Author: Pete Loughlin

This week we’re delighted to welcome a new sponsor, Nipendo, to Purchasing Insight. Nipendo is fairly new on the P2P scene but in the five or so years that they’ve been about they’ve already made quite an impact with an impressive customer list which includes HP, IBM, Motorola, Pfizer and Office Depot. I was excited to speak to Nipendo’s CEO, Eyal Rosenberg,  a couple of weeks ago – I wanted to know what makes Nipendo’s proposition stand out from the crowd. We covered a lot of ground but the thing that stood out for me was the concept of E2E-invoicing. At first, I was a little skeptical but as Eyal explain more, enhancing his explanation with case study examples, the Nipendo vision became clearer.

Sometimes, great ideas just never take off because some prerequisite solution to a problem hasn’t been solved. E-procurement was a great idea in the 1990’s but until the internet was ubiquitous and trusted, it was slow to take off. Looking back, the trust and ubiquity grew quite quickly but in 1996, if we had a crystal ball that said it would take the best part of a decade to become an established way of doing business, I wonder whether we’d have given up. We didn't know that the problem was trust and ubiquity until it was solved.

Do you recognize this business? They are a market leader. They have a significant - perhaps largest market share in their industry. Everyone knows their brand. They recruit the best people and their brand looks great on a CV. They have the confidence to know that they can retain their market share and still win business without having to compete on price. Can you tell who I'm thinking of? Here's a few more characteristics.

We have highlighted many times the challenges of working capital management. It’s become a cliché to refer to the “perfect storm” – the combination of virtually zero interest rates and constrained liquidity that gives both cash rich, large businesses and cash strapped suppliers a headache. But every cloud has a silver lining. Better working capital management provides an opportunity and now, REL, the specialist working capital arm of Hackett, has revealed the size of the prize, in Europe - a total of €762bn is tied up in excess working capital - equivalent to 6 per cent of EU GDP!

I recall in the late 1990's, I claimed that access to to the internet would soon be seen as more than a convenience, more than a useful tool but a fundamental human requirement. A bit of an exageration you might say and when I said this at conferences people took it that way - as a joke. I wasn't joking. I was guessing but I wasn't joking. Today there are more people with access to the internet than there are people with access to running water. There are parts of the world today where people need to walk 2 km to get water but they can get a mobile signal. What we think of in the developed world as basic infrastructure like electricity and water on tap hasn't reached corners of the globe that the telecommunication infrastructure has.

UKNeF is the snappy acronym for the United Kingdom National e-invoicing Forum. It's constituted under the Chatham House rule. In case you are unfamiliar with the Chatham House rule - it's like Fight Club. The first rule of UKNeF is don't mention UKNeF. And it really is like Fight Club. The action takes place in a basement. It's an orgy of e-invoicing debate starring Edward Norton as "Nigel Taylor", the insomniac office worker looking for a way to change his life who finds friendship with the devil-may-care character "Charles Bryant" played by Brad Pitt. OK, it's not like Fight Club - but it is set in a basement.

The UK Government last week published what they call their “Information Economy Strategy” in which the UK’s intentions for e-invoicing in public sector are stated. It’s been met with a positive, indeed an enthusiastic response. But not from me. This is what the UK government says: “Government also wants to make it easier for its suppliers once they have won contracts, by encouraging the use of electronic invoicing.” And they go on: “Government will not mandate suppliers at this stage, but will look at ways to spread best practice, and will track progress with a view to taking action if required at a later date.” Some commentators seem to believe that this adds up to a commitment. I’m no mathematician but when read this, in terms of commitment, it adds up to the square root of .. well, nothing! This statement of intent is typical politician speak that aims to placate the well informed who know something needs to be done and at the same time reassure the flat-earthers, fearful of change.