Over the past year, the challenges of maintaining business continuity with outdated technology and processes were experienced by far too many organisations. Along with this, the problem of manual processes was never more apparent and exposed enterprises that were still relying on paper to get things done. However, with every challenge comes a corresponding opportunity, and having to address the reliance on paper and outdated processes had a silver lining: increased attention from decision makers and senior management. Yes, this actually was a positive development. Why? The result was a significant interest in accounts payable (AP) automation transformations.
Once the decision to automate has been made, the next step in the process is navigating the technology landscape to find right solution for your organisation. There are many considerations that go into making technology investments. Of utmost importance is making sure whatever technology selected can not only handle and address the needs of today’s AP function and organisation as whole, but also needs for the future. And, as we all know the future is uncertain, businesses must make sure the technology they adopt will be viable in the future as well.
Best-of-Breed AP Automation vs ERP Solutions
Ardent Partner’s research clearly shows that automating AP makes sense and technology is the linchpin to its ultimate success. However, there are no shortage of technologies available to automate the AP function, and the decision-making process can be a daunting one. For many organisations, the transformation ultimately comes down to deciding between a best-of-breed AP automation solution and one offered by the incumbent ERP vendor. So, what’s the best way to decide between these two options? First, it makes sense to understand the origins of solutions and solution providers under consideration and compare and contrast their offerings and capabilities.
Best-of-breed AP solutions were developed specifically for the purpose of transforming and automating the AP function, and their providers possess deep, subject-matter expertise and understanding of the needs, wants and requirements of organisations in all things AP. ERP solutions, on the other hand, were originally designed to manage resources and connect various back-office functions, such as manufacturing, operations and accounting. Over the years, ERP solutions started striving to be everything to everybody, including providing modules for AP.
As you would expect, ERP AP solutions are tightly integrated with their own modules and database, but they fall short when it comes to being able to access or integrate with other systems. best-of-breed AP solution providers, on the other hand, are able to integrate with wide range of ERPs, third-party purchasing modules and many other systems.
Ease of use is critical in the adoption and ultimate success of any solution. best-of-breed AP solutions are known for their intuitive design, user friendliness and quick uptake by users. On the contrary, ERP solutions have not traditionally been known for user friendliness or intuitive design.
No one knows what the future holds, and organisations need to make sure the AP solution they select can grow and adapt as things change. Today, you have a single ERP, tomorrow, who knows? Will you outgrow your existing ERP? Will you acquire other companies that have different ERPs? With an ERP AP solution, what happens if you all of sudden need to connect to a disparate ERP system? For best-of-breed AP solutions, this is not a problem.
A key strategic value of automating AP is having access to untapped data and being able to turn it into value for the organisation. best-of-breed AP solutions provide out-of-the-box and ad hoc reporting, KPIs, dashboards, and benchmarks that have been specifically designed for the AP and finance functions. Additionally, they can access and report on data from multiple back-end ERPs and other systems. For ERP AP solutions, this is a hefty challenge.
The Clear Choice: AP Automation
Technology can be a powerful enabler of sustainable efficiencies and strategic value that can transform operations and improve performance. Automating AP can provide significant cost and process efficiencies, but only if an organisation selects the right solution for their unique needs. There are many considerations to take into account when making a buying decision, but if you look at the big picture and take a long-term view, Best-of-Breed AP solutions stand apart from other options and make (more) sense.
For more information on why best-of-breed solutions always beat ERPs in AP, check out our co-branded whitepaper with Ardent Partners.
-Written by Bob Cohen