Management

The Latest

16 November 2021: BlackLine launched its new accounts receivable (AR) tool, which it claims is the first unified platform for end-to-end cash flow optimisation in the industry. The software features intelligent optical character recognition (OCR) to eliminate manual work and reduce process errors. It also allows the predictability of customer payments when building cash flow forecasts. 

Why it’s Important

More organisations are adopting e-invoicing to take advantage of automation features, reduced printing costs, shorter payment delays and faster delivery times. As noted in our previous advisory The ERP: A critical IT application for the business, more Australian organisations are joining the trend of transforming their finance processes by replacing their ERP finance systems with a scalable Cloud-based ERP system that offers seamless integration to other business applications and streamlines backend business processes. 

Recently, IBRS conducted a study into the economics of ERP and Cloud solutions to find out the best ROI on their tech investments. A common answer among mid-size organisations and government agencies is the value of financial automation in relation to labour hours. On average, they reported productivity savings of between 0.5 and 3 full-time equivalent (FTE) roles when they switched to e-invoicing. Interestingly, the same benefit was cited by respondents in our 2019-2020 study on local governments in the country.

There are challenges to e-invoicing adoption, however. Apart from the perceived complexity and difficulty of most organisations in getting up to speed in their transition, employees worry about the threat of being made redundant in the near future.

IBRS discovered, however, that senior leadership teams transfer employees impacted by the reduction in labour hours to other roles where their skills are applicable. Organisations that go down this path gain more control in carefully managing their employee concerns. E-invoicing has become a foundational solution for better process management to establish digital relationships with their partners and internal staff.

Who’s impacted

  • CFO
  • CIO

What’s Next?

Before upgrading the financial platform, review the context of your current organisational and ICT strategy. Consider how the platform supports full ‘end-to-end’ processes that are integrated with other business software systems so that appropriate touchpoints are captured and understood. By doing so, the platform can meet its expected impact on your financial metrics and process requirements.

Related IBRS Advisory

  1. A review of ERP finance systems
  2. The ERP: A critical IT application for the business
  3. Replace or reinvigorate today's ERP Solution now
  4. Turning data analysis from an art to a science

Conclusion:

Due to the scarcity of skilled ICT professionals and managers, organisations will inevitably seek extra capacity from augmented services providers to address the shortfall. Staff conducting due diligence to find the best provider and qualify the providers must be unafraid to ask difficult questions, business savvy and, when dealing with providers, able to separate the wheat from the chaff. Identifying providers with the capacity and ability to deliver the desired outcomes and are a good fit is not an easy task.

If the staff find that no provider can deliver what is required, stakeholders must either:

  • Wait for internal staff to become available, or
  • Hire and train staff which can be an expensive, time-consuming exercise that may increase business risks.

Conclusion:

Australian organisations in both public and private sectors enthusiastically identify and implement best practices from around the world. After considerable time and effort has been allocated to implementing these processes and the associated tools the results are all too often less than satisfactory. There are many best practices, frameworks and tools to assist in the optimisation of IT but there are two key problems areas that if overcome, can make a significant difference in the benefits that organisations will derive from best practice implementation.

Conclusion: The coming global recession will see ICT budgets cut, or at least constrained, in the 2021 financial year through to 2023. CIOs are now inundated with advice that boils down to this singular direction for efficiency and mostly, for survival. Although sound, this advice does not take into consideration that many CIOs have long been practising cost-efficiency. Many IT shops are already cut to the bone.

IT projects will be on the chopping block. Hence, it is crucial to prioritise now – before the cuts are mandated – which IT projects can be shelved for a few years without unacceptable risks to the organisation. It is important to note here that postponing or cancelling projects is being framed as a business risk decision. The CIO’s role is to put forward the risks of delaying or killing off a project, not to be the sole arbitrator.