Connected Process

There is no way you can gain the Optimum level of results if you do not have visibility about your connected process. Every time an invoice gets generated, it goes through a journey. These Journeys vary depending on internal and external factors. As a process or transformation leader, you will have to carve this journey out.

a. Start with a?simple invoice journey where assuming every step works perfectly and put standard controls.

b. Then start with influences internal this would include compliance, approvals, wait period, system restrictions, Process knowledge, People dependency, First Time right, and ERP. Tech being used. This will help you to understand what those levers are impacting the journey and with Quantitative analysis, you should be able to put effective controls.

As per the APQC Article published in December 2022 – Top performers who are 25th percentile have a cost per invoice of $1.42 while Bottom performers spend $6.00 per invoice. Considering the use of technology, process excellence, and COE, the cost of invoices at the 25th percentile has reduced by $0.58 in 4 years.        

Another aspect would be to look at external factors. This could include regional laws, regulations, customer viewpoints, delays, disputes, feedback, wait period, will pay on time, and changing demand. Again, when you do analysis basis instances/ numbers and frequencies – you can also put controls in place.

Holistic thinking is required when leaders want to work towards connected processes and impact the cost of invoices. This addition to Connected processes can be influenced by:

???People -?Training people with the right set of tools, Access to the right set of documents, an Effective training management program, and a culture of learning can have a big impact.

???Technology -?The ‘A’ of Automation also could mean Assessment and Action. Just because technology is available doesn’t mean you have to jump on it. Check whether your current system is integrated first. If your teams are using different systems and every team is using different methods to update the same information / OR the same method but in different systems, then this can be standardized. Automation will bring value, but you should work on assessing and asking yourself this question – AM I AUTOMATION READY??

Additional points

???It is important to understand that any analysis you are doing has to have the right and rich data. You cannot just use a month's data and decide. You will need 3 months minimum, or I advise 6-12 months so that you cover seasonal influences as well.

??On controls, avoid putting manual controls in place. People doing an audit irrespective of science-based audit theory will fail. Try to work on system triggers and reports which are available in real-time for you to check. Work with your teams to identify critical points which are more leading in nature and can impact your KPIs.

Disclaimer:?The views expressed represent my personal opinions and do not necessarily represent the position of EY.