I remember learning how to type in high school nearly 20 years ago. Our witty, sarcastic, wiry, Irish teacher, Mr. Murphy would put us through the paces in daily drills and one of his favorite sentences to have us type to his dictation was “The quick brown fox jumped over the lazy dogs.” That, and “Now is the time for all good men to come to the aid of the party.” I feel like in addressing the matter at hand I want to attempt to be that good man at least for the sake of the automation industry and for those who stand on the outside looking in wondering what all the fuss is about.
I want to take a minute today to run through the primary reasons why companies have not pursued AP automation. Granted that I’m biased and I think that pretty much all companies can and should pursue AP automation to streamline process, reduce costs, drive efficiency, mitigate risk, create visibility and process accountability, along with laying the foundation for monetizing process. All of those notwithstanding, there are at least 50-60% of companies that have done little to nothing by way of automation.
Do I think things will stay that way?
In a word, no. It’s not possible when you consider how prevalent automation and robotics systems are becoming (though there is considerable disruption in the traditional business process outsourcing space, as we see the model evolving to a document process outsourcing approach). Consider some of the outrageous ideas that are being put forth in the B2C marketplace as you read this. Amazon is patenting a drone / blimp mothership delivery process. Volvo is releasing its first 100 autonomous driving XC90’s. Budweiser already delivered its inaugural 18 wheeler load of beer in a autonomous truck. AI devices / interfaces like Amazon Echo, Apple’s Siri, Google Home and others are all positioned to be commonplace for fetching basic information and will increasingly do more complex things. The fact is automation is all around us and it’s here to stay. At some point the innovations and expectations for automation are going to push us over the line, so to speak, and folks in the financial back office will expect the same level of convenience afforded to them in their personal lives.
So, if there’s all this momentum in our personal lives and the B2C sector, what gives with B2B adoption?
Here’s our take at the 3 reasons companies don’t pursue AP automation:
Lack of ROI justification. This reason is predominantly centered around the way in which AP automation software has been traditionally deployed. You see, in order to have a compelling automation story, you need several technologies to make this happen. Optical Character Recognition, Electronic Workflow, Electronic Document Management, a Business Rules Engine, and a dynamic integration are the bedrock components. That’s not to mention additional value-added items like Audit tools, vendor portals, ePayment invocation, discount capture tools, and others. The bottomline here is that the first set of four, if needed to be installed and managed locally, will set you back way upwards of six figures, even approaching a half a million dollars depending on the size and scope of the organization implementing. Further, to add insult to injury, you’ll need a cadre of IT staff to maintain that system, much of which is oddball technology. As such, with such a hefty price tag, many companies will take years to recoup their initial investment, which is why many of these attempts to research automation have died on the table of CFOs all over the world.
The good news here is that if that is a scenario you’ve encountered, things have and are changing quite a bit due to cloud delivery and hybrid service providers that enable you to retain the process but with the full array of automation tools doing 85% of the work.
Lack of vision. Some companies are content with living in the status quo. They are not wowed by automation or its benefits or business advantages and are content to just go with the flow, even if their process is decades old and costing them in various ways. It’s too bad, because with automation and some of the innovation around payments you can literally flip the script on it being a cost boondoggle and turn it into a back office profit machine for your organization if you just have the vision and fortitude to venture forward. I would go so far to say that for organizations that lack the vision to see a better future or at least investigate for themselves what is possible, that it ultimately falls back to ineffective leadership. “As the head goes, so goes the body”as they say. This is a tricky one to cure, because so much of it centers around who is driving the bus in your business so to speak.
Lack of awareness. This is a fun one to discuss, because I never tire of talking with Controllers and CFO’s who just didn’t realize that in terms of AP automation and ePayments, it’s literally possible to have your cake and eat it too, and then have more cakes sent to you and your friends. When you start to discuss a relational, symbiotic process of a highly efficient and streamline AP process coupled with dynamic virtual card / ACH payment invocation, and the cash rebate stream you can generate with this approach, coupled with the process savings you get from automation, they’re blown away. I’ve seen them on more than one occasion utter something like ‘this can’t be possible’ or ‘this is too good to be true’. It’s fun, and it’s even more fun when they weren’t aware of this type of integrated, holistic, and hyper impactful approach. It’s also an easy one to cure once you start providing compelling case studies and making reference calls available. For those who have gone down this automation path especially for payments tied to AP automation, their mirth is infectious and other Finance executives feed on it.