CloudTrade – one of the best kept secrets in e-invoicing

CloudTrade – one of the best kept secrets in e-invoicing

Posted by Pete Loughlin in e-invoicing, Electronic Invoicing 23 Apr 2014

Every service or solution provider has their USP – their unique selling point that makes them stand out from the crowd. But in reality, when you take a group of similar vendors, they’re actually not that different. Electronic invoicing is just like that. To the seasoned professionals there’s a world of a difference between the numerous vendors but to the end user – the ones whose views really count – they’re all the same. So it’s actually quite exciting to find an e-invoicing solution provider that really is a little bit different.

Consider this: They’re not disruptive. That’s right. A start up that doesn’t claim to be disruptive. In fact they have made a virtue of being positively non-disruptive. They are about as non-disruptive as it’s possible to get. That’s quite a challenge – getting suppliers who operate in a paper based world to deal with their customers electronically without demanding they change anything they do. Suppliers like that and suppliers also like that fact that CloudTrade don’t charge them. This is part of the reason that CloudTrade have doubled in size for two consecutive years but to understand the whole story behind CloudTrade’s success, you need to understand their secret sauce – the unique way they approach the market.

Purchasing Insight logoCloudTrade recognize that the biggest obstacle to getting e-invoicing to pay-off is getting suppliers to adopt. And that’s what inspires their three business principles:

  • Don’t ask the supplier to change their applications or infrastructure to send XML or EDI
  • Don’t ask them to raise their invoice in their own accounting package and then do it all over again in a 3rd party portal
  • Don’t charge them

These principles create a compelling proposition for suppliers. But this isn’t CloudTrade’s secret sauