/2018 48,900 4/2/2018 2/28/2018

1688 2192 Low W as hington 11/17/2017 44,850 2/26/2018 1/25/2018

1710 2281 M edium Texas 1/23/2018 47,130 3/26/2018 2/21/2018

1743 2299 High NewYork 1/19/2018 49,030 3/26/2018 2/21/2018

1947 2081 Low M as s achus e. . 12/28/2017 49,970 5/7/2018 4/4/2018

1959 1369 High NewYork 10/19/2017 48,900 3/5/2018 1/31/2018

1995 2345 M edium Texas 1/12/2018 46,740 5/7/2018 4/4/2018

A.

A.

A.

A.

A.

A.

A.

A.

A.

A.

E nter the Target DSO108

Invoice No

1369 2031 2081 2192 2257 2281 2293 2299 2310 2345

0

50

100

Num

ber

of D

ays

Predicted Payment Days

Target Payment Days

E xclude Cus tomerNone

E nter M ax Number of Invoices10

Cus tomer regionAll

Cus tomer s egmentAll

DPO Opt imizat ion M odel

Net E arnings : 42,000Cus tomerR egion

AllProduct Type All

R egion

California NewYork W as hingt . .

0

20

40

60

DP

O

54.52

64.8458.35

Product Type

A B C D

0

20

40

60

80

DP

O

53.26

63.63

50.74

73.73

0M

5M

10M

Am

ount

Date1/31/2018 to 8/17/2018

Payable Amount

Available Amount

Paid Amount (Opt imized)

Dis

coun

ted

Neu

tral

Pen

alty

0

100

200

Num

ber

of In

voic

es

Invoic. . Due Date Amount Payable Date Payable Amo. .

1004 4/16/2018 15,400 6/10/2018 15,400

1005 3/12/2018 36,550 2/25/2018 36,093.125

1012 5/10/2018 8,260 4/10/2018 8,136.1

1026 3/7/2018 30,730 5/6/2018 30,883.65

1042 4/4/2018 28,180 4/3/2018 28,039.1

1053 3/17/2018 9,840 5/16/2018 9,987.6

1061 3/30/2018 24,070 4/29/2018 24,250.525

1063 2/2/2018 6,950 5/3/2018 7,019.5

1069 5/22/2018 8,860 7/16/2018 8,860

Days to pay. .

0 50 100

No of Invoices

0M 1M 2M

Payable Amount

0K 20K

E arnings

0-20

20-40

40-60

60-80

80-100

100-120

120-140

Opt imized DPO:~53 days

Dashboards for Receivables Insights & Advanced Analytics

Dashboards for Payables Insights & Advanced Analytics

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Benefits of Infosys Working Capital Analytics Solution

• Increased optimization of receivables & payables through the application of analytical models

• Insights on suppliers, customers and their payment patterns to decide dynamic discounts and partial payments

• Insights to plan for receivables financing, pre-shipment finances and for negotiations on changing payment terms

• Reduce idle cash and excess working capital reservation

• Prevent occasional short-term dips and spikes in the past balances driving the sweep strategies

Recommendations for negotiating appropriate payment terms, what-if analysis on the impact of dynamic discounting, waivers and extensions on the cash position, probability of delaying or defaulting on invoice payments, inventory insights, insights for revenue forecasting & budgeting are being worked upon.

A C C O U N T S P E C I F I C D A S H B O A R D A c c o u n t d e t a i l s F i l t e r s : - - >

C us t N a m e C us t Indus try .. C ountry O f B us ines .. Ac c t Type Des c P roduc t Des c r Ac c t O pen Da te

C us tom er N a m e

002Fis heries US

As s oc ia tion

C hec king with Inte..

B US IN E S S

C H E C KIIN G W /IN TE R ..6/28/2016

C ont. ID

33098690

Ac c ount N o

All

B iz E ff Da te

9/27/2016 to 2/12/2019

S ep 1, 16 M a r 1, 17 S ep 1, 17 M a r 1, 18 S ep 1, 18 M a r 1, 19

B iz E ff Da te

200M

300M

400M

Bal

ance

Feb 11 Feb 16 Feb 21 Feb 26 M a r 3 M a r 8 M a r 13

Da te [2019]

1500M

2000M

Avg

. Bal

ance

1500M

2000M

Val

ue

T r a n s a c t i o n d e t a i l s

Debit

$30.5KCredit

$35.8K

T o t a l A m o u n t

Debit

192C redit

230

T o t a l C o u n t s

TR ANSF. . CHE CK DE POSIT ONLINEPAYM E NT

ATM TR ANSFE R

ZB A TR ANSFE R

FMUPLOAD..

SUB STITUTE CHE CK

DE POSITADJ UST. .

ONLINE TR ANSFE R

2 . 2 K1 . 6 K

1 . 3 K 1 . 4 K 1 . 3 K 1 . 5 K1 . 0 K 0 . 9 K

0 . 4 K1 . 0 K

T o p 1 0 T r a n s a c t i o n s b y A m o u n t

TR ANSF. . CHE CK DE POSIT ONLINE . . ATM TR A. . ZB A TR A. . SUB STIT. . ONLINE . . PAYM E NT CLOSING. .

1 31 1

7 96

95 5 6 6

T o p 1 0 T r a n s a c t i o n s b y C o u n t

Tues da y W ednes da y Thurs da y Frida y S a turda y

0

100

200

300

Acc

Txn

Am

t

W e e k ly T r a n s a c t i o n s b y A m o u n t

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0

50

100

Co

un

t of T

ran

s ..

