It seems these days that the availability of data is outstripping many organisations’ capacity to make effective use of it. It’s almost unfathomable at a time when we’re pushing the boundaries of predictive capability that AP leaders are still driving their departments by looking in the rear view mirror instead of at the road ahead.
Perhaps the problem is that analytics have come so far, so fast, that there’s a misconception about what’s achievable or available. To some, “analytics” is just a glorified word for reporting – to others, it connotes impenetrable algorithms and supercomputers. To me, analytics sits on a continuum from simple to complex, which reflects organisations’ maturity in the way they use data. In fact, the evolution of analytic capabilities is strikingly similar to the way GPS has transformed navigation.
The manual option
Until a few years ago, most of us found our way from A to B using a roadmap, and you could say organisations with paper-based processes are still relying on the equivalent of a dog-eared, outdated atlas with a few pages missing.
Independent GPS devices
Then along came personal sat nav devices. All of a sudden, vehicles of any age could benefit from after-market technology that affixed to the windscreen. It’s the equivalent of bolting on analytics capability to existing AP systems – you get some nice, actionable visuals but overall, it’s a pretty disjointed experience. And those suction cradles that hold the device have an annoying habit of falling off the windscreen!
Embedded GPS navigation
Fast-forward a few years, and car manufacturers started embedding GPS into the dashboard. There’s no need to worry about the device’s battery life or signal, and the display is optimally positioned for the driver. Analogously, we start to see analytics delivered within the AP console rather than as a separate module. Now, organisations can check at a glance, for example, if an invoice is in workflow, and how many days it has been in the system or awaiting approval.
The next evolutionary step is integrated functionality. Built-in sat nav has gone beyond giving turn-by-turn directions – it can intelligently re-route the driver based on live traffic congestion or weather data. And by linking to the fuel sensor, the system can anticipate when the driver will need to fill up and highlight nearby Points of Interest – in this case, petrol stations within driveable range. To map this to the analytics concept, a smart system can apply predictive capability and alert or take action accordingly. Say it detects that an invoice about to be approved for payment will incrementally exceed the budget for the period; it flags up the potential breach and prompts the user to extend payment terms so the expenditure falls into the following month’s budget.
GPS as a core component
We’re now getting to the stage where GPS is becoming a core automotive component, spawning a whole new product category. Self-driving vehicles are already being trialled on the roads, sensing their environment and adapting accordingly, opening up new opportunities for travel and unmanned transportation. Analytics are set to go down a similar road by optimising routes for the free flow of invoices. Automation is moving beyond mere touchless processing towards systems making “decisions” based on business logic and machine learning. Soon, there may be no need to manually code an invoice ever again – a smart AP system will recognise that as long as the invoice falls within certain parameters, the cost centre can be automatically appended and payment authorised.
Not everyone will welcome the autonomous car – plenty of us rather enjoy driving, for a start. But few would miss the low-grade, repetitive nature of administrative tasks in the AP department. There will always be a need for a degree of human intervention, but I can certainly envisage a time when transactional processing will become fully digitised and payment terms could feasibly be reduced to same day. You only have to look at the way electronic trading has revolutionised the stock market, making transactions easier to complete, monitor, clear and settle without all the shouting and gesticulating. Perhaps one day, analytics might even eliminate road rage, too!