Many of us in the 1980s were mesmerized by the “Knight Rider” television series that featured the “KITT Car”, an interactive Pontiac Trans Am with a human-sounding voice and operations that far exceeded the capability of a normal automobile. The featured auto not only had the ability to react to changing conditions rapidly, but could also self-diagnose, providing extensive valuable internal and external data to its rider.
In the 1980’s, such an automobile was a dream in the mind of the writer, but technology has advanced so fast that today such innovations are becoming a reality. Smart technology is dramatically changing production in every major industry.
What is most compelling about these technological improvements is that they are altering the way day-to-day intelligence about normal business operations is collected and acted upon. Michael E. Porter and James E. Heppelmann examine the influence of smart technology on today’s business functions in their in-depth article, “How Smart, Connected Products Are Transforming Companies”.
Improved Sources of Data
Before smart technology existed, data within a business organization was collected slowly by various human activities. Surveys were taken, efficiency reports were written, customer response to products was evaluated and tirelessly measured to use as a basis for future business decisions. Departments such as accounts payable existed within an activity loop, where daily functions were carried out with little influence on the business as a whole.
AP automation is one type of smart technology, and it has changed everything about the way the average accounts payable department now interacts in today’s business. E-invoicing has elevated accounts payable to such a degree that major business decisions are being made based upon the electronic invoicing data obtained.
How Accounts Payable Must Adapt
Because such technology is under constant improvement, there is an increasing need for better responses to the data that is being originated, in the way that it is being combined, analyzed and controlled. It’s not enough just to receive better data; if businesses are to remain competitive, they must improve the way that such data is handled.
Accounts payable automation already contains within it the devices needed to make control of better data easier. Real-time information is uploaded automatically, with electronic archiving that makes comparison and analysis of data simpler and quicker. Electronic data sharing means that there no longer needs to be a lag time in the dispensing of important information that can affect other departments.
Computer parameters can be set to fine tune the data transfer, defining the boundaries of acceptable daily cash expenditure based upon budget allowances and expressed company goals. Problems can be resolved as they occur, even from remote locations. Electronic enablement’s such as dynamic discounting can be used to achieve better results with vendors, making payment of invoices quicker and more manageable.
There is no doubt that continual upgrading of software and systems will make an increasing demand on the accounts payable department of the future. However, electronic invoicing will continue to be improved to significantly shorten data response time, making the corporation as a whole more competitive.
Referenced Source: “How Smart, Connected Products Are Transforming Companies”: Michael E. Porter and James E. Heppelmann: https://hbr.org: October 2015 Issue