Artificial intelligence (AI) is one of the hottest digital transformation topics in accounts payable.
AI can mine data to provide contextual insights for decision-making and financial planning. For instance, the technology enables accounts payable departments to intelligently leverage data from millions of transactions stored in repositories for spend management or cash flow analysis and liquidity management, or to identify preferred suppliers. And the technology can monitor business processes to help ensure compliance with regulations and policies and to flag suspicious transactions. The insights generated by AI also helps reduce operational costs through the identification of bottlenecks and the root cause of exceptions, as well as the predictive modeling of invoice volumes.
Accounts payable is a prime target for digital transformation.
According to PricewaterhouseCoopers (PwC), 27 percent of accounts payable activities could be eliminated or automated. What’s more, transaction processing consumes a staggering 84 percent of the typical accounts payable practitioner’s day, the Institute of Finance and Management (IOFM) reports. It should come as no surprise then, that IOFM found that AI is one of the technologies that accounts payable practitioners predict will be the most important to the future of their profession.
AI is certainly important – anything that will help accounts payable reduce costs, increase accuracy, accelerate cycle times and enhance decision-making will help in the long run. But AI shouldn’t be considered more important than developing a digital transformation strategy that incorporates the right mix of technologies and processes to address the challenges accounts payable departments face.
Without a digital transformation strategy, artificial intelligence will often struggle to fulfill the business strategies and goals of a company. A digital transformation strategy allows targeted and timely delivery of initiatives, which is a necessity in today’s quickly changing finance environments. Finance departments that are using a digital transformation strategy within their organization better understand their needs and the power of artificial intelligence and other emerging technologies.
An effective digital transformation strategy is built on six pillars:1. Clarity and agreement among stakeholders on goals and strategies
- 2. Current capability gaps
- 3. Prioritized capabilities
- 4. Desired business architecture
- 5. Clear and measurable value propositions
- 6. Expected outcomes and milestones
In addition to AI, a digital transformation strategy might incorporate technologies such as:
- Machine learning
- Robotic process automation
Finance organizations are investing like never-before in AI and other digital transformation technologies. To be sure, accounts payable is ripe for automation. Yet 83 percent of corporate leaders surveyed by Gartner admit that their organization is struggling to make meaningful progress on digital transformation. The problem is that too many organizations blindly deploy technologies such as AI without regard to their business strategies and objectives. The result is often ineffective, conflicting or redundant software solutions, even in cases where “can’t miss” technologies such as AI are deployed. That’s why a digital transformation strategy is critical to minimizing wasted expense, time and effort and achieving the full benefits of AI and other emerging technologies.
IPS wants to help your accounts payable department develop its digital transformation strategy.