the wrong tool in the right place? when used for business

Transcription

1 the wrong tool in the right place? A guide to the hidden costs of when used for business transaction processing

2 introduction is an amazing tool that has revolutionised business communications and driven the use of the internet by providing almost instantaneous exchange of information between people. Its ease of use, ubiquity, immediacy and low transaction cost has helped it win out against meetings, fax, post and phone. From a business perspective, this tool on everybody s desktop is now carrying megaloads of spam, personal , duplicates, triplicates, updates and of course the key business transaction documents such as orders and invoices. Do the key documents that your business depends on always get the immediate attention they need and deserve? Are they ever mistakenly overlooked or left languishing in the wrong mailbox? Is there a hidden cost to your business that has never been articulated for want of an apparent alternative? This whitepaper highlights a number of attributes that are of critical significance to the timely exchange of supply chain information and explores if is in some cases the weakest link? PAGE 2

3 six key functions There are 6 key functions required for a document transaction system to provide seamless trading between supply chain partners creating efficiencies and cost savings for each member. A solution built on best practice principles for document transactions should meet the following criteria: 1. Be able to share information in a timely reliable manner 2. Ensure information gets into the correct processing pipe consistently 3. Provide shared visibility of processing status 4. Allow for consistent use of agreed mechanisms for resolution of exceptions 5. Create a shared, authenticated audit trail 6. Provide lean operation enhancement capabilities Can meet all of these criteria? PAGE 3

4 1 can share information in a timely and reliable manner? undeniably allows for sharing of information in a timely manner, but the reliability of such communications is not necessarily guaranteed. Ultimately a successful communication relies on the message reaching the correct destination for processing , however, offers no such guarantees. is primarily a personal communication tool, transferring messages between people when in a business processing environment. Ideally, messaging should instead be between job functions to prevent important documents, such as orders, invoices and contracts, falling between the cracks when a named individual is otherwise unavailable. Ultimately a successful communication relies on a message reaching the correct destination, consistently delivery is often hit-and-miss, particularly when carrying attachments. Enhanced IT security means that s are routinely quarantined or deleted by antivirus scanners, content filters and firewalls. When this happens, neither party can confirm message receipt or progress the issue. And so begins the inevitable (costly) process of telephone-tag to trace the cause, resolve the issue and finally get the document processed. There also remains the potential that a client inadvertently forwards a virus-infected attachment which can wreak untold havoc on the recipient s network. Cleaning and repairing a malware infection adds significant cost to the business relationship through system downtime and data restoration. is certainly timely, but the reliability of sending andreceiving documents so that they are in the right place at the right time is not. PAGE 4

5 2 does get information into the correct processing pipe? Assuming that an actually arrives in the correct recipient s inbox and the recipient is in the office, there is always the potential for critical attachments to be lost. is often misplaced through poor management of mail boxes, incorrect filing on shared server storage or even accidental deletion by the recipient. When a business document is ed to a client, there is no guarantee that the information will be handled correctly and passed into the correct processing pipe. Any system which requires manual intervention, such as the filing of attachments, is immediately prone to problems. People naturally make mistakes, and without a suitable level of transparency, such errors are often time consuming and costly, to identify and rectify. There is also the possibility that the recipient has simply done nothing at all with the , thereby bringing the entire process to a standstill. There is no guarantee that ed information will be processed correctly by the recipient in a timely manner The problems are magnified for s sent to multiple recipients or generic mailboxes with multiple users. The potential exists for duplication of processing efforts which creates a new level of confusion that can be just as costly as a lost document. Even if there are processes in place to prevent such duplications, they tend to be unenforceable, relying on recipients to do the right thing as management visibility is practically non-existent. Because attachments require so much manual processing, is a far from ideal platform for business document transaction. To avoid these issues, a transparent overview is required which keeps stakeholders appraised of each document s progress automatically. A system open to both sender and receiver reduces the requirement to supply manual status updates to trading partners, or to spend time following up such queries. PAGE 5

6 3 does provide shared visibility of status? Assuming an has successfully navigated the internet, passed the recipient s security systems and been placed into the correct processing pipeline, how does the sender know that everything is proceeding as it should be? Standard systems do not support pipeline monitoring or a transparent reporting mechanism that can be used by trading partners to assess the status of transactions themselves. Senders must instead rely on recipients to remember to provide updates, or they must themselves chase up documents. Queries from trading partners increase delays in processing as information is gathered to create an accurate response. These partner induced-delays are costly for both parties in terms of time, effort, and ultimately cash. Standard systems do not allow for pipeline monitoring or a transparent reporting mechanism When information is distributed throughout a company, status queries often involve drawing data from multiple departments. Each business unit has its own tools and methodologies, making accurate and timely data aggregation and reporting difficult. Even once an overview of processing status has been ascertained, often the wrong tool is used to communicate this information to the trading partner; phone messages or faxes often end up binned or delivered to the wrong person. If a timely response to a query is not received, the whole process is restarted tying up even more resources in a costly merry-go-round of requests. To avoid these issues, a transparent overview is required which can keep each interested party appraised of their document s progress automatically something does not provide. A system open to both sender and receiver removes the need to supply status updates to trading partners and the time spent following up such queries, thereby shortening processing times, freeing up resources and cutting costs. PAGE 6

