Last time, we took a look at what it takes to become a Chief Procurement Officer in 2014. This time, some predictions for the Accounts Payable automation (what we commonly refer to as “ePayables”) market from our resident expert Vishal Patel (with an assist from Andrew). If you’re interested in our views on procurement in 2014, make sure you register for our January 23rd webinar, by clicking this link – Procurement: Big Trends & Predictions for 2014.
ePayables Predictions for 2014
2014 is going to be an exciting time for the providers of ePayables solutions and for the AP organizations that use them. For far too long, AP departments have been stuck with manual and inefficient processes. And while many will continue to struggle this year, in 2014, we expect to see more organizations begin initiatives to transform the AP function (including ePayments) and bring the AP operation into the modern age. AP, Finance and Procurement leaders increasingly understand the value that a more efficient AP process can deliver with their real-time, accurate vies into invoices and payments. CPOs, procurement leaders, and treasurers should all take note because the value created within a “transformed” AP process can and should extend across the entire P2P process and working capital objectives.
Here are our top predictions for the 2014 ePayables market:
- The ePayables market will grow – driven by more RFPs that seek an “end-to-end” ePayables solution. Nonetheless, many new initiatives will focus on the removal of paper invoices and the automation of manual processes. Some AP departments will go the scan and capture route while others will pursue eInvoicing; many will do both. Those that have already implemented technology will continue to optimize their processes, focus on improving performance metrics and increase the level of value-added activities (for example – driving dynamic discounting programs forward).
- Business networks take center stage – Networks of connected buyers and suppliers will grow significantly in 2014 as enterprises ramp up their efforts to connect electronically to their suppliers. These electronic connections enable more efficient transactions (invoicing, PO’s, payments, etc), reliable and accurate data and overall a higher level of collaboration between two trading partners. Besides Ariba, the networks to watch include Paymode-X, Hubwoo, Basware
- Dynamic discounting market grows fast – In 2014, we expect dynamic discounting (DD) solutions be the fasting growing segment in the ePayables market . Over the last couple of years DD solution providers have gained significant traction and have brought some much needed innovation to the space. Taulia is one innovative provider that has developed a slick solution that integrates directly into their clients’ back-end systems. Ariba has a mature DD solution and has been providing these capabilities to its buyers and suppliers for several years; the growth of its network (participants and transaction volume) continue to grow the volume of total discounts captured. Tradeshift also launched DD functionality that offers various capabilities including the execution of an agreement, interactive charts, a dashboard, etc.
- Capture providers will extend their addressable market – Traditionally, data capture providers have been focused on large enterprise customers that process large volumes of invoices. Of course this focus will remain but in 2014 we expect that some providers will focus on the mid-market. With new cloud offerings and mobile capabilities, these providers will begin marketing more affordable solutions that are able to integrate quickly and easily with “mid-market” ERP systems. Providers to watch include Canon and Medius.
- Supply chain finance gets more attention– With the increased usage and growth of business networks, the rise in demand for dynamic discounting and the automation of the AP process in general (read shorter invoice cycle times), solution providers and financial institutions alike are putting a lot of effort and resource behind supply chain finance (SCF) offerings. While capturing more early payment discounts is highly desirable it requires cash on-hand, not all organizations are sitting on piles of cash and this is precisely where SCF comes in. Through SCF, financial institutions offer short-term credit to buying organizations against the security of an unpaid (but approved) invoice. CFO’s and Treasurers are going to explore this space in more detail in 2014. Providers to watch include Taulia, RBS and Kyriba.
- Mobile capabilities gain strong interest – Some solution providers announced mobile capabilities in 2013; more will do so in 2014. Soon mobile capabilities will be expected from all providers or ePayables solutions (capture, eInvoicing, ePayments, etc.) and this year we will see some RFPs include mobile in the selection criteria. That said, we predict that mobile capabilities will differ broadly in the market with certain solution providers developing full native mobile capabilities while others will offer more limited capabilities (e.g., email or web-based approvals).
Stay tuned for more coverage and discussion of these predictions on CPO Rising and on Payables Place.
RELATED ARTICLES
2014: The Rise of The Business Network and B2B Payments
Supply Management: Big Trends & Predictions for 2013 (Big Data)
