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Informed choices can let tech take the strain out of data processing

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Businesses looking for ways of getting technology to handle routine information-handling tasks in their shared-service centres aren’t always adopting the best solutions.

For most businesses, centralising responsibility for the handling of specific operational tasks such as accounting, human resources, IT, compliance or purchasing in shared-service centres is seen as a catalyst for driving organisational efficiencies, reducing costs and improving service delivery.

The fact that such a move doesn’t always reap the expected benefits is often attributed to an inherent lack of visible data. That's a potentially significant issue when, according to the Institute of Financial Operations, many accounts payable departments are reporting a growing demand for real-time information and nearly 40 per cent of controllers say that meeting this demand is a challenge.

At the heart of this problem is the paper-driven processes that some businesses are still using to sort, manage and verify an unstructured mix of paper, email, PDF and fax invoices arriving in multiple currencies and languages.

The inadequacies of such systems inevitably lead to entry errors, information gaps, bottlenecks, slow cycle times and information silos, culminating in a sub-optimal approach to cash management that costs organisations time and money, as well as putting them at a commercial disadvantage. Consequently, the potential of shared services isn't being matched by reality.

So, what are the strategic options facing senior executives who want to drive performance improvements and gain greater visibility, control and efficiency across the procurement lifecycle?

Automating the accounts payable element is the obvious way to drive inefficiencies out of such labour-intensive processes. However, a lack of familiarity with the technology available often results in organisations investing in piecemeal solutions that not only create a fractured landscape but also leave many inefficiencies still in place.

This was Siemens’ experience a decade or so ago, when it implemented a series of data-capture initiatives designed to manage a rapidly growing volume of invoices from its global vendors. Although the company achieved some process improvements, too many human touchpoints remained to produce the real efficiency gains it was looking for. On top of this, it also created a set of unaligned and duplicated technologies: at one time, for example, Siemens was using ten different optical character recognition products.

To improve transactional efficiency, Siemens turned to a dedicated intelligent-capture platform that helped eliminate manual data entry and allowed the extraction of data that had previously been locked inside unstructured documents. This strategy enabled it to eliminate much of the time and cost associated with manual data entry, including the need to resolve errors and exceptions. In practice, for each transaction some 93 per cent of data from more than 50 fields was accurately captured, with the vendor determined correctly in more than 95 per cent of cases. Invoices are now reviewed, processed or rejected automatically, the system is now handling 3.5 million invoices, received in 20 different languages from vendors worldwide.

An intelligent information and capture solution also paves the way for continuous process improvement, as data is captured, ‘learned’ and validated from complex documents. Integrating insight like this with other organisational systems helps businesses gain a competitive advantage by adopting new technologies that make them faster and nimbler.

While process automation in areas like accounts payable isn’t a new concept for shared-service leaders, Siemens' experience shows how, with the introduction of automation technologies, labour-intensive processes can be eliminated, allowing service centres to release time to add greater value to the wider business. They can switch from performing just operational tasks to a more service-focused role in which they look for improvement opportunities beyond the service centre itself.

For shared-service organisations, this offers the potential to create new processes and reinvent old workflows, so they become better defined and more consistent. The added visibility that comes from having relevant data and documents on a single platform to which all users have access enables data silos to be replaced with 360-degree information views, greatly improving the speed and quality of decision making.

So, it’s no longer a question of whether an organisation should automate its payables processes, but how best to do it. The answer to that question, however, lies in the unique needs of each business.

Tim Hood is associate vice-president in EMEA for Hyland.

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