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By Michael Pyliotis, Vice President, Asia Pacific, Basware
Cash flow, or lack thereof, has the power to make or break an economy. The squeeze of cash flow hinders thousands of businesses each year, across Australia and the wider APAC region, fuelled by a culture of late payments. In Australia for example, one in five businesses experience payment delays of more than 60 days with almost one in two businesses owing more than $20,000 in unpaid invoices.
The Federal Government is anticipated to mandate the payment of invoices by July 2019. In the meantime, it has also called out the value that technology can bring to economic prosperity—streamlining administrative tasks whilst facilitating better payment practices. It is therefore up to today’s CIOs to understand the challenges and opportunities experienced across the business—within finance, and at the accounts payable level—to be able to support the processes that drive growth.
Cashflow, technology, and the CIO
For the CIO in particular, it is vital to understand the businesses functions at the core of the issue—in this case cash flow and accounts payable go hand-in-hand. When it comes to buying any software, and purchase-to-pay software in particular, there are three key problems that must be addressed by the IT purchaser proposing new software, or even improvements or revisions to the existing solution.
Knowing exactly what is used, and the ability to predict what will be needed, can gives teams a clear direction to improve catalogued content, spend management, as well as budget and contract management
Problem 1: Having the right skill set in the organization
Everyone’s talking about the potential of artificial intelligence (AI) in business—with it being widely acknowledged that it will be used in the future to deliver staggering cost and time savings. But none of that is possible if you don’t have the right skill set within an organization to harness the power of AI and drive change. AI without the skill set to use it is like getting a new sports car and not knowing how to drive it. CIOs must consider the current skill set and training required within finance and accounts payable to initiate the change that will drive business growth (not hinder it!).
Problem 2: Having all the data you need
All the information in the world is useless if it lives in disparate, disconnected systems. Technologies that seamlessly integrate information across tools and systems are critical to the free-flow of data; which drives analytics and can generate insights about customers, suppliers, employees, and purchases. Knowing exactly what is used, and the ability to predict what will be needed, can gives teams a clear direction to improve catalogued content, spend management, as well as budget and contract management. It is therefore critical that CIOs take stock of the existing tools and data sets before adding new technologies to the procurement mix.
Problem 3: Measuring ROI through adoption and company culture
There are two sources of ROI: one is the actual savings seen on paper, that demonstrate success to the board. The other is seen through adoption and the use of technologies across the business—from the boardroom to the frontline. This means adopting technologies across 100 percent of suppliers, capturing 100 percent of spend, automating 100 percent of invoices, and making 100 percent of this activity visible through analytics. Once an organization has all of its financial data in one place, it can begin taking advantage of innovative add-ons like predictive or prescriptive analytics, robotics, and AI to multiply the ROI.