Corporates have a lot on their plate when it comes to digitization, cloud migration, data security and overcoming silos between back-office platforms opens a world of opportunities for businesses to boost efficiency and improve bottom lines — but it’s no easy mountain to climb.
In procure-to-pay, digital transformation efforts are tackling the friction associated with paper purchase orders and manual payments. But organizations and their vendors are rarely at the same point in their digitization journeys, meaning businesses continue to face a mix of both paper and electronic documents — and in procure-to-pay, that requires agility to manage paper invoices from vendors, for instance, even when the procurement and accounts payable departments have gone digital.
Ike Kavas, founder and CEO of data technology firm Ephesoft, spoke with PYMNTS about how this variation in firms’ digital journeys makes for an even more complex challenge in managing unstructured data as demands for a seamless and faster experience
“The wave of digital transformation is not only coming from external forces but from internal employees,” he said. “They expect to submit their expense reports electronically. Outside vendors expect their contracts to be signed much quicker, and their invoices to be paid much quicker.”
The need for speed is among the most influential forces encouraging companies to embrace digitization, and typically, businesses’ first step is to turn a paper document into an electronic one.
If a company generates a paper purchase order or receives a paper invoice, Kavas noted that in the very least, businesses must create a digital record of that information. That doesn’t necessarily solve the challenges of unstructured data because, as Kavas explained, a human still needs to look at a PDF document and manually enter its data into back-office systems like an enterprise resource planning (ERP) or accounting portal.
For businesses with thousands of documents flowing in, there is a point at which more human resources is no longer the answer to accelerating processing, said Kavas.
That’s where machine learning, artificial intelligence and other intelligent technologies come in, he noted, adding that the technology can turn unstructured data into understandable information — allowing businesses to automate regardless of the state of digitization at their vendors and business partners.
The actual value in these tools is their ability to learn by example, with their ability to take thousands of documents from a company’s records to understand which actions to take depending on what data is on a document.
In procure-to-pay, the capability — and the automation it allows — can have a significant impact on businesses’ bottom lines on a day-to-day basis. For instance, faster invoice processing means the ability to capture an early payment discount. Intelligent analysis of unstructured invoice and purchase order data means the ability to identify cases of fraud or errors in pricing or orders received.
At a broader view, Kavas said the ability to turn unstructured data into actionable analysis allows for more sophisticated insights — including which vendors and spending categories are most efficient and valuable — thanks to machine learning’s ability to not only capture unstructured data, but to analyze it in the context of droves of other data points coming from within and outside of the enterprise.
Admittedly, not every organization is immediately on-board with this kind of technology — particularly those that are in the earlier stages of their digital transformation journeys.
“Some of them are skeptical,” he said. “How can a computer do what a human does? AI and machine learning — it can be a scary thought.”
But for the firms whose digitization efforts are a bit more mature, benefits like cost savings and compliance encourage executives and procurement teams to become educated about these technologies.
“Some of our customers receive thousands of invoices, checks or contracts a day,” he said. “They cannot scale anymore by hiring more people. They need technology to grow their business.”