W e e k ly T r a n s a c t i o n s b y C o u n t

Cummul ati ve I nter es t E ar ned

S m ar t S w eep Cum ul ati v e I netr es t S tati c S w eep Cum ul ati v e I netr es t

Jan 4 Jan 9 Jan 14 Jan 19 Jan 24 Jan 29

0

50 0

10 0 0

Cu

mu

lati

ve I

net

rest

R ecommendation: Sweep 100% of pr edicted amount @ 10AM Sweep day-end balance @ E OD Set OD l imit to $ 10,000

Cur r ent Pair Str ategy: 2 way Fixed

Cur r ent Amount: $ 40,000

Cumulative E ar ning thr ough cur r ent Str ategy: 482.7

Pr oposed Pair Str ategy: 2 way Range Based

Cumulative E ar ning thr ough pr oposed Str ategy: 979.5 I nter est Revenue I mpact : 182% Additional Gain/Month

Earning Maximization Using Smart Sweep- Case 1

31,D

ec,1

71,

Jan

,18

2,Ja

n,1

83,

Jan

,18

4,J

an,1

85,

Jan

,18

6,J

an,1

87,

Jan

,18

8,J

an,1

89

,Jan

,18

10,J

an,1

811

,Jan

,18

12,J

an,1

813

,Jan

,18

14,J

an,1

815

,Jan

,18

16,J

an,1

817

,Jan

,18

18,J

an,1

819

,Jan

,18

20,J

an,1

821

,Jan

,18

22,J

an,1

823

,Jan

,18

24,J

an,1

825

,Jan

,18

26,J

an,1

827

,Jan

,18

28,J

an,1

829

,Jan

,18

30,J

an,1

831

,Jan

,18

0 K

50 K

10 0 K

150 K

20 0 K

Static Sweep - Amount

31,

Dec

, 20

171,

Jan

, 20

182,

Jan

, 20

183,

Jan

, 20

184

, Ja

n,

2018

5, J

an,

2018

6,

Jan

, 20

187,

Jan

, 20

188

, Ja

n,

2018

9,

Jan

, 20

1810

, Ja

n,

2018

11,

Jan

, 20

1812

, Ja

n,

2018

13,

Jan

, 20

1814

, Ja

n,

2018

15,

Jan

, 20

1816

, Ja

n,

2018

17,

Jan

, 20

1818

, Ja

n,

2018

19,

Jan

, 20

1820

, Ja

n,

2018

21,

Jan

, 20

1822

, Ja

n,

2018

23,

Jan

, 20

1824

, Ja

n,

2018

25,

Jan

, 20

1826

, Ja

n,

2018

27,

Jan

, 20

1828

, Ja

n,

2018

29,

Jan

, 20

1830

, Ja

n,

2018

31,

Jan

, 20

18

0 K

10 0 K

20 0 K

Smart Sweep - Amount

Sw eepAmt / Smar t Sw eep @ E OD Sw eepAmt / Smar tSw eep @ 10 AM

Januar y 0 4, 20 18 Januar y 14, 20 18 Januar y 24, 20 18

0 K

10 K

20 K

30 K

40 K

0 I

nte

rest

Bal

ance

37,98 4

10 ,723

32,495

10 ,418 10 ,996

10 ,20 512,0 39

9,0 15 8 ,8 58

12,70 3

8 ,3567,8 15

7,58 9

29,559

7,18 06,742

-7,40 4

4,990

26,513

-4,545 -4,498

3,18 53,121

18 ,48 0

2,4682,460

-2,8 0 4

19,533

23,247

620

21,179

0

E OD OD Balance - For Smar t Sweep ( E OD)

Dashboards for Cash Balance Forecasting & Smart Sweeps

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Agile Implementation

An agile approach is employed for implementation of Infosys Working Capital Analytics Solution.

The above mentioned benefits can be implemented in 10 to 12 weeks. Use cases that cannot be scaled for diverse data such as ‘cash balance forecasting’ will need exploratory data analysis, training and testing of models at each phase.

• Discovery – 2 weeks of discovery to identify and analyze the sources, their data models and formats

• DevOps based pilot use case – 8-10 weeks of data mapping, installing Genome accelerators, pipelines configuration, implementation of analytical model and dashboards, testing and scheduling

• Sprint-wise augmentation – 6 week sprints for subsequent use cases for data mapping, implementation, testing and scheduling

• Understand technical and data architecture

• Define the use case and scope for POC

• Setup the environment

• Stake holder identification

• Offline data ingestion

• Execute: Raw > Curated > Transformed

• Perform source to target mapping

• Develop data flow scripts & processing engine

• Implement Genome data store (Gene Blocks & Genome)

• Customize Genome Market Place (GMP)

• Demonstrate & plan next sprint

• Architecture

• High level mapping

• POC implementation Plan

• Directional outcomes of the PoC

seic

nedn

epe

D &

seiti

vitcA

• Subject area wise networked data products (Gene Blocks): ~ 2

• Derived analytics features (Genome): ~20

• Visualization: Invoice Insights, Payments & Collections Insights s

elba

revil

eD

• Customize & Implement : Automated data ingestion using Infosys Information Grid (IIG) and Genome automation framework

• Perform data ingestion and transformation

• Develop and train analytics model

• Build reports and visualization

• Demonstrate & plan for next sprint

• Gene Blocks: ~ 2

• Genome : ~20

• Advanced models and visualizations

8-10 weeks 6 Weeks per Sprint3-4 weeks

Sprint 0Establish &

Implement Pilot

Sprint 1 ..NImplement Use

Case(s)Prepare

Demo & Decision

Agile implementation approach

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