Joint Applications approach to purchase-to-pay automation brings best value to both CFOs and CIOs

Research from BasWare reveals the drivers for financial transformation in businesses

BasWare Corporation, the leading provider of Enterprise Purchase-to-Pay (P2P) and Financial Management solutions, today revealed that successful finance transformation is based on a Joint Applications approach to purchase to pay automation.

Joint Applications is an emerging trend which best meets the conflicting requirements of the finance and IT departments, by providing best of breed functionality combined with cost effectiveness. It enables CFOs to reach their goal of automated financial processing, analysis and compliance while answering shareholder concerns.

The research shows that CIOs and IT departments have traditionally promoted single ERP architectures and lower Total Cost of Ownership (TCO) as the best business solution for automating financial processes. But this approach fails the finance department in a number of critical areas.  CFOs require ease of use and functionality above an elegant IT architecture, and system flexibility to meet changing business requirements such as mergers and acquisitions. This can be achieved by using a mix of best of breed technologies integrated with an ERP architecture.

The research, conducted by Dr Martin Fahy, senior lecturer in Accounting & Information Systems at National University of Ireland, Galway on behalf of BasWare, questioned finance practitioners across EMEA and North America about finance transformation.

The key CEO and CFO concerns and drivers behind the emerging trend of Joint Application systems were found to be;

• Shareholder value not Total Cost of Ownership
CEOs and CFOs are focused on managing capital and operational costs and enhancing shareholder value.  Vendors and IT professionals wrongly believed that total cost of ownership was the primary concern and sold ERP systems accordingly

• Scale and flexibility over single instance ERP implementations
Many ERP projects have failed to deliver the promised cost benefits because they did not have the flexibility to deal with a range of organisational and business process issues. CFOs, conscious of impending changes in the business environment, have a preference for agile technologies which work across a wider range of circumstances.

• Effective execution over elegant strategy
The research suggests that the organisations that will be most successful in purchase to pay automation will emphasise execution over elegant strategies, where senior management embraces change and recognises the strategic importance of finance transformation to the company’s future.
Functionality and ease of use are key considerations to enable real process re-engineering

“ERP alone is not enough for today’s finance function.  CXOs are looking for more flexible systems that can be adapted to suit sudden or long-term changes in the business,” said Steve McCarthy, Managing Director, BasWare UK.  Steve continued:  “One of the major problems is the failure to automate the interface procedures between sub-systems and ERP master data.  Often there’s been no attempt to automate the generation of key analytical information.  Where this isn’t locked in closed systems or inside people’s heads it is unstructured and needs to be manually entered at the invoice stage.  This is inefficient and leads to errors, which ultimately cost the business money, impacting on bottom line, and subsequently shareholder value.”

Dr Martin Fahy, senior lecturer in Accounting & Information Systems at National University of Ireland, Galway said: “Current approaches to P2P automation are based on total cost of ownership calculation and focus on first order technology costs, such as licensing and support costs.  While the approach has some intuitive appeal, it fails to recognise the shareholder value concerns the CFO and CEO associate with technology investment.”

The report, entitled “Joint Applications & Purchase to Pay Automation” outlines the challenges faced, levels of adoption of P2P technologies to date, the experiences of those that have deployed p2p automation solutions, and the level and nature of communication and information sharing needed between the finance and administration, procurement and IT departments prior, during and post installation.

A full copy of “Joint Applications & Purchase to Pay Automation” can be downloaded from www.basware.com/whitepapers

For more information, please contact:

Steve McCarthy, BasWare UK Limited
Tel:  +44 (0) 1483 685652 or email:  steve.mccarthy@basware.com