Cash flow / provisioning interface

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The description of business as having two primary areas, cash flow and what is performed or provided (provisioning) for that cash flow, provides a powerful and natural segmentation for better identifying and handling the processes associated with each. The real power of this segmentation comes in analyzing the interface between the two areas; as interfaces often represent the location(s) of most frequent failure in processes.

Consider the four classes of cross-interface actions as it pertains to the cash flow/provisioning interface:

Positive provisioning = the product or service was provided (because the money was paid). GOOD.

Negative provisioning = the product or service was retracted/cancelled (because the money was not paid). GOOD.

False positive provisioning = (the money was paid and) the product or service was reported as having been provided. However, it was not. This will lead directly to customer dissatisfaction and will actually require that the customer reinitiate contact with the company in order for corrective actions to be initiated and taken. BAD.

False negative provisioning = (the money was not paid and) the product or service was reported as having been retracted/cancelled. However it was not. This can lead to hidden costs and lost margins and, in some cases, dissolution of the business as customers are able to take advantage of the service without paying for it. BAD.

Because of the distinctly different areas of expertise required to deal with financials and provisioning, most software tools focus on one or the other, not both. Thus, analyzing business in terms of the cash flow/provisioning interface provides a distinct advantage in terms of identifying the expected weaknesses associated with the corresponding interface between financial and provisioning software systems. And appropriate planning and design can be put in place. The most damaging situations, false negative provisioning, occurs more often in companies that are reselling 3rd party services under a bulk-billing model, as such a model does not lend itself easily to identifying costs that are not being covered on the accounts receivables side of the business.

Both of the false provisioning situations (positive and negative) come about due to failures in the integrity of the hand-off processes between the financial and the provisioning sides of the business.