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EXECUTIVE REPORT By Jeff Pape Banking on financial institutions for business process outsourcing Business process outsourcing rests on the theory that activities not core to an organization’s mission are best left to others, for whom such work is core. Good outsourcing partners help lower operating costs; better outsourcing partners add enhanced visibility and control over back-office activities; the very best outsourcing partners serve as trusted advisers who drive growth for their clients. Trust is not a given; it is earned over time. One of the most trusted relationships an organization has is with its banking partner. Why not, then, consider a bank when looking to outsource back-office functions, such as processing and paying invoices A reliable banking partner can offer access to an ever-expanding array of payment options, as well as expert, customized counsel to ensure an organization gets the right tools, and uses them in the right proportions, for its unique needs. Beyond that, the best banks have established processes for regularly sitting down with clients to assess needs and address whether current services can be improved to better meet those needs. It’s not about showing off the latest technological breakthrough and pushing it on the client. It’s about asking the right questions, eliciting thorough responses, carefully considering those responses, and developing a holistic set of recommendations based upon them. Without such a process, the provider is merely offering products, not solutions. With it, the provider begins to earn the trust required to move beyond service provider toward valued adviser and partner. Jeff Pape is senior vice president and payables strategy manager with U.S. Bank Corporate Payments Systems. Moving funds is what financial institutions do. No other third-party provider can deliver the level of cost-efficient and secure payment reliability that a bank can. Banks are unequalled in their ability to guarantee payment delivery exactly when promised and to whom promised. Their latest solutions — including cardless, “virtual,” and single-use payment accounts — provide exceptional visibility into an organization’s payment history and an unprecedented ability to manage employee spending, account misuse, and overall payment activity. Through automation, these tools minimize human error and maximize efficiency. As important as the latest solutions are, they’re meaningless without the backing of experts who understand them and — more important — understand their client. Technology without customer knowledge is like a Maserati with an empty tank: It looks great, but it won’t take you very far. A deep knowledge of the how and the why of a buyer’s current payment processes makes the banker more likely to generate sensible and attainable recommendations for integrating new solutions into a more comprehensive, more holistic, and customized payment strategy. The groundwork for such understanding is laid every day through focused interactions, attentive conversations, and a general readiness to listen. 2 Executive Report | Second Quarter 2013 | The Institute of Financial Operations
EXECUTIVE REPORT By Frank Tiedt ‘Content-to-process’: The increasing need for outsourcing document management to ensure paperless processes In the competitive environment of a globalized world, companies strive for business process optimization to maintain and expand their market position. For many companies, being competitive requires concentrating on their core business. This means becoming more service-oriented by leaving certain tasks to the experts: business process outsourcers or shared services centers. This article focuses on external business process outsourcers, although internal shared services centers work in a similar way. Gartner’s forecast from Q4 2012 shows that business process outsourcing will grow 6.2 percent in 2013. This means companies are increasingly relying on a service provider’s expertise. When choosing the right service provider, companies particularly value: extensive business know-how, innovative and evolutionary thinking that keeps up with market developments, service orientation, quality, and certainly cost and time efficiency. Companies expect that their needs are identified and fulfilled. Automated information and document management Before documents and information arrive in different departments, they have to be identified and then processed accordingly. Every day, companies receive a range of documents and information, such as invoices and credit notes that need to go into the accounting department. Processing different types of information and distinguishing them from one another is time-consuming and resource-intensive, the major reason companies outsource this task. Many service providers specialize in document management and automatically and digitally process the incoming information for paperless processes in the respective departments. Not only is relevant information available faster, but it arrives efficiently and in a reliable quality. Business process optimization calls for automation. Only then are operating costs decreased and efficiency increased — the two things that have a major impact on a company’s competitive advantage. Flexible and scalable solutions to serve different needs Ideally, solutions for automating business processes should be adaptable to a company’s individual needs. Depending on the size and type of a particular project, companies may require different technologies. Additionally, when choosing to outsource processes, a company often seeks to do so for more than just one department, and the accounting group has different needs than human resources. International companies with different sites in different countries have even more complex requirements. A service provider often has to serve many customers at the same time, each of them demanding considerably different solutions. Implementing technologies that can handle these variations allows an organization to offer tailored configurations for all clients while at the same time increasing its own efficiency. Innovation and evolution is the key to success Complex document management solutions that are flexible and scalable are likely to cover all the needs a company might have. With such technology, a service provider can, in addition, guarantee optimized setup times, efficient implementation, and reliable calculation of project costs to ensure a faster return on investment for the customer. To keep up with the pace of today’s changing economy, companies constantly need to develop their business model further as well as increase their efficiency. The same applies to a service provider: Depending on the changes the company’s customers go through, the solutions offered must also be adapted. Only state-of-the-art technology allows companies to maintain or even increase their competitive advantage. The right partner I.R.I.S. has identified both the demands of companies that outsource processes as well as which technology service providers need to fulfill them. With IRISXtract for Documents, business process outsourcers and shared services centers have access to a “content-to-process” solution platform for invoice and order processing, HR and supplier recordkeeping, and case management in the legal, healthcare, and finance fields. Frank Tiedt is the chief sales officer for I.R.I.S., a computer software company based in Belgium. Executive Report | Second Quarter 2013 | The Institute of Financial Operations 3
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