Paper format was extensively used to review the account payable invoices by the City of Thunder Bay. In the hard copy format the invoices of account payable are being received which are further incorporated manually in the Enterprise Resource Planning (ERP) software, SAP account. In the archive boxes 7 year’s data are keyed regarding the accounts payable through integration process and thus this project includes a thorough analysis of movement regarding invoice processing from paper based to paperless (Shakkarwar, 2017). The major implementation of this aspect reveals the fact that it is cumbersome to let the paper format of the account payable invoices through the world in case of businesses that have global presence and hence paperless integrated process automation through SAP is an effective solution to enhance productivity as well as channelize the requisite resources to the respective terminals worldwide where they are required with less consumption of time. The paper investigates on the aspect where it is been found in the corporate world about 150000 account payable invoices are transacted throughout the world and hence it is important to examine how the integrated process automation system can benefit the business in case of the cities of Sue St Marie Ontario, London Ontario, Sudbury and Niagara Falls, USA respectively. The also delves into the aspect of system application and products in data processing in case of the city of Thunder Bay.
The city of Thunder Bay is a sleeping giant that is located in the north shore of Lake Superior in the Thunder Bay district, Ontario. After an initial downfall of population the 2011 census reveals that the population of the place is 121,621. There is extensive presence of parks and wilderness areas where major industries includes forestry, mining, education, hospitality, transportation as well as manufacturing. Hence there is necessity of implementing effective strategies that can carefully yet steadily speed up the business process and generated higher growth as well as development in the city’s income, livelihood earning and enunciate the aspects of accounts payable systems in a comprehensive manner. The potential constraints and their corresponding limitations are take into consideration where they are also being compared and contrasted with other cities like Sue St Marie Ontario, London Ontario, Sudbury and Niagara Falls, USA respectively. Based on relevant literature the research is being conducted to redesign a strategic understanding that will help in channelizing automated accounts payable system and render advantageous outcome for the city as a whole.
The research is been conducted upon the data regarding the account payable invoices. Through the interviews conducted upon top managers and employees of the city the purpose of the project was discussed and the impact of paperless account payable invoices through integrated process automation is being incorporated. The managers highlighted the importance and needs for process automation through SAP account in data processing and displayed the flaws and fortes of both paper format and paperless format of integrated process automation system through ERP software, SAP. The basic process can be shown as follows:
The employees also kept their keen focus upon the importance of these automation process as according to them it will make the business processes much more cost effective and labor efficient. Notably, the research methods has substantial impact upon the strategizing the report towards a feasible outcome.
The strength, weakness, opportunities and the corresponding threats can be incorporated as follows:
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Strength |
Weakness |
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Ø Ensures effective management of cash flows Ø Effective processes the revenue generation and sales data within short span of time Ø It is inclusive of straight through automation of exception handling, payment channelization, analytics, matching, extraction and invoice capture mechanisms Ø Reduces falsified payment of fees and displacement of invoices or loss of invoices followed by streamlining the GL coding Ø Is able to store periodic data and helps to conduct adaptive trend analysis for better understanding of the business performance |
Ø Reduces human intervention and becomes much more adhered with technologically advanced system of automation Ø Demands creation of an alternative platform for engaging the human resources that will lose their work due to extensive intervention of the automation process Ø May reduce knowledge regarding the process of the whole automated information exchange process |
|
Opportunities |
Threats |
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Ø Reduce harassment with loss of invoices and channelizes the purchase orders in an efficient manner Ø Risks associated with chasing documents lost in emails gets mitigated Ø Digital business endeavors create value through maximizing digital assets that are reflected in revenue earnings due to better cash management Ø Companies that are receiving millions of invoices each year gets freed from the loaded ancillary cost involved in processing the invoices manually |
Ø Hugely system dependent procedure Ø Provides competitive advantage in terms of less consumption of time but due to low labor engagement through direct human intervention it losses innovative operational functionality Ø Challenging due to its ability to siphon of information and access automated paperless account payable invoices which demands secure and safer platforms for exchange of sensitive information |
The feasible marking criteria of the cities close to the fact the proper system of innovation is necessary to get incorporated within the process of account payable and financial management segments. Notably, the aspect of concern is regarding the channelization of financial objectives as well as mitigating the risk that is associated with it. The scenario have its clear advantage regarding projecting that the accounting strategies that are being used is in implementation of segregating the accounting information regarding the accounts payable (Einkamerer & Maqbool, 2017). The advantage of the SAP process accounting solutions are many. However the vast procedures enables the integration of automated solutions that is associated with paperless transactions. Notably, each cities has their relative difference from one another and due to this reason it is important to benchmark them in order to improve the financial, operational as well as managerial aspects that are allied with accounts payable format whether it be in papered mode or paperless mode. However, as there is a shift from the papered format to that of the paperless format, hence it is quite common that the changeover will bring variation in the process of financial operations within the cities from fundamental perspectives.
