By Ryan Demaray, SMB EMEA MD at SAP Concur UK
Digital transformation is no new phenomenon and even before the pandemic, many organisations had long term digital transformation strategies in place. However, having to face a unique crisis like never before, businesses were now forced to rethink the way they work with technology to better accommodate hybrid and remote working models within their organisation.
Many were now scrambling to digitize their operations as solutions that facilitated the processes and challenges of the here and now had to be prioritised over tech that would provide additional efficiency further down the line.
However, these solutions or quick fixes were found to be somewhat ineffective in the long-run. In fact, according to the latest report from SAP Concur titled “The Hidden Potential of VAT reclaim”, it was found that 40% of those companies surveyed reported an increase in errors, especially when it came to expense and invoice submission and processing.
Now more than ever before, as the global economic growth is expected to decelerate over the next two years, business leaders are constantly under pressure to reduce costs and optimise the business’ performance across its entire organisational value chain.
And this includes making the necessary improvements and adjustments to the existing travel and expense (T&E) management processes to avoid similar situations in the future and investing in better tech to accommodate recent trends such as hybrid working scenarios.
Considerations for implementing digital T&E solutions
According to IDC insights, 53% of businesses are planning to increase their spend on finance-related technology. However, with their bottom line in mind, business leaders need to make sure they’re funnelling their investments into areas that make sense for their business as implementing a highly sophisticated solution prematurely might not be necessary for everyone.
Here are three things to consider when looking at the technologies that are appropriate for each stage of your business’s digital travel and expense management maturity process –
Maintaining legacy applications – Although extensively relying on obsolete technology or aging applications are known to cause security issues and financial damage in the long run, organisations are often reluctant or nervous about adopting new applications as they fear this might bring about disruptions to their current business processes.
In fact, according to IDC’s 2020 SaaSPath Survey, over 40% of the businesses involved in the study admitted to relying on outdated applications including Excel sheets and other solutions with long update cycles for travel and expense management.
Even if businesses choose to stay with legacy systems to avoid additional financial outlay, many end up spending more in terms of maintenance. Organisations might also encounter additional non-financial costs in terms of lower productivity, lack of vendor support and security breaches. Overtime, as technology rapidly progresses and businesses continue to adopt innovative systems, the existing legacy system can become incompatible with the newer applications.
In order to overcome some of these challenges associated with legacy applications, businesses should now look into managing their workflows more effectively by automating tasks to reduce human errors in data entry and to prevent employees from manipulating system vulnerabilities so as to validate out-of-policy expenses and other transactions.
Automated point solutions and connected platform ecosystems
With automated point solutions businesses can track employee’s spending behaviour, save considerable time, and improve the overall accuracy of the whole expense management process.
While traditional expense management involves using spreadsheet and paper-based systems to report and process reports, automated expense management systems use rule-based patterns for travel and expense processes. This essentially reduces errors, prevents employees from committing expense fraud and improves the efficiency of the overall reimbursement process.
To further enhance their automation efforts, businesses should consider making use of a connected platform ecosystem that can help connect various financial applications, which in turn provides a more accurate view of expenses and minimises the risk of inaccurate claims being accepted.
Having a connected platform ecosystem, within your travel and expense operations, enables back-office point solutions to connect to a system of record, third-party applications, and external data sources. This establishes one consistent view of travel and expense, which enables everyone in the organisation to be on the same page when collaborating. And to take these advantages even further, businesses should consider integrating application suites and deploying intelligent prediction processes.
Application suites and intelligent prediction processes
With integrated application suites that connects business apps with budget tracking and pre-approval processes, businesses can not only accelerate the connectivity of their business processes but also innovate their operations to respond faster to employees and partners with real-time processing.
As businesses continue to face unexpected demands and challenges, these integrated application suites can help organisations to optimise and streamline end-to-end employment spend management processes and proactively control their spending rather than just responding to it when it has already occurred. This makes it easier for CFOs and other financial decision makers to have a complete view of the company’s balance sheets make strategic decisions more efficiently.
Once apps are integrated across various business application landscapes, businesses should then look into implementing intelligent prediction processes which can help further accelerate business performance.
Due to increased data volumes, the task of spend management continues to expand in scope and complexity. With the help of intelligent prediction processes, businesses are now capable of working at optimal efficiency as these processes continue to support emerging innovative technologies including virtual assistants, T&E planning/ budgeting as well as AI-based fraud protection.
Evolving towards better expense management processes
Although becoming a business that has intelligent and predictive processes should be the ultimate goal, it’s an option to move towards this rather than try and transform completely overnight.
Hence, rather than steaming ahead and implementing intelligent prediction processes, it makes sense to audit where the business currently sits in its journey. What may work for a business at the connected platform ecosystem stage may not make sense for a business that is operating at the legacy systems stage.
Overall, by constantly and iteratively implementing solutions and connecting all sources of travel and expenses across the entire enterprise, businesses can gain full visibility of each item of spend and can establish manageable expense management solutions. This can enable businesses to make better strategic decisions around travel and expense management and to keep up with the pace of change within the business environment.