Written by: Gabriele Indrieri, Managing Director for EMEA South at SAP Concur
Before the pandemic, many businesses planned to implement long-term digital transformation strategies to streamline operations. However, these had to be placed on hold due to the shift to remote work, which resulted in 40% of companies witnessing increased errors in travel and expense (T&E) invoice submission and processing.[1]
Now that the initial storm has passed, 53% of businesses plan to increase their spend on finance-related technology, with over a third planning to invest 10% or more of their budgets[2].
However, business leaders need to also consider the bottom line and ensure their investments make business-sense. According to IDC insights[3], this should be determined by the company’s maturity to avoid any risks or losses as a result of implementing technology prematurely. As such, businesses need to consider which technologies are appropriate for each stage of their digital T&E management maturity process, the challenges that they may present and the benefits when moving to the next stage.
Here are the five steps within the T&E maturity model to consider:
1. Legacy applications
IDC’s 2020 SaaSPath Survey[4] revealed that 40% of businesses are reliant on solutions like excel sheets and other on-premise solutions with long update cycles for T&E management. This type of accounting works until the number of employees increases and more accountants need to be hired to keep up. In addition, it leaves room for human error when statements are transferred to a separate accounting system. Ultimately, it can result in more work, higher costs and employee dissatisfaction. A solution is to automate tasks and workflows which can reduce the opportunity for non-compliant employees to manipulate data to validate out-of-policy expenses.
2. Automated point solutions
These solutions manage single tasks and workflows by using rule-based automation patterns for T&E processes. Although it’s a step towards greater efficiency, it works best in a segmented financial environment. This can lead to a limited flow of information which hinders the CFO’s ability to effectively communicate financial metrics.
To progress automation further, businesses should strive for a connected platform ecosystem to create a more accurate view of expenses to minimise the risk of inaccurate claims being accepted. However, currently 42% of businesses describe their financial applications’ digital transformation as disconnected4.
3. Connected platform ecosystems
A connected platform ecosystem enables back-office point solutions to connect to a system of record, third-party applications, and external data sources. This establishes one consistent view of T&E, which enables everyone in the company to be on the same page when collaborating.
Businesses can benefit even further by integrating application suites – something 59% of businesses say they’d prefer to do over implementing a “best of breed” solution. The suite connects business apps with budget tracking and preapproval functions to allow for proactively controlled spending, instead of responding to spending that’s already occurred. In turn, it makes it easier to drive policy changes, create business resilience, and enhance compliance.
4. Integrated application suites
Integrated application suites allow CFOs to have a holistic view of working capital to make strategic decisions quickly and flexibly.
Once implemented, all that remains is to optimise and streamline end-to-end employment spend management processes such as putting intelligent technology in place to reduce processing times for auditing and VAT/GST reclaim.
5. Intelligent prediction processes
Having intelligent prediction processes in place marks the completion of finance transformation for T&E. By this stage, businesses should be able to work at optimal efficiency, with processes completely connected and expenditure completely visible. This will make the business extremely competitive due to increased agility and established resilience.
Getting to this stage means that the business is in a position where it can easily iterate as innovative solutions emerge. It essentially lays the foundations for technologies such as virtual assistants, predictive T&E budgeting, and planning, as well as machine learning-based fraud protection.
Step by step towards better expense management and compliance
Becoming a business that has intelligent and predictive processes should be the ultimate goal, but it’s an option to edge towards rather than trying to transform completely overnight.
By completing the five steps, businesses can
iron out difficulties and gain buy-in from the business culture. By constantly
and iteratively implementing solutions, you’re more likely to establish
sustainable practices which enable long term efficiency for T&E.
[1] SAP Concur report: The Hidden Potential of VAT reclaim.
[2] WW – C-Suite (CXO) Survey, IDC, December, 2020
[3] IDC White Paper „ sponsored by SAP, The Business Value of SAP Concur Solutions for Optimizing Travel and Expense Operations”, Doc. #US48377021, February 2022
[4] SaaSPath Survey-2021, IDC, March, 2021