Long-standing enterprises have been deploying automation solutions to manage spend in fits and starts over the last few years. As a B2B fintech transforming spend, a question that Zaggle often gets asked from large enterprises is; ‘if it isn’t broken, why fix it?’
We decided to answer this by delving into Zaggle’s recent experience of working with established large enterprises. Recently, we deployed our SaaS-based Expense Management Platform for a century-old enterprise with 5,000 plus employees. We partnered with the organization to replace its legacy expense management solution (EMS) solution. As part of the implementation, Zaggle built interfaces with partner travel systems, payroll systems, forex feed systems, ERP, Payroll and HRMS systems to bring employee-related expense policies and data onto a single platform.
Multiple systems to manage a range of employee expense types are normative for incumbent enterprises that are operational for decades. Add procurement systems, payables, receivables, supplier management, accounting, reconciliation, and channel partner management and incentive systems to the mix and enterprises have a complex, spaghetti set-up comprising homegrown systems, third-party systems, and legacy ERP systems to manage spend. Further, many point solutions are built on proprietary, non-standardized interfaces, which operate discreetly. While these systems may speed specific functions, they do not scale and adversely impact operational agility. Over time, processes evolve and splinter resulting in an operational drag, as workflows operate differently from the initial intent.
The Status Quoist Mindset
Many enterprises are lulled into maintaining the status quo as they see this as a massive three- to five-year transformation effort—and are unclear about the risk-reward ratio. Often the systems are deeply integrated into an enterprise’s operations and replacing them completely can be a complex and expensive process. Not to mention the disruptions it may cause to the day-to-day business operations during the transition.
From our experience of leading spend automation projects for large enterprises, an interplay of factors – technical, cultural, and financial – are responsible for preserving the status quo.
Why Challenge the Status Quo?
Organizations, apprehensive about replacing legacy spend management systems, need to take the following factors into consideration:
Costs of servicing technical debt
Enterprises have deployed point solutions over time, resulting in fragmentation and functional duplication. Over the long run siloed applications escalate operating costs and businesses miss opportunities to embrace more efficient and innovative ways of working.
The costs of running and maintaining ageing multiple-point systems remain hidden. Many enterprises, saddled with legacy systems, spend upward of USD 40 to process expenses and invoice receipts due to the number of system hops needed. The opportunity costs in terms of lost productivity, employee and supplier dissatisfaction, and inability to secure higher discounts due to delayed payments remain underwater, as these are not accounted for in the books.
Dearth of talent
The operations and maintenance of legacy systems are expensive due to a dwindling pool of experts with the technical and institutional knowledge to support systems developed for a different era. Organizations are also challenged as today’s top technical talent has little desire to work with antiquated systems and platforms.
Rising stakeholder expectations
Employee and supplier expectations for a better user experience are on the rise. Accustomed to super apps that deliver fluid, digital-first experiences, there are unwilling to put up with clunk, hard-to-use systems and there is a growing demand that B2B spend applications provide similar consumer-grade experiences.
New use cases
Conventional systems are not extensible to offer workflow support for emergent use such as real-time payments or embedded finance. The average time for teams to build and onboard new functionality can take between twelve and eighteen weeks, impeding business agility.
Time to insight
Data fluency is becoming a core organizational skill. Businesses with decisioning agility can drive both top-line growth and bottom-line profitability. A mixture of near-real-time and batch data is spread across myriad applications, and a typical finance department can take days to aggregate data inputs to enable advanced analytics that can reveal ways to increase productivity and uncover new value.
As part of their digital transformation journey, businesses need to assess current spend management practices. Are current systems helping them anticipate and respond with agility to rapidly evolving business needs?
When companies think about bringing legacy systems into the digital era, their initial assumption is they will have to ‘rip and replace’. An incremental approach to modernizing financial applications and introducing automation, AI-infused processes, and the cloud to reduce costs and overheads can address the need for agility while keeping costs low and with zero disruption.
Rather than a rip-and-replace approach Zaggle, a SaaS-based B2B spend automation Fintech, recommends a step approach to modernizing traditional spend workflows and retiring legacy systems.
The process commences with creating a repository of current workflows and identifying critical processes that need to be overhauled. Rather than manage this in-premise, enterprises can collaborate with business spend automation solutions providers to identify and shift critical spend workloads to the cloud.
Zaggle offers enterprises a firm foundation to build sustainable businesses by efficiently managing spend. Zaggle’s Spend Automation platform unites disparate spend solutions, alleviating costs and other challenges related to the maintenance of homegrown and point systems. Businesses can select from a broad suite of capabilities including invoice management, expense management, receipts management, channel and employee incentives and spend analytics. The platform’s unified integration layer for synchronizing data with legacy enterprise systems enables businesses to preserve existing investments and progressively transform with easy componentized upgrades.
Enterprises that opt for modernizing spends will benefit from:
- Improved efficiency: Reduces costs of maintaining ageing systems as well as processing costs from Day One. Zaggle, for instance, has significantly rationalized the cost of processing expense receipts and supplier invoices to less than USD1 for large enterprise customers.
- Business value creation: Streamlined business processes boost operational performance and enable data insights that can create new opportunities to further growth.
- Better use of talent: Reduced reliance on increasingly scarce and expensive legacy specialists
- Reduced risk: Improves regulatory compliance and controls risk— with partners assuming equal responsibility for the same.
- Future preparedness: Cloud-based solutions enable strategic flexibility and will be easier to maintain and modify in line with growing demands.
Take the Leap
According to industry reports, businesses that adopt SaaS-based, cloud-native platforms, as part of their digital transformation journey, and scale them across the enterprise, record five times higher growth than businesses that are slow to adopt. By implementing a SaaS-based spend automation solution, enterprises can achieve operating efficiencies and focus on growing the business instead of being weighed down by systems and processes that are unable to keep pace.
Businesses contending with an unpredictable economic environment and other significant market pressures are turning to Zaggle to retire technical debt and better manage spend. Write to [email protected] to talk to our experts.
Omidia – Modernization without Disruption is Possible