The City of Thunder Bay needs to incorporate effective performance measures through cost reduction and enhancing work efficiency. It is been found that employees on an average processes manually 12, 367 invoices where the invoice cost incurred is $ 6.32 per invoice which counts for $78159.44 invoice fees. Notably the process of automation will help to reduce this enormous fees by 90 % rejuvenating world-class benchmarks with invoice automation and lowering of the processing time of the invoices. The included factors that are in general difficult to formalize such as novel insights about the future, deep shifts in prices and commodity values that are missed to get adjusted within the invoices due to human errors, unprecedented regulations or inventions, etc. In conjunction with these scenarios the incorporation of planning integrates with effective decision making process and leads to plausible positioning and betterment of the city for the future followed by interpreting the casual relationships between these factors. Demonstration are made to develop dynamic scenarios followed by taking credible measures and tackle future uncertainties from both of the pessimistic and optimistic perspectives.
In case of Sue St Marie it is been found that the efforts that is needed to make in order to ensure feasible transactions with the usage of paperless invoices and not through paper format invoices is enormous. Most important the demographic scenario of the city needs to be given crucial focus on this respect. With respect to the daily to daily financial activities that are taking place it becomes cumbersome to monitor each and every activities with substantial accuracy. In order to do so, it is clearly found that the paper based format of invoices is limited due to its labor intensive approach while it is also been seen that the paperless process automation format help to execute the same activities regarding account payable through the ERP systems in the SAP environment at a less time consuming manner.
In case of London, Ontario which is a city within the southwestern part of Ontario, Canada it is seen that the population of the city is moderate amounting to 383,822 by 2016. However, the density of the city is low. The city has a planned structure where papered accounts payable format has less limitations as compared to Sue St Marie, Ontario. On the other hand, Sudbury has a unincorporated township. Notably, gap persist due to the reason that the cities have almost uniformly distributed population. The paper format may be labor intensive which increases the cost and consumes greater amount of time. However, on the other hand implementation of automation solution for accounts payable invoices helps to streamline and simplify the process in a time consuming way shifting it from a traditional process towards an innovative process inside the familiar SAP environment. These are inclusive of straight through automation of exception handling, payment channelization, analytics, matching, extraction and invoice capture mechanisms.
With a population base of 48, 632 only it is found in Niagara Falls, USA that the density of the population is quite high per square meter. In accordance with the demographic structure of the city, there is crucial need of benchmarking it in terms of paperless transactional invoices. The SAP procedure not only makes the process of accounts payable paperless but also integrates the financial management initiatives by matching income invoices based upon relevant data and processed information. The documents are then stored inside the SAP for maximizing straight-through processing of the invoices. This assures that the solutions regarding the understanding of the SAP procedures and their corresponding implementation for the accounts payable initiative has a gap between the paper based format and in the paper less format.
The gap that persists is regarding the impacts that takes place upon the account payable activities due to shift from transactions based on paper base format to that of paperless format in the cities of Sue St Marie Ontario, London, Sudbury and Niagara Falls, USA respectively.
Based on the demographic location and the way of communication and exchange of information it is been seen that the cities requires to undertake certain endeavors to overcome the barriers that they use to face in papered accounts payable procedures. In general channelization of the paperless procedure extensively boosts the similar kind of activities in all the cities yet gap analysis reveals that due to relative difference in location and variation in the way of living and executing the financial functions by the residential people of the particular cities there is proportional change in the impact of the shift from the papered format of accounts payable to that of the paperless format of the same. Thus, implementation of technologically advanced system based automation will revive the flaws in the channelization of paper based account payable invoices and along with that in all the cities in the short run will improvise the exchange of information and processing of activities in a less time consuming manner. This will strengthen the automated functionality of the activities at a faster rate as well as will ensure the processing of a more number of activities within less span of time and through a credible and safe information exchange platform.
