Clearly, AP automation is on the rise; the question is how to best implement it. Before evaluating AP automation solution providers, controllers, finance managers and others in the AP department must explore a number of key considerations; namely, the choice between installing a tool inside the ERP system or using a certified solution with data recognition, validation and workflow that resides outside the ERP system.
One company, one ERP system? Not so fast ...
On the surface, a solution that runs AP workflow inside the ERP system seems like the most reasoned and practical approach. In reality, this type of one-to-one relationship does not accurately reflect the complex, multi-connected global persona of today's business industry, and can lead to dysfunction down the road.
Many of today's companies achieve their growth by acquiring or merging with other companies, each with their own separate IT systems. This often leads to an impossibly diverse ERP landscape made up of vastly different systems, architectures and data formats -- it's not unheard of for a company to have as many as five ERP systems in use across a global enterprise. Plus, not all ERP systems have workflow engines, and success in modifying the application code to automate AP is not guaranteed.
What are the options? Some companies install an AP workflow tool inside one ERP application. While this may be a compatible solution for a select few, companies running several ERP systems within the organization must still maintain "inside workflow" in each instance. It's only a matter of time before additional costs and consistency issues rear their ugly heads.
Running a variation of an ERP system is another option that sounds good in theory, although, since they are all based on the same platform each system can be different enough to require special attention. From a high-level view, they appear identical, but it can be a very different picture at the operational level. Even if a company has standardized on an enterprisewide ERP solution, multiple instances in different locations around the world can require integration of multiple workflow tools in order to automate AP workflow, complicating initiatives such as setup of shared services centers.
Why "inside ERP" invoice processing falls short
There is a misconception that, because all actions can be performed from within the ERP interface, "inside ERP" workflow is a more streamlined and effective solution. However, this does not reflect the multitude of problems that many companies face in reality. Consider: