Imagination
August 2007 - Issue 01
SOAPBOX
It’s not easy to successfully manage a technology project and, at the same time, berate your clients for achieving their goals! If this seems nonsensical, let me explain. When an organisation decides to automate its processes, we try to influence it not to see the outcome solely in technical terms. Our rationale is that, whilst automation may be the agreed goal, it is just the first step on a journey that should lead to real business improvement. Automating the process is not the end. It’s not even the middle. It’s the start.
The desired outcome of a process automation project should be seen not solely in terms of saving time and effort but as guiding the organisation towards process improvement. Take the case of supplier invoicing. By automating the processes of presentation and approval, you will produce useful data. Armed with that data, you can report on your operations and, possibly for the first time, gain true business visibility and transparency.
One of the first things that most companies see when they report on their newly-automated processes is that the cost of managing purchase invoices lies not in the mechanics of getting them into the system but in exception handling. Automating your processes is like shining a bright light into a dark cupboard. Clearly visible will be the exceptions which strain the system and erode productivity. Once identified, they can be eliminated at source.
We all know that exception resolution handled in the old way absorbs cost at all levels. Supplier relationships suffer, not least in late payment and loss of prompt settlement discounts, and a strain is put on the business. In an increasingly consumer-driven world, supply chain processes can build or destroy customer satisfaction and loyalty, so this is a critical area to protect.
Human error penetrates every element of invoice processing: be it in paper or electronic document capture, data validation, exception handling or approval, and it’s in everyone’s interest to drive out exceptions. Only through reporting will you see where the problems lie. Perhaps a supplier has quoted the wrong PO number? An automated process doesn’t solve the problem: it merely makes it quicker and easier to spot. Whilst automation is a benefit, it’s just the start of process improvement.
Our advice is, don’t embark upon process automation unless you are going to take it to its logical conclusion. Whilst automation will certainly deliver some return on investment, this is limited when compared to the gains that can be enjoyed from process improvement. Sadly, you will never achieve world-class accounting by automation alone, particularly automation of poor processes. So, to make your business better, look at your processes and see what you can improve. Spot where the exceptions are creeping in and eliminate them!