Life comes at you pretty fast. And if you don’t already know what the 4th industrial revolution is, and how far along it we already are, chances are you could miss it. OK, so maybe not quite the words of Ferris Bueller, but change is happening at an exponential rate and is disrupting almost every industry in every country. The fusion of various technologies and the blurring of the physical and digital is driving an explosion of data, rich with information.
As Drew Hofler, Senior Director, Solutions Marketing, SAP Ariba explains; “We’ve entered a new era where thanks to technology, anything not only seems possible, but is possible.
“Business networks, for instance, are disrupting finance, creating communities through which companies can connect to their suppliers, banks and other partners to exchange and settle funds in the simplest possible way. Innovative AP organizations have embraced networks to simplify the basic blocking and tackling associated with invoices and payments and are now taking things to the next level, using them to centralize data collection and analysis, improve collaboration and drive greater value across the entire supply chain.”
Just how valuable this is to business was highlighted in a headline in The Economist last month – “The world’s most valuable resource is no longer oil, but data.” For those working across purchase to pay, this represents an enormous opportunity and a bit of a dilemma. The P2P environment is a boiling pot of business information; not just useful for finance and procurement, but also for other areas such as sales and marketing and HR. If only we knew how to get at it.
If your organisation is still heavily dependent on manual processing, then accurate, traceable data is going to be hard to come by. And although fewer than 30% of organisations are currently operating in a mostly automated way – our research this year shows that those working in a mostly manual fashion have dropped to just 21%.*
And as advances in technology progress, those at either end of this spectrum will continue to pull further apart. The difference between a world class P2P team and one with more traditional, paper based processes will become more apparent, with no comparison between the levels of value each can bring to an organisation. So much so, that the functions themselves will start to look and be perceived very differently, with significant consequences for the careers of individuals in each type of organisation.
Nowhere is this more apparent than in those organisations where the separate functions of accounts payable, treasury, finance and procurement are connected. Over the last few years, there’s been a shift towards greater collaboration across P2P, driven in part by the development of enabling technology. But unless there's been a corresponding investment in change management, the result is going to be disappointing.
In fact, just over 30% of organisations that have a fully integrated P2P put their success down to having someone to oversee the area as a whole and who in turn has the trust and buy-in from the executive team. But, even for those who have moved in this direction, they stress that it's important not to become complacent as old silos have the potential to creep back once that person has moved on.
Which means that it’s really important to embed change into the structure of the team. To do that successfully, the reasons for the change need to be made obvious to all. And before you start on any transformation journey, there needs to be a thorough overhaul and strip-down of processes with a clear eye for which metrics to measure and act on to achieve success.
Of course, the increasing levels of automation make it easier to extract those reports and provide actionable insights. This has pushed P2P professionals to become more analytical, drawing on quite a different skill set to those needed in the past. And yet, the ability to maximise on this shift is often hampered by the fact that more than 50% of AP time is still spent on manual processing while 31% spend more than a quarter of their time in exception handling.
But, if this all sounds very familiar, don't allow yourself to be distracted by the continuation of familiar problems - significant change is already happening. Take for example mobile apps for AP, although only a small number of organisations currently use it, over a quarter expect to see its growth in the near future and although only 2% of organisations use robotic processing automation, 20% expect to embed it into their road map in the next 18 months. So while each of these changes have significance in themselves, taken together, the possibilities are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics and the Internet of Things as they begin to make an impact on our supply chains.
And that's without even starting on the subject of Blockchain...
*PPN Annual Survey