Finding the value of implementing cloud and automation across your procure-to-pay (P2P) is the first step. The next step is determining the monetary value to build a case for adoption. Based on research by Forrester Consulting, we now have the quantified value and return on investment (ROI) of cloud-based P2P solutions such as Basware’s.
Automation. Digitisation. Cloud. These are all buzzwords that infiltrate business markets worldwide. The benefits of cloud have been made clear time and time again. Across procurement all the way through to accounts payable, the more cloud processing and thus the more process automation your company has, the quicker it is to achieve advantages such as:
Cost savings
Flexibility
Data-based insights
Automatic software updates
Sustainability efforts
Process efficiency and control
Remote work capabilities
And though it’s easy to recognise and become excited by the potential of these benefits, what’s difficult for most is actually quantifying these advantages. When taking something like a digitisation project to your C-suite one of the first questions they want answered is “What’s the ROI? How will this affect efficiency? What will we gain?” So the next challenge, after identifying the benefits of automation and cloud, is distinguishing what the actual economic impact is.
To help us better understand the benefits, costs, and risks associated with investing in cloud technology, specifically for procure-to-pay (P2P) solutions, we teamed up with Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential ROI companies could achieve by deploying Basware’s cloud P2P.
(For a quick view of the results, check out this infographic.)
To set the scene, Forrester spoke with Basware customers to better understand their journeys. Before implementing their cloud P2P solutions, they suffered from inefficiencies such as manual, paper-based AP processes and poor visibility of their procurement transactions.
But after implementation, they saw benefits such as streamlined invoices, increased procurement and AP efficiency, improved spend under management, reduced operating costs, and increased savings. Forrester used their real-world experiences to calculate monetary gains such as:
Annual spend optimisation
Accounts payable (AP) productivity gains
End user productivity
Early payment discounts
With Basware P2P, customers found that procurement teams gained greater visibility of buying behaviors, drove supplier consolidation, and brought spend under management. Forrester calculated that over 3 years’ time, that all added up to the impressive $2.7 Additionally, they evaluated “unquantified benefits” like:
Ease of effort and visibility
Risk mitigation
Increased supplier satisfaction
Annual spend optimisation - $2.7 million
With Basware P2P, customers found that procurement teams gained greater visibility of buying behaviors, drove supplier consolidation, and brought spend under management. Forrester calculated that over 3 years’ time, that all added up to the impressive $2.7 million spend savings.
AP Productivity Gains - $737,000
Due to the increase in electronic invoicing, companies can more effectively drive touchless processing of invoices through advanced matching and coding. This led to further productivity increases such as automated validation, streamlined routing, and reduced supplier inquiries.
Procurement Productivity Gains - $680,000
Improved sourcing processes and compliance led to huge efficiency gains, optimisation of resource allocation, enabling procurement staff to attend to more strategic tasks, leading to a potential organisational gain of $680,000.
End user productivity gains - $494,000
Time savings thanks to automated matching and approvals create a more streamlined AP process and leads to tremendous time savings and permits end-users to refocus their energy on more strategic finance endeavors.
Early pay discounts - $260,000
With Basware cloud P2P, customers can reduce their invoice processing times using e-invoicing and automation. This straight-through processing means invoices can get paid quicker, supplier inquiries answered faster, and early pay discounts capture more frequently.
Legacy system maintenance cost savings - $157,000
On-premises solutions are costly and quickly becoming obsolete. But cloud solutions are automatically updated and take up zero physical space. By upgrading to the cloud, companies ditch paper costs and require minimal invoice storage and logistics costs, presenting a savings opportunity of $157,000 over three years. And for IT teams, in the age of cloud computing, IT departments can become an integral part of the business rather than an enabler viewed as an obstacle or expense as in days past. There is an opportunity here to become a value-add to the business, but that change requires some new knowledge and companies are already looking for it.
Ease of effort and visibility
Interviewees stated they gained higher levels of visibility across their invoices and visibility into all invoices after implementing Basware P2P. With this visibility, companies were able to continue this trend of transparency into their finance and procurement departments. Basware provides a holistic view into 100% of your suppliers and spend from a single, centralised location to enable better strategic decision making. Armed with data and visibility into company spending, you will be in a better position to control your spend, mitigate risk, and manage the entire supply chain.
“For us, there was a lot of benefit to move to an automated solution, especially as a global company. We had no visibility to anything outside of the US. Basware now provides us with that visibility and the ability to streamline. We get a holistic view of the company across multiple segments and multiple entries.”
Financial strategy and controls – SOX compliance manager, oil and gas drilling and production operations firm.
Better user experience
Basware’s cloud P2P provides accessibility for users wherever they are. This not only contributes to business continuity efforts, but also increases collaboration, visibility across processes, and leads to an increase to user satisfaction and efficiency.
“I needed to make sure that the tool interface is simple and easy for our people to use. As we brought Basware in, we realised how innovative the tool is and that the company continues to look for better ways to add value to a business through automation and analytics. The system is very simple to use, and it’s portable through the use of mobiles and tablets.”
National manager of financial systems, sports management firm.
Mitigating the effect of COVID-19
Risk at any level causes disruption in an organisation – especially when entire workforces are required to work from home at the flip of a switch. Basware’s cloud-based solutions and easy to use remote-capable solutions give staff the ability to keep business moving, regardless of their work location.
Greater level of procurement analysis and risk mitigation
Before Basware, customers struggled with limited visibility due to different approvers approving at different times. But with Basware, procurement became more streamlined and gained greater approval visibility while making it easy to identify potential fraud.
It’s clear that no vendor offers a full source-to-pay (S2P) suite that is best in class across all modules. By going with a full S2P suite, customers are locking themselves into suites of uneven quality that will often take years to roll out.
At Basware, we firmly believe in a future where a microservices architecture will enable customers to manage vendors and spend in a core spend management platform like ours but also allow them to capitalise on the latest in specialist services.
According to the TEI report, “Benefits such as faster time-to-value, excellent ROI, and payback are much better with Basware solutions due to a best-of-breed approach, as compared to other players in the market that force a single suite across P2P.”
Data intelligence capabilities
Cloud solutions offer a ton of benefits, but one stands on – data. Automated cloud P2P produces immense amounts of data that can be used to inform business insights. These insights can then turn into strategic action points that help organisations further reduce costs, understand spend, and identify bottlenecks and alternative savings opportunities.
Basware’s built-in analytics dashboards give organisations critical insights using highly visual dashboards. With this information, businesses gain benefits such as:
Actionable insights into spend, finance, process KPIs, and sustainability
Ability to better manage spend, cash flow, supplier relationships, and discounts
More informed decision-making organisation-wide
Ongoing process improvements
New savings opportunities
Cross-departmental collaboration and shared KPIs
Drive innovation
All the data that informs analytics also helps drive innovative artificial intelligence (AI) and machine learning (ML) technologies in your P2P. For instance:
Basware SmartPDF helps to create touchless invoice processing.
CloudScan digitises paper invoices so you can reach 100% electronic invoices.
Advanced Matching decreases manual handling.
SmartCoding alleviates the strain of non-PO exception handling.
And Predictive Analytics can let businesses know if any invoices are at risk of being paid late meaning more early payment discounts, better-optimised cashflow, and fewer late payments overall.
To read the entire total economic impact (TEI) report and learn more about all the benefits of Basware P2P, download it here.