We are all immersed in the digital world.
In our private lives we interact daily with Facebook, Twitter, Instagram and WhatsApp. At work, it’s applications for communicating with colleagues and clients; email, LinkedIn and Skype. There’s also Microsoft Office, document and content repositories, PMO and finance applications that power the practicalities of everyday business.
Increasingly, the information we share is digital. If we are to survive and thrive, we must figure out efficient ways to send, consume and interpret this data. So it’s alarming that a recent survey conducted by KPMG found only half of executives say their company has a digital transformation strategy, and only a quarter know what their next steps will be. The issue here is that most people think of digital transformation as part of IT development, rather than a corporate or personal strategy. As a result, they often end up relying on crude technology and just making do.
On a daily basis, I’m sure you’re bombarded with buzzword ladened marketing pitches about disruptive technologies, cognitive machine learning, artificial intelligence, blockchain and robotic process automation. Information overload and the multitude of suppliers peddling ‘world class’ solutions has become a cliché.
Yet, success stories still make it through the noise and the fear of standing still galvanises people into embracing change. We all recall what happened to the likes of Kodak and Nokia when they ignored technological innovation. We also hear IT horror stories, where the shiny (and expensive) new system fails to deliver the promised business gains.
The wood from the trees
Digital transformation is a strategy. For it to work, it needs to be accepted across the entire supply chain, providing benefits to senders and receivers. There is no point in embracing a technology like Blockchain if the majority of your clients are using a different strategy. Betamax and VHS spring to mind, for those old enough to remember. And talking of the future, it’s millennials who will be inheriting these decisions.
The benefits of a digital economy are obvious – repetitive, mundane tasks can be automated, human error removed and transaction data communicated instantly, reducing costs and allowing humans to add value to the process where it matters.
So, we need to make digital transformation easy for everyone to embrace. It’s a journey, and businesses need to take everyone they interact with along with them, rather than leave them behind. At home or at work, we have many modes of content creation and communication, so any digital transformation strategy must consider the target audience.
If businesses put unnecessary barriers between them and their counter-parties, the result will always be resistance and noncompliance. The buyer of a product or service simply wants to receive what they’ve ordered on time, at the agreed price, and this means a simple non-disruptive way of paying and recording transactions.
Technology can enable Digital Transformation
For example, a restaurant ordering flour for baking cakes, making pizzas and bread needs three different types of flour, detailing these as separate line items on the order. But, if the invoice has the total price and simply says “flour”, how do I know what has been delivered and in-turn manage my inventory?
The signed delivery note might have the correct information, but the restaurateur would have to manually enter the delivery note and invoice information into their finance and stock systems. They could just match at header level to save data entry tasks, but they would then have lost compliance with data integrity.
Technology alone can’t deliver digital transformation. But it can help to enable digital transformation. In the case of the above example, the buyer needs to communicate with the supplier electronically and include information on the order that the supplier can recognise and process automatically.
Similarly, the supplier needs to acknowledge the order, make recommended changes, receive final confirmation of the order and arrange delivery and invoicing inline with the order. That way, they can complete the transaction.
In the real world this rarely happens. So how do we leverage technology to deliver an end-to-end digital transaction?
The importance of interoperability
What the sender and receiver both need, is a common communication platform where data is recorded, encrypted and freely exchanged. Email is the most obvious candidate, since everyone uses it on a daily basis.
Communications need to contain information that can be clearly understood or interpreted with validation, ensuring the detail enables both parties to complete the transaction with commonly available technology. This interoperability is crucial.
To see how to works in practice, take the processing of a purchase order. If a buyer sends an order by email as a digitally created PDF, the buyer can leverage the native PDF capability contained in their ordering or finance application. Email is secure and provides an audit trail, which is critically important. This is a great start, as the record of purchase adds no additional cost to the buyer, no stationery, ink or postage. And crucially, the supplier has a digital record of the order.
An application-generated document can be processed automatically without the need for scanning and OCR, which tries to convert an image into a machine-readable format, but unfortunately cannot eliminate character recognition errors. With an application-generated document, the supplier is able to read the header and line information on the order for processing. This is the first step in the journey to digital transformation, but there is more work to be done if businesses want to achieve end-to-end automation.
There are many confusions and challenges when it comes to e-invoicing and to realise maximum benefit it is important to understand those differences and select the right one for your business.
Read our e-invoicing to help make better e-invoicing decisions for your business.
Data is everything
We have heard much about the potential of Blockchain, Cognitive AI or RPA to automate business processes. But the one thing this digital transformation journey needs in order to succeed is data. An RPA process without content or context gives us a dumb robot, and a blockchain with missing data has no integrity. So how do we overcome these issues?
At CloudTrade we have developed a simple-to-use service that acquires transactional data from any application-generated document with 100% accuracy. The data is then interpreted and validated to ensure content and context meets the requirements of the receiving system, providing end-to-end automation. It’s simple but highly effective, as it allows the sender to email their instruction at no additional cost, which is then acknowledged and automatically processed.
Take the order example. The buyer creates their purchase order in PDF format via their finance or ERP application, and they email this to the supplier’s email address for processing. CloudTrade acts on the data contained in the email body and attachments, extracting header and line information with 100% accuracy. The line level data can contain SKUs, unit prices, tax amounts etc.
The line level detail then allows the buyer to automatically process the invoice for payment, again by using CloudTrade for invoice processing.
Line level detail opens a whole new world for spend analytics (how much Type-0 flour did I use last year and from which supplier etc) data governance, compliance and trade finance options.
The digital transformation journey is not just a technology issue. All parties need to participate, and that means adopting systems that leverage ubiquitous technologies like email and PDFs. CloudTrade can be deployed to remove barriers to entry, ensuring critical line level detail is captured and correctly interpreted to allow end-to-end process automation.
By doing this, we can drive adoption amongst buyers and suppliers, helping businesses everywhere to embrace the digital revolution with confidence.
Book an exploration call with our sales team to understand how CloudTrade can help automate your e-invoicing and e-order processes.