Accounts Payable Automation is the process of re-engineering the accounts payable process to create and improve efficiencies. More often than not it involves digitisation and centralisation of a process that is currently manual and paper-centric. When done correctly an AP Automation project is not just automation of the current process, it is a complete re-imagining of the process.
Organisations are drawn towards AP automation projects because they offer a very large set of potential benefits. These benefits include cost reductions, accuracy improvements, resource reallocation, improved cash management, access to early payment discounts, avoidance of late payment penalties, improved vendor relationships and increased staff satisfaction just to name a few.
Unfortunately for most organisations they need to run a change project before they can access those benefits. This can be challenging as history tells us that approximately 50% of change projects lead to frustrated delivery (failure to deliver on time, to budget and / or the full scope) or completely failed delivery.
We have put together our top tips to avoid being in the 50%. Here they are;
1. People Leadership.
It should come as no surprise that people leadership sits at number 1 in our list. Despite the significant advances in labour management since the Industrial Age we are still seriously deficient in the way we lead our most valuable resource through these change projects.
If you want to improve your people outcomes on a project then you need to start the communication about the project (what it is, why it is needed, how it will impact the individuals etc.) with the team early on and where possible engage them in some of the decision making. It is important that organisations also let the team know what the non-negotiables for the project are. Allowing team members to think they can change an outcome that is a non-communicated non-negotiable is just a waste of energy that will become a massive de-motivator for the individual when they eventually work out that it is non-negotiable. For this I will use the Bus analogy. The team need to know that the bus they are on is going to a new destination. They need to know that the destination is not open for debate, however, what is open for debate is some of the semantics relating to the journey. e.g. which seat they will take, will there be stops on the way etc. Having the courage to engage the team early will lead to superior project outcomes.
Your project team will need good levels of Executive Support. The key people on the project need to know they have the backing of the executives. They need decisions made in a timely manner and required resources made available to ensure success. They also need executives to step in where needed and remove roadblocks.
Engage your IT department early. In our experience the IT department will be a great ally on a project like this if they are engaged early and are able to make sure their input is heard. The modern IT department is usually very concerned with delivering business value and they will want input. On the contrary, bringing the IT department in late will lead to your frustration as you have to wait while they go about their normal checks and balances.
The final people leadership tip we have is to look after your Subject Matter Expert (SME). Most organisations have a person that is central to the successful operation of the current AP process. This person will be in high demand as you set about planning an automation project. They need to provide significant input into the project. The problem is that these key resources are generally already over-utilised in their normal working week. Having them contribute a significant effort to your project will leave a big hole in the current process that will cause many issues. What normally happens is the day-to-day operational issues take priority on the project and the project slips well out into the future. Good leadership here plans for this resource issue by back training other resources into some of the key components of the SME’s current role. That allows them to be freed up to participate in the new automaton project without significant negative impacts to the organisation.
2. Consider Cloud Deployment.
Research* has shown that cloud delivered AP solutions are 100% more likely to deliver real time visibility into an organisations cash position. This is just one of the benefits that organisations can enjoy when they choose a cloud deployment model.
A cloud deployment model will provide stakeholders access to information when they want it from anywhere in the world. Any modern cloud based solution will offer mobile access to information as well as allowing staff to process their workflow tasks on their mobile device as well.
A less known but hugely compelling reason to choose cloud deployed solutions for AP processing is based around the skills required to maintain that type of solution. Corporate IT Departments have many IT skills but few of them are specialists in document capture, document management, workflow and data integration. When these technologies are deployed in the cloud your cloud hosting partner will have these skills. That way when there is an issue you can rest assured that the right resources with the right skills will get it resolved quickly.
3. Choose an Integration Capable Solution.
Even if your first project stage does not require integration with your ERP, it will likely be a future need. AP automation solutions that provide maximum ROI need to access vendor, PO, receipting and other critical information from the ERP so that they can make informed approval routing decisions. They will also need to be able to pass electronic invoice data back into the ERP so that human labour is not needed to do it. None of this can happen if your solution does not have a strong integration capability. This capability will also be essential if you plan to use the implemented platform to automate other key business processes. e.g. HR Automation, Contract Management, Customer Service Processes. In the information Age companies that are able to effectively connect their technology have a significant advantage over those that cannot.
