Basware – Ability to Capture Data is Most Important Criteria for P2P Solutions

The opening keynote at Basware Connect came from Eric Wilson, VP P2P, where he talked about the ‘mega’ trends that Procurement and Finance are facing and how to handle and think about them. Then in a later speech he spoke about how to protect your tech investment against those trends, all with an undertone, and it was an undertone – not overt advertising – of how Basware can help companies prepare for the future.

He began with a quick reminder of what we once thought was innovation. The Diners Club card, online banking and ATMs,  all so commonplace now, it’s incredible to think we saw them as gimmicky. And here we are today scared that machines will take all our jobs away – do not fear, he says. We’ve been there before; we felt that way during the Industrial Revolution with the introduction of the Spinning Jenny and the Flying Shuttle. What is essential, is how we think about this progress.

But, we are so wrapped up in thinking about all the challenges inside our business that we forget to pay attention to what’s happening outside too. So what should we be paying attention to? There’s lots of jargon being bandied about – so he gave us a clear look at what they mean.

RPA – robotic process automation: Don’t be mistaken – it’s not a robot. It’s a piece of software that takes action for you. But not to be confused with AI – it’s not that intelligent. It’s used for specific repetitive tasks; it’s valuable but not the answer to all your problems. In P2P, it’s not going to fix the classic problems of late payments and maverick spend, but it will automate some business processes.

AI: this is the big one. It will transform everything in the next few years, just like electricity did. AI is here now, it’s not coming – it’s behind the social media apps we are using, every email we send – and it will continue to accelerate. It comes in different levels:

Level 1 – is reactive and rule-based, like programming. It’s not overly smart, but is valuable. It will recognise the same invoices that come in regularly and will create a recurring payment for example. It sees a pattern and takes that task off your hands.

Level 2 – is a bit smarter. Take self-driving cars – this is still rule-based programming: they will stop at a red light and they will stay within their lanes – those are rules. Going a bit further, it combines a little bit of leaning, it will learn that the distance of something is x, but when it detects that distance has decreased to y, it knows it must start to slow down

Level 3 – is smarter still. It takes historical data and applies it to what’s happening now. So, it may see loads of PO data or invoice data and provide predictive information based on it – it will tell you that, based on the pattern it has seen, a particular invoice is at risk of being paid late. It can speed up approval times and accelerate the P2P cycle.

Level 4 – this is where it starts to get really different. This is not just taking historical data and applying it to now, this is taking what it has learnt and applying it to something else. Learning from other scenarios and putting it all together.

Blockchain – is not bit coin! That’s an application of blockchain. It’s a network of computers sharing information in a highly secure way. For buying and selling, the whole cycle and every transaction in it is recorded and confirmed. Every party knows that all the links in the chain have worked. As Simon Taylor, Co-founder of 11:FS later put it: it really just means centralisation vs. decentralisation – if one organisation could process all of the invoices for the whole world, we’d let them. BUT there’s a trust issue with centralising everything! However, he says, the consensus is that if we already agree about something, we don’t have to worry about reconciliation.

Now, Eric wasn’t just giving us a lesson on the different definitions, he was making a good point.  Understanding what’s coming, means you can protect your investment. He gave the Siebel story as an example of ‘not seeing the forest for the trees.’ Siebel was the best CRM system on the market – then SaaS came. And Siebel became obsolete.

Invest for the future, he says, don’t just buy, install and run – make sure it stays relevant. And today, it’s not SaaS that’s the game changer – it’s data.

For 100% visibility and control of spend, and to get the predictions you need for comparison and for competitive advantage, you have to capture data centrally in your P2P system. You need access to internal data, external data, and public data – and it must be complete. That means you must ingest all (not just the big ones, but the whole tail) suppliers into your system, and all the invoices (not just those that match up nicely) through it, and you must get everyone to use it. To do that you must make it the easiest way of doing something, which caters for all levels of supplier sophistication, with an open architecture, for 100% adoption.

So how should we evaluate a system? Get suppliers in for a demo, give them data, the spec, and rate them using scorecards, then pick the best one? It’s not that simple.

Scorecards and RFIs are flawed. Looking at functionality, is not enough. Today, we need to evaluate a P2P system on its capability to capture data – all data: budgets, timings, sales forecasts, and so on -- to be able to predict scenarios. We must look for something that every supplier, even those outside your top 10 that don’t do EDI, will find easy enough to use. Easy enough that all orders and invoices will go through, and everyone will use it.

So, don’t do a Seibel – evaluate your ability to capture data.

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