Shows Senior Management The Money: Part 2 of 5 – Overcoming Stakeholder’s Objections
In the part 1 of the series, we saw that the first step towards developing a winning business case for deploying an e-invoicing portal is to understand your AP department’s top goals.
Let us now have a look at the second step for developing a business case that will help you gain senior management support and approval for deploying an electronic invoicing portal.
STEP 2: OVERCOMING OBJECTIONS WITH FACTS AND DATA
Stakeholders have fear of potential risks associated with any automation project and hence raise objection to any automation proposal.
Identifying those objections and effectively responding to them will demonstrate credibility of the solution and will reduce the fear of potential risks that stakeholders might have.
Thus, effectively responding to anticipated objections by the stakeholders can raise the odds of an approval for deploying an electronic invoicing portal.
Stated below are some of the common objections by senior stakeholders towards deploying a supplier portal and how to overcome them;
Objection: “We already use scan-and-capture technology.”
- But Consider This: The Hackett Group’s benchmark data finds that businesses that currently scan their invoices save $2.28 per invoice by migrating to electronic invoicing. Businesses that use scan-and-capture technologies (such as optical character recognition) save $1.26 per invoice by migrating to electronic invoicing. Thus, there is significant incremental savings if one switches to e-invoicing from scan-and-capture.
Objection: “Our invoice volume is too low to justify the cost of deploying electronic invoicing.”
- But Consider This: According to the Association for Image and Information Management (AIIM), most businesses that receive at least 30,000 invoices annually, and have a staff of at least 3 FTE’s, achieve payback on their electronic invoicing investments within a one year.
Objection: “Process improvements are nice, but we need hard-dollar savings to justify electronic invoicing.”
- But Consider This: Best-in-class companies capture 85 percent of the available early-payment discounts, representing a 0.11 percent hard-dollar savings as a percentage of total spending, according to The Hackett Group’s 2015 P2P Performance Study.
Objection: “A lack of technical expertise will prevent suppliers from adopting electronic invoicing.”
- But Consider This: According to The Hackett Group’s 2015 E-Invoicing Supplier Onboarding Poll, 65% of businesses identify the fees charged to the suppliers to use the service as the biggest barrier for suppliers to adopt electronic invoicing and not technical expertise. Today there are eInvoicing solutions that do not charge suppliers any fee at all.
Understanding the objections and overcoming them with rational responses helps in bolstering the case for automating your AP.