Select the AP Automation Solution of Your Dreams

By Andrew Bartolini

A dream doesn't become reality through magic; it takes sweat, determination, and hard work. -- Colin Powell

Selecting the right technology solution is never an easy process, no matter the department. Any number of issues can occur, including poorly-thought-out requirements, a haphazard project plan, and even an initiative pursued without an understanding of what needs to be changed in the first place. This goes double for accounts payable, which occupies such a central position in many enterprises that a poorly run automation project can cause a particular brand of nightmare for the enterprise.

Department leadership must proceed with caution to prevent the AP automation solution selection process from sliding into waking nightmare territory. There are a few necessary stages to follow, including understanding the current process, getting stakeholder buy-in, developing a project blueprint, and determining solution requirements—all of which must ideally be done before even beginning the RFP process to actually pick the solution.

Get Stakeholder Buy-In

The first step in selecting the right AP automation solution is to convince stakeholders that an automation solution is needed at all. This includes buy-in from the executive level as well as all other relevant project stakeholders, which can provide a wider set of interests, priorities, and requirements for discussion. That said, the sooner these inputs can be identified and understood, the sooner they can be integrated into the larger project plan. These stakeholder groups are typically:

Procurement manages the initial stages of the procure-to-pay process and may use processes or systems that need to be considered before choosing an AP automation solution. Procurement can also offer a significant amount of support in explaining how an AP automation solution can positively impact supplier management.

Finance/treasury may have specific requirements related to payment execution in order to keep the AP automation solution in line with enterprise cash management goals. Treasury is likely to be supportive in explaining how AP automation can help improve working capital optimization.

IT should be deeply involved because it will be able to define any constraints or integration requirements based on the enterprise's current technology infrastructure.

Line of business users can make a huge difference in terms of program success, especially if a large number of users are going to come from the business. Should this be the case, the line of business should have a representative involved in solution selection.

Suppliers can be the Achilles heel of any AP automation project. Understanding the preferences and inclinations of your supplier base will help the project team understand how much effort will be needed to enable suppliers onto the new AP automation platform.

Without gaining support from stakeholders, as well as executives, even a well-run solution selection project runs the risk of ending up with a solution that doesn't integrate with current IT architecture or one that suppliers refuse to use. This could result in a waste of enterprise money and the lack of any sort of return on investment. Once stakeholders have bought into the need for automation, the next step is to understand how the process operates today.

Understand the Current State Whether the plan is to automate the entire process or to automate just one particular piece, it's critical to understand how the process currently works. Understanding the current state of AP will allow you to uncover specific pain points, which in turn can help refine requirements for the automation project. This stage of the solution selection process is also a good point to establish and gather some baseline performance metrics so you can actually track improvements after the automation project is completed.

These performance metrics could include things like:

  • Number of invoices processed per employee
  • Cost to process an invoice
  • Cycle time to process an invoice
  • Percentage of on-time payments
Gathering baseline metrics and comparing them against industry averages can provide a picture of how well the current process operates when compared with the industry at large. After completing this step, you can start devising an actual project plan.

Establish a Project Roadmap

After understanding the current process, the next stage in picking an AP automation solution is to create a defined project plan. This is the stage where you align the long-term AP strategy and its potential impact with the wider enterprise's plans and goals. The project plan developed in this stage should consider multiple factors, including:
  • Process efficiency and savings goals
  • System capabilities
  • Visibility and reporting capabilities
  • Business and functional user engagement, requirements, and adoption
  • Supplier enablement strategy
  • Procurement processes and technology
  • Budget and timeline estimates
While the long-term strategy can be the business case, which helps focus the project, it's important to perform this step in order to fully determine the desired end-state. This is also the stage where you consider all possible impacts of automating AP.

For example, the procure-to-pay process is a two-part workflow where AP manages only the second half. What this means is that AP must consider the systems and processes that procurement already uses when choosing a solution. After the project plan is fully spec'd out, then you can begin to consider the technology requirements.

Determine Solution Requirements

The final stage before sending out RFPs to solution providers is to determine your solution requirements. This stage is when you consider whether to look at a cloud-based, hybrid, or on-premise solution, as well as what capabilities the other project stakeholders require. For example, if you're looking to automate just the front end of the AP process, you may not need the capability to pay suppliers electronically. This is also the stage where you determine which functionalities are your absolute must-haves and which ones would be nice to have but aren't critical to the decision-making process.

Put Out an RFP

Once all the background work is done, it's now time to put out an RFP. This is traditionally done after the project receives the go-ahead from senior management and a plan is fully in place for the solution selection process. You must get stakeholder buy-in and perform a lot of legwork before coming to this stage of the game, but the good news is that your success rate is likely to be much higher if you do all that work before this stage.

The goal here is to get a detailed view into each solution provider's complete offering and gain a better understanding of how their products and services, strengths, and experiences match up with your organizational requirements. In order to succeed at this, you have to also share information; this means that your RFP should convey the goals and objectives of the project and include specific functional requirements that you've already determined are necessary. Vendor responses are much more likely to be relevant and focused if you provide information about your project.

Demo the Technology

The final stage of selecting an AP automation solution is to schedule live technology demos with selected providers. This tends to happen after a short list is winnowed down, but that depends on how many providers respond to the RFP in the first place. It's generally a good idea to invite some or all of the other stakeholders to the demo, as they'll provide different perspectives on the solution and can also get a feel for the possible choices. Preparation for the demo is key, and you may also consider sending the provider a list of questions ahead of time.

In some cases, it may be appropriate to conduct a pilot program with a particular solution.

For example, if you're choosing a scan-and-capture solution, it can make sense to ask the short-listed providers to process a certain number of documents through their software in order to see which one provides the best data capture results. The end results can compare rates, accuracy, and other metrics to choose a “winner,” as it were.

Create and Follow the Process

Picking an AP automation solution is a major investment of time and money. Because of this, it is important to take caution throughout the process so you can be sure that you're making the right choice. This process includes a fair number of steps, from gaining stakeholder buy-in and understanding the current process through sending out an RFP and demoing solutions, but the end result should be a solution that ticks all the boxes in your project plan and has the desired result in automating your AP process. After all, automating AP can drive cost and process efficiencies that are hard to replicate with manual workflows—and can make AP more strategic in the long run.

Andrew Bartolini is Chief Research Officer and Managing Partner of Ardent Partners, a Boston-based research and advisory firm with extensive experience tracking developments in the accounts payable marketplace. For almost 20 years, Ardent's analysts have been benchmarking and advising end-users on accounts payable technology investments and best practices. For more information, visit www.ardentpartners.com


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