Making Shared Services a Reality for Accounts Payable
This post was contributed by Nilay Banker, founder and CEO of Inspyrus.
Savvy organizations are aggressively taking advantage of new technology and processes to dramatically improve Accounts Payable (AP) operations, often in conjunction with moving to a shared services model.
However, the number one challenge organizations face moving to a shared service model for invoice processing is the need to support multiple ERP systems from a single environment. Here, the predominant view is that before an AP shared service can be considered viable, the organization must first consolidate multiple ERP systems. This often immediately renders the shared service initiative to the organizational back burner or worse (becoming unattainable), when you consider the majority of ERP consolidation projects can take two to five years – or longer — to achieve.
In addition, traditional invoice automation solutions have fundamentally failed the integration game by offering only rudimentary data transfer mechanisms from disconnected systems to separate, dedicated ERP platforms. They also create operational inefficiencies by pushing all invoice exceptions to the ERP system to be resolved – all under the guise of being “integrated.”
The advent of the Cloud has certainly made it easier for organizations to establish the shared service technology foundation for invoice automation. However, Cloud technology alone doesn’t assist in minding the integration gap. Rather the dependency falls mostly on the invoice automation solution.
AP shared services nirvana requires more than a cloud “lift and shift” approach to invoice automation. It requires deep real-time, bi-directional data integration and process execution for all invoice data and processes, across multiple ERP systems — transparently and simultaneously.
Next-gen AP automation solutions take a real-time “multi-ERP” integration approach, allowing companies to have a single invoice automation system that works across all ERP systems — delivering up to 90% automation and up to 3x the cost savings compared to today’s legacy processes and vendor solutions.
Moreover, this next-gen approach provides unprecedented process visibility and information access across all business units, divisions and ERP systems. This allows individual invoices and key stakeholder approvals to be easily tracked, audited and completed anytime, anywhere and via any device (aka mobile) — eliminating traditional process bottlenecks and decision blind spots.
This improved visibility and velocity of information flow can also set the stage for organizations to pursue additional initiatives that can deliver even greater value to the organization.
For example, having AP under a shared services umbrella provides the requisite real-time visibility and process agility to take full advantage of other essential tools in the AP automation arsenal — supplier portals and dynamic discounting. With supplier portals, invoices can be created, validated and made exception-free from the get-go — eliminating paper and accelerating operational efficiency. More importantly, they provide suppliers with frictionless self-service experiences enabling improved visibility of invoice payment status and the ability to dynamically request early-pay discounts. With dynamic discounting, modern companies gain a major advantage by creating a new, significant source of cash savings (up to 2% of annual corporate spend). This blazes the trail for the “new normal” in corporate finance where the accounting department is now a profit center.
The net-net? Next-gen AP automation solutions make the AP shared services dream a reality and possible now. Organizations can immediately take advantage of the tremendous benefits that shared services provides, while on their ERP consolidation journey. Success favors the bold… those who break away from legacy limitations can achieve peak business performance.
Nilay Banker is a Stanford Computer Scientist with over 23 years of experience with cutting edge technologies and successfully delivering business software products for Fortune 500 companies. Previously, as Director of Product Development—Oracle Fusion Middleware and WebCenter, he was instrumental in developing strategies and roadmaps for several products in addition to taking these products to market.
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