The past few years have seen several sea changes in the higher education sector, not least financial belt-tightening by state and national legislatures, the increasing need for innovative tertiary revenue streams and, of course, the coronavirus’s continuing effects, especially on international student numbers.

The resultant fallout has a significant impact on finance functions. While institutions’ central finance functions have traditionally been the hub of their relatively discrete business units, models are shifting. Today it is possible to centralise data-focused operations across campuses and even beyond, as universities consider partnering and merging to survive and thrive in a post-pandemic world.

Key to this evolution is the need to aggregate available financial information and streamline processes: not only in higher education institutions’ finance departments, but in every cost centre, organisation-wide, and to turn this into meaningful data that cements their authority as a driver of meaningful organisational change and adaptation.

But the crux of the matter is time. There’s never enough of it. Many finance professionals still find themselves engaged in manual and administrative duties that often have little to do with core financial tasks. Depending on automation levels and the maturity of the technologies deployed, these activities are squeezing out more important tasks. As a result, less time-sensitive but more meaningful activities such as strategic planning, policy oversight, impactful reporting and providing guidance and leadership often fall on to the ‘to-do’ pile, but seldom make their way to the ‘have done’ checklist.

By leading the use of advanced financial technology, central finance functions can reduce costs and improve efficiencies internally. And, by amalgamating data sources, meaningful information will flow – putting finance leaders in a position to positively shape other departments’ approaches to financial matters, as well as their conceptions of the central finance department.

Is central control essential?

Almost all enterprise-scale organisations use centralised functions for key operations to reduce duplication of tasks and, therefore, wasted resources. In a shared service model efficiencies abound, but the risk increases as departments are less able to find the information that is meaningful to them. Embracing difference and, therefore, complexity is essential.

Managing financial data begins with technological challenges, but it is not a pure IT exercise. Until the last five years, complex operational procedures have been an anathema to business software. In brief, complex procedures at a significant scale were difficult to mirror in software. This is no longer the case: finance solutions have matured, as have the typical approaches of IT systems in general. With today’s software, multiple so-called point products (specialist solutions capable of doing one thing only, yet doing it well) work in tandem with others, instead of one solution being imposed centrally.

We wondered: how are academic institutions managing this complexity and improving efficiency? And what are the implications on HE staff (academic, administrative, auxiliary) and third parties? When complexity is not fully realised and captured, are clear insights possible?

Centralised processes enable technology like machine learning to interpret POs, invoices, remittances, etc., at scale, without individual departments having to fund this capability. But without appropriate support, institutions who deploy software can still flounder. Using specialist providers who can operate independently whilst still being able to connect data in meaningful ways is essential.

For example, one of Basware’s customers, a Tertiary Education Institution in Australia, says that using a specialist provider for their e-invoicing has allowed them to synchronise activities, while feeling like they are supported every step of the way.

The Basware implementation team has been the most engaged, knowledgeable, and reliable project team of any technology vendor we’ve dealt with. While we’re using a large education-specific ERP vendor, we’re just another number to them. Basware has been with us every step of the way – and continues to add value to us. They’re more than just a software solution.

Customers using software technology to automate previously disparate and disconnected processes are also realising the comfort of improved governance and compliance, especially when the auditors investigate accounts. For example, recent research revealed that only 6% strongly agree that they have deployed automation to monitor and check compliance data across all critical areas of the business. We think this is significantly risky. But what do you think?

Actionable insights begin with accessible data

Businesses making decisions based on outdated information are taking significant risks. Real-time data [1] is a prerequisite for accuracy. In many higher education institutions, like any large business, data flows at necessary speeds. Unfortunately, interpretations of ‘necessary’ vary significantly between departments and functions.

While data collation comprises 12.5 per cent of a person’s average working week or 11 days over the period of one year, [2] information can often reach central finance in a manner timely enough to comply with policies or governance (with a significant amount of manual re-work involved), but no quicker. Operating in discrete business units, academic and administrative departments work to different cadences, determined according to business unit type and internal processes.

We wondered: are universities helping their employees do bigger, higher things than simply moving numbers around? Data siloes may be preventing finance departments from seeing the bigger picture – not to mention delaying decision-making and increasing admin busy-work. The fact is good data provides a foundation for informed decision-making. But it can’t be used if it can’t be obtained. Disconnected systems and processes are a roadmap to stagnation.

Finance is the central hub of a university. In technology terms, data silos are not necessarily problematic, but those silos do need to be filled. Relying on manual processes to achieve this is not ideal.

It’s clear that automation helps central finance get access to (near) real-time data proactively, rather than waiting for the manual receipt of needed information. However, methods of data collation may vary hugely across campus/es. This may include everything from Excel to Google Sheets, .csv, open-source and proprietary software, to isolated and networked applications in local data centres or in cloud repositories.

Leading institutions deploy technology platforms that allow different business units to gain access to financial software that is easy to use. But does it all need to be in one platform? Not necessarily.

It’s worth noting that centralised financial technologies no longer need to rely on a single entity from a single supplier: for instance, spend and cash flow capabilities might be handled by dedicated software but be fully integrated with existing enterprise resource planning (ERP) systems. Similarly, central finance might operate using an e-invoicing platform, a procurement management solution, and a governance and data security management element. These can form part of the institution’s ERP or integrate with them using APIs. But to end-users the interface with which they interact need not be apparent, with seamless data flows from platform to platform the only visual clue.

Does this make finance and procurement teams’ lives easier? Yes. In an ideal world, finance teams should deploy a solution once and let it do its thing, so they can focus on adding more value back to their institutions. For example, another APAC-based Tertiary Education Provider says, of using Basware:

We’re very happy with our e-invoicing software choice. It’s good. It does its thing. It ticks over. We don’t have to look at it. We’re happy.

Those using automated tools to manage financial processes such as e-invoicing – and even procurement – are reaping the rewards: including improved visibility, time-savings, and cost-reductions. This adds up to improving the lives and reducing workloads on finance teams. It seems like a logical choice to many. But what do you think?

Making the case for financial leadership

It’s well-established that non-financial professionals will interpret and engage with financial information quite differently from their finance-trained colleagues. The de facto tools deployed by many finance departments are not optimised for general use, and therefore any content will have less impact than desired. For example, common tools like PowerPoint and Excel are used in most finance presentations, despite these often not presenting information in ways assimilable by non-finance personnel. These tools are also non-interactive and not collaborative.

As a result, a significant percentage of non-financial personnel feel that the ways they are shown relevant information is not appropriate, with academic studies suggesting that best engagement methods may be found outside the institution altogether, such as freely available “Web 2.0” channels. [3]

As in the case with cross-departmental finances being managed by a central location, the same logic applies to being able to present key findings from connected information in a way that genuinely adds value to institutions and academics. This requires standardisation and clear outputs, based on best-practice processes, so that finance teams and leaders can win hearts and minds.

We wondered: is it clear to those financial professionals who are keen to put forward agendas for the greater good, that activities like ring-fencing and defensive attitudes are natural reactions to difficult circumstances? With this realisation comes the knowledge that, in order to change attitudes to financial matters in areas where such concerns are not of primary concern (in academic or research-led areas of the organisation, for example), care needs to be given to how messages are shared, how the mandate for digitisation can be ‘sold in’ and how an attitudinal shift to the necessity of automation is put across.

The answer may lie in a combination of factors such as improved efficiency, visibility, faster payment times and improved supplier relationships. With the right systems in place, it’s possible to get 100% of visibility of supplier data, a deeper sense of cashflow, and knowledge of committed spend 3-6 months further than is currently possible. The right systems also enable institutions to tick the compliance box, reduce auditing pain, and eliminate fraud. Risk reduction is also possible through multi-level approval layers that are quick and easy to approve and audit trails come as standard.

For example, recent research revealed that one of the top three compliance and supplier risk drivers for better data visibility is increased reporting requirements to governments / regulators. In Australia, universities are increasingly concerned about reporting requirements to address regulations such as the Modern Slavery Act and the ABS Survey on Foreign Entities.

One way in which finance can ensure these benefits – including compliance – are realized is by making it easy to implement a solution, as this quote from another Australian-based Basware customer in this sector illustrates:

We love your standardised project delivery and approach. All your systems and processes are standardised, clear, and well documented. It has made it easy to implement your solution and makes us confident that our users will engage with it more easily, so we can get better, more consistent results.

In short, by better synchronising the financial functions in the different parts of the institution – an activity that should be led by central finance – the finance department can show other business units where “quick-win” savings can be made, financial problems alleviated, and difficult decisions made. The decentralised approach to higher education funding is now largely accepted as a cornerstone of financial strategy in the sector. [4] But what do you think?

Polling the professionals

While the questions raised in this article and the solutions suggested (and often observed) to resolve these issues go some way towards addressing the pressures faced by CFOs and senior finance leaders of higher education institutions, we know that because of the rapid changes in financial environments in the last two years, a great deal of information about these issues is now outdated.