4. Partner with a Trusted Advisor.
Generally an organisation will only run one AP Automation project and it is impossible for it to be a core skill of the organisation. There are a number of companies, like ours, that do plenty of these projects. Probably the biggest influence on your potential success will be the quality of the partner you choose to do the project with. Engaging a company like ours will enable you to tap into decades of process re-engineer and technology deployment experience. When deployed for your benefit this experience will underwrite the risk associated with running such a large change program.
Hopefully these tips help you deliver a successful AP Automation project. If you would like to meet with us to discuss your specific project please email us at firstname.lastname@example.org.
*Ref. Aderdeen Group 2015, Bring Invoice Processing Costs Back to Earth with AP Automation in the Cloud.
So, you are going digital. You have started or completed a project/s to implement digital solutions. You and your technology partner have analysed your requirements and worked hard to test and turn on a digital platform. But what then….
One item often overlooked when implementing digital solutions is the changing environment within which they will work moving into the future. You see from day one of your new systems’ use it will start to have a decreasing ROI. This is due to the unstoppable changes in the environment in which this solution now operates. This environment includes the organisation, it’s people, it’s other processes and the external environment which can include things such as the legislative environment.
So, we have implemented a solution and we know that everything around that solution will continue to change causing a decreasing ROI. How do we mitigate this organisational risk?
We would strongly recommend that you have your technology partner provide a “Managed Service” for the solution / solutions.
For the purposes of this article a managed service is a contracted set of services that are provided by a solutions provider to a solution using customer. Typically, they are paid for monthly, operate as a use-it-or-lose-it facility and are used as needed to achieve specific solution outcomes.
As an Example;
A company, ABC flights, has a 6 hour per month Managed Service with their technology partner for their AP automation solution. They pay a monthly fee for this and request work against it via a web portal. Typically, ABC use this service to update invoice templates to ensure a high percentage of data is captured automatically when invoices enter the solution. They have also used it to make workflow routing changes, upgrade the software components to the latest version and seek advice from the solution experts on potential future projects.
So, who should demand these Managed Services? Well, we believe the customer and the technology partner should both demand them. They provide significant benefits for both parties. I have identified these benefits below;
Benefits to the Using Customer
An ROI that is sustained [and possibly even improved] over time. Work can be regularly scheduled to keep the system operating at peak level despite any changes to the operating environment. The Managed Service can also be used to digitise additional processes and drive even greater ROI.
Team member satisfaction with their work as the systems they use are modern and operating well. This is more important to organisations as the millennials continue to rise through the workforce. Like it or not, this generation expects their employers to be digitally savvy.
An ability to ensure you are maintained onto the latest versions of your software components. These versions generally have significant security upgrades as well as a slew of new and improved operating functionality. Whilst most organisations understand the importance of software maintenance, far less of them ever actually implement a regular upgrade process to ensure they are on the latest versions of their software platforms. This is often due to the cost of a technology partner implementing these upgrades. With a Managed Service, these upgrades can be done as part of the service thus ensuring the customer continues to reap the benefits of their investment in software maintenance.
Priority of work request processing with your technology partner. Your technology partner will definitely process their Managed Service customers in priority over their non-contracted customers.
A smoothing of cash-flow relating to the operation of the solution. Even if you do not have a Managed Service it is highly likely that at some point in time [usually when there has been a big problem] you will need to spend a quantum of money maintaining the system. This work is generally not budgeted for.
- A solution that adapts to the changing environment
- Maintained, reliable systems for workforce use
- Timely access to improved security and new / improved functions
- Priority response from technology partner
- Improved cashflow for solution maintenance costs.
Benefits to the Technology Partner
A happy customer that will often act as a referral customer. In our experience, our active Managed Service customers are easily our happiest. They get everything they want, when they want it and when there is an issue with the solution we don’t waste time trying to work out who is paying, we just start work. Having a Managed Service means that the technology partner can be at their best when things are at their worse.
The ability to resource accordingly so that service requests can be dealt with in a timely manner. When a technology partner has a critical mass of Managed Service customers they are able to staff their engineering departments with stable, high quality solution engineers. If a technology partner only ever does project work it is much harder to ensure adequate staff levels for peak demand.
