Why DIY automation projects fail and how managed services can drive success
There’s no denying that to gain a competitive advantage, you need to make investments in technology to improve your finance operations. However, the mistake many finance leaders make is believing that technology is a silver bullet to their problems. More often than not, making the wrong investments can cause more harm than good.
Why automation matters
Most finance departments are bogged down with manual, paper-intensive processes.
Consider the time and effort involved in issuing purchase orders (POs), recording the receipt of goods, matching an invoice with a PO and goods receipt, and initiating payment to a supplier. The process at most organizations involves too many manual interactions, takes too long, creates too many errors, provides inadequate visibility, and frustrates suppliers and stakeholders.
So, it’s no surprise that finance leaders are leaning into automation to streamline their processes. In an era of hybrid workplaces, old-school, manual-based processes just aren’t cutting it. According to IOFM’s recent report, 71% of AP leaders say they have plans to automate and 41% say that their departments are already “largely automated” and plan to deploy more technology.
The DIY approach
While the need for digitally transforming finance is clear, many organizations still struggle to successfully achieve it due to their Do-It-Yourself approach to automation.
DIY initiatives carry a high risk of failure, require in-house staff to learn the intricacies of new technologies, and demand a dedicated project manager to drive user adoption. This can all be costly and resource-draining for the enterprise.
4 reasons why DIY automation projects fail
1. Poor stakeholder and business unit engagement
A seamless process transition and the long-term success of a project require wide-ranging buy-in from the C-Suite and the IT team, as well as adjacent and associated business functions. Failure to gain engagement from relevant stakeholders could lead to incomplete implementations that would never achieve the full benefits of automation.
2. Weak process and project management
The success of an automation project depends on its user adoption. Implementing new technology requires integration with existing systems and data and must be aligned with established processes and workflows.
3. Lack of specific objectives and long-term sustainability
Many finance departments embark on DIY automation projects without defining their goals, which results in these projects becoming white elephants.
4. Human resource constraints
Any technology solution will require people to use, manage and maintain it on an ongoing basis. Many organizations wouldn’t have the in-house capabilities to do so nor the resources to employ new talent.
Is there a better approach to finance automation?
The answer is a resounding yes. Managed services combine vertically integrated solutions such as procure-to-pay, invoicing, and payments with services that provide ongoing execution and back-office support.
6 strategic benefits of managed services
1. Agility and flexibility
Managed services providers draw from a deep catalog of solutions and prescriptive services and leverage an agile engagement model that can be configured to meet the needs of almost any client.
2. Business outcomes
Managed services combines the prudent use of automation, remote services, and process optimization to build on these benefits and drive proven outcomes and accelerated time to value.
3. Improves visibility
With managed services, you’ll get access to automation tools such as dashboards with ad-hoc reporting capabilities and real-time visibility of payments and KPIs. The increased transparency combined with built-in cash forecasting features gives businesses complete control of cash flow and allows them to make better working capital decisions.
4. Continuous improvement
Managed service providers bring expertise in financial and accounting processes and can identify areas for improvement. They analyze existing workflows, streamline processes, and introduce best practices to enhance efficiency and effectiveness.
5. Unlocks cash flow
The right managed services provider also provides trade financing, payment terms adjustments, and credit to remove the barrier to scalability and growth. This means your organization can optimize DSO and/or DPO with ease, freeing up working capital that can be used for growth.
6. Cost savings
No more worries about costly implementations and time-consuming administration. Managed services providers take care of the management of your finance functions as well as the software, removing the cost of paying and training talent to manage your tech stack.
DIY automation is risky, expensive, time-consuming, and burdens the team. Only when a business combines automation and managed services can it confidently achieve optimal operational performance and working capital management.
Read this report by IOFM, sponsored by Corcentric, to learn more about how managed services can transform your organization.