“Perception” has long been one of the biggest issues holding AP groups down within the organizational hierarchy of an enterprise. Perception acts as a lens through which reality is viewed, understood, and acted upon. As such, there is a tendency to assume that how reality is perceived is what it truly is. For many years, executives have failed to see the larger potential of AP, based on its history as a highly siloed and very tactical unit, and generally ignored the department’s needs for new resources, attention, and systems. The pandemic has enabled executives within finance and the business to see AP with new eyes and evaluate it based on its impact on performance and operations.
A robust 66% of businesses state that AP is either “very” or “exceptionally” valuable to the enterprise. This clear majority is exactly double the 33% who saw AP the same way six years ago, indicating that a new era has started for the industry. This surge in perceived value shows that AP is succeeding in driving real value to the business and its suppliers by developing and producing actionable intelligence and insights that can be utilized to:
1) Improve/support supply chain resiliency
2) Deliver impactful gains across multiple functional areas
3) Improve the bottom line
4) Positively impact working capital.
That the majority of organizations today view AP as a valuable unit speaks volumes to its performance during the pandemic. And, Ardent Partners expects AP’s momentum to continue throughout 2022 and the next few years.
At the same time, there is more work to be done to keep improving perceptions (and performance) and have AP viewed more favorably within the enterprise. In 2022, very few AP groups have mastered their function, with AP groups rarely first in line to receive budget increases and special project approvals. But the truth is that AP does not have to be “at the top of the list” for its position to be greatly improved, it merely has to be “considered.”
That said, with the wave of innovation that has recently swept across the enterprise software industry, it will be increasingly important to the longer-term success of every AP department that it be viewed similar to other strategic business functions (i.e., worthy of some investment). Failing in that regard will leave an AP operation susceptible to being left behind when innovations begin delivering breakthrough intelligence and results.