7 4 can support agreed mechanisms for resolution of exceptions consistently? In much the same way that a lack of pipeline monitoring system generates manual requests for status updates, is less-than-ideal for resolving exceptions. Whenever a query is raised regarding an ed document, the challenge then becomes the need to track down the correct contact at the sending company. Many times a return will be sent requesting clarification but this then runs the security gauntlet once more, risking that message going missing. Should that get through, it may still be directed to the wrong contact. The same goes for telephone queries, which can result in switchboard hell as the caller is bounced around departments looking for the correct person. And when the right person is found, is he or she ever there with the answer you need. Welcome to the world of telephone tag. is less-than-ideal for bringing visibility of and resolution to exceptions Often an exception query will ensnare several people, all of whom are seeking the same clarification as the issue is escalated or delegated at the sender s company. If the recipient chases an exception more than once, additional resources will be diverted into resolving the query and duplicating effort. Then there is also the danger of multiple documents with minor revisions entering circulation Because is a such a flexible personal communications tool, there is no way to create or enforce a workflow for processing exceptions, let alone support such a concept. Everyone loses when a document s detail requires clarification. PAGE 7

8 5 does provide a shared, authenticated audit trail? When resolving queries or disputes, an accurate audit trail reduces the costs incurred investigating issues. however can only really confirm that a message has been sent from someone within your company - there is no automated way to verify that a document has been received, let alone processed by the appropriate job function owner. On a one-to-one basis, such issues are not insurmountable, but where an has been copied or sent to a group of contacts, the issue becomes much more difficult to control. Instead of one authoritative document in circulation, there are suddenly multiple copies, each of which can be amended and re-sent by each recipient, creating multiple audit trails. does not provide automated auditing to prove that a document has been received or processed The conversation becomes fractured, creating multiple threads, each of which contains different facets of the original message without providing a conclusive overview. When a document is amended and re- ed, there is no guarantee that it will reach the original contact group leading to a situation where some people will be working from out-of-date information. Corrections and modifications applied to copies will undoubtedly raise queries and exceptions which then require additional resources to resolve. The inability to provide a central authoritative copy of a document and accompanying audit trail means that is particularly ill-suited to authenticated audit trail creation. PAGE 8

9 6 is supposed to reduce lead times and workloads thanks to the immediacy of the format. However, as previously demonstrated, documents attached to s have the potential to create extra work whenever there is a need to obtain a status update or query an exception. does provide lean operation enhancement capabilities? A standard attachment such as a PDF or Word document received by still requires manual re-entry by the recipient which is a costly and often error-prone process. Ideally documents should be sent in a format that can be imported automatically once received, but attachments rarely work in this way. Even if a common format can be agreed with supply chain partners, there will on occasion be attachments which do not meet the standard and which still require manual re-keying. Documents attached to s have the potential to create extra work A PDF version of an invoice when sent to a customer may save the supplier s business time and effort initially, but the client must then manually enter the relevant information into their own accounts system. At this point there is the potential for a typographical error which will later result in a payment dispute. However the customer may also send remittance advice by PDF attachment, requiring the supplier to go through the same manual rekeying process. Both supplier and customer lose through time spent re-entering data and following up errors which delays payment. Because has become a dumping ground for corporate communications stored in disparate mailboxes, conducting internal reviews is fraught with challenges. cannot assist in supply chain analysis because much of the insights required are not collected automatically, preventing the identification of potential cost-saving efficiencies. may reduce lead times associated with the postal service, but it provides no other operational improvement capabilities. PAGE 9

10 conclusion clearly fails to meet each of the six practice principles, primarily because it was originally designed as a one-to-one communication method. When the shortfalls of are replicated across a community of trading partners, each of these inefficiencies is magnified. The same problems occur multiple times for each supplier and customer, as do the costs associated with resolving each incident creating a massive, but often over-looked business cost. It is probably fair to conclude that document interchange using is incurring, rather than saving, expenditure Obtaining status updates, chasing exceptions, verifying delivery and de-duplicating attachments are extremely wasteful in terms of human resources across the entire supply chain. Much of the effort expended by staff remains invisible to the management team and is very difficult to hold to account. It is probably fair to conclude that document interchange using is probably incurring, rather than saving, expenditure. allows for instantaneous communication, but it comes at the cost of duplicated effort, resource over-utilisation and untraceable operation. Clearly an alternative method must be found which avoids each of the costly pitfalls identified within and which can meet the best practice guidelines described in the Introduction of this guide. PAGE 10

11 About celtrino Celtrino is a well-established provided of hosted supply chain management and electronic invoicing services to businesses across Europe and the rest of the world from its headquarters in Dublin, Ireland. Building upon more than 200 years experience in supply chain automation, Celtrino staff develop and supply services designed to improve the workflow, efficiency and profitability of their 600+ customers. Celtrino uses industry standard cloud architecture to underpin its hosted e-business solutions, allowing worldwide clients to benefit and perform B2B transactions globally, irrespective of local limitations. Regardless of company size, Celtrino s clients are able to access enterprise-level functionality, providing them with all the tools required to compete actively on the global stage. PAGE 11

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