Key Points
Ease of Doing Business for MSMEs:Digitisation and automation of business processes is no longer a good to have.It is a must have from the standpoint of ensuring transparency, scalability, predictability and controls over business operations.The best news to emerge on the technology side for SMEs is that these tools are very affordable, offer pay as you go terms and most importantly, deliver excellent Return on Investment (RoI)..
For instance, working capital reduction in the form of lower Days Sales Outstanding (DSO) from automating Order to Cash (O2C) processes in a services company is a good example of cashflow savings...
Apart from ROI, the other ways in which returns can be measured on technology implementations are:. 1.Savings in time effort (For instance,12 months rolling forecast achieved with say 15 man-days of effort each month post-automation, as opposed to say 40 man-days earlier)..
The SME was struggling with the timely and complete entry of vendor invoices for month close, resulting in delays in publishing accurate monthly profitability statements.Around ten per cent of invoices were routinely entered late or inaccurately, resulting in significant time delays in vendor reconciliations and payments...
Post implementation of a vendor management tool, vendors are now able to upload the invoices themselves and have full visibility into the status of approval and payments of their respective invoices.Finance has visibility into the accurate cash flow requirements for vendor payments...
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Measuring ROI from technology implementations, by S Venkat
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