That’s why Basware is commissioning independent research in partnership with Tech Wire Asia to ask finance leaders at higher education institutions how they are choosing, using and re-imagining technology tools to achieve their goals: to improve services, streamline processes at data and operational levels, re-position central finance, and change approaches and attitudes to financial matters across the campus.

Participants in the survey from Tech Wire Asia will receive an advanced and exclusive copy of the ensuing research in a condensed report that will enable them to benchmark their own department’s performance against those of their peers.

Register to participate in this research by voicing your opinions and telling us about your experiences.

[1] While “real-time” as an adjective might imply nanosecond precision, in finance, it is interpreted more generally. Information that is weeks out of date might be pertinent; data from months or years ago may not be so. For finance professionals, real-time should be interpreted as less than 24 hours old, in ideal circumstances.

[2] https://blog.statwolf.com/9-key-facts-about-machine-learning-in-2017

[3] https://www.mdpi.com/2071-1050/12/1/331 pp.5

[4] https://www.hanoverresearch.com/media/Financial-Reporting-in-Higher-Education.pdf pp.13

The post Lessons in Higher Education Finance: Lead from the Centre appeared first on Tech Wire Asia.

The company’s P2P automation and management platform streamlines procurement and accounts payable processes, leverages machine learning to proactively reduce the number of exceptions to its automated processes and provides granular data that transforms finance into a strategic function, across the enterprise.

But what does it look like on the inside, and what role do AI and innovation play in changing the nature of finance operations? We asked Michael and Sush, and this was their expert, detailed response.

What does a finance team look like, with, and without Basware’s help?

As technologists, when we thought about modern-day finance operations, we were inclined to ask Michael what a Basware-enabled finance department might look like: what could be happening on the shop floor?

“In a high-performing company, the first thing that you’re going to be able to see is that there’s a degree of processing taking place, by exception, rather than manually. [This is underpinned by] things like AI, machine learning and business rules that conduct all the heavy lifting you will typically see being done in a back-office finance function,” he said.

In other words, when companies are using automation, the real difference lies in what you don’t see, rather than what you do see.

In companies without Basware, the scenario is somewhat different.

“The thing you’ll notice is that most large companies without an advanced, connected software solution have a lot of paper, PDFs and a lot of people handling most of these tasks manually. Most of these teams are typically used to heavy transaction processing.”

Basware’s software transforms typical, manual, and transaction-heavy environments into ones that are more automated. And the solutions seamlessly enable reporting and compliance using analytics tools that let users see where the problems are, so they can further automate around the blockages. As Michael says, this “fosters an environment of continuous improvement.”

Fostering an environment of continuous improvement with people at the heart

The idea of continuous improvement obviously applies to the processing systems that are the lifeblood of the P2P cycle. But does it also apply to the people? Absolutely. Rather than threatening to replace the jobs that skilled professionals do well, Basware’s technology allows them to put their training and experience to more positive use than mundane admin work.

We asked Sush what a successful finance division – including all staff, managers, and the CFO, looks like once they’re using Basware.

“We do hear a lot from our clients about how user satisfaction has improved, once they put [Basware] in place. So yes, technology can do things a lot better. I see technology as an enabler. There are things that humans do a lot better; that technology can never replace.

But it’s important to note that technology, whether we talk about artificial intelligence, or machine learning, or RPA, does really well within a particular box. If we give any of those technologies a lot of repetitive data, [they] can see the patterns and trends and can process that a lot faster.

At Basware, what we bring to the table is we let the machine learning and the AI and all of the technology handle the rapid amount of stuff that’s a little bit monotonous. [As a result,] instead of spending hours on the phone with a supplier trying to explain why an invoice is lost or missing or why a payment is delayed, they can spend that time looking at where they are spending the money, and with what suppliers.”

The true difference comes with scale

The savings and the possibilities multiply when used on a larger scale, of course. “When you multiply that scenario across 40 people in Europe, maybe for 40 or 50 in the US, maybe another 20 or so in Asia. You can see the impact. This is why I call Basware a platform of continuous improvement,” Michael said.

Does continuous improvement happen overnight or over time?

To us, continuous improvement sounds like it implies a series of long-term gains that might not necessarily be seismic shifts right from day one. We asked Sush if that was the case.

In fact, Sush disagreed. She says that implementing a well-thought-out P2P solution allows organisations to see noticeable differences quite quickly: “Organisations are going to see significant benefits almost immediately, upon implementation. You could call it the Big Bang, if you want. I think that’s going to be true, when switching from a completely manual process to automation, whether they use Basware or a different solution.” But [with Basware, specifically] there will also be smaller, more consistent changes that further amplify a P2P’s usefulness over time.

