We are a year into this pandemic and in some parts of the world, we see the light at the end of the tunnel: incidence numbers are going down, immunization has broken 20% of population in my home town and vaccine availability is increasing. More and more people around me, among them my 19-year old son, are getting access to their dose. Looking back at that year, we saw big shifts in the way we ate and the way food was made. This had far-reaching consequences on the digitization of offices. You can read about them in this blog.
Obvious things that companies did do was adapting to a different style to reach the end consumer: restaurants turned into ‘dark kitchens’ for take-out and home delivery, e-commerce boomed, and stores invented or expanded parking for store-pick-up. The unnoticeable changes happened behind the scenes. A dispersed workforce, partially working from home or in the office, triggered some big investments into office automation. Here are the top 5 things that companies chose to invest in:
1. EDI
EDI has been around for decades, nothing really new. Covid-19 triggered a lot of companies to revisit their approach to this. Often, companies used web portals to transpose data between their Accounting Software and using these portals manually, citing reasons for doing it for ‘checks and balances. Today, Good EDI solutions can check whether the prices and delivery dates are correct, whether product is available for delivery and if the order is within normal order patterns for that customer. EDI is also more prevalent in integrating into 3PL providers (mostly cold storages) or public data sources for automated pricing solutions, like the USDA blue-sheet. It is not rare that these projects eliminate the need for whole positions.
2. Document Management
Document Management Solutions have been around for decades now as well, but storage got cheaper and scanning software got smarter. With Simple Archiving Systems knowledge workers become approximately 15% more efficient and effective according to IDC. More recently, these solutions have expanded:
- Workflow Management Systems route documents through the organization, processing purchase requisition approvals, travel requests, maintenance of product specifications and quality documents and other procedures – regardless where people work, even mobile via email or Web access.
- AI solutions can ‘look’ at documents and do some repetitive tasks such as recognizing an invoice and its content and determine the meta data – a process that used to require a human.
- Contract Management software extends the idea from transactional processes to contracts that have longer durations, such as building leases or cell-phone contracts.
3. Bank Integration
Bank standards still vary largely around the world. The European Union has harmonized and standardized business transactions between countries for years while North America has multiple standards that have emerged locally, such as the ubiquitous ACH to make payments. Other things like ‘positive pay’ are less standardized and vary from bank by bank. Things are changing though. MT-940 is a global bank standard which allows importing of bank statements in North America and process Account Receivables and bank reconciliation electronically – another repetitive task in the digitalized office. The fact that more and more bank transactions move from the traditional checks to electronic forms of payments accelerates adaptation of these technologies.
4. Managing Expenses
I mentioned earlier workflow, which customers expanded to pre-authorize expenses (typically purchase requests before the expense occurs) and incoming invoices that are not PO related. Contract management expanded into areas in which you have regular expenses, such as building leases or mortgage payments, cell phone bills, car leases or your Aramark bill. There are now some activities to expand this to include travel expense management or expense tracking. Companies use for some expenses company credit cards and integrate the statements directly into the expense management and automate the accounting tasks as well.
5. Perpetual Inventory in Accounting
Other industries have done this and today it is standard in integrated systems. The complexity of the processes in the food industry with numerous product transformations and activities that at least in part require manual inventory transactions via scanning and barcoding did not exactly gain the trust and confidence of the accountants. These things have changed dramatically, and more often than not, the actual physical inventory count has been made wrong and the inventory was indeed accurate. Instead of manual inventory adjustments once an accounting period, we see now customers posting daily their inventory transactions. With some creative math with weekly and monthly expenses based on budgets and sophisticated formulas in state-of-the-art business intelligence tools allow CFO’s and other financial roles to provide management with financial statements during running accounting periods, making the need and desire to close the books fast almost obsolete. These daily P&L statements are so close to the end result, that it is not worth the time to wait – unless you are the IRS or a CPA.
Summary
I started automating food businesses with Computer, Software and Business consulting in 1991 – 30 years ago. One of my most advanced customers in Germany at the time was a meat processing facility near our HQ with about 300 employees and just 15 of them occupying office space. While that number has not changed much overall, a bigger share of these 15 heads is now occupying IT roles, repetitive tasks in accounting have been automated so that there is only one accountant left – who has other responsibilities as well, while the actual things that need to be done as clerical work have tremendously increased due to regulations such as Country-of-Origin labeling and increased food safety requirements. More offices are staying dark, and people are not only working from home, but they are also staying at home without work.