While most companies today rely on their existing ERP systems to manage their business data and support their business processes, the reality is that these systems were designed to handle only half of the equation at best. Designed to store and manage structured data, ERP systems have struggled to adapt to a world where unstructured data (including documents, images, video, etc.) is now the prevalent and fastest-growing source of information.
Fortunately, as the world of information has continued to evolve towards more and more unstructured content, technologies that can intelligently capture information and derive a structure from unstructured content have evolved by leaps and bounds. As a result, process automation for back office operations like accounts payable (notoriously document-heavy and error-prone), has taken off.
When it comes to the financial supply chain, procure-to-pay represents a great starting point. The business case for automation is clear, and the precedent for achieving a relatively quick ROI is well established. But for CFOs and finance teams that want to take an additional step back to look at the big picture, process automation and intelligent capture technologies have the potential to have a broader and deeper impact on the financial supply chain.
Procure to Pay: The Starting Point
When it comes to achieving efficiencies by eliminating manual processes and streamlining access to data, the P2P process represents low-hanging fruit for most companies. The costs to manage payables invoices manually can be 10x the cost of automating the process of procurement document handling, data entry, approval routing and ERP transaction processing.
Opportunities to automate and streamline steps in this process include:
For some companies, automating P2P is the beginning and end of their process automation experience. But for a growing number of companies, the cost savings and business benefits achieved leads to further process automation, with the O2C process next on the agenda.
Order to Cash: Accelerating Receivables
Because most orders and supporting documentation also are delivered in inconsistent formats across multiple channels, managing them manually can delay shipping and billing, limit visibility to orders, increase error rates and impact customer satisfaction.
Automating manual steps in the order to cash process steps leads to faster, more reliable receivables management, while delivering more timely information about customer orders and payments and greater overall process visibility. Cash application, payment processing, dispute management and order creation processes all benefit from process automation, beginning with the extraction of timely information from unstructured documents and data.
Record-to-Report: The Last Mile
While ERP system are the primary tool to manage the financial close, they are not designed to manage unstructured information that supports and provides context for recorded transactions. For this reason, companies that rely on smart process technology and record-to-report automation tend to have a faster close.
Benchmark studies have shown that in recent years, world-class organizations companies automate 95% of general ledger journal entries to streamline accruals, provisions, reclassifications and adjustments, compared to just 84% for their peers.
Smart Process Technology and intelligent capture’s ability to manage unstructured content can be key to maintaining a timely, accurate audit trail for the financial close process. Today, only 43% of record-to-report top performers and 37% of peers use automated workflow tools for closing, but these percentages are projected to rise. According to the Hackett Group, sixty-seven percent of top performers (but only 35% of peers) indicate that less than 40% of their close activities are still done manually.
New Frontiers: Beyond Finance
With so many finance departments taking steps towards P2P automation, the adoption of automation solutions for O2X and R2R is likely to grow rapidly in the next few years, particularly as CFOs and business executives look for opportunities to embrace business process automation throughout their organizations.
Beyond finance, smart process technology can extend the same benefits to any process that is dependent on data and documents or other unstructured content. By automating routine tasks like data entry and document handling, firms achieve timely access to accurate, validated data.
This data is a gold mine from the standpoint of both process automation and business intelligence, supporting faster, more efficient automated processes but also more informed decision-making.
For companies beginning their journey by automating their P2P process, the good news is that their efforts will not only likely produce a quick pay-off for the firm in terms of operating efficiency; it also promises to be the first step in a journey that will lead to ongoing innovation within finance and throughout the organization.
For more information about Smart Process Platforms, intelligent capture and finance automation, visit the Artsyl Technologies Web site at www.artsyltechnologies.com .