CFOs know that it is imperative upon businesses to change the way they operate by digitizing core processes. Such transformation has been seen to improve the performance and reach of organizations.
George Westerman, Research Scientist at MIT’s Sloan School, dramatically puts it as follows. When digital transformation is done right, it’s like “a caterpillar turning into a butterfly,” but when done wrong, “all you have is a really fast caterpillar.” So the writing is on the CFOs screen, but she is unsure where to start the transformation initiative – which processes are best suited for digitization?
Showing early results to peers and management is important to gain support for digital transformation within the organization. Demonstrable benefits, ease and speed of implementation, low barriers to entry, and enterprise wide impact are some of the factors that lend credibility to a successful digital transformation project. Markers such as these, help to pave the way for larger digital thrusts with significant capital investments and senior management attention. As digital transformation partners to several finance leaders, we have observed that spend management digitization delivers impressively on these managerial metrics. Platforms, suites, and solutions addressing this territory go by different names but largely fall under the Procure to Pay (P2P) umbrella. P2P solutions use a common platform that connect all stakeholders involved in sourcing and procurement. This platform based approach breaks down silos of miscommunication and non-communication and catalyzes collaboration through the organization and with vendors. From the perennial missing invoice that was in someone’s drawer to the e-invoice that routes itself to the right desks automatically. That’s the sort of enabling that P2P solutions offer. Faster error free cycles, better vendor relationships are the performance enhancements of digitizing spend management.
When business processes get digitized, there are fewer instances of deviations from policy. In fact, it is the digitization of policy that is what metamorphoses caterpillars into butterflies. Companies have policies on spend management that can be quite complex because of changes and addendum’s over time, and the need for situation specific decision making. Today’s sophisticated P2P software have rules engine that can be programmed to accommodate most spending policies, approval processes, and integrate with the DOA matrix. With automation, the bulk of spending instances can be managed essentially by the system with management teams focusing on exceptions and special cases.
So, spend digitization through P2P software is high impact, results are quick, inclusion of stakeholders is high and hence it is the ideal starter project for CFOs and CEOs to metamorphose the caterpillar into a butterfly.