Are You Ready for the Post-Invoice Economy and the Future of Source-to-Pay?
Digitalization, Procurement Trends, Industry Trends and Technology, Source-to-Pay
Are you ready for the future? Admittedly not the catchiest of beginnings, but I do have a good reason for the question.
We have reached a point where technology can’t accelerate our existing business processes any further. Incremental changes to our ways of doing business have only limited impact, and we simply cannot move forward if we keep applying new technology to old processes and business models.
We need to break the habit to be prepared for the future of source-to-pay, working capital management, and other core B2B (business-to-business) processes. This means a fundamental change in the way the B2B world works.
If we want to achieve the next level in B2B commerce, we need to adopt a completely new way of thinking.
(Tired of reading? You can also watch the webinar where we discuss the new paradigm of B2B commerce and the future of source-to-pay.)
The new key value drivers
We will soon arrive at a post-invoice economy. What we mean by that is a new era, where, as technologies continue to advance and converge, highly transactional processes such as accounts payable (AP) and accounts receivable (AR), will become commoditized. Organizations are then able to derive less and less value and competitive advantage from AP and AR as the total number of invoices will reduce and invoice handling will become fully automated.
Consequently, procurement and cash management will become the new key value drivers within the organization, more valuable to both top and bottom line performance, and to the success of a business.
We believe new thinking is required to navigate the shift effectively. We call this thinking Cash Agile. Business leaders are challenged by the rapidly approaching future to transform their thinking. The new era calls for leadership in procurement and cash management. The result will lead to closely intertwined and collaborative supply chains where cash agility will fuel the new competitive edge. So, I ask again – are you ready to make the shift?
The past, present, and future of B2B Commerce
30 years ago organizations took the first steps toward digitalization and looked to printing and scanning services to improve the control of outgoing and incoming invoices and other business documents. 10 years later, the early adopters started to demand electronic invoices from their suppliers to streamline their AP processes, as well, and centralization of payments became a hot topic in corporate finance functions. Fast forward yet another 10 years, and finance and accounting outsourcing and rule-based automation were trending as ways to improve control and cut costs.
Today intelligent automation with robotics and machine learning are driving further efficiencies to purchasing and payment processes while business networks evolve, and interoperability between systems and organizations enable collaboration between buyers, suppliers, their banks, and other stakeholders of B2B trade.
But now the digital age, where we already live as consumers, is finally starting to redefine our expectations for B2B connections and commerce as well. Technologies like blockchain and artificial intelligence will revolutionize AP and AR functions, and the future of source-to-pay will be here sooner than you think.
How to be Cash Agile?
What matters in the post-invoice economy is the agility of your procurement and cash management. Organizations - and the business leaders in them - will no longer stay competitive and relevant by focusing only on process efficiency and cost savings.
So when I say agile, I am not only talking about the agility that comes with efficient processes. I am talking about your organization’s ability to manage the whole of its business landscape in real-time, to predict and plan, to optimize the management of cash, to react quickly and with certainty of outcome.
I am talking about the agility in your supply chains and about the ability to see the red thread between sales, e-commerce, billing and collection, procurement, invoice handling, and cash management.
This is what we call cash agile, and this is how we see the future of source-to-pay, best-in-class working capital management, and other B2B processes.
Will you make the shift?
The rapid advances in digitalization and technological development have already had organizations working hard for years now to avoid from getting left behind. But, in the end, not everyone will make the shift.
There will be winners and losers in this fundamental transformation of the B2B world. Which group do you want to belong to?
Rowan Lemley has over 10 years of experience in the purchase-to-pay arena. During that time, he has lead product marketing for AP Automation, B2B networks, and most recently eProcurement and Product Information Management solutions.
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