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Understanding your organisational landscape and laying the foundation for a successful accounts payable automation project.

Accounts payable automation is not a new concept, but it’s one that is often misunderstood. In order to successfully implement this type of solution, you first need to understand your organisational landscape and prepare the foundation for success. This blog post will explore the different aspects of your organisation that need to be considered when considering accounts payable automation. From business processes to data security, we will cover everything you need to know in order to make your project a success.

The WHY

Organisations today are under pressure to do more with less. One way they can cut costs and improve efficiency is by automating their Accounts Payable (AP) function.

However, before embarking on an AP automation project, it is important to understand your organisational landscape (both socially and politically) and the particular areas where care may need to be taken.

There are five key aspects that you need to consider (but you will encounter more as you develop your project WHY in relation to your organisational long-term strategy):

1. Your current AP process, the data, flows and knock-ons
2. Your organisational structure and how these play into the processes you currently have.
3. The people involved in the AP process both directly and indirectly.
4. The aims of the project in relation to the wider strategic meta-narrative.
5. The technology you will need to meet the aims of the project and ensure the wider applicability of the base solution software.

Taking a step back

Simon Sinek wrote a seminal book called “Start With Why” (available here) and in it, he brought us “The Golden Circle” theory as an attempt to explain why some people and organizations are particularly able to inspire others and differentiate themselves successfully.

A very effective technique to interact with people, identify your unique value proposition, and motivate them to act is by clearly expressing your "Why." According to Sinek's hypothesis, expressing one's "Why" appeals to the area of the listener's brain that affects conduct. This explains why the Golden Circle model is seen as such a powerful leadership idea. At the organisational level, expressing your "Why" is the cornerstone of a compelling value proposition that will set your brand/product/project apart from competitors.

What, you may ask, has this to do with automating your AP function? Everything. Sinek’s WHY theory carries through into everything we do and in projects that impact an organisation, you can list the positive benefits till you are blue in the face, and you can articulate with the prose of Shakespeare the stunningly beautiful processes that you have redesigned and finetuned with a fibonacci-esque skill but, if the "audience" doesn’t believe that YOU believe what you are saying, if you can’t express the value and existential purpose for which "this" is being done, then you will NEVER get full buy-in and ownership. Sure, people, MAY go along with it but being human, they will always find a way to circumvent or reduce their effort if they don’t pick up what you are putting down. Being human, they will pay their bills and give lip service, but unless they believe they will never have faith.

The WHY of AP automation for your organisation is not something that I can cover here – I am more than happy to discuss your particular WHY or how that can be articulated over a coffee (just drop me an email shaun@anota.co.uk) but, I think it prudent to highlight the importance of understanding and articulating your motivation as it relates to an organisational “WHY”.  That’s not to say that your automation project won’t succeed if you don’t have an articulated WHY in place but, it makes difficult conversations MUCH easier if you know WHY, and those above you SUPPORT the WHY, those beside you SEE the WHY and those below or who will be impacted UNDERSTAND the WHY.

The bigger the organisation, the more important the articulation prior to “particulation” and reformulation.

Knowing where to start and stop

Accounts payable automation is a hot topic in the world of finance, and for good reason. automating accounts payable can save your organisation time and money. However, before embarking on the AP automation project, it is important to understand your wider organisational context as you lay the foundation for a successful implementation. Automating AP in isolation from the rest of the organisation, and failing to consider additional uses for the base software can lead to a significant reduction in both adoption and ROI so it’s important to take a wide view even as you look at one specific area of the business (in this case, accounts payable).