How do these changes happen? Obviously as users learn, their skills improve. But Sush pointed out that this is not the only source of incremental improvement. “One source of change is the Basware system,” she explains. “The system itself learns and starts giving more recommendations to users – for example, as the AP department uses the system more they can identify areas where they can do more. Basware can look at your historical transactions and identify anything that looks like a recurring payment – this could be a lease or cell phone payment or property maintenance – and then it makes recommendations to the user that you can reduce the amount of processing you’re doing on the back end by moving this to something that we call a spend plan – which is a proactive tool that organisations can use to bring more spend under control.”

As users become more familiar with the Basware platform’s power, their ability to further improve the system is also enhanced.

Since the Basware platform is a cloud service, users get updates and new functional enhancements as the platform evolves. “We’re constantly adding new functionality,” said Michael. “And being a cloud-based service, any new functionality is immediately available for everyone.” Michael explained.

Interoperability with other systems

At an enterprise level, life can be complicated by the need to use, and share data, between existing technology stacks both in the organisation as a whole and in the finance function.

We asked Sush, “Is interoperability with other systems an answer to the data puzzle?”

Her response was, “Yes, interoperability within a client’s existing technology ecosystem is absolutely essential. There is no situation where we would go in and say, ‘Hey, you need to rip out what you already have, and then put Basware in instead.’ We work with clients to understand their existing technology landscape and provide a solution that not only fits within that environment but also adds additional value.

One of the ways we differ from our competition is a lot of our competitors push this idea of, ‘You need to automate the entire source to pay process with one vendor, and we are that vendor that is going to do it.’ We usually go in and say, ‘Hey, whatever is your most urgent need, let’s start with that and then you can build on it either with Basware or with another best-of-breed solution that addresses your needs better.’ The number of permutations and combinations can really be interesting. And for that kind of scenario to be really successful, integration is very, very important.”

Interoperability opens up the possibility of true data visibility

In a world where most organisations create a plethora of data, the art and science of decision-making can often rely on having access to the right data. That’s when the magic happens.

Once Basware is in place and connecting with all relevant systems, Michael explains that, “Instead of tracking transactions being done in different offices around the globe], now it’s being centralised, and we’re consolidating all of that complexity. We’re allowing the machine learning and the business rules to do all the heavy lifting. And then we’re dealing with the exceptions. The reliance on manual effort is diminishing over time. And as the continuous improvement platform continues on its journey of improving things, reliance on human intervention becomes less.”

As users become more interested in seeing a new dimension in procure-to-pay data visibility, they become more curious about the intelligence that their connected businesses operations can show. “Using our Analytics tool, our most successful clients are constantly asking for new dimensions and custom reports to then really fine-tune where those opportunities are to improve the process as they go on,” explains Michael.

Transformation isn’t always easy, but using a best-practice approach pays dividends

Historically, many organisations have shied away from making transformation happen. The Pandemic forced us to re-evaluate remote-working and, as a result, it has also accelerated the pace of business transformation, particularly to the cloud. However, there is little point in bringing in a solution that merely mimics existing and less than ideal processes. True evolution happens when companies re-think the way they undertake every action within the procure-to-pay journey: from sourcing and procuring goods, to reconciling purchase orders with invoices, ensuring three-way matches (automatically, where possible) and reconciling information to see future room for improvement.

Michael summed it up for us like this: “The point is that, if you simply use a system to do the same stuff that you’ve always done, you actually aren’t using best practice. And that is where the real difference comes in. When you can get finance and procurement talking to each other, because they’re using the same language and data, they are able break down traditional the silo walls. And they can actually start to pool their resources by using a unified set of metrics across the entire procure-to-pay process. But more importantly, they’re actually gaining visibility of the quick wins and continuously improving the process with every action they undertake. That becomes part of a mindset of doing what’s right for the business, rather than just accepting the way it’s always been done.”

A clearer picture emerges from the combination of granular detail and high-level dashboards

Even the most highly paid finance professionals in an organisation may well be sidetracked by edge-cases. In part, that’s why humans will always have a role to play in supporting the full P2P process. But, over time, automation software will find more ways of accommodating edge cases. A machine learning-powered P2P engine can learn to deal with more exceptions as time goes by. And that, for many Finance Divisions, is just the beginning. The granular nature of the data ingested by the Basware software ironically creates the clearest birds-eye view of the overall process.

It’s not only a matter of perspective, but it’s the fine detail that gives the clearest picture.

If what you’ve read here is ringing any bells of recognition, now might be the time to talk to Basware. Pick up the phone to a representative local to your centre of operations or request a demonstration of the platform’s full capabilities.

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