Editor's Note: Interested in business process management for financial operations, then make sure you attend this Webinar coming up February 19th, BPM for Financial Operations: Reduce Your Risk and Increase Control. Sign up right here!
What follows is my podcast with Malcolm Ross, Director of Product Management at Appian. Malcolm Ross has been working with clients to implement business process management software for over eight years, and in this podcast we drill down on improving financial operations with BPM.
Listen to or download the 6:26 minute podcast below:
Due to current economic conditions, means financial companies need to focus on improving their business processes?
Absolutely. I think we found more than ever that the CFO is going to be king 2009. More and more organizations are really turning back to their finance groups to see how they can figure up faster efficiencies and great process improvements across organizations as well as in financial operations. To quote on a recent study, there's (Indiscernible) finance masters came out with an article in 2008 which really quoted that when a top three items that was impairing companies for improving process performance was really a lack of consistent processes and consistent data inside their financial organizations.
So now CFOs are king, why should CFOs then look to BPM to improve their financials?
Great question. Well, the promise of BPM is a number of things. The first is really to integrate the processes across enterprise in one holistic view. So essential that they cannot only integrate from a system to people perspective but also being able to see processes in their entirety. If we think of like an order to cash process, well, what are all the steps? Often we have disparate groups receiving and billing and invoicing of all the different department that touch that overall process and you really need to be integrated so you can identify the efficiencies.
The next promise of BPM is what I like to call empowerment. Empowerment of business and financial analyst, which really document their processes and turn that documentation directly into functional IT applications. So we're going to also empower the IT group to build process-based applications very quickly and at a very low cost. And finally, we're going to enforce those processes once they're actually automated. All the rules and measures and controls that have been programmed in by the finance group through that documentation effort are now actually going to be enforced.
So we're going to have fraud prevention, we're going make sure that every single process that we've documented is going to be enforced exactly how we spelled it out. And lastly, we're going to capture the information that actually transpired through those processes. So we're going to decrease the cost of internal and financial audits by having a detailed audit history of every single financial transaction as well as we're going to like to do high level aggregate views and see efficiencies or processes and process bottlenecks in all the different aspects of finance.
Well, that sounds really relevant to companies. Now, I know a lot of companies also have very significant automation already set up with accounts payable and accounts receivable. Where would a BPM system fit for a company like this that already has some significant ERP investments?
Yeah, it's extremely common that most companies already have investments and financial ERP systems. So often the first question I get is well, why would I need something more? And then you start to sort of explore the (Indiscernible). Say, well, how do you do your current internal audits? How do you do your (Indiscernible) exception handling? And often the response back is well, Microsoft Excel and e-mails, completely inaudible and unenforceable processes.
Really need to think outside of these stagnate unflexible ERP environments. So think of, well, how do we do invoice exception handling? Things like dispute management and financial close, and collections, and sells quotings are often highly collaborative and also require controls and financial controls to enforce regulations of financial policy. So we need to think beyond ERP system and thing about all this other processes that lack efficiency and lack the capabilities be basically audited and have the process control that we need in place to make sure we have a efficient and well round financial organization.
So essentially then what is the core value proposition of a BPM software system like Appian's?
Well, for Appian, our core value proposition is that we're one of the easiest to deploy, easiest to get started BPM systems out there in the market. We have a wide variety of skilled resources available to us. So basically, know financial processes extremely well and can implement it very quickly sample or BPM environments for financial operations.
Appian's also one of the most comprehensive BPM suites out there in the market including all the necessary components to integrate the backend systems, to rapidly empower business (Indiscernible) and document those processes, and capture all the (Indiscernible) that's going to be transferred through those processes so it's instantly searchable and people can collaborate on that content.
Can you give me an actual real world example of a BPM system actually improving the processes of a company?
Sure. A great example of deployment that we've done for Enterprise Rent-A-Car. Enterprise Rent-A-Car as you know is one of the largest rental car companies out there in the United States with a fleet of almost 900,000 cars and over $9 billion in revenue. And we targeted a specific group of Enterprise Rent-A-Car that had over 18,000 invoices a month with a high amount of exceptions resulting in highly manual paper intensive processes. This is for a vehicle maintenance repair group, obviously, core to Enterprises' business.
Now, the manual effort in keeping up with all these invoices and Excel spreadsheets prevent Enterprise really from supporting a strategic (Indiscernible) to account payable initiative. So it's holding them back in their strategic goals in improving their overall AP processes.
The great aspects of our Appian implementation at Enterprise was that the entire implementation was done in just eight weeks and that was just for the first division. After just 12 additional weeks, we were able to roll out 12 more divisions. So the entire deployment took across just almost 20 divisions only 20 weeks.
Now the invoice to processing time, which reduced from 9 to 19 days all the way to 1 to 6 days. And 40% of all invoices now are auto approved with automate business rules. They're all enforced inside the business processes. So we were able to achieve great efficiency and basically improving their AP invoicing process and reducing the overhead it takes to really maintain them. From that benefit, (Indiscernible) focus on a strategic (Inaudible) AP initiative across all Enterprise Rent-A-Car.
That sounds great, Malcolm. I think everyone listening to this should definitely sign-up for Appian's upcoming Webinar, BPM for Financial Operations: Reduce Your Risk and Increase Control. It's coming this Thursday, February 19th. Thank you so much for joining me today, Malcolm.