The exchange of information regarding accounts payable will not only take place through a credible and feasible platform but also will be able to enhance the number of accounts payable activities within the middle term. There exists lots of challenge in the middle term regarding the implementation of paperless format of accounts payable invoices automation through the ERP and SAP by replacing the paper based format. One of them is to assess the implemented activities through the paperless format are accurately taking place or not (Tsai & Chou, 2015). The other factors includes that whether the incurred initial investments are able to ensure a profitable and credible greater about of future earnings with respect to the present value of the future earnings. Finally, the ill effect of the process automation may force a replacement to substantial amount of human capital, those who use to execute the paper based format but due to the process there will be availability of technologically advanced equipment that will help in the implementation of the paperless way of SAP process automation and hence will remove a substantial amount of human resources. Hence, the government expenditure in the middle term will be to create alternative income generation mediums for the replaced work force within a lesser span of time or the cities should strategize to make the work force skilled in the process automation of SAP based paperless accounts payable invoices. Equilibrium should persist in the market regarding the alternative factors that are being removed due to this process automation and will be supported effective to boost them towards alternative means or options of income generation. The bettering off due to the process automation should not be hampered as well as the factors that are being hampered due to the process automation in the paperless format should not get worsen off. Rather a Pareto Optimal state of implantation should be encouraged in all the cities in the middle term to maintain the balance within the economy. Also it is found that in the middle term the challenges lies in implementing the automated process and training the human capital effectively to ensure that the process is executed up to mark. To emphasize this issue it can be put forth that the barriers is not only to implement the accounts payable invoices through paperless format but also to facilitate effective training and development initiatives so that the implementation of the activities through the bottom line human resources takes place efficiently. Moreover, in the middle term the challenge lies in synchronizing the investments that are initially made to process the account payable information through the software and also to train the human resources for raising their expertise in processing the informative transactions regarding account payable through the paperless format.
In the long term the cities will be boosted with functioning initiatives as well as from economic perspectives it will be able to fill up the gap that exists with the time frame that is been taken to process the account payable information of 7 years of all the cities under considerations, which are Sue St Marie Ontario, London, Sudbury and Niagara Falls, USA respectively. This will impact the cities in the long term from both microeconomic as well as macroeconomic point of view. The government expenditure that will initially get incurred to automate the process of account payable though in the long run it will be able to accumulate information regarding account payable for the last 7 years in an effective manner. Moreover, this will gear up the way of transactions that take place within the city and will incur in the future as profitable initiative through bringing a credible platform that can store information of past years followed by providing a trend analysis for further research and development. Along with that the siphoning of the monetary transaction will be effectively conducted and globally accessible platforms will be there to look for information regarding account payable at any point of time without much effort. Paper based formats takes much time to get transacted for one place to other though this procedure will remove those barriers and will ensure a credible processing and storing of information in the long run followed by rendering a fast paced infrastructural development and an automated framework that will bring not only quantitative change but also qualitative change in the economic state of all the cities irrespective of the limitations of them due to demographic positions or skilled human resource unavailability.
The following success factors are the key in implementation of the automated solutions in the city of Thunder Bay:
The following risk factors are the key in implementation of the automated solutions in the account payable process:
The VRIO analysis is an internal assessment process that helps firms and cities to understand their internal resources and capabilities which may provide competitive advantage based on the internal and external market structure. In this case of process automation in SAP through shifting from paper based format to paperless format the four aspects are examined which incorporated whether the approach is valuable, rare, organized to create value and imitable or costly to imitate, etc. The sustained competitive advantage of the approach is being discussed as follows:
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Valuable |
Rare |
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Ø The initial cost for automation of the process in SAP might be a bit costly though it have the ability to generate greater future return that will cover up the initial cost incurred for implementing the process Ø The approach is valuable as it ensures shifts from the burdensome manual procedure of paper based format to a less time-consuming paperless format Ø This approach lessens the amount of human intervention and reduces the probability associated with human errors Ø This process ensures storage as well as easy access of data within seconds globally from any permissible place worldwide and to authentic users who possess the right to access and in an more or less user friendly platform Ø The process generates value for the organization by minimizing cost and maximizing benefits in terms of generating credible processing of information related to account payable invoices |