Here are a few things to keep in mind when assessing your organisational landscape:

1. Existing Systems & Processes: What systems and processes are currently in place for accounts payable and divisions related to data from/to AP? Are they manual or automated? If they are manual, what is, for example, the process for receiving, routing, approving invoices and making payments? If they are already automated in some way, what software is being used? It is important to understand how your current system works in order to make sure that any new system integrates seamlessly.
2. Company Culture: Is your company culture open to change? Are employees willing to embrace new technologies? Or are there concerns about job loss due to automation? It is important to gauge the level of resistance to change within your organisation so that you can address any concerns upfront and identify the noisemakers, peacemakers, and bridge builders within the organisation. Some of these people who may not be in the AP function (or accounts as a whole) may well form part of your project oversight team to be able to share the “gospel” of the project outside of your initial target "audience".
3. Data Security & Compliance: Does your organisation have strict data security and compliance requirements? If so, you will need to make sure that these are folded into your initial SoR (Scope of Requirements). This is usually accomplished with a simple weighted matrix spreadsheet.

Digging a foundation on which to build successfully.

Organisations are complex creatures, and no two are alike. In order to prepare the ground for the project, you need to have a clear understanding of your organisation's cultural landscape and the people that form the “Living organism”, their biases, stresses, challenges, and success indicators.

This means considering factors such as your structure, wider business processes, strategic long-term aims, growth determinants, and existing systems and data. Only by having a comprehensive understanding of these things can you hope to map out a path to success.

So, here are some key questions to ask when trying to get a handle on your AP context:

1. What is our current accounts payable process?  Pretty obvious huh? Well, you’d be surprised at how many people don’t start here.
2. How is our organisation structured and how does that feed into our AP process?  Again, obvious but a key to determining not only success but, important elements in how you design new, improved and streamlined processes.
3. What accounting software do we use and, what other software is used outside of AP but that feeds into or out of the accounts package or process I.e., BI, CRM, Quote management etc?  The problem with taking AP in isolation is that often, people forget to consider the inputs from across the organisation and, what is relied upon outside of AP that originates within the AP function.
4. What other systems does our Accounts Payable department interface with?  It’s important here to note that we consider not JUST software but people, and knowledge. Particularly in older organisations, you have silos of corporate knowledge and often these reside in the minds of individuals or intra-departmental core specialities. An automation project is a unique opportunity to de-risk organisations and centralise knowledge, not just data. By recognising information (and wisdom) silos and extracting those systemically, the organisation can better utilise invaluable data points going forward and crucially, empower more people to add value.
5. What data do we currently capture in our Accounts Payable process, where is this used, for what purpose and by whom?  Looking beyond the immediate AP data requirement and use, understanding where and HOW data and information are used beyond the accounting function is critical to providing value to the wider business.
6. Is this data accurate and up to date, how is it managed/controlled, and by whom?  Supplier lists, approval matrices, budget levels, VAT codes, currency exchange rates, variance percentages, futured indexes, stock lists, key suppliers, customers etc. All these lists holding critical data that will be used in systemic decision-making need to be examined, quantified, validated, ensured, insured systemically, and controlled. How often are they updated, by whom and under what circumstances?
7. How well do different departments within our organisation communicate with each other? What tools do they use and what are the procedural/process trigger points for communication?  These will prove invaluable when it comes to leveraging existing tools for the uptake of new systems, for example, if your organisation works well using MS Teams, you would be wise to ensure that any solution can utilise Teams to, for example, notify users of an invoice to be approved or, a supplier query. The key to transformation here is to leverage already existing vanguard solutions in aiding take-up and buy-in.
8. With all this in mind, what do we NEED our new processes to look like, what data do we need to capture, what are the critical elements of what we do that need to stay in place, and what CAN’T we automate?  If you’re not going to take the chance to streamline and modify your processes what’s the point? You can automate a failing manual system, but it just makes the failure quicker and more successful. It’s called TRANSFORMATION for a reason!

Answering these questions and understanding the people critical to a wider acceptance of your transformation project will give you a good starting point from which to plan your automation revolution. Without a clear understanding of the terrain, it'll be all too easy to get lost along the way.

In the next post, we will look at the formulation of your team in more detail. In the meantime, feel free to drop me a line at shaun@anota.co.uk with any comments, feedback or questions.

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