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Myths Causing Barriers to the Adoption of Digital Invoice Application
When we try to bring in any “change” or “transformation” at large we have faced with multiple challenges. Some of these challenges are “real” and some of these challenges are “unfounded” or even “myths” which creates barriers to any change or transformation we are trying to bring in.
With my experience I would say that “myths” which causes barriers to any organizational transformation can broadly be categorized under any of the following categories: People, Process, Technology, Resources.
A Survey done for a sample size of n=729 across geographies including APAC by Harvard Business Review, 2018, “An Inflection Point for the Data Driven Enterprise- Pulse Survey” gives us an insight to differentiate between myths and realities. An extract from the larger table shows the following for Financial Services Industry.
One would have imagined that lack of funds or top management support would have figured in the top five barriers to transformation but it doesn’t. So what does it mean? Building a Business Case with ROI and getting Management approval is not as difficult as you think for a Digital Transformation project.
Now let us get into the context of Digital Invoice Application(DIA).
Myths causing barriers to the adoption of Digital Invoice Application(DIA)
Myth #1
Difficult to Build a Business Case
Myth #2
Too Expensive
Myth #3
Cloud Based Applications lacks Security
Myth #4
Moving to Cloud Consumes lot of Resources
Myth #5
Takes long time to Implement
Myth #6
Current Process is too Complex to Automate
Now let us look into each of the above 6 Myths and try to debunk them.
Myth #1: It is difficult to build a Business Case for Digital Invoice Application
When companies believe they cannot justify the cost of a solution, it is often because they are unable to quantify the cost of the current process in terms of time, effort and IT infrastructure costs like hardware and software. Hence it is important for you to know your current “cost per invoice processed.” Once you are able to calculate your current cost of invoice processed, you have to calculate the cost of invoice processed for your proposed Digital Invoice Application solution. Here you have to discuss with the solution provider to take inputs related to cost of implementation. A simplified version of the equation is as follows.
Current Cost per Invoice Processed + Future Cost per Invoice Processed = Benefits per Invoice Processed
An IDC survey shows that for a end-to-end Digital Invoice Application Solution the pay back period can be 5 months and a 5 year ROI can be 505%.
If you want to know more about how to calculate your ROI on your AP Automation Solution, see our Blog Post on “How to measure your ROI on your AP Automation?”
Myth #2: Digital Invoice Application Solution is too Expensive
Most of the Digital Invoice Application Solutions are Cloud based and not on-premise Server based.
Solutions that offer end-to-end Digital Invoice Application solution using Software-as-a-Service (SaaS) and the “cloud”, require no upfront software or infrastructure purchases or recurring license maintenance. Choosing a Digital Invoice Application solution that is offered as a service allows all the users that are part of the business process to participate without having to pay expensive user-based license fees.
Normally Digital Invoice Application solution providers offer a flexible pricing model. You can choose a model which will help you optimize your cost.
With a true multi-tenant SaaS solution, you should expect functionality upgrades periodically based on best practices and input from your peers sharing the same core application platforms. All of this implies that you will reach your ROI significantly faster than otherwise.
Myth #3: Cloud Based Digital Invoice Application lacks reliable Security
The fear of Data Security and Frauds is not unfounded with the numerous cases which have been happening around us. Specially in the current situation which we are in 2020, it has been observed that Data Security threats and Fraudulence has increased exponentially.
PEOL’s Express Lane Invoice Processing Orbit(ELIPO) is hosted on AWS Cloud with AWS Security features. If you plan to procure Digital Invoice Application solutions hosted on lessor known Cloud service providers, involve your IT department to assess the security features. You may also ask them that weather the Security features meets specific international standards.
Note that Data Security threats and Fraudulence doesn’t come from outside the organization only but it comes from within the organization also. Hence, access controls specially related to Approvals and Payments can be carefully controlled using the Digital Invoice Application. You can also configure the business rules using the Digital Invoice Application. PEOL’s ELIPO has customizable Approval Work-flow and also Configurable Business Rule engine.
Myth #4: Moving to the Cloud takes excessive company resources
Many companies licensing cloud-based Digital Invoice Application solutions need to involve their IT departments minimally to deploy the solution. Generally, IT is required for enterprise resource planning (ERP) integration, just as it would be for any on-premises solution. However, cloud-based AP solutions do not require customers to perform time-consuming installations or deploy IT resources to adapt existing hardware to new applications.
Upgrades and enhancements are made in the cloud and can be used immediately, without waiting for lengthy downloads to a company server.
In fact, many early adopters cite the lack of IT involvement as one of the key reasons they could move forward with the project. Most SaaS solutions offer around-the-clock tech support via the web, email, or telephone.
Myth #5: Digital Invoice Application Solution takes a long time to implement
Many Digital Invoice Application Solutions may have out-of-box Integration Features with your existing ERP. In this case the implementation time is less.
In case you decide to procure and implement a Digital Invoice Application solution which does not have out-of-box integration features you may need to do some additional work. Make sure you form a cross functional team comprising of your IT department, Account Payable function and the personnel from your solution provider. Further make a detail project plan related to deployment, migration, testing etc. and a project review mechanism to track progress. Focussed execution will decrease your implementation time.
Myth #6: Existing Invoicing Process is too Complex and company Specific to Automate
If you are processing invoices manually which is predominantly paper based then your process is already complex and painstaking to say the least. My experience is that such processes becomes more complex with every passing year. I have seen organizations re-engineering their current processes after looking through the prism of “lean management” before implementing ERP or any other application. Hence this is the time you simplify your current process to make it more efficient before implementing a Digital Invoice Application solution.
Further, if your organization has been a part of any merger or acquisition then you may land up in a situation where your multiple locations are having different ERPs. Imagine the variety and complexity of your invoice processing. In such cases all these different ERPs of different locations can be integrated with one Cloud based Digital Invoice Application to streamline the invoice processing function.
Don’t get caught in the maze of Myths and Realities
As it is said that sometimes myth is a reality and reality is a myth, depending upon who is looking at it. Organizations have spent enough time in trying to navigate through this maze of myths and realities and lost valuable time. The time to act is now.
Progressive companies take decisions based on facts supported by Data and does not get bogged down by myths. There is lot of evidence out there to support the benefits of Digital Invoice Application in terms of time and cost. Do a ROI calculation and make a business case to implement a Digital Invoice Application. All the best!
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