Business confidence has dipped this year in response to a flat economy and continued uncertainty around Brexit. It seems that few organisations have strong contingency plans in place in case of a hard Brexit and some are concerned about the implications for their supply chain. And while access to cash remains difficult, with some organisations reporting average payment terms at 50 days or more, it’s likely that there’s some embedded risk within them. So over the past few months, we’ve taken an in-depth look at how this environment has affected the UK’s P2P departments and the challenges and opportunities they face.
Although many organisations reported that they were still tightly constrained by budget, most had implemented either new technology or adopted new processes to maximise cost savings and efficiency. Almost half of the respondents felt that increased collaboration between the different areas of purchase to pay will affect them in the next 12 months. This is partly as a result of enabling end to end technology, and also where the different areas of procure to pay are governed by one department head. Having a collaborative policy has the benefit of breaking down any existing silos and makes it easier to implement interconnected KPIs, and to partner with other areas of the business. However, alongside the greater emphasis on data analysis and reporting, expectations of the P2P team have grown, but have not always been met by executive support or change management initiatives.
Organisations reported using a variety of different technologies to process their invoices, from scan and capture, OCR and PDFs to touchless processing, eInvoicing and the use of robotics. The number of businesses working in a mostly manual environment have fallen again this year as have those working entirely on-premise. A quarter of respondents reported working in a hybrid cloud/on premise environment, while those only operating in the cloud made up just over 11%. This increase in automation has led to a rise in reporting analysis, and in fact this is one of the areas of P2P that now consumes the most time.
Some of the operational and process challenges faced by AP departments remain the traditional ones of cost reduction and keeping track of invoices, but this year we’ve seen some big changes in three areas. Last year fewer than 2% of organisations had implemented RPA. This year, that’s gone up to 16%. But what’s interesting is the 43% who expect robotics to appear on their roadmap in the next year or two. RPA has taken off in areas of repetitive, large volume activities and as a plug in between technologies. Its rise also has implications for the outsourcing industry and this year, we’ve seen reshoring (moving previously outsourced AP back) rise from zero to 3%. Alongside the explosion of RPA, mobile capture has become the second fastest growing technology this year. And after a couple of fairly static years, eInvoicing has risen 9%.
Before organisations can consider what comes next, some are still playing catch up. If you’re still swamped by paper and excel spreadsheets, it’s difficult to contemplate blockchain or AI. However, we do expect that over the next 5 years there will be an increased use of machine learning and in the more advanced organisations, the use of AI too; where humans interact with technology to create an augmented way of working. As for blockchain – although exactly half had heard of it, half again said that they still didn’t understand how it would affect them in their roles. So some work to do there for the vendors currently exploring it.
Join our webinar next Thursday 4th October to delve deeper into the latest trends and developments