Digital Transformation Without Digital Expense Management - Are You Risking The Bottom Line?
Disruption is the new innovation and digital economy is shaping an organization’s speed of responsiveness to define success or failure. The pace of digital transformation is relentless and the advent of mobility, IoT, analytics, social media platforms and cloud computing is impacting organizations immensely. Additionally, the advent of globalization has not just opened up avenues for newer business opportunities but also added immense complexity in managing the business processes.
This digital transformation is forcing business departments like finance, HR, procurement etc. to radically overhaul their business processes. Apart from interactive interfaces, these functions are demanding data that has real-time updates, is extremely accurate, consistent across platforms and above all has zero-errors. To achieve this, organizations must reinvent their business processes through automation that simplifies documentation, performance tracking and incorporate faster decision making while making the life of the employee easier.
Expense management is one such category that has a direct impact in increasing the organization’s revenues. For instance, travel related expense management is the second largest controllable expense for an organization. However, organizations often don’t have complete visibility into their entire spend. One of the key reasons is the manual tracking of these expenses on excel sheets that just fails to provide a complete overview of employee spends. As per Concur report “Asia’s Journey to Optimized Travel and Expenses Management”, only 13 percent of the Indian companies have deployed an automated T&E system. This means that only a selective group of enterprises are currently enjoying benefits from visibility, compliance, reporting, and duty of care, mobility, business intelligence and real-time control.
A quick analysis on the potential and magnitude of expense management in the Indian market throws up startling facts. India is one of the largest business travel markets in the world. According to the GBTA’s (Global Business Travel Association) report “GBTA BTI Outlook – India, Prospects for Domestic & International Outbound Business Travel 2014-2015, India spent close to $ 26.2 billion on business travel in 2014. In 2016, the pace shall continue with travel expenditure advancing another 11.3 percent”. With new age technologies like cloud computing and mobility, organizations can gain flexibility and scale. This will enable small & large organizations to explore the full potential of managing a travel & expense management solution effectively. As per Concur’s T&E Expense IQ report, more than $50 billion worth of expenses are processed annually through its cloud based solution. It is observed that the busiest expense processing month is December in India.
Automation of expense management is key, as it also helps in securing an organization’s reputation. The possibility of the organization’s reputation being undermined by employees engaging in malpractice of claiming more than what was spent is not new. Fraudulent practices not just affect the reputation, but also the bottom line, if not identified and checked on time. The chances of non-compliant spend and submission of padded expenses is higher when there is no automated system. The entire claims process is extensive and in the presence of any errors, the time factor gets compounded owing to numerous reasons that make it a difficult task for CFOs to ensure timely validation. Claimants often procrastinate while filing claims and lost receipts further hamper the submission process. An automated expense management solution that addresses these concerns on real-time basis is an invaluable asset for all organizations, small and big alike.
Having talked about automation, it is equally important that organizations strive for simplicity. Any automation that leads to more complexity will not yield desired results. Instead it will further cripple business and breed inefficiency. The mantra is to automate expenses while running simple with the process. In driving the digital wave inside an enterprise, it is important to have systems, especially travel and expense management, to be based on open platforms with interconnected eco-systems. As more and more services get digitalized in the coming months, Services ‘mash up’ will become the 'new normal' sooner than later. This makes business travel, a seamless and effortless experience.
Gartner predicts “digital business incompetence will cause 25 percent of businesses to lose competitive ranking by 2017”. While successful digital transformation may not just be the result of only implementing new solutions, however they may be also derived from equipping the organization to explore newer possibilities.
In conclusion, the digital transformation for an enterprise will remain incomplete if the travel and expense management systems are not overhauled to provide improved compliance, productivity, visibility and employee experience. As stated by George W. Bush, ‘You cannot do today’s job with Yesterday’s methods and be in business Tomorrow.’ Likewise, growth requires appropriate business strategy bagged with ‘automated technology’ support of progressive elements, one that uplifts and at the same time balances.