Insights for Procure-to-Pay and Finance Leaders

Disrupt or Die

Smarter business starts now

Disrupt or die—the dictate is so endemic to business today, it’s gone from meme to near-cliché with alarming speed.

But here’s what drives me crazy about disrupt-or-die: business is changing at the speed of light, yet most business processes are stuck in the past, thwarting companies as they struggle with disruption in the Internet age.

If you want your company to survive, you must disrupt outmoded operations in order to adapt to fast-changing needs and remain competitive—before the competition does it first. Many of the most basic processes for running a business are still acting as they did when they began, decades or even centuries ago. And it’s all because business has been dependent on antiquated business solutions and software. Look at basic invoicing procedures: today, you have to send out an invoice, track transactions, keep a ledger. And god forbid there is an error—then the process starts all over again. This is pretty much the same as what merchants did in ancient Mesopotamia—five thousand years ago.

Businesses no longer have five to 10 years to spend installing an enterprise-wide software system that, like a highway under construction, will be outmoded and in need of a redesign before it even opens. These old-guard, enterprise-wide software systems first began to take hold in the 1960s amid “command and control” management. It was an internal system of record-keeping and control. But today, a system needs flexibility, adaptability and agility so it can act as an accelerator for business growth.

We must fix this flaw, and fix it fast. Our global economic recovery, sputtering as it is, would be better off if we did. Companies have to worry less about the cost of change and focus more on the speed of change and on their ability to adapt faster to a world that is evolving at a rapid pace. But businesses can’t afford to just rip out the existing “highways” and start from scratch, which means the answer lies with the Internet—and in the cloud.

As large companies begin to embrace cloud-based technologies, so do the thousands of businesses they work and partner with. And what is driving this change? It’s not the desire to trim bookkeeping costs. Today, companies are motivated by real data and generating value, both of which are made possible by cloud and platform technology.

As more companies share more information on a common platform, business gets better and smarter. Back-office functionality suddenly moves to the frontlines with valuable data to help make strategic decisions. Accounts Payable becomes a pulse point for how a business is faring. New clues emerge on dashboards for what to order and when. Credit checks get faster, re-orders get quicker, and trust—one of the most important components for good business—can expand with knowing more about your partners than ever before.

In fact, if we do this right, we may one day wipe out one of the most archaic and damaging realities of business: delay-then-pay. The 30-60-90-day billing cycle pits business against business and customer against supplier. Thousands of small businesses go bankrupt every year because they run out of cash while awaiting stretched-out payments. This makes sense for absolutely no one—big business or small business.

In a truly transparent, big data world, this wouldn’t have to happen. Right now, unpaid bills amount to trillions of dollars a year in idle capital. Trillions of dollars, wasted. All because we’ve been taught that business is a zero-sum game; that in order to win, someone else must lose. Well, as hard as it may be for the old-guard of the enterprise world to believe, that’s not true anymore. Let’s talk about that mind-blower next.

Related Reading

Tradeshift Blog: The Future of Business

Harvard Business Review: Strategy is No Longer a Game of Chess