The Other Sides of AP Transformation

What comes to mind when you think of Procurement Transformation? What about Accounts Payable Transformation? Interestingly enough the term Procurement Transformation seems to elicit more of a holistic thought process, it is more about setting the strategy for the People, Process, and Technology of the entire function. So why is it that AP Transformation has a straight through line to automation and technology? Accounts Payable also has people, processes, and technology to consider when constructing a long term strategy. Just like Procurement, AP can be overshadowed as such a tactical function so the assumption is that technology is the easiest fix for efficiency. While I would agree that a best of breed AP automation solution is a very effective means of taking laborious work and streamlining it, I would say that all too often the other equally vital components are less focused on.

The decision to implement an AP solution is just as onerous as selecting the best fit Procurement technology, whether it is P2P, eSourcing, or Contract Lifecycle Management. There is no doubt that it can a complex puzzle of sorts, how does this plug into that, what will integrate and what will need to adapt in order for this module to work, all while considering how the supply base will be impacted as well as the internal stakeholders. When selecting technology there are a lot of boxes to check and decision makers to involve. But what about the bigger picture?

Before any technology can be effectively implemented in an organization, the workflows that govern the process need to be evaluated. As we have discussed in relation to Procurement technology, an overly complex and painful process will not be automatically fixed by technology in AP, or any area of the business for that matter. Oftentimes as organizations grow they add process for the sake of adding process with the belief that it will create consistency and efficiency. It’s not long before they turn around and see that the process has taken on a life of its own, and may even require a full time job to manage it. Processes that are too complex will create confusion more than anything and ultimately lead people to find ways around them, negating the original purpose altogether. When you try to implement technology using those overly complex workflows the likelihood of success is low. Even if the technology can somehow survive in that environment it won’t be long before the same pain points pre-technology arise post-technology and you find that now the finger is being pointed at ineffective technology. There has to be a scapegoat and it’s easier to blame the technology than to look beyond it to understand what the root cause is.

Now that we have identified the problem, what is the solution? It can be easier than you think. Before you make the investment in the technology, take the time to evaluate your processes against best in class measures. There will always be a business case for the technology to create efficiencies. Improving your processes ahead of the technology is a way to ensure that business case comes to full fruition. Implementing an improved process along with an automated solution can help the organization to digest the change in one bite rather than trying to change the process first and then the tech, or worse the other way around.