Significant increases in customer delight. As well as all the standard benefits that accrue from a happy customer there are also lots of efficiency benefits that accrue. An unhappy customer needs a lot of management. Most of that organisational effort is nonchargeable and diverts organisational effort away from strategically important tasks [like growth].
Reduced commercial risks as deployed solutions remain valuable for the length of the agree service contract. There are less late payments and discount requests as the customers are happy.
A potential case study target. One of the most powerful things a company has is its customer success stories. It is these stories that often provide the confidence and credibility needed to succeed in attracting new customers.
- Turns customers into advocates
- More effective technical resource management
- Reduce customer rework costs
- Significantly reduce commercial risks
- Create case study opportunities
So, there are many benefits to Managed Services however there is one key element that needs mentioning for those customers considering using one – A Managed Service is only valuable if it is actively used by the customer. Failure to use a Managed Service just leads to an unjustifiable organisational cost.
As we continue down the digital transformation path, more and more organisations will be implementing digital work solutions. These work solutions need to give great ROI and ensure that any human labour required by solution is deployed on high value tasks. First-world economies need for this to happen if they want to be able to maintain high wage levels.
Organisations that want to ‘Win’ in the information age need to implement solutions that deliver great ROI, delight their staff, adapt to the changing world and maintain high levels of security. Implementing a Solution Managed Service for your digital solutions is the best way of maximising your organisation’s chances of being one of the ‘Winners’.
Do you have any experience with Managed Services on Digital Solutions? We would love to hear your story.
Contributed By: Lee Bourke, CEO, FileBound Australia.
IT projects are notorious for having a high rate of partial or total failure. These failures are often born of poor project execution and can lead to any or all of the following outcomes;
- Additional resources needed to deliver the project on time.
- Additional time to deliver the project with the same resources.
- Reduced or modified functionality of the project deliverable.
As well as these troubled outcomes there is also the fatal outcome where nothing gets delivered. This blog seeks educate on the hidden costs of the poor project execution that lead to these outcomes.
Before exploring the hidden costs lets take a look at the real or understood costs. In project terms there is a golden rule relating to remediation (rework) costs. Essentially the cost of remediating a troubled project magnifies exponentially the further into the project you get before identifying the issue. For example:
This table tells us is that if we fail to discover an issue until the project has gone live then we are faced with a cost to remediate that is one hundred times greater than if the issue had been found during design. So lets assume the issue in design cost four project hours to remediate. Using sixty dollars an hour as our cost base then failure to find an issue until a solution is live could cost us $24 000 to correct.
Now those hard costs are a real problem for an organisation, yet these can often seem insignificant next to the hidden costs of poor project execution. Lets explore some of the major hidden costs of these poor project deliveries;
Opportunity cost of the project team resources
In most organisations there is a resource bottleneck in relation to high value IT resources. These resources are rarely idle and generally go from one project to the next as an organisation continues to transform itself or its clients based on the demands of their respective markets. When a project suffers from poor execution it either delays the current project resources moving to a new project or it draws in resources off another project to help with the remediation. In either case there is another of the organisations projects that gets delayed or restrained. It is rare for organisations to factor in the cost of these ‘other project’ delays when assessing the cost of a poor project deliverable.
Opportunity cost of your executives
When a project starts spinning into a troubled state it inevitably drags the organisations executives into it’s wake. These executives are the ones that need to re-organise and reallocate resources. They are also responsible for the additional communications and expectation management around the knock-on impacts of the struggling project. This all takes time and distracts the executives from other tasks. These other tasks could be revenue in nature or could simply be tasks to ensure the efficient operation of the organisation. Either way these knock-on effects can become quite costly and are never assessed as costs associated with the rectification of the troubled project.
Opportunity costs associated with sales misdirection [service provider]
If your company is a third party delivering the project for your client then there are a whole extra level of opportunity costs you need to consider over and above the ones detailed already. The largest of these is the opportunity cost of having your sales arm continue to be involved in a damaged project. If your sales team are engaged in these post sales activities they reduce the amount of pre-sales activities they can perform and as such there is a direct reduction in revenue.
