This Changes Everything! 5 Ways Organizations Can Transform Their AP Process Using Artificial Intelligence

Transcription

1 This Changes Everything! 5 Ways Organizations Can Transform Their AP Process Using Artificial Intelligence

2 This Changes Everything! 5 Ways Organizations Can Transform Their AP Process Using Artificial Intelligence Mark Brousseau Managing Director, Advisory Services, IOFM Mitsuyuki Tominaga President, Works Applications America, former VP SAP Japan Kentaro Osaki Product Development Manager, Works Applications America

3 Contents - WHERE WE STAND TODAY - THE FUTURE - 5 WAYS AI CHANGES EVERYTHING

4 This Changes Everything! WHERE WE STAND TODAY

5 How Organizations Process Invoices [VALUE] 46% [VALUE] 11% Automated Invoice Solution Manual Paper-based Process Supplier Self-service Portals ERP System Accounting Software 21% Source: Ardent Partners 2017

6 Common AP Bottlenecks AP Specialist Receive Invoice Review invoice Select Invoice Match Resolve 5 Approval Request 5 Pay Post to GL Labor intensity Confirm Purchaser AP Mgr. 1 Heavy data entry 2 Manual two/three-way matching 4 Approve 3 Resolving issue of matching AC Mgr. 4 Slow down in approval processes 5 Fragmented inter-department communication Controller

7 Cost Per Invoice $8.78 $6.92 $5.81 $4.76 $3.41 $2.87 $2.44 $1.77 Low Level of Automation Average Cost Per Invoice High Limited Automation: $7.90 Moderate Automaton: $4.31 Significant Automaton: $3.40 Source: IOFM 2017 Benchmark Study

8 The Cost of AP Invoice Processing Cost to Process a Single Invoice $2 - $5 per invoice 29% Volume of Invoices Processed (Per Month) 500 or Fewer 501 to 1,000 17% 30% $6 - $10 per invoice 21% 1,001 to 5,000 31% $11 - $15 per invoice 14% 5,001 to 10,000 15% $16 or more per invoice 9% 10,000 to 20,000 7% Source: Ardent Partners 2017

9 Annual Number of Invoices Per FTE 19,889 22,756 8,600 10,938 1,350 3,600 Low Level of Automaton High Limited Automation Moderate Automaton Significant Automaton Source: IOFM 2017 Benchmark Study

10 Time to Process a Single Invoice 46% 28% 14% Under 5 days 10 to 15 days 15 to 30 days 30 days or more 6% Source: Ardent Partners 2017

11 The Problem with Long Cycle Times

12 Source: Ardent Partners 2017 Best-in-class performers will process a single invoice within 3.5 days while the majority of companies will take 12 days to process a single invoice.

13 AP Pressures & Priorities Top AP Priorities The Top AP Pressures Reduce invoice-processing costs 63% Need for real-time availability of data High cost associated with invoice processing High percentage of exceptions Losing/difficulty finding paper invoices Missing out on vendor discounts Need to better link P2P processes and systems Improve reporting and analytics Improve collaboration/communication with procurement 35% 32% 51% Extend payment terms/optimize DPO 31% Source: Ardent Partners 2017

14 This Changes Everything! THE FUTURE

15 Respondents want AP to Become: Simple, Transparent & Seamless None of the above 2% Simple 3% Transparent 6% Seamless 10% All of the above 79% Source: IOFM Future of Accounts Payable Survey 2017

16 3/4 Expect Greater Enterprise Demand of Accounts Payable Information 19.7% 1.3% 25.5% Significantly greater use of accounts payable data across the enterprise Slightly greater use of accounts payable data across the enterprise No change 53.5% Slightly less use of accounts payable data across the enterprise Source: IOFM Future of Accounts Payable Survey 2017

17 AP Departments are Investing in Process Standardization & Automation No investments 13.1% Compliance and security 45.7% Finance talent 20.0% Process standardization 61.1% Innovation 24.0% Automation 59.4% Source: IOFM Future of Accounts Payable Survey 2017

