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Decision Management boosts AP performance


There was an interesting little article on the Institute of Financial Operations site last week – In relentless pursuit of productivity: Index tracks traits of best-in-breed AP operations. This reported on some results from the Accounts Payable Productivity Index study. What struck me about this was the role of automated decision-making (using business rules) among top performers in this study:

  • More than 95 percent of top performers reported leveraging automated matching functionality and exception-based management rules to automate purchase order- supported invoice processing and manage PO invoice processing exceptions. [Clear use of business rules to automate decisions like “Which PO(s) match this invoice” or “is this invoice valid”]
  • More than 85 percent effectively deploy rules-based automated workflow solutions to effectively manage the flow of electronic invoice data and images through the organization.[Automating approval and routing decisions with business rules this time – decisions like “who needs to see this invoice before it is paid”]
  • More than 55 percent deploy some form of supplier and internal customer self-service tool. [Realistically these will be handling decisions too as a supplier or internal customer wants to know if a change is approved, if enough information is being provided, if a PO is complete and so on]
  • More than 40 percent use electronic catalogs for web-based purchasing and electronic settlement.[Presumably also automating settlement decisions]

I also enjoyed the fact that, while top performers have squeezed all the efficiency gains they can out the system, they are continuing to see effectiveness gains. As the article says

top performers are becoming more focused on effectiveness, improving customer service, gaining more timely and accurate visibility into spend, reducing invoice processing cycle times, and ensuring payment accuracy within defined terms, as opportunities for efficiency enhancement become more difficult when organizations reach advanced levels of accounts payable transformation maturity.

My experience is that the role of Decision Management and of Decision Management Systems only grows as organizations focus on effectiveness. Not only do analytics start to play more of a role when one considers effectiveness, automated decision-making frees up resources from repetitive tasks while reducing re-work and allowing for ever-greater self-service. After all, the more decisions the system makes the less time you spend waiting for a person to make it.