How Finance Will Benefit from the Third Wave of Expense Management Innovation Open Configuration Options
In my previous post, I outlined how we are entering the third wave of innovation in travel expense management solutions. Whereas the first two waves of innovation in expense management were mainly about shifting work from one type of tool or one device to another, the third wave is about getting rid of work that requires human effort altogether.
As this wave happens, the expense reporting process will be completely automated for travelers. It will be transformed from a process in which humans do the heavy lifting with a boost from technology to one where just the opposite occurs: Humans are exception handlers, stepping in only when automation hasn’t gotten it quite right.
But what does that look like on the other side of the equation, in Accounts Payable? This is where the next wave of innovation will help people move ahead by leaps and bounds.
If we look at where AP is now, despite all the brouhaha around automation, reconciling expense reports and deriving insights from expense data is still incredibly manual. The first two waves did a lot to help with processing expense reports, but what we haven't done is cross that final frontier of analysis and prescription – telling people what they need to know before they even know to ask for it.
That is what the third wave is about on the AP side – pushing relevant data insights to the user at the right time. The expense management system of the future will share information with you such as, "Hey, based on the expense reports that have come in over the last few weeks, the number of expense reports that contain Hotel ABC has risen by 750%. Here's the median dollar value amount of these expense lines. Perhaps this is something that shouldn't be expensed and should have a negotiated contract. You may want to consider a sourcing event so that you can get your rates down. The previous time you put in place such an initiative, you created $750,000 of value for your company."
You can have a high degree of confidence in these insights, because the front-end data collection and organization is automated, virtually eliminating data entry mistakes and policy violations.
A Digital Assistant for Expenses
People in AP will also be able to submit voice queries via their phone ask things like, "How many expense reports have I approved in the last seven days?" or, "Can you get me all the expense reports that I've approved for Joe Employee?" or, "How many out of policy expense reports have I seen from my department over the last year?"
The success of voice assistants like Amazon’s Alexa, Apple’s Siri, or Google’s Home Assistant, especially the ease with which teenagers and even younger children use these tools, makes clear that the future is already here, and it’s voice-enabled.
Imagine a digital voice-enabled assistant by your side, telling you exactly what's going on with your company’s spending. That's the true promise of the third wave of expense management software: with all this data and insights at our fingertips, we can be thinkers, rather than doers of repetitive menial tasks.
AP professionals are no longer the people in green eyeshades poring over spreadsheets. They’re proactively bringing ideas for saving money and improving efficiency to their leaders in finance, and ultimately, to the CEO. They finally have a chance to be heroes, not just once a year, but every day.
All About the Data
What’s driving this third wave of innovation? Commercial applications of artificial intelligence have made great strides in the past two or three years as the amount of data has exploded and the computing power needed to analyze it has gotten cheaper. Entrepreneurs and technology leaders finally have the data and the tools to make this happen.
The traditional expense report isn’t going to go away just yet. As we have seen with the first two waves of expense management innovation, technology waves tend to happen in periods of roughly eight to ten years. That's approximately the lifecycle for a particular generation of solutions. There are early adopters and laggards for each new wave.
We are just at the beginning of the third wave, but within a few years, leading companies will realize fully the vision of an expense process where nobody touches anything – employees don't spend any time doing their expenses and AP automatically gets all the insights they need to be heroes in the eyes of the CFO.
The time to start considering investing in this new generation of technology is now. As companies strive to optimize every one of their human resources, the hours saved by their employees who are business travelers, as well as by accounts payable adds up very quickly. Companies would be well-advised to take advantage of these new opportunities now – before their competitors do.