The emergence of innovative technologies in recent years has the potential to radically alter the way business is done. As enterprises intensify their focus on optimizing internal processes, modern Accounts Payable (“AP”) teams are now better positioned to advance beyond their transactional past and showcase their strategic value. Emerging technologies like Blockchain, Machine Learning, and Artificial Intelligence (“AI”) are helping to make a strategic future for AP departments possible. It is important that AP leaders and their teams understand these technologies that can make an impact on their operations and results.
While technology has been a key driver of the success for the modern business, enterprise technology has recently entered an “Age of Intelligence.” New technologies are entering the marketplace at a pace never before seen. Today, AP teams, which used to only provide their primary value based on increasing efficiencies, are now well-positioned to help expand their impact and transform into a more strategic function. These leading AP teams must now strive to become strategic partners that can showcase their importance and make an impact at the highest level of business operations. For most, smart investments in AP automation (or “ePayables”) will be critical to their success. AP leaders are challenged to simultaneously execute against their everyday operational pressures while also keeping an eye towards the future. The Ardent Partners team has identified several innovative technologies that have great potential to impact the AP industry in the years ahead.
Blockchain: The Transaction Enabler
Blockchain technology has the potential to increase efficiency, fidelity, and security of transactional and logistical data exchanged between trading partners and ultimately power much of the current procure-to-pay process. For example, Blockchain-enabled “smart contracts” may be utilized to automatically generate and transmit invoices after the goods and/or services have been received and also schedule, track, account for, and even, initiate a supplier payment once an invoice is approved (click here to read how Tradeshift is leveraging the technology to craft a new Supply Chain Finance application on its platform). For AP teams, this could result in a powerful efficiency boost, while also allowing for a pure and unalterable system of record that would increase visibility into enterprise-wide supplier transactions, documents, and agreements. As Blockchain becomes more relevant in the months and years ahead, and its value better defined, AP and finance leaders should investigate how its advanced design can help their organizations succeed.
Machine Learning: The Future is Already Here
One technology that has already begun to have an impact in the AP process is learning. Machine learning is a function of powerful data engines, advanced algorithms, and user behavior that combine to take processes, user interfaces, and user experiences to the next level. The area where machine learning is most frequently used today is with invoice receipt via Scan & Capture solutions, which are the most common, and generally, among the easiest to deploy. These solutions are designed to take paper-based and/or PDF invoices and related data and transform them into a usable electronic format. Eventually, tools enabled with machine learning algorithms will be able to anticipate organizational needs to help load balance the flow of invoices and better manage them in real time. It will also be used to increase the drive for more straight-through processing of invoices by automating routine decision-making and transactions and enabling AP staffers to take on more strategic work.
Artificial Intelligence: Data is Power
A natural extension of machine learning is artificial intelligence (AI), which leverages algorithms and tools that can ultimately make an AP operation smarter by processing and understanding cause and effect without human interface. Today, machine learning that is powered by Big Data and advanced algorithms is beginning to unlock value for many leading enterprises across a broad range of business functions. But, AI is distinct from machine learning in that a solution with a functional AI capability does not require human input beyond the initial programing phase. Instead it uses algorithms and internal rules to independently make decisions. Invoice exceptions are the scourge of every AP department. AI has great potential to avoid many of the exception issues by preemptively identifying problem invoices and the suppliers most likely to submit them. AI can also provide value via invoice processing and payment approval/scheduling, but perhaps its greatest promise lies in supporting advanced analytics. It has the potential to automatically collect, cleanse, and present financial and operational intelligence for AP and finance leaders to use to make better decisions.
Conclusion
For many AP departments, standardizing basic processes and executing with a basic level of proficiency is enough of a struggle as is. Transforming internal operations takes a commitment of energy and resources. But it is a worthwhile pursuit that can deliver long-term operation advantages if achieved. The initial gains from process automation can be a great achievement. But once that has been accomplished, it is time to look ahead and incorporate innovation and technological advancements as additional value drivers. When the innovations described above fully take hold in the market, the groups that are best equipped to take advantage of them will be the ones that already have core AP automation processes in place. These technologies have the potential to free AP executives from the many current tactical tasks they face today (paper-based invoices, exception handling, etc.) and allow them to emphasize more advanced capabilities and take their department to the next level of performance.
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