At last month’s IFO Fusion conference in Orlando, my good friend and colleague Bob Cohen (VP, Marketing at Basware) and I presented what turned out to be a very popular session, The Future of AP: The Top 5 Changes Coming to AP. Although an obviously ambitious topic, it is one that both Bob and I care deeply about. In our capacity as marketing professionals in the AP market, we are consistently exposed to the client voice not only as representatives of our own companies, but also at the numerous industry conferences we constantly attend across the nation.
This presentation was the distillation of literally hundreds of conversations with finance and technology professionals over the past two years about what AP professionals and the AP market have identified as the key to becoming increasingly efficient, productive, and more relevant in today’s business environment.
The list that follows outlines what we see as the top five changes coming to AP:
1. More Importance Will be Given to the Quality of Supplier Information
2. Supplier Networks Become a Reality
3. Technology Provides New Ways to Automate AP Systems & Processes
4. Buyers & Suppliers Collaborate
5. More Cooperation between Finance & Procurement
In this post, I’ll add my thoughts about about the first two points; the remaining items will be handled over the next two weeks.
1. More Importance Given to the Quality of Supplier Information
Improving supplier information is an elusive but increasingly seen as a critical goal in AP departments. Lavante benchmarking data indicates that every year over half of any company’s suppliers will change some significant contact attribute in their AR department. These changes – ranging from the primary contact, physical address, or email – can dramatically affect an organization’s ability to interact with that supplier and maintain transactional excellence.
A rapidly-decaying vendor database has real hard costs associated with it. Consider the potential loss of missed discounts, unanswered phone calls, or miss-directed checks as just a few possible outcomes of incorrect contact data. There is an enormous financial upside to improving and maintaining the highest quality of supplier data. This issue gains increased relevance as industry analysts are focusing attention on this new vendor data management market* and technology providers, such as Jigsaw and Lavante, deliver solutions to help companies effectively automate this process.
Improving supplier data offers a great benefit across the larger procure-to-pay life cycle by providing both procurement and finance with one uniform, single source of truth that will drive improved procurement activities as well as payment processes.
2. Supplier Networks Become a Reality
Simply put, a supplier network is inevitable. Numerous software providers are emerging and gaining momentum as network providers, although a clear market leader is yet to rise to the top. It is obvious that AP professionals are increasingly interested and excited to leverage the benefits and functionality that a comprehensive supplier network can offer.
We see the emergence of a supplier network is a natural for two major reasons.
• A network most closely resembles what is fast becoming the favored means of communication amongst large, disperse groups – social media. Consider when you buy products on Amazon and the instant access you have to what others think about the seller and the product. Think also about how quickly you can use Facebook to inform your entire family that you are safe after a natural disaster has struck your geographical region. Or, the use of Linked-in to seamlessly communicate well-beyond your personal network to professionals in your field. AP departments (and all business for that matter) have much to gain from adopting this same level of immediacy and efficiency!
• A supplier network should deliver equal benefits to both supplier and customer. Ultimately the winning technology will deliver the greatest benefits across both populations in order to drive adoption.
Click here for part 2: Technology Provides New Ways to Automate AP Systems & Processes. The final installment will come shortly with: Buyers & Suppliers Collaborate and More Cooperation between Finance & Procurement. Please add other ideas about what you think is coming in the AP industry.
Lavante & Basware will present a webinar on July 13 at 11am PDT on this topic, covering these top five changes. Click here to find out more and register.
* See Jason Busch’s Spend Matters blogs for more discussion around vendor data management, supplier networks, and other P2P issues.