According to a new report by the Harvard Business Review Analytic Services (HBRAS), 90% of surveyed executives say increased transparency leads to better-informed decision making across the entire organization.
Visible Commerce for holistic business transparency
Here at Basware we believe that the transparent exchange of money, goods and services, enabled by the ready availability of data empowers people to make more effective and more ethical business decisions.
This belief, that clarity of operations drives corporate capability, underpins our purpose as a business and is something we refer to as Visible Commerce. Visible Commerce, to us, means complete transparency into all the flows of money, goods, and services around the world. It’s not only about the transactional transparency of the buying, selling, and paying of transactions. It’s more than that. It’s also about a more holistic transparency into who is behind all those transactions, what that company stands for, and why we as a consumer or business should care. Visible Commerce is about harnessing the power of technology to truly become better businesses, a better society, and better people overall.
To address this concept further, we commissioned Harvard Business Review’s Analytic Services (HBRAS) team to survey nearly 800 executives and create the report, Using Transparency to Enhance Reputation and Reduce Business Risk. The report explores how the latest software and business management processes; incorporating e-invoicing & processing, automation of accounts payable, and eliminating indirect spend, are delivering benefits in terms of supplier relations, sourcing responsibility and employee productivity.
Keep reputation and risk in check
We live in a time where consumers and businesses alike want transparency. We all want to know what we’re purchasing, where it’s coming from, how it’s produced, and if those means align with our ethical, environmental, and humanitarian values. The goods and services we select are an extension of what we stand for.
We’ve heard situations like this too many times in the news. A company has been accused or worse, found guilty of child and slave labor claims, or supporting inhumane work conditions, or a number of other discrepancies, simply because they have transacted with a bad supplier. But the supplier usually isn’t the name in the headlines—the buyer is. One bad transaction and your entire company’s reputation can go up in smoke. It’s on the forefront of many professionals’ minds, too. According to the HBRAS report, 55% of respondents say that ethical and commercial considerations are equally important when evaluating suppliers.
If a business fails to provide transparency into their business operations, consumers become skeptical. And if an organization doesn’t provide transparent internal processes, they can’t reap the benefits of business-developing technologies and 100% financial visibility.
As it is, such total visibility across an organization is rare and a lack of visibility persists. Without such visibility, businesses lack the foundation that supports all data-driven business strategy. Without total transparency, you only get a glimpse of the full image and therefore can only get so far in achieving your strategic goals.
Create a culture of change – starting with Finance and Procurement
A culture of transparency is essential to increase employee engagement and simplify processes, as highlighted in the report. Finance and procurement teams need to be at the heart of this change, improving visibility to boost reputation and revenue growth. Such a culture of transparency is essential if organisations are to demonstrate ethical practices and reduce complexity.
In my conversations with clients and peers, there is a widespread understanding that better visibility of the flow of transactions releases value. These conclusions tend to be based on instinct or past experiences, and to date there has been relatively little independent exploration of the wider benefits that digitization of the finance function brings.
The results of the global study by HBRAS, Using Transparency to Enhance Reputation and Reduce Business Risk, are both startling and gratifying. HBRAS finds that those working toward the total visibility of the flow of money, goods and services are able to take more effective strategic decisions, identifying Visible Commerce as a defining characteristic of winning businesses worldwide. The financial value of adopting a Visible Commerce mind-set is significant. One third of the firms studied were enjoying operational savings in excess of 10% of turnover.
Technologies such as our own Purchase-to-Pay solutions are delivering huge efficiencies through automation of the requesting, purchasing, receiving, and accounting for goods and services. Beyond efficiency and convenience, such technology is unlocking higher expectations of business. Visible Commerce is opening up the opportunity to go further and empower organisations to take effective and ethical business decisions.
Transparency requires a shift in attitude
From accounts payable to quality management, visibility of such data is helping businesses to become better corporate citizens. It allows them to take responsibility for not only the quality of goods and services, but also the manner in which they are produced. Visibility of finance data is about more than Purchase-to-Pay solutions, although we believe this technology is a key enabler.
It requires a wider shift in management attitudes toward tracking and valuing an organization’s reputation as a responsible operator. It is part of being able to prove to customers, partners and regulators that you are not just faster, cheaper and more efficient, but that you uphold high ethical standards that benefit society.
Learn more and read the report
The HBRAS report explores the full value that business transparency delivers, and I urge you to read and share it with your teams. Providing a lens over the social and economic advantages of Visible Commerce, it is essential reading for every CFO and CEO. Download it now.