Ø The process is rare and unique which provides a competitive advantage to the firms in all the cities where the implementation of the approach is significantly done Ø The resources needed to implement this procedure is not costly in the long run rather it seems to be costly initially for which it is thought of to generate competitive disadvantage in the short run however in the long run it provides a temporary advantageous opportunity to the firms within all the cities Ø Rarity of usage of the process provides a unique advantage to the cities since it is not yet used within all the cities and hence channelizes the cumbersome manual procedures to a paperless format Ø Since it is not available to all the cities hence a competitive parity will prevail Ø This approach is rare as it not only minimizes the labor intensive manual process but also is able to reutilize the retrieved labor due to automation into alternative means of work practice |
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Organized |
Imitable |
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Ø In accordance with the usefulness of this resource the cities are able to accomplish the process as the policies, culture and environment are capable to cope of with the change since there is presence of skilled labor force which can be trained as well as groomed towards using the SAP for automation of AP process Ø The flexible managerial and operational aspects of the cities will help in improvising the process and synchronize the automation with the changing environment followed by generating sustainable growth and development to the firms of the city as well as the authoritarian government of the respective cities Ø The infrastructural advantage of the cities and ability of the human force engaged in work culture of the city possess effective technological knowledge and flexible mindset towards new changes and hence they will be able to cope up with the change in an organized manner. |
Ø Other cities cannot easily imitate this automation process for which a provisional competitive advantage in channelizing its activities within a shorter span of time and in a credible manner Ø Proper infrastructure is necessary to implement the automation paperless procedure and hence it is not imitable by all Ø The cities of Sue St Marie Ontario, London, Sudbury and Niagara Falls, USA respectively possess an effective infrastructure to imitate the process of automation in case of account payable invoices for which there is existence of competitive advantage in the process Ø Since it is costly in the initial phase renders a competitive disadvantage though in the long term this will become advantageous |
The automation of the accounts payable invoices provides opportunity to the companies and helps them to identify the process automation in SAP. The scenario planning analysis becomes effective based on the objective of automating the accounts payable process in paperless format as well as depends upon the existing state of the respective cities that can be incorporated as follows:
It is important to focus on the main decisions that should be prioritized to implement the automated accounts payable process in a paperless manner. It is entirely predictable in case of Sue St Marie Ontario that the business model should run at pace through its implementation. Beside this it is also important to create the scenario that substantiate the automated process and along with that is able to balance the predictable barriers and nullify the problems. As for example in case of Sue St Marie Ontario there will be necessity to create alternative work options for the manual labor force that was previously involved in executing paper based accounts payable invoices processing.
In case of London, Ontario it is being seen that there is necessity to implement effective facilitation of awareness generation program and training for developing the skills of the people that will intervene in the process of automation and will run it in a user friendly manner. To ensure that the process is being effective accomplished it is essential to strategize the scenarios that may prevail in the process of successful implementation of the automated invoice processing in SAP.
It is been seen that in most of the cases it is needed to store the invoices for seven consecutive years. Hence, in the complete retention periods should be automatically adhered with the retention policies without the intervention of human entities. As per scenario analysis there should be both of the pessimistic and optimistic view where the worst and the best cases are taken under consideration in case of Sudbury as that is also kept under consideration for all the other cities. It is a clear fact that it is far superior to store the invoices through archiving boxes of the documents offsite or filing cabinets. However, these are very expensive as well as vulnerable to loss and difficult to retrieve or search (Katamba et al., 2017). The optimistic approach however implicates that the automatic storage of the invoices and access globally not only renders simplification to the compliance activities but also provides support for the cities in terms of avoiding unnecessary costly fines and accounting discrepancies by reducing financial anomalies and resolving issues related to decision making in the near future.
In case of Niagara falls, USA it can be incorporated that true economies of scale comes under consideration due to the accomplishment of automated process where a significant shift takes place from paper based format to the paperless invoicing of the accounts payable invoices. The ERP based SAP process drives the business environment through boosting the accounting system and confidential information exchange procedure along with keeping things transparent as well as credible. Extraction of relevant data and connecting them with the chosen enterprise application speeds up invoice processing followed by tackling fluctuation in corporate cash position. Notably, companies that are interlinked with accounts payable process of ERP solutions effectively reports straight-through by processing volumes that are more than twice in comparison to that of other companies (Lintukangas, 2017). This is due to the fact that in case of Niagara Falls, USA the capturing of invoices is able to improvise its progress through multiple channels of automation at the same point of time and in a less cumbersome manner. It can simultaneously store electronic images and create invoices followed by retrieving copies in the form of documents that uses familiar application platforms and extract information for work tasks. Along with that, it performs account coding in various invoice fields through automatically matching invoices maintain consistency with purchase orders and integrating the results with system of records and enterprise applications.
