To Trust or Not to Trust? That’s the Compliance Question
A new report from Basware reveals some fascinating drivers for visibility in the supply chain. Read on to learn more.
After interviewing 400 finance and procurement professionals, Basware stumbled upon some rather interesting findings which are presented in this new report, Visible Commerce: Overcoming Operational Blind Spots.
As we are all well aware, the amount of data businesses are producing has increased tenfold and the way things are looking, it’s only going to grow more. With automation driving many business operations and digitisation projects on the rise, how much are companies still relying on trust over data insight nowadays? In the research, Basware examined how enterprises keep up with internal and external compliance requirements when it comes to worldwide electronic invoicing mandates, global regulatory compliance, and supplier information management.
But how confident are finance and procurement leaders in their approach?
Don’t leave compliance to ‘trust’
Turns out, not very. And what was discovered is pretty alarming given the growth of digitisation. For instance, you would think that data would give you more visibility, but it turns out that with the sheer amount of data businesses are bringing in, they don’t have a great way to actually make sense of the data to use it for compliance checks.
A staggering 48% of firms said that when it comes to compliance, they rely more on trust than data insight. 35% agreed they lack the data capabilities needed to expand their supplier ecosystem and another 34% can’t ensure global regulatory compliance with invoicing mandates. This puts businesses at tremendous risk both for financial repercussions and poor performance. And though 57% believe that increased governmental reporting requirements will greatly impact them, it’s likely that the other 43% just simply aren’t aware of the effects and repercussions of noncompliance. Because of this, they rely on ‘trust’ and therefore put themselves at greater risk by merely hoping they’re compliant.
Data insights to bolster supply chains
It’s also becoming more vital now than ever to check (then double-check) that suppliers are operating ethically, sustainably, and in a manner that aligns with how you want your brand to be perceived. Without data insights driving that goal of full supply chain transparency, the more likely these risks become.
Along these lines, the interviews revealed that 51% say they struggle to prove that their financial supply chain meets the full range of standards for compliance and 45% admitted that their compliance procedures focus only on the top tier of suppliers, not the entire ecosystem of suppliers into the longtail. The numbers are clear indicators that organisations need to change the way they manage risk through better supplier information management using automation and insights into their suppliers.
100% Visibility – Your Secret Weapon
What all this comes down to is visibility. It seems simple, and honestly, it is. And many organisations have already taken the first step towards capturing that total visibility. They’ve automated parts of their processes and jump-started their digital transformation projects. And just as these report findings show, they’re motivated to increase visibility and are honest about their shortcomings. Companies are taking action to improve visibility and management of their data. The research shows automation is seen as the answer to improving data visibility, and companies are investing heavily. But still, a whopping 51% see lack of visibility as an issue.
As it currently stands, only 6% of companies have deployed automation that helps with compliance. And when we speak about financial supply chain compliance, we mean ensuring 100% supplier visibility and e-invoicing compliance. Nearly six in ten companies (58%) believe that without better automation, their firms will be at risk of suffering significant reputational damage.
It is reassuring, then, that 54% intend to significantly increase their investments in data automation over the next twelve to eighteen months. Furthermore, 61% expect to increase their investment in automating and digitising data collection, and 57% plan to spend more on continuous automation for touchless data processing. Acquiring the tools to understand the data is also critical, and 54% want to invest money into AI/machine learning to support data-based decision-making.
The end-goal (and likely the utopian state of your business) is total transparency. As businesses start to get a better handle on their data and increase their digital investments, automation can not only help with both internal and external compliance but give valuable insights across the full value chain.
If you found these findings interesting, check out the whole report, Visible Commerce: Overcoming Operational Blind Spots for more. And be sure to check out the all-star panel discussion in the recent Procurious webcast, produced with Basware – Let’s Get Visible: Diverse, Local, Sustainable Procurement – now available on demand.
