The Top 6 Keys to Selecting the Right Accounts Payable Automation Solution for your Business
It’s recently been that time of year (again!). The elections heated up and more and more the airwaves were filled with talk of who’s in the lead, who’s the best choice going forward and who’s ultimately going to win the day. Politicians were glad-handing, kissing babies and making claims for their party’s platform. And of course, they were telling you why the other guy or gal was not the right choice.
It got me thinking about how similar the election process is to selecting an application solution; well, except for the “kissing babies” part. Let’s say you are off on a mission to find an accounts payable automation solution for your company. You are likely doing this because you are not happy with the current process. Paper based transactions continue to dominate the AP landscape and you are looking for change, an improved, more efficient way to get the job done. Doesn’t that sound a bit like wanting to elect someone new into office? People want to vote for positive change.
Now, as you begin to look at your AP automation options and the vendors that supply them, you see that just as in politics, many promises are being made about a particular approach. And just as in an election, this can lead to lots of confusion about just which choice is best. Vendors (like candidates) can both “spin” their strengths in their favor and their opponent’s weaknesses against them. So, how do you sort the wheat from the chaff? How do you make sure you are truly comparing apples-to-apples? In essence, how do you know you are electing the right vendor for the job with a solution that will truly transform your AP process?
Here is some advice from our 20 years of experience in this field that can help clear away the confusion and prepare you to make wise choices; no magic – just some good old common sense.
1. Identify an executive project sponsor
Without identifying an executive sponsor that “owns” the business problem that has the clout to carry the initiative through to the executive team to get funding and resources appropriated for the project and is willing to continue their involvement until the project has been successfully implemented, stop the process (as was said in the game of Monopoly, “Do not pass Go, do not collect $200.”). Having a strong executive project sponsor is not only a critical success factor to getting the project approved, the odds of successfully implementing the project without one are so miniscule that it makes no sense to waste everyone’s time, effort, and money to go forward with a project, even if you were able to gain a project go ahead.
2. Form a project team early on before you even begin to “vote” on a vendor choice
Your project team should begin with a core team of stakeholders who will benefit from and provide input into the project. The core team should first define the process that will be followed to evaluate the opportunity to implement a new solution and how that evaluation will be structured. Not defining how you’ll perform the evaluation would be similar to starting a football game and having no predefined method as to the rules to break ties at the end of regulation.
Once the rules of the evaluation are defined, then the project team should be expanded to consist of all stakeholders that will be affected by and benefit from the solution. All will provide valuable input as the project plan develops. The team will be tasked with sorting out where you are and where you want to be in terms of an improved AP process.
3. Develop a business case
What problems are we trying to solve and why are some of the most important questions you can ask. This gives everyone involved a clear vision of what the goals are. It also makes it far easier to sell your approach to management and keep everyone focused on outcomes (like lowering the average cost per transaction by 50%, cutting the time from invoice receipt to scheduling of payment in half, or doubling the amount of early payment discounts we are capturing) rather than concentrating on tasks. This is the vision that will drive your choices.
The business case should be reviewed with the executive sponsor to gain their buy-in that this is a “sellable project.” Business case development is typically an iterative process until either an acceptable business case is identified or it is determined the project should be shelved without one.
4. Gather key requirements from all the stakeholders
List all of the benefits that you want to receive from the solution and prioritize them from high to low. These requirements usually start out as wish lists and then get whittled down to the top items based on costs, resources and other constraints. Getting everyone together on these priorities to define the project scope will keep the project on track (avoiding scope creep) and help ensure you realize the benefits you desire.
5. Develop a scorecard for vendors that is consistent with your requirements
This is a red letter item. Without developing a way to measure each potential vendor partner’s software and process expertise, you will find your selection process becoming too subjective (it could turn into a “beauty contest” where the flashiest solutions wins) or maybe based solely on the lowest acquisition cost. Your scorecard should mirror the requirements you have previously developed and the priorities you have placed on each area. This will fairly compare potential solution provider candidates against your requirements and their capabilities.
6. Begin to research potential vendor partners
There are many choices in the area of AP automation that are familiar with making the process work efficiently with your ERP solution. Talk with other users of your ERP solution and in your industry about their experiences to get a good point of reference and a feel for their track record. Also, leverage unbiased resources with expertise in the field, such as the Institute of Financial Operations (IFO), for information about which vendors you may want to consider in your evaluation process.
At this point, you may choose to develop an RFP or an RFI. Or you may simply begin interviewing potential solution providers and working down the list to select the best candidate for the job. Either way, you are now well informed about your needs and ready to “vote” for the best candidate.
Based on our nearly 20 years experience in this field, Image Integration Systems has developed a series of tools that can be useful for those considering an AP automation project. We have a Business Case Analysis Tool and Sample Requirements Template for Accounts Payable Automation that we’d be pleased to share with you. Please reach out to contact us via the Contact Us page on our Website if you’re interested in receiving this information.
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