Today’s buyers are smarter, knowledgable and more informed. The old adage “people buy from people”, may still have some relevance, but it is fading fast. Today’s technology becomes rapidly obsolete by the next dawn. Success in such a dynamic and rapidly changing environment demands a new and forward-looking approach in the way we behave and businesses manage their operations and ensure competive advantage. At its core lies the transformation that is being constantly shaped by technologies such as machine learning, artificial intelligence, augumented and virtual reality, blockchain, etc., to create and provide a greater value for the clients.
In such a backdrop of digital transformation, businesses need a critical review and assessment of their operations for efficiency and profitability. This puts the corporate chief financial officers (CFOs) and the finance departments, interestingly enough, in the middle of it.
Today’s CFOs have become key to leading digital transformation and process optimisation in their organisations. Current day finance departments are no longer simply tasked with ensuring compliance, allocation of budgets, balancing and closing of books. Their focus has shifted more towards driving greater value and operational efficiencies by gaining insights powered by real-time analytics, automation of manual and repetitive processes, rethinking strategies that deliver process optimisation and cost savings.
In such a scenario, corporate spend management inadvertently emerges as the ripest sector for digital disruption. It is indeed an irony that even today in over 90 per cent of organisations, the two major aspects of accounts payable — the supplier invoice management and business travel and expense management —continue to be predominantly paper-based and manually managed. Even though many of these companies may have spent considerable sums in upgrading and updating many of their accounting and ERP systems, accounting departments are still buried in paper and manual processes.
Business travel in India continues to experience double-digit growth year-on-year basis. The Global Business Travel Association (GBTA) puts the size of business travel in India at $45 billion for 2019. Considering that over 90 per cent of that money will be accounted for through paper-based mechanisms, imagine the potential for misreporting, omission and outright risk and fraud. In fact, it is estimated that businesses lose to the tune of $1 billion annually on account of expense-related fraud. Market research has shown that in more advanced countries, a single paper-based expense report can cost up to $30 to process. In India, these costs are about half as much depending on the organisational approval and audit processes. Implementing automated solution can not only reduce processing costs by almost 40 per cent and processing time by about 80 per cent, but can also remove the potential for fraud or misreporting. There is not only money, but time to be saved here.
Then again, outright automation might not yield the value businesses are seeking.Deploying automated solutions can only deliver desired impact when CFOs match context with technology. There is no “one-size-fits-all” approach here.