The way enterprises do business has changed significantly over the past 15 years and these shifts are reflected in the way ePayables and P2P solution providers go to market today. Historically, Accounts Payable (AP) was seen as a back-office function within the enterprise, and a very tactical one at that. Procurement, on the other hand, has traditionally been much more dominant and successful in the battle for strategic prominence. AP’s role has also increased over the years and has taken on responsibility for managing B2B payments, including cross-border payments, as well as becoming a source of spend management analysis and working capital management strategies.
While it has taken a long time (since the early 2000s), more executives and organizations have started to take a look at all parts of their enterprise operations in order to find strategic advantages, and this includes the AP function. All of these factors have impacted how ePayables solution providers package, market, and sell their solutions.
Fifteen years ago, most AP software was sold as a stand-alone, tactical package that addressed eliminating paper invoices through the use of OCR technology, and leveraging workflow to eliminate the manual routing and approval of invoices. Selling AP software usually started by speaking with AP managers and then trying to get more senior finance employees interested in the project and involved in business case building.
AP has typically suffered from a perception problem within organizations due to its perceived tactical-only value. But this has started to change over the past five years. AP units are beginning to be viewed more as a strategic, valuable, business partner, worthy of involvement and engagement in enterprise wide planning, working capital management strategies, and cash flow conversations. Data from Ardent’s 2016 and 2017 ‘State of ePayables’ research study show just how far organizations have come in their thinking and mentality about AP departments.
In 2016, 67% of AP teams were viewed as having “some or much strategic value.” In 2017, this number jumped to 87%. AP departments are having an impact, and are now being seen as a source of value, not simply as a tactical department.
This all brings me back to how AP is being sold and marketed to in today’s environment. Years ago, a typical invoice automation sale was very siloed, usually beginning and ending within the AP department. Today, AP has found its niche and become much more aligned with the broader procure-to-pay (P2P) process. AP automation deals are very seldom anymore self-contained to just one business department or unit. Most ePayable solution providers have branched out over the years and now offer full P2P functionality, or significantly more than was the norm only five or ten years ago. This product line expansion has enabled practitioners to increase their sphere of influence and play a much more strategic role in organizations.
Today, AP automation deals almost all have involvement from other groups within the organization like Finance, Treasury, Procurement, Purchasing, and Legal, amongst others. Automation of AP is no longer seen as a stand-alone activity, rather it is more often than not viewed through the prism of the entire P2P process. This means selling an AP automation deal has become much more complex, with more people having input and influence over the process. How deals are sold is greatly impacted by the specific vendors vying for a prospect. If a vendor has a procurement bent, chances are the deal will be run through the procurement department. And conversely, if a vendor has more of a finance bent, chances are the deal will be run through the finance department. Accounts Payable always played a tactically important role in the organization. By increasing its strategic value over the past years, AP has moved from a behind-the-scenes function in most P2P deals to front and center. This change has impacted solution offerings from providers as well as who is involved in decision making and what is being purchased.
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