Another year and another round of products and marketing efforts focused around automating accounts payable (and accounting in general).
In this Two Question Tuesday, Max Vermeir (Senior Director, Technology Product Markting for ABBYY) shares his perspective on how improving technology will begin to fulfil the decades-long promise of (almost) fully automating accounts payable, invoicing, and more.
Despite ongoing efforts to digitally transform this time-consuming and laborious task, research from the Institute of Financial Operations & Leadership shows that 68% of organizations are still manually typing invoice data into their systems. Not only does this increase the likelihood of errors, but manual entry wastes valuable time and money. So, what’s going wrong?
There are lies, damn lies, and statistics (my favorite Disraeli quote). We’ve been writing about capture and accounts payable for decades. In my mind, it felt like that process has been well on its way to being fully automated. However, recent research suggests otherwise.
AP has been the lowest of the low hanging fruit in IDP and capture since the beginning of the industry, so to carry on with that metaphor, why is that fruit still just barely above the ground for the IDP industry to harvest?
Vermeir: It’s interesting, right? IDP and AP match up so well and yet there’s still so much yet to do just in that space alone.
It’s always been the same thing. I remember when I started my career about 11 years ago. I know I’m lying a little about my age, but let’s stick with 11 years. Somebody told me back then, “Oh, paper’s gonna go away in about two to three years. We’re now in 2023 and like I said it’s been more than eleven years and paper is still around.
If you think about it paper is much more around than we realize.
We’ve gone from actual paper to just digital paper and not a lot has changed beyond that. And that’s also why I think there’s still a lot of low-hanging food. There’s not that much automation yet in the AP business, although people do realize that it’s absolutely a necessity. So financial leaders are aware that the manual processes are painstaking and it doesn’t give you a lot of control.
They are continuously focusing on this. Over time and with the economy fluctuating, there’s more focus on making sure that cost control is effective. Right now we’re seeing a big uptake in the communication around AP again, although a lot of people have been investing in it and, at the same time, a lot of the big companies have solved for the problem.
But still, the world evolves. All of these systems that were already in place were very much geared towards the real pure paper process. Now we’ve switched over to the digital paper or paper document to digital document process, which makes it a whole kind of different ball game. Also kind of the requirements from different countries, especially if you’re getting invoices from all over the world, which is more and more common for every single business.
You see that document formats are constantly changing. Again, thinking about where IDP was a couple of years ago to where we’re heading now; it’s been a constant evolution and actually trying to figure that out as well.
The reason why I still think there’s low-hanging fruit is because the push to RPA gave a big push to general automation. We know that. What we’re seeing again is that there’s more and more investment being made from, first, the cost control perspective.
So reducing transaction costs through really automating these highly repetitive tasks is absolutely essential and investing in technologies to gain data-driven visibility and better allocation of working capital is one of the main gains that you can really get out of this.
Still it’s interesting because I think honestly, and this is purely my own opinion, is that in general the technology of IDP, even though it’s been around for a really long time, not everybody is actually aware of it. I talk to customers still today that say to me how it’s great that we have computer vision in the last couple of years.
Well, no. Computer vision was invented before I was born. I hate saying that, but it’s absolutely true.I think there’s a lot of different factors that play into the fact that not a lot of this has been automated. But it’s great to see the kind of outcomes that we can deliver for our customers when they actually do go on that journey. For example, at Metro Digital, we’ve been able to have really drastic cost savings for their invoice processing cycle.
Carlsberg, I love talking about that one because they now have a 92% touchless order process. So that means that every single beer from Carlsberg is getting into your fridge a lot faster.
IDP is there and the efficiency gains are absolutely possible. What I will say is that the continuous improvement of the technology has made the time to ROI even shorter than it was before, especially in the AP process.
Okay. It’s funny you should mention that in “two or three years paper’s going away.” I remember when I joined AIIM in February of 1995 there was a poster on the wall that said the paperless office is here. Yeah, still waiting, right.
Picking back up on where you left off, what is new and different about technology today that allow for – finally – full AP automation?
Vermeir: I think a couple of things have happened pretty quickly. We’ve all looked at historical timelines. The timeline in which events are happening when it comes to technology is getting shorter and closer and closer to each other.
One of the things I love to talk about because I personally was able to see it happen is consumerization. When Apple introduced the first iPhone, people suddenly had very easy to use technology in their hands and before that “Enterprise Grey” was the standard most for anything that was kind of enterprise focused software.
And I do think that because people suddenly had it in their hands every single time and not just the iPhone, but just technology in general for the consumer was becoming a lot easier to use. So they were getting accustomed to that. So there was demand on the enterprise space too. So that kind of really changed. And also with the cloud, everything became much easier to use, much easier to connect. A lot of legacy systems were replaced.
There are also now capabilities that we’ve got in just the amount of available resources. When it comes to computing power … he hardware that is now becoming a lot cheaper to use has actually allowed us to start using AI principles that have been around for a long time. Before, we just couldn’t do it because we didn’t have the resources to use them efficiently.
That brought us another level of differentiation between vendors in this space; of leveraging that and ensuring that customers no longer have to go through lengthy manual configuration, but just using those technologies to apply the AI where it’s actually useful and delivering out-of-the-box solutions like we do; for example with App Advantage.
The great thing is we’re on the cusp of another one. You know everybody’s been talking about generative AI ChatGPT as the Hail Mary for every single business problem that’s out there, which is not what it is.
It’s going to definitely change how we interact with the technology that we already have today. We went from having to configure a lot of things and coding, scripting all of that to low code, no code, definitely being embedded in every single organization, everybody understanding and being able to work with technology a lot faster and a lot easier.
Now we’re going to have it even easier to work with very complex technologies in the background, through simply communicating with whatever application you’re working with at the time. So I think those are several events and if you think about it, that’s in the span of; what, maybe 10-15 years? And it’s amazing to see.
There’s been a lot of conversation around “but how is this going to take my job?” That’s what everybody said about every other event that we’ve had when technology came into play. But it’s going to be up to those that really kind of see it for what it is, another tool that allows you to revolutionize your business or evolve your business and make it even better than it is today and get ahead of your competitors.
With ABBYY, we’re definitely there at the forefront to ensure that our customers are successful and not just the AP. That is definitely the low having fruit that we can solve for you pretty quickly. Overall we’re there to help you out with any kind of document process.
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Image: Photo by Maja Petric on Unsplash