The aspect of scenario planning in case of the city of Thunder bay is a strategic analysis method incorporated to make flexible long term plans that can cope up with both the best results as well as worst results of the unseen future. Hence, it will effectively boost the decision making regarding demographics, political, industrial aspects along with information regarding mineral reserves that are impacted with key driving forces identified by considering the economic, social, technical and political steep trends that are found to persist within the city. Prior to formulating specific strategies, scenario planning involves the aspects of systematic recognition of the various factors in Thunder Bay that get combined in complex ways and creates surprising futures due to nonlinear feedback loops in the process of paper based manual operations. It is been found that postal strikes or disruption in the manual process of invoice deliverance, hinders the process of accounts payable. The employees and the managers revealed that fact extensive dependence happens upon the received invoices through mails and send out cheques. Due to postal strikes the vendors who were marked to receive the invoices did not obtain them and along with that due to increase in the amount of workload the front line employees sometimes fails to cope up with the instant work pressure that gets created through these mismanagement of the process. This creates grievances within the suppliers and vendors and the mode of communication between them and the firms gets deteriorated. Clearly, the current system is much more old fashioned and traditional that lacks innovation for which it includes paper based hard copy approach and filing procedures. However, in the city of Thunder Bay vendors prefers more technologically advanced way of business proceedings as in global sphere business is becoming more technology driven for which they desire automated process and not the current process of hard copy paper based invoices. It not only will shorter the waiting time or processing time of the account payable invoices but also boost the cost that the employers incur due to mailing, processing, dispatching of receipts, deposition of cheques and printing of documents. Based on the financial assessments, consumption time for conducting operation, improvisation in the use of human resources, boosting the exchange of information and accounts payable database maintenance system, the following importance in case of the city of Thunder Bay can be incorporated as compared to other cities:
Conclusion
It can be concluded that process automation through SAP is like the low- hanging fruit that ensure deliverance of a greater return on investments within a shorter span of time followed by resolving the cumbersome process of designing and maintaining the accounts payable processes in manual paper based format. This includes invoice receiving, delays in processing, exceptions in processing as well as information matching, etc. It is been found that within all the cities the AP automations helps to go beyond the limitations of financial data management and helps to strategize them towards a more organized and credible way of doing business. The staffs of the organizations within each of the cities do not need to toggle within programs or have to learn new interfaces rather the automation process is seamless as found. It’s a fact that the automation is being reviewed through human intervention though sophisticated tools through automated solution in SAP platform allows rapid, easily correctable invoices that gets auto rejected or escalated without requisite intervention. In cities like Sue St Marie Ontario, London, Sudbury and Niagara Falls, USA respectively it is also being found that, the financial teams are able to access accurate information of the invoice data in SAP at the earliest and helps in utilizing the opportunities that boost the decision making process for gaining faster insights through the analysis of the data regarding each of the cities. Moreover, the process of paperless automation helps to magnify the future value of present investment for the organizations within the city that are already being made in their SAP systems. Immediate visual feedbacks gets available upon the performance of the organizations through the automated SAP systems in the cities as well as accurately troubleshoots with ease the financial anomalies followed by reporting upon existing performance and tweaking automated process in the paperless format in a better way from that of the manual paper based process of monitoring the account payable invoices. It is been seen that in the cities friction is being confronted in the business processes due to paper based format. However, visibility of data is important that can be interpreted towards a significantly meaningful solution with the help of this paperless format of account payable invoices in the automated solutions in SAP.
References
Einkamerer, T. F., & Maqbool, J. (2017). Accounts Payable: Improving a System for Better Efficiency. AMR, 39. https://core.ac.uk/download/pdf/145230884.pdf#page=45
Katamba, A. B., Voon, A. Y. S., Min, H. S., & Seow, H. V. (2017). The Impact of Information Systems on Financial Audit: An Over View of External Auditors’ Preparedness to Tackle Clients Automated Environment. Advanced Science Letters, 23(11), 10692-10695. https://www.ingentaconnect.com/content/asp/asl/2017/00000023/00000011/art00049
Lintukangas, A. (2017). Improving indirect procurement process by utilizing robotic process automation. https://www.doria.fi/handle/10024/143385
Marshall, T. (2015). The status of fish populations and their habitat in the Thunder Bay Area of Concern. https://infosuperior.com/download/aocs/tbay/documents/other_documents/Marshall%20-%20Status%20of%20Fish%20Populations%20and%20Habitat%20in%20TB%20AOC(3-2015).pdf
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Strock, B. R., Hooper, L., Glavin, E. M., & Bressler, B. L. (2018). U.S. Patent Application No. 14/739,344. https://www.freepatentsonline.com/10007923.html
Tsai, B. H., & Chou, S. B. (2015). Application of multiple output data envelopment analysis in interpreting efficiency improvement of enterprise resource planning in integrated circuit firms. The Journal of Developing Areas, 49(1), 285-304. https://muse.jhu.edu/article/558473/summary
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