The concept of ‘going paperless’ goes back at least 30 years to early iterations of the internet and desktop computing. Given the enormous technological leaps we have made during that time, I find it incredible that we are still having this debate at all.
Technologies like blockchain and artificial intelligence have undoubted potential to revolutionise key aspects of the treasury function, from greater efficiencies, through to enhanced KYC and innovative new financing options. To begin any discussion at this point, however, is to ignore a fundamental step in the journey, without which any benefits of emerging technologies are entirely irrelevant. So let’s walk before we run.
The way businesses trade together has not really evolved much in the past 40 years. Digitisation within large enterprises is actually at a pretty advanced stage, and yet globally just 8% of trade transactions are digital.
The missing piece in the puzzle is digitisation between business partners across the broader supply chain ecosystem. You can have the greatest level of digitisation internally, but if the partners you are dealing with – banks, suppliers, buyers, logistics handlers – are not digital, then the whole process reverts to the lowest common denominator.
Take a step back and compare this to the way you live your life outside of work. How many of us still receive a paper copy of our bank statement every month? How much more convenient is it to download a mobile copy of our boarding pass when we arrive at an airport, as opposed to having to remember to print these documents off at home?
Why do our expectations shift as soon as we go to work?
Firstly, most business software is simply not up to the job. Rather than making it easy for businesses to connect with one another, most business software is designed in islands. True digitisation is just not possible within this framework. The best you can hope for is the equivalent of a telephone that only makes calls to people who use the same telco provider.
Secondly, your business might be committed to digitising its operations and eliminating paper-heavy processes, but if the external partners you deal with are not on board, the system begins to break down. Most supplier onboarding initiatives involve a lengthy to-do list with no real upside for the supplier. That feels like a pretty one-sided deal, and no great motivator.
So what’s the answer? The ubiquity of mobile, internet and social media mean that our personal lives are increasingly governed by a series of digital relationships. If businesses are to get rid of paper then the industry would do well to take inspiration from sites like LinkedIn, which foster a digitally connective ecosystem that makes it very easy to connect and share information.
Consumer technology also teaches us that if you want to influence behaviours, then carrots are far more effective than sticks. If your objective is to eliminate paper-heavy processes, you need to incentivise businesses to make the change as well.
To come back to the original question, technologies like blockchain and AI offer us a glimpse of an exciting future. They also open up the door for a range of innovations that will help suppliers see immediate benefits from going digital, from faster approvals through to enhanced supply chain financing options.
But before we can really say goodbye to the past, we need to get the basics right. The software exists to achieve full digitisation at scale, but the benefits this technology provides have always focused on the buyer. New technology is one thing, but if paperless is ever going to become the norm, then new perspectives and new business models will be required that offer benefits to the whole ecosystem of digitised business relationships.