Achieving the future of finance today – new generation software to empower
Today’s CFO has an increasing role to play in the enterprise’s strategic development. And this, of course, will involve digitization decisions which affect the whole organization: after all, few other departments have the reach and influence that is wielded by finance, an influence which grows proportionately according to the organization’s size.
Decisions about software in the financial space are often led by traditional banking advice, and usually, this is conservative in its scope. Every day new fintech startups clamor for attention, but the weight of the financial underpinnings of large organizations means that change is gradual, and is informed by previous negative experience.
A prime example is the area of procurement, which may well have been the subject of an attempt at digital rationalization. But in-house ERP systems (which by definition run the whole enterprise structure) are so entrenched that changes are wildly complex to deploy, as potential dangers from ill-judged changes can have catastrophic consequence. CFOs and their banking partners are therefore loath to commit – quite rightly – to the latest flash-in-the-pan solution on offer.
It’s thought that around four out of ten of today’s medium-to-large sized organizations’ CFOs spend a majority of their time not engaged in traditional financial management. Around two-thirds of CFOs’ time today is spent with external stakeholders: shareholders, governmental bodies, regulatory organizations, suppliers and customer-focused groups.
So to develop a more strategic, outward facing role, the CFO needs to use technology to remove some of the operational pain-points which cause trouble for procurement, treasury and payables teams.
Procurement is one of the most manual operations in the modern enterprise, and one of the few areas where even a concept as long-in-the-tooth as a paperless office can founder. Smooth and streamlined purchase to pay (P2P) systems stumble when suppliers present paper invoices or lack the sophistication (or size) to be able to send XML or EDI data directly to ERP systems. And where there is manual, repetitive work to be done, human errors tend to creep in – that causes headaches up the line for C-level finance personnel.
P2P and e-invoicing solutions are now becoming available which operate like an increasing number of operations in the enterprise, as cloud-based SaaS (software as a service) provisions. Next-gen offerings can sometimes benefit from the back office’s experience in the reliability & usefulness of robotic process automation (RPA) and artificial intelligence (AI) – see at the foot of this article for selected suppliers’ detailed solution portfolios.
As manual processes in the finance mailroom begin the moment invoices arrive, right through to reporting facilities, software has the power to address inconsistencies, and – more importantly – actually offer extra facilities and value to the finance department.
RPA and AI, for example, can streamline:
- Invoice & PO capture.
- Data entry to existing ERP systems.
- Approval, discrepancy and resolution processes, even when the enterprise’s delegated authority matrices are complex.
- Ledger & invoice reconciliation.
- Supplier master data creation, editing, and auditing.
- Automated report generation, according to time or emerging conditions.
Any number of the above possible improvements will lower resource-loads and, therefore, potentially lower costs. Quantifying such gains are difficult in the short term, but may well become part of the finance department’s savings and be an integral part of turning the department from being a net loss operation towards the positive, in internal auditing terms.
But once the mundane & repetitive show benefits from the application of a little software know-how, certain activities can then either start or reach new levels of efficiency and possibility:
- Early payment discounts can be requested and managed in software, making procurement at a lower consistent cost a realistic proposition.
- Efficient payment to statement reconciliation will highlight the most effective avenues of activity, to maximize financial health.
- Prevention of supplier mismanagement through prompt or early payment, preventing unexpected price rises from disgruntled suppliers.
- Automated processing of non-PO transactions using AI-powered decision making, with only extreme exceptions requiring human intervention.
Modern procurement systems need also affect legacy ERP/MRP or operations management software, taking the specific system processes onto dedicated hardware in-house or in the cloud. API integration with embedded process software ensures that accepted methodology can continue, but with increased efficiency and revenue generation as a bonus.
To learn more about next-gen procurement management systems available to today’s CFOs, read on. We at Tech Wire Asia have selected three of our key partners whose products need to be considered for the next level of procurement, invoice and PO management software.
The Finnish financial supply chain software company has always prided itself on its innovative streak and is one of the first in the market to use AI (artificial intelligence). Its cloud software is specifically designed to automate the manual or repetitive financial processes which are an unavoidable part of procurement, though Basware offers breadth of business value to the finance department too.
Discovering repetitive invoices to automate, flagging invoices likely to be paid late, or managing early payment discounts can be entrusted to the software algorithms, with their abilities informed by Basware’s long experience in finance and procurement software – this is no scattergun attempt at ERP with a cursory nod to the finance department!
Basware operates on a per-transaction flat fee basis via its cloud-based offering and can be deployed right along the P2P chain; known exceptions such as orphaned invoices and non-PO demands are handled by software according to smart automation capabilities, engaging people in to the financial process only where needed. Basware believes that computers and AI make a great companion for financial and procurement professionals: they call this Mind-Machine Partnership with a term #SuperFinance.
Basware also allows the creation of a supplier self-service network, with self-managed catalogs, meaning that workloads are removed from staff – suppliers simply use the power of the web to interact with the purchasing company.
The same network mentality extends to the Basware Network, which is a business-to-business network of 220+ global partner networks and over a million buyers and suppliers who transact electronically.
Visibility and prescriptive insights are necessary to control and optimize spend in the modern business environment. This is impossible today due to a fragmented technology and process landscape for business spend.
Coupa, the Business Spend Management (BSM) Platform, offers a unified, cloud-native platform for finance and procurement leaders to track, manage, and analyse all business spend from sourcing to payment, and everything in between, including supplier management, risk management, contract management, and expense management. The company also offers spend insights powered by Coupa Community Intelligence, an artificial intelligence engine leveraging anonymized real-time data from across Coupa’s global customerbase.
With $700 billion in spend under management, the company operates across the globe and serves businesses in every industry, from manufacturing to retail and hospitality to financial services and healthcare. Its clients include companies ranging from mid-sized businesses to global enterprises, including Airbus, DiDi, MGM Resorts Interntional, and Caterpillar Inc..
Coupa easily integrates into dozens of popular and niche ERP systems including SAP, Oracle, Netsuite, Microsoft Dynamics, and more. The company offers an open supplier model, with both a network of suppliers with pre-negotiated rates, and no-charge for using any supplier not in the Coupa network.
High levels of user adoption are the mainstay of any Coupa deployment, and its intuitive interface ensures rapid onboarding and continued usage, ensuring global compliance and accurate data. Where previously staff had to learn disparate, silo-ed systems across the financial service gamut, Coupa offers a single platform that is easy to use for administrators, employees and suppliers.
Want to read more about Coupa? See this article.
Now part of the SAP behemoth, Ariba offers a range of web-based procurement and purchasing solutions suitable for organizations of practically any size.
Ariba places its emphasis on a simple series of processes which can be employed right across the enterprise: spot-purchases up to main supplier-level procurement. Suppliers are quickly onboarded and can be pre-enabled for purchases according to preset rules and privilege groups. Compliance standards are maintained, which increases the overall confidence levels in the supplier pool, while simultaneously cutting through legacy process complexity.
Ranked by Forrester Research in “The Forrester Wave: Supplier Risk and Performance Management Platforms, Q1 2018: The Providers That Matter Most And How They Stack Up” as a leader, the company has been cited for offering a “good product and ambitious roadmap.”
Ariba’s cloud solutions can leverage SAP’s extensive AI-power, and its abilities are further extended by a dynamic supplier network which acts as a virtual digital marketplace. In the Ariba network, companies can synergize proposals, contracts, orders, invoices, and payments – and even use the network as a contract negotiation platform.
*Some of the companies featured in this article are commercial partners of Tech Wire Asia