The silence of absent hoofbeats

There is an anecdote that I’ve seen used several times in presentations which touch on industry disruption. Known as The Great Horse Manure Crisis of 1894, it was originally penned by Steven Davies and used to highlight the potential flaws in taking a current trend and extrapolating into the future assuming it will continue. In more recent times, I’ve seen it used more as cautionary tale of not considering potential disruption to an industry.

Basically, the story goes that back in 1894 there were somewhere in excess of 50,000 horses in London as horse drawn carriages, cabs, and buses were the primary means of transport beyond one’s own feet. The ‘crisis’ was that if growth continued unchecked, the city would need ever increasing amounts of horses to meet the transports needs of the city and this would result in 3 major issues. The first being how to house and feed that many horses. The second to was what do to with all the horses that died. And the third was, as one writer put it, that London would be buried under 9 feet of horse manure in 50 years’ time. Of course, the internal combustion engine happened, automobiles hit the streets disrupting the transportation industry, and Londoners avoided a very smelly future. 

I was reminded of this anecdote when I attended the New Zealand launch event for PEPPOL e-Invoicing and was stunned by the deafening silence of absent hoofbeats.

When it comes to Accounts Payable (AP) Automation, capture is a key component of pretty much any solution. Because AP is a document centric process, the steps around the classification, indexing, OCRing, data extraction and ‘reading the invoice’ are necessary to trigger workflows, make decisions, route documents and integrate data. Originally, the first step in the AP Automation process was the scanning of a hardcopy document. However, over the last decade or so we’ve seen that initial communication channel change to become predominantly email based and largely paperless. The use of the word ‘scanning’ decreased, and the word ‘capture’ made its way into the AP lexicon. Since then there have been a whole bunch of new technologies that have been applied to capture solutions to improve the way that capture works. These include such recognisable buzzwords as machine learning and artificial intelligence (AI). 

But what happens when the invoice document disappears? If the invoice data is transferred directly from vendor ERP to customer ERP via the PEPPOL network, is there a need for document-based capture? There is risk that if you’ve invested in Machine Learning, RPA or AI based capture, then all of a sudden you have stabling and fodder for a herd of non-existent horses.

Of course, with AP Automation solutions there are many other considerations beyond the initial document capture. For example, elements such as approval workflows, GL coding, PO matching, goods receipting, fraud detection and database validations all need to be addressed as well. There is still very much a need for AP Workflow solutions to complement ERPs and finance systems that lack those options, or that don’t have the configurability that your business needs. 

However, if AP automation is roughly a solution of three moving parts (Capture, Workflow, & Integration), what does the future of these solutions look like if one of those parts is no longer needed? Or at least not needed to the extent and volumes it currently is…?

Capture will likely still be needed in some form. Just as there are still taxi’s after uber, there will likely be some element of hardcopy and/or emailed invoicing to contend with. Not to mention that any change involves a transition period and that emailed PDFs won’t just disappear completely overnight.

However, one important question you must ask now before diving head-first into any new capture technologies for AP Automation, is whether or not capture has become a London horse. 

If you are considering an AP automation project now or in the near future, we need to have chat about whether you are investing in stables or garages.

If you have any questions or would like to have a chat about how we can help please contact us today.

Kris Elliott

Solution Sales Executive

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