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Preparing for 2021: Using Technology to achieve Spend Governance

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As Managing Director for SAP Concur, Mankiran is responsible for providing strategic direction to the company's India business, as well as leading and providing guidance to sales, solution architecture, customer development, partner alliances and marketing teams. She is focused on helping customers drive digital transformation by leveraging Cloud applications. Prior to joining SAP Concur, Mankiran was the Managing Vice President & Country Manager for India at Gartner. She was a board member of Gartner’s global diversity & inclusion program and has been an advisor and mentor to many growth stage startups in Enterprise B2B Space.

The year 2020 threw every organisation off their planned trajectory and required them to pivot quickly to keep their business afloat. With lockdowns in effect and markets closed, businesses witnessed unanticipated lower toplines leading to an urgent need to maintain sustained cash flow for business continuity. Moreover, with majority of the workforce working remotely, organisations had to ensure seamless collaboration between teams to maintain high productivity levels.As the uncertainty amidst the pandemic and economic disruption continues in 2021, companies need to utilize solutions which support quick financial decision-making and provide complete view of business health.

Even with lockdown restrictions easing up and markets slowly starting to open, the need to stay prudent with budgets continues. For the business and finance leaders, it is imperative to gain a holistic and transparent view of the entire organisation’s budget and expenses. This need for complete spend governance and visibility can be achieved through intelligent solutions that are embedded with latest technologies like AI, ML and advanced Analytics.

The power of Artificial Intelligence
Artificial Intelligence (AI) has come up in a big-way as the technology of the new era. For effective spend governance, AI can play a big role. It can help in automating repetitive tasks and processes that take up valuable manhours and free up time for employees to do more business-critical tasks. By reducing human intervention, efficiency of finance process is increased and mistakes are significantly reduced. Now, we are looking at the advent of hybrid workforce, where some employees operate out of the office location while other work remotely. In this scenario, AI-powered bots can prove to be extremely helpful in guiding the employees and helping them perform finance-related tasks.

Ease of process using Machine-Learning
Outside of payroll, the second largest controllable area of business spend is employee expense. However, amongst the several processes in an organisation, the expense claim process remains particularly tedious for employees as well as approvers as physical receipts are supposed to be scanned or worse, to be submitted as a hard copy in original. This process increases the chances of human error and fraudulent claims where employees overclaim, unwittingly or otherwise. Power of ML-enabled solutions can be used to scan, identify and understand data like currencies, dates and expense types. ML can further convert the receipt pictures automatically into expense reports.

According to an Oversight Systems Spend Analysis Report, a typical organisation loses five percent of annual revenue to fraud each year – 89 percent of which, according to an ACFE global study, are asset misappropriation which includes expense reimbursement schemes. Machine Learning, along with AI, can spot potential fraudulent expenses through its precise translation and advanced language processing. This can bring in a robust spend governance framework thereby saving the companies from substantial financial loss.

Data Analytics – A holistic view of the business
To implement an uncompromising spend governance framework, the finance leaders need to have complete visibility into the company’s expenditures on different fronts and a means to summarize and convert the entire data into meaningful information. The resulting insights would prove to be valuable for strategic evaluation and decision-making by the senior management.Equipped with the latest technology, Intelligent Spend Management (ISM) solutions employ advanced data analytics that present a consolidated view of the entire company’s expenses and enable CFOs to draw valuable insights. Using such digital solutions helps business leaders in gaining data visibility and data accuracy, with which they can leverage their existing resilience capabilities to repair or improve processesand maintain the company’s financial health.

Integrated &Mobile-first solutions
Although using digital solutions can help increase the efficiency of spend management, one big piece of the puzzle is integration of the applications across all finance department processes. In the present age of internet, we are witnessing a huge rise in inter-connected devices and processes leading to a high need for data generated at different touchpoints to come together to form the complete picture. The same is necessary for the success of spend governance in an organization as we need digital solutions to be integrated across the expense and invoice management process for an end-to-end perspective - from origination to payment. Integrating systems that are operating in silos - such as Payroll System, Vendor Management, Invoice Management and Enterprise Resource Planning (ERP)- can ensure a seamless flow of information and a comprehensive view ofcompany spending.

SAP Concur Finance Study 2020 found that 35 percent Indian employees wanted their organisation’s expense process to review and approve claims using laptop, PCs and mobile apps. With the rise of the hybrid workforce, getting tasks done on-the-go is more important than ever. Moreover, to make spend governance a success for the organisation, it is imperative that employees are as much part of the decision-making as the policy makers.A study by Gallup suggests that organisations that create exceptional experiences for employees, also see exceptional results, including 17 percent higher productivity and 21 percent higher profitability. Hence, using mobile-friendly digital solutions for spend governance is important so that the employee can easily follow the set policies and contribute to overall compliance numbers.

Conclusion
Fragmented and laborious approaches to spend governance not only adversely affect productivity but they distract and frustrate the employees. This also leads to lack of control over budget and expenditure-related decisions for finance teams. Without using digital solutions, organisations run a risk of wasting their time, money and efforts in an attempt to keep their spend under control. In the current environment, ensuring visibility into critical spending information – such as expense reports, vendor invoices and major spend areas – can make a difference in terms of bringing the companies back to a stable position and be prepared for the future. Considering this, organisations need to take the wise decision of adopting suitable technology and minimize the threat to their financial health and viability.