Future revenue cost of reputational damage.
Often a troubled project leads to failed customer promises. These failed promises lead to reputational damage that can impact the organisation to sell its customers products in the future.
Future revenue cost of late delivery
Often an organisation is undertaking a project to enhance a listed product or create a new tailored product for its customers. Delays to these enhancements or delays to the introduction have a direct revenue implications. Notably like the previous hidden costs, these are never taken into account when tallying the costs of poor project execution.
As you can see from the above list there are some very compelling reasons whey we should all place a high premium on getting projects executed correctly the fist time around. Feel free to review the following blogs that deal with the methods for avoiding these poor project outcomes;
At FileBound we would love to hear any thoughts you have around this subject matter. Have we missed anything / Have you noticed similar outcomes?
Chief Executive Officer
As the world continues to change as does the role of the salesperson. In many ways the transformation of the sales team (and its members) is the most important transformation in any organisation for as we all know “nothing happens until someone sells something”. In this blog we will be exploring the traits of the Trusted Advisor and why, now more than ever, they are necessary traits for any professional salesperson.
So what is a Trusted Advisor? Well the name really does present the answer. It is a person who is not only trusted by others but is sought out by others for their advice. The following diagram depicts the Trusted Advisor role in terms of the relationship between personal intent and functional capability (subject matter expertise).
Now we know where a Trusted Advisor sits in the Sales landscape we need to explore the traits that elevate a salesperson to this space. There is plenty of literature on this topic but if I had to distil all that I have learned about the traits of a Trusted Advisor here is the list I would present;
1. A Trusted Advisor has intent for the long term. To do this the Trusted Advisor will seek an understanding of the prospect / customers strategic objectives as well as their tactical objectives.
2. A Trusted Advisor is a problem solver and is not afraid to lead with ideas. Trusted Advisors are malleable in their understandings and are just as happy to learn as to teach.
3. Trusted Advisors have an accountable and accessible nature. They are happy to own their missteps (and those of their team) and work transparently to correct them. They understand that when conditions are at their worst, they need to be at their best. They are easy to contact and always return messages.
4. Trusted Advisors bring the required resources to the table to solve problems. The Trusted Advisor understands that they are not experts at everything and have a strong network of accessible colleagues and technical resources they can call on to help solve their prospect / customers problems.
5. A Trusted Advisor see’s their role as a continuing role with their prospect / customer. They don’t relax once they have delivered an outcome, they simply move on to the next opportunity.
So why is being a Trusted Advisor so important now?
Well historically a salesperson would be coached to take a ‘Trusted Advisor’ position only for high value solution sales. This is still the case for these high value solution sales and is as important as it ever has been. Contrast that with salesperson selling box products. These salespeople were coached to focus on features and benefits and were not necessary burdened with taking this higher order role with their prospects / customers. This was a commercial necessity as the box product sales generally had a very low margin level and the cost of sale was very important. The Trusted Advisor approach to selling is a higher cost approach. In the past the box product salesperson had one job and that was to make sure the prospect / customer clearly understood their products features and benefits including their “Key Value Proposition”. Their role was to continue to communicate these messages so when the decision point was reached by the prospect / customer they would ultimately choose their box over all other boxes in the marketplace.
Fast forward to the modern day and we now find ourselves in a world where many buyers are able to educate themselves online. They can effectively learn about your products features and benefits (including the “Key Value Proposition”) without you. They can research other buyer’s journeys and experiences with your products globally from multiple online networks. The buyer has effectively made the traditional box product salespersons role redundant. So what is your role now?
If you are a box product salesperson and you continue to engage the prospect / customer the way you always have you run the risk of losing credibility. They do not need you to tell them what they already know and if you see that as your job you are missing a huge opportunity. They are craving a deeper relationship. This is your opportunity to become the Trusted Advisor. What is important now is understanding what they are trying to achieve and helping them achieve it with your products and services.
If you are a high value solutions salesperson then you need to continue to act as the Trusted Advisor and exhibit the traits associated with the role. Hopefully this blog has re-affirmed your commitment to this methodology and motivated you to elevate your sales performance to the next level.
Chief Executive Officer
FileBound Australia Pty Ltd