18 Automation Tops the Budgetary Priorities of AP Leaders 75.2% 50.3% 38.9% 24.8% 15.9% 8.3% 34.4% 24.8% 3.2% Source: IOFM Future of Accounts Payable Survey 2017

19 Artificial Intelligence is a Top Automation Priority for AP Source: Gartner Research Circle 2017

20 This Changes Everything! 5 WAYS AI CHANGES EVERYTHING

21 REAL Progress Transition from ERP era to Present

22 AI Headlines What s the fuss all about? Google's AlphaGo beats Go master Robots and AI would take over 50% of human jobs in next 30 years AI creates new Rembrandt painting

23 What is AI?

24 What is AI? Common Misconceptions Not Terminator, I Robot or Ex-Machina

25 What is AI? Real Examples of AI Google s Cat

26 What is AI? Real Examples of AI The result of deep learning Pricked Ears Straight Whisker Feature extraction of cats by AI

27 What is AI? Real Examples of AI AI for cancer diagnostics

28 What is AI? Real Examples of AI 93.7% accurate More accurate than a doctor Faster diagnosis Uses thousands of images to compare

29 AI is great at repetitive tasks and analyzing large data sets. 1. Analyzing large amounts of data = Past x-ray pictures 2. Finding certain features in the data = Cancer or not 3. Apply the pattern to new data = New x-ray picture

30 AI is great at repetitive tasks and analyzing large data sets. Perfect for business applications such as accounts payable.

31 Common AP Bottlenecks AP Specialist Receive Invoice Review invoice Select Invoice Match Resolve 5 Approval Request 5 Pay Post to GL Labor intensity Confirm Purchaser AP Mgr. 1 Heavy data entry 2 Manual two/three-way matching 4 Approve 3 Resolving issue of matching AC Mgr. 4 Slow downs in approval processes 5 Fragmented inter-department communication Controller

32 1. Data Entry OCR still demands a lot of manual configuration 50% Time 50% 50% Someone still needs to - Manually input invoice data - Configure OCR Image File OCR Text Data Input Into Database (Data Mapping) OCR

33 1. Data Entry AI keeps learning new formats Supplier Info Each Item Amounts Feature extraction of invoice by AI

34 1. Data Entry AI keeps improving parsing accuracy 50% 60% Time 50% 80% 50% 100% Image File Text Data Data Mapping Import Capture Data Mapping OCR OCR AI

35 2. Matching Breakdown of manual matching process Two/three-way matching Detecting gaps Resolving gaps Invoice PO

36 2. Matching Automation and suggestion Auto-match Detect Suggest Invoice PO Suggest Suggest Suggest

37 3. Approval Headaches Absence of approvers delay invoice cycle Heavy workload on approvers for screening invoices

38 3. Approval How AI Can Help Route smarter Perform initial screening and prioritize invoices Alert users to fraudulent actions Comparing calendar z Suggest new flow Notify at right time

39 4. Compliance/ Internal Control How AI Can Help Headaches: - So many mistakes (wrong payment, duplicate payment, etc.) - Fraud - Lack of visibility on responsibility - Lack of price comparison

40 4. Compliance/ Internal Control Proactive alerting by AI AI can detect incorrect or suspicious transactions based on Company guidelines Past operational records Business customs

41 5. Capture Profit How AI Can Help Headaches: - Hard to balance maximizing early discount vs minimizing overdue - VAT returns are often forgotten

42 5. Capture Profit How AI Can Help AI can - Suggest priority of invoice processing based on best combination of capturing early discount and prevent overdue penalty - VAT return capturing

43 Truly automated AP Process AP Specialist Review invoice Data entry Select invoice Match Resolve issues Approval Payment Posting to GL Labor intensity Confirm Purchaser Self-improving automation AP Mgr. Matching automation Approve Automated issue resolution AC Mgr. Speedy approval processes Efficient inter-department communication Controller

44 This Changes Everything! THANK YOU!

45 Artificial Intelligence meets AP Workflows Booth # 319 Los Angeles - New York - Tokyo (424) info@ai-works.us