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Workflow is key to Process Automation

Process automation is an ongoing part of the business landscape in most organizations. Companies are continuously looking for ways to improve internal and external processes to accomplish a number of goals:

  • Increased customer service
  • Smooth out supply chains
  • Reduced internal costs
  • Improved vendor communications/relations
  • Manage cash flow more efficiently
  • Eliminate non-value add tasks

Process automation has been enabled in large part by technology that is able to perform tasks that were previously performed by human resources at a much higher cost and with less accuracy. Whether it is newer technology such as robotics and artificial intelligence (AI), or other more mature technologies like OCR/ICR, EDI, or the functionality available through most ERP packages, technology has allowed companies to convert largely manual, resource intense processes into automated tasks. Taking laborious human activities out of processes and replacing those manual activities with technology based automation provides substantial benefit. But to take process automation to the next level, getting actionable information into the right hands at the right time is critical!

Workflow management, or business process management (BPM) as it is also called, is a key component to getting information to right people at the right time that will allow them to make timely decisions based on that information received. The first step as we have discussed is to automate and streamline business processes. Once that has been done workflow management can be leveraged to take that a huge step further. While process automation will make the information available to decision makers faster, it is the workflow component that will insure all the stakeholders will get the information, or piece of the information, that they need to make decisions.

Let’s look at an example of this by taking taking a deeper dive to into an accounts payable (AP) process. Applying process automation to AP functions like document and data capture, vendor inquires, disputes, web based invoice submission, vendor onboarding, or a number of other sub-processes can deliver significant savings. Utilizing tools such as vendor portals, dynamic discounting, PO flip and OCR can offer up even greater efficiencies and savings. But the real win is when workflow management is applied utilizing a rules based approach.

A rules based approach to workflow, while more complicated to implement, delivers greater benefit over the long run than a manual or email based workflow system. In a rules based workflow configuration, the AP automation system, through communication with the financial system of record and through recognition of header level data, will determine the characteristic of the payment and route that information to one or more of the appropriate parties. For instance, a construction invoice for $2,000,000 would be routed much differently, and likely to more than one person for review and approval, than a services invoice for $500 which may only require one person to review and approve. Routing rules may be established based a “delegation of authority” which outlines approval authority based a number of criteria, most importantly invoice total. In the example above the $2,000,000 construction invoice, the delegation of authority may require the approval of a Senior VP level executive as well as a line of business executive and a financial executive before it can by sent to the ERP for payment. Other criteria that may be evaluated to determine workflow routes can include things like commodity or service, location, general ledger (GL) charging department, etc.

In the case of a PO based invoice, the workflow system will gather data from the financial system, AP application and any other relevant systems, such as inventory or materials management, and attempt to do do a 2, 3 or 4 way match. In the case of a three way match the workflow system may look for a match from invoice>receiver>purchase order. If the a match is made the workflow system will feed the results to the ERP and/or other systems so a payment can be initiated without any human intervention, the receiver will be closed out, inventory levels adjusted, and a deduction made to the purchase order to reflect the goods received. In the event a three way match is not successful, the workflow system will query the rules and route the information to a knowledge worker to determine the nature of the mismatch and corrective action. Again, the rules governing the nature of the product/service and the area of mismatch will determine the workflow route. For example, if the mismatch is based on an out of tolerance pricing discrepancy the work item may be routed to a buyer in the purchasing department to contact the supplier or make a decision to accept or not. In the event the mismatch is due to a unit of measure issue, like a liquid coming in quart containers when the PO specifies gallons, the ordering party may be the route destination so they can decide if the shipment should be accepted as is, or declined.

As you can see there are many different scenarios that will be considered in a workflow management system. If a well thought out design is put in place, information will flow rapidly throughout the enterprise to the proper individuals who can make decisions and keep the processes running smoothly. These workflow management systems can also be configured to account for many different “out-of-the-ordinary” situations. For instance, escalations can be put in place if someone in the flow is not responding in a timely manner or proxies can be setup in the event someone(s) in the workflow is unavailable due to vacation or some other extended absence. Any finally, workflow participants can participate via mobile devices so executives on the go will receive notifications and can view and respond to work items where their decisions or approvals are required.

If you are interested in learning how your company can benefit from process automation and implementing a robust workflow management system contact ICG Consulting and we can show you and your team what is possible. To request a demo of ICG’s process automation and workflow management solutions click on the link provided.

Posted on March 9, 2022