Ask top managers where the order-to-payment process lands among their strategic priorities, and most will tell you it doesn't even make the list. Often, order to payment is delegated to a middle manager with responsibility for operations effectiveness or logistics management. But as companies realize that strong brands and good products are no longer enough to ensure success, and as they begin to see limits to growth in their primary (and even secondary) channels of distribution, the strategic importance of the order-to-payment process is growing.

Most industries are experiencing intensifying cost competition, rising customer sophistication and fragmentation, and converging product performance. Product life cycles are shrinking, and demand is becoming less and less predictable. In such an environment, delivery performance and customer service are becoming as critical as product performance and brands. The way companies make, adapt, sell, and distribute their products is turning into a major source of competitive edge.

Consider Benetton, which changed the game in fashion retailing—not through its designs, but through a completely new approach to making and distributing clothes. Fast, responsive, and accurate, its order-to-payment process allows it to compete with higher margins than the rest of the industry.

Or look at Procter &...