It’s no question that business-to-business (B2B) organizations trail business-to-consumer companies when it comes to technology usage and innovation, and the subsegment of financial technology (fintech) is no different. In this cost-cutting environment where every dollar must work hard, it’s difficult for companies to make large fintech leaps when so much of their operations are manual and paper based. It’s imperative, however, that B2B enterprises understand that (1) now is the time to embrace fintech because it will lead to superior financial performance; (2) fintech, especially in accounts payable (AP) and procurement, yields a clear return on investment; and (3) intelligent technologies, like artificial intelligence (AI), are absolutely attainable right now.
Underscoring the benefits of embracing fintech, a recent Deloitte study found that “Higher-[digital] maturity organizations surveyed were far more likely than lower-maturity ones to significantly outperform their industry average on key financial metrics.”
Let’s explore how your B2B organization can leverage fintech to outperform now.
First, you need automation via the cloud.
The first way to dip your toe into the fintech water is to move to the cloud; it’s the foundation for emerging technologies. You don’t use a typewriter to access email and Wi-Fi. Similarly, you can’t rely on on-premise systems to advance your technology.
“Modernizing legacy enterprise systems and migrating them to the cloud may help unleash an organization’s digital potential. Until recently, these undertakings could also bust that same organization’s digital transformation budget.”
That’s the beauty of technology; there are now many options that make a transition to the cloud financially feasible. The cloud is gold. It streamlines and accelerates procurement and AP processes and aggregates the real-time financial data behind those transactions, not to mention facilitates remote working, which will only continue or — even increase — in the future. And there are benefits galore as compared to on-premise systems: lower or zero maintenance costs; scalable operating expenses versus capital expenses on your balance sheet; increased corporate agility for scaling up or back; and more secure, leading to less risk.
Next, you need to collect all the data.
You’re in the cloud; now you need data. Start small and win big, all while plotting your roadmap for the future to continually build this data set. Automating your invoicing or procurement processes are great places to start. Automation of these processes removes human error by handling manual, tactical tasks that these departments typically perform: authorizing purchases, automatically notifying approvers and processing invoices. Fewer human interactions yield fewer errors.
Voila – you have data. This comprehensive data set will present you with historical trends, transactional details and user behaviors, providing the framework for technology to do its job. In other words, paper-based, manual processes do not yield a single, consolidated view of all your transactions and spend. It’s the equivalent of wearing sunglasses at midnight – you can barely see anything.
If you’re one of the few B2B companies that has automated their procure-to-pay (P2P) operations, then this is the update for you. “To achieve the benefits and scale of AI and MLOps, data must be tuned for native machine consumption, not humans, causing organizations to rethink data management, capture, and organization.” according to Deloitte.” They predict that, “In the next 18 to 24 months, we expect to see companies begin addressing this challenge by reengineering the way they capture, store, and process data.” Side note: if you’re unfamiliar with MLOps, Deloitte describes it as “… the application of DevOps tools and approaches to model development and delivery to industrialize and scale machine learning, from development and deployment to ongoing model maintenance and management.”ii
Then, you can leverage AI/ML.
With data in the cloud, you are ready to leverage the power of AI and machine learning (ML) technologies for superior financial performance in a multitude of ways.
Gain speed in a global organization
Technology has recently emerged that captures invoice data automatically via AI. In other words, it automates the conversion of machine-readable PDFs to e-invoices, requiring extremely minimal manual effort for the AP team. Unlike optical character recognition (OCR) technology that relies on capturing data from images, AI-enabled technology is trained using data automatically extracted from historical invoices via an ML model. For global organizations with operations in multiple countries, which therefore receives many invoices in different languages, this is hugely beneficial as it removes delays in processing because they don’t have to wait for template set-up or manual mapping.
Read More: The Secret Ingredient to Driving Customer Acquisition
Mitigate risk
How much time does your team spend identifying and mitigating risk in the supply chain? Probably only once it’s too late, correct? With AI and ML technology based on internal data and third-party sources, your team can be served up intelligent supplier and spend analysis and recommendations in a snap. Think about having the answers to these questions without any manual labor:
- Are you too dependent on one supplier?
- Do you have too many suppliers for the same category, causing you to miss volume discounts and preferred customer status?
- Do you have suppliers in a geography that is politically unstable?
Identify the ROI of changes
Wouldn’t it be tremendous if you knew which improvements would yield the greatest return on investment? You can! Via prescriptive analytics technology in e-invoicing, you can predict the outcomes of certain changes. For example, if you move these 10 suppliers from paper to e-invoicing, you would gain the following benefits (reduction in processing costs by X%, reduction in carbon emissions by Y%, improvement in processing times by X% and incremental discount capture by X%).
Read Also: Global Fintech Interview with Alexander George Muthoot, Deputy Managing Director at Muthoot Finance
Small Leaps, Huge Gains
Sure; the B2B space still has a long way to go in leveraging supremely futuristic technology advancements. But there is plenty of fintech that is available and feasible now that will truly improve financial performance and subsequently, those ever-important financial metrics. The roadmap here should provide you with huge gains yet requires only small leaps.
