Discovering the value in implementing cloud and automation across your procure-to-pay (P2P) is the first step. The next, is determining the monetary value to build a case for adoption. To help with both, Basware have quantified the value and return on investment (ROI) of cloud-based P2P solutions with the help of research by Forrester Consulting.
Finance flexes its new muscles
The role of finance is changing. For years, CFOs and accounts payable end-users alike were process focused and traditionally reactive in their roles. But given the influx of digitisation in the market, finance teams have the power to be proactive, taking on strategic goals such as investigating the profitability of commercial units, the business case behind strategic investments, and the terms of key contracts.
In order to achieve these new goals, the finance function will inevitably be faced with the realisation of one decisive detail – digitisation is key.
Across procurement all the way through to accounts payable, the further digitised and cloud-based a company’s processes are (and thus the more process automation the company has), the quicker it will achieve advantages such as:
- Cost savings
- Data-based insights
- Automatic software updates
- Sustainability efforts
- Process efficiency and control
- Remote work capabilities
And the push to do so is coming at a time where these benefits aren’t just a nice to have, they’re a necessity.
Prior to the pandemic, digitisation of business processes wasn’t considered necessary to successful continuity efforts. But 2020 has shown that digital infrastructure is key to creating a strong and resilient businesses.
According to research commissioned by BlackLine, the pandemic has reshaped the role of finance and accounting and revitalised the urgency around digital transformation. In fact, 40 percent of respondents want to improve financial planning, analysis, budgeting, and forecasting through automation over the next year. Additionally, one-third of C-suite executives are planning to implement or scale automation over the next 12 months.
Digitisation is clearly a key component in finance teams strategic plans, but securing buy-in from management, as well as with end-users, to begin implementation of automated, cloud-based operations is a real challenge.
CFOs want answers to questions like “what’s the ROI?”and “what will we gain?”. Meanwhile, end-users want answers to questions like “what changes will this new technology bring?” and “will automation and digitisation replace me?”
In order to answer these questions and more, Basware teamed up with Forrester Consulting to conduct a Total Economic Impact (TEI) study to examine the potential ROI companies could achieve by deploying a cloud-based P2P solution. The research found that it’s possible for firms to realise a 315 percent ROI and a net present value of $3.84m over three years.
Forrester spoke with Basware customers to better understand their P2P automation journeys. Before implementing their cloud P2P solutions, many suffered from inefficiencies such as manual, paper-based accounts payable processes and poor visibility of their procurement transactions.
But after implementation, they saw benefits such as streamlined invoices, increased procurement and accounts payable efficiency, improved spend under management, reduced operating costs, and increased savings.
Annual spend optimisation – $2.7m
With Basware P2P, customers found that procurement teams gained greater visibility of buying behaviors, drove supplier consolidation and brought spend under management.
Accounts payable productivity gains – $737,000
Due to the increase in electronic invoicing, companies can more effectively drive touchless processing of invoices through advanced matching and coding. This led to further productivity increases such as automated validation, streamlined routing, and reduced supplier inquiries.
Procurement productivity gains – $680,000
Improved sourcing processes and compliance led to huge efficiency gains, optimisation of resource allocation, enabling procurement staff to attend to more strategic tasks.
End user productivity gains – $494,000
Time savings thanks to automated matching and approvals create a more streamlined accounts payable process and permits end-users to refocus their energy on more strategic decision-making.
Early pay discounts – $260,000
Firms can reduce their invoice processing times using e-invoicing and automation. This straight-through processing means invoices can get paid quicker, supplier inquiries answered faster, and early pay discounts captured more frequently.
Legacy system maintenance cost savings – $157,000
By upgrading to the cloud, companies ditch paper costs and require minimal invoice storage and logistics costs. IT departments can become an integral part of the business rather than an enabler viewed as an obstacle or expense.
And though money usually does the talking, so do the unquantifiable benefits. With the digitisation of business functions not only saving company’s cash, but also delivering additional advantages, including:
- Better user experiences
- Easier workflows and increased visibility
- Risk mitigation now and in the future
- Greater levels of procurement analysis and risk mitigation
- Flexibility and scalability thanks to a cloud-based architecture
- Data intelligence capabilities
- Innovations in RPA and AI to further simplify finance and P2P
The true ROI of P2P automation
The benefits of P2P automation are clear – from both a quantitative and qualitative perspective. Finance departments are realising more and more that digitisation of their processes and upgrading to automated, cloud-based solutions are no longer a nice addition, but a necessity.
Gartner research even revealed that 60 percent of polled CFOs agree that they will be spending more time accelerating digital skills in 2021, while 66 percent say they will be dedicating more time to RPA and workflow automation this year.
Read the entire total Total Economic Impact™ (TEI) study and learn more about all the benefits of automating, digitising, and upgrading your P2P to the cloud – here.