December is always a time of year that encourages people to contemplate the future. With the promise of a new year around the corner (and the overwhelming desire to leave 2020 behind us) all eyes are on the future and what’s next.
The same feeling is present even in the business world and especially for those who deal directly with any part of the source-to-pay (S2P) process. Though at first, the future of S2P may not seem as exciting as some of the other technological advancements, there’s a lot of promise for S2P, including the potential for complete S2P automation.
Many companies have some form of automation in place in their current source-to-pay (S2P) operations. Automation is certainly nothing new to most of today’s leading companies. But depending on how developed they are, what sort of business initiatives are prioritized, and where budget is allocated, some organizations are far further along in their automation journey than others.
One thing that might be holding capable organizations back from automating further is a lack of understanding of what 100% automation looks like in practice and what this futuristic S2P entails. So, let’s take a brief look at what total automation can be like at each step: sourcing, procurement, accounts receivable, accounts payable, and analytics.
It’s true the “human” element of business operations can’t be totally replicated, but there are a lot of steps that, with the right solution in place, can be eliminated for staff and the risk of human error reduced.
Consider sourcing. Through automation of any kind, data is gathered which helps not only inform strategic decision-making but also feeds machine learning models. So, the more you automate, the more these technologies are trained iteratively, allowing them to learn what works well and what doesn’t. Wouldn’t you like to have the ability to do a full background check when sourcing suppliers, just like the banks would perform on yourself if you were to borrow any money?
With automation you can and even when automation is first implemented, data-driven sourcing solutions run in the background, watching what users (and suppliers) do, taking note, and learning over time. Full automation of the sourcing process means that after the technology understands what to do and learns your common actions, your team doesn’t need to monitor each step involved in your sourcing operations. Each small decision, from questions usually asked during the RFQ to the set scenario constraints, is recorded and stored as data that feeds the machine learning technologies further.
What does this look like for your sourcing team? Reduced sourcing cycle times, less of those more time-consuming, some would say laborious tasks, and more time for those strategic initiatives.
If any department needed to build a robot army, it’s procurement. Our friends in procurement work in a world full of repetitive tasks and data-dependent processes. Because they deal with a high volume of iterative tasks, without automation these tasks are prone to errors and inaccuracies, ultimately costing time and money.
Total procurement automation is (like sourcing and every other part of the S2P process) fed by data which is then consumed by software robots. They can fill out and submit forms, capture and perform a series of tasks, and automate tedious procurement activities like populating a purchase order (PO) by using information stored in the procurement solution.
Total automation of the procurement function can alleviate staff from manual, time-consuming tasks such as:
Addressing user search queries
Generating a purchase order
Confirming three-way matching
Routing and tracking requests
Analyzing supplier performance
Flagging areas of increased risk concerning supplier sanctions
And just like with sourcing, once tasks such as these are automated, your team can focus on strategy and analysis, bringing value to procurement and your organization as a whole.
Accounts Receivable automation
Getting paid and getting paid quickly are probably two of the most important things for an organization. But many suppliers find that once they send their invoice out the door it can take anywhere from 30 to 90 days (or sometimes even longer) to get paid.
Total automation of the Accounts Receivable (AR) function takes the administrative burden of invoice sending off your team and places it instead onto technology. Clunky paper invoices are eliminated entirely, and all can then be sent as electronic invoices (e-invoices) to customers. Creating, reviewing, proofing, and sending invoices by hand is now a thing of the past because, with total automation, machine learning technologies (AKA those little robots learning in the background) do these manual tasks for you.
Accounts Payable automation
As mentioned above, after receiving an invoice it can take an incredible amount of time to pay suppliers. But with 100% automation of the accounts payable (AP), this processing time is reduced drastically. Regardless of how your supplier sends you an invoice (paper, electronic, XML, EDI, PDF, email) automation allows you to process and pay them without lifting a finger – no excessive data entry required.
As soon as your automated AP solution receives the invoice, your robots in the background begin doing what they do best – capturing data and using it to make sure your AP staff don’t focus too much time on repetitive tasks. At first, AP automation captures invoice data and records it in a digital format. From there, without any interference from your AP team, automation handles the coding and routing of the invoice.
Total automation of the AP function can alleviate staff from manual, time-consuming tasks such as:
Without wasting time on manual steps, your AP team can focus on (you guessed it) more strategic initiatives and less tedious AP chores.
Remember the days of endless Excel spreadsheets and unimpressive graphs and charts? Automation changes all that and delivers, instead, a powerful data visualization tool that gives you not only hindsight into your S2P operations, but foresight and insight.
When you’ve automated your S2P, those robots in the background have been busy at each step collecting data. They use this data to automate processes and make your staff’s job less manual, yes, but that data can also be used to inform analytics.
Automated analytics solutions help to provide 100% visibility of your financial data so you’re not stuck guessing or locating bottlenecks only after they’ve caused trouble. Turn procurement transaction data into insights on how money is being spent and how suppliers are performing. Monitor every step in your AP process and provide insights to better manage KPIs and workloads in AP departments. Get visibility into why invoice processing fails and easily identify exceptions and resolve them. Track performance against best-performing companies and even monitor your carbon footprint index. All without ever having to open an Excel document and all available at the click of a button.
So, what does the future of S2P look like? Touchless. Totally automated. Continually optimized. Automated processes set the foundation to collect 100% of your business data. The data then informs technologies such as machine learning, robotic process automation, and natural language processing. These technologies then eliminate manual intervention from staff, freeing up their time to focus on strategy, not tedious tasks.
With more strategy comes more growth. And in times when many organizations are still walking the line between sink or swim, ensuring efficient growth is key.
Automation, then, speeds up processes, increases efficiencies, eliminates errors across the board, and improves supplier/buyer relationships – paving the way for a better world economy for all. And if the future of S2P can offer all those benefits, why wouldn’t you want to automate as many parts of source-to-pay as possible?