Accounts Payable: A Case Study in Digital Disruption
Stephanie Dula 28 Dec 2015In a recent webinar, PayStream Advisors’ senior analyst explained the uberization of AP, and discussed Cisco CEO John Chambers’ warning that by 2025, 70 percent of companies will attempt to go digital but only 30 percent of them will succeed. This means that 40 percent of today’s companies “will not survive the next 10 years.” Finance operations are just as much, if not more susceptible to digital disruption than other industries. Business models and supply chains are increasingly reshaped by digital disruption, and according this fascinating blog post by Cisco’s Joseph M. Bradley, financial services is the fourth most affected industry. No longer can finance managers take a ‘wait and see’ approach to technology that enables efficiency.
One of the primary factors that has pushed this issue to the forefront for many finance managers has been a shift in demographics. 2015 was the year that millennials, the generation born between 1979 and 1995, officially surpassed GenXers as the majority of the American workforce. These workers are more tech savvy than their predecessors, and they expect constant connectivity with colleagues and visibility into the inner-workings of the company. They won’t settle for highly manual processes, but rather want to see that what they do has a direct impact on the bottom line.
The evolution of AP automation software has made that possible, and it’s also resulted in dramatic reduction in processing costs for those that implement it. Yet many organizations still face implementation challenges, especially related to internal change management and the belief that setup and integration will result in costly IT involvement.
The good news is that, thanks to digital disruption, AP automation doesn’t require as much budget or IT time as in years past. New tools have emerged that make it much easier to get to a ‘clean’ process than it was even three years ago. Capture technology using OCR and automated matching bring it right into the native accounting system. Organizations are driving out paper and moving to more of an end-to-end process that takes the entire purchase-to-pay continuum into consideration. There is no longer a need for much of the scanning, routing, mailing and fedexing of documents to departments around an organization.
In a data-driven world, it’s the lack of visibility that accompanies manual processes that prompts many organizations to make the change. As Matt Williams, CEO, North America at solution provider Yooz, explains, once an invoice has been walked over to someone’s desk, visibility is lost and cycle time increases. He walked us through a client case study in which a large, decentralized healthcare provider with 200 sites, 180,000 annual invoices and 500 users was able to improve processes and reduce costs by 78 percent. Like many organizations, the client struggled to push invoices through the approval cycle in a timely, cost-effective manner. Through implementation of the Yooz solution and integration with SAP, they took their cycle time from 18 days down to just four. They now realize additional benefits including opportunity for early payment discounts.
To see how they did it and find out more about digital disruption in AP, view the full webinar on-demand.
Suggested Resources
On-Demand Webinar
The Uberization of AP: Disrupt or Get Disrupted
At PayStream Advisors, our research consistently shows that the AP industry is one of the most significantly impacted by emerging automation technology
