Gordon Irons Managing Director of Australian consulting firm, Leap IT Solutions, is witnessing a boom in technology adoption in shared services across the Asia Pacific region.

Given the increased focus on improving business performance since the global financial crisis became a reality in 2008, many organisations – both public and private – have adopted shared services to improve the efficiency and effectiveness of their back office functions such as procurement, finance, IT and HR.

A key driver of operational excellence in shared services is the process known as Purchase to Pay (P2P) – which can more than double productivity and working capital for organisations.

The Asia Pacific shared services market is growing strongly with demand for shared services automation solutions such as P2P at their highest levels in recent years, and at Leap IT we believe the Asia Pacific shared services market is now in the growth stage.

Demand for P2P and similar automation solutions is strong in all sectors – with retail, manufacturing, property and construction, sport, media and professional services all showing strong interest in improving their business performance by adopting shared services to improve their procurement and finance activities.

For example, in professional services we have seen an increased demand for SaaS based solutions that help to automate both invoice processing and expense management. In addition, given the soft retail environment we have seen a number of organisations in this sector deciding to adopt a SaaS-based approach to shared services improvements.

In making these decisions customers have indicated they need to invest their limited capital in solutions which are “closer to the customer” and enable them to compete with the increasing number of offshore retail providers - who allow customers to do their shopping on the web with goods being delivered in days at significant discounts to what’s being offered in retail stores.

In discussions with existing and prospective customers we are also seeing an increased emphasis and importance being placed on business process improvements within shared services. The CFO is leading this change in thinking as he/she is looking to improve their overall effectiveness and ability to support decision making in their organisations.

For example, organisations in the manufacturing and retail sectors have formed project teams (sponsored by the CFO) where business process owners are appointed to drive improvements – rather than functional leaders for activities such as accounts payable or accounts receivable.

As a result, whilst there is recognition that reliably capturing and managing supplier/invoice data is an important part of the process, these process owners are regarding data capture as the “front end” component of an overall solution approach to automating their Purchase to Pay (P2P) or Order to Cash (O2C) process.

Supplier-based B2B networks

In the retail and manufacturing sector we have witnessed an increasing interest from customers in working with international solution providers who provide B2B-based supplier networks. In part this is driven by their need to reduce the amount of paper-based invoices being received from their key suppliers but we believe this approach to P2P automation will grow quickly in the next 3-5 years.

For example, in the retail sector, following recent merger and acquisition activity and the closure of retail outlets, we are seeing organisations move more of their supplier-based activities onto the web. This includes all purchases, access to catalogues, receiving goods and invoices and other P2P related communication.

As a result B2B solution providers who have developed supplier-based B2B networks to support their European and North American customers are actively working with customers in the Asia Pacific region who are looking to improve their P2P processes and leverage investments they have already made in financial/ERP applications. In our view SAP’s recent acquisition of B2B solution provider – Crossgate – is a salient example of SAP’s increased focus on providing solutions to meet this growing demand.

Web-services integration

Given the increased adoption by senior technology executives of a Services Oriented Architecture (SOA) approach to managing their increasingly complex environment, we have witnessed many organisations in both the private and public sector seeking a web-services integration approach when looking to automate shared services processes such as P2P.

We believe this reflects a maturity and understanding of the issues many organisations have faced when upgrading their core financial/ERP applications where “customisation” was used in automating some of the P2P processes.

For example, when we were advised by clients such as Gunns and Mirvac why they had selected our solution, we were advised that they wanted a “configurable” solution which is loosely integrated – rather than a “customised” solution which is tightly integrated. They indicated to us that they regarded a “customised” solution as much riskier, more expensive to maintain and less scalable as their business grows. In our view this represents a “tipping point” in technology thinking about the best way to automate procurement and finance based processes in shared services.

www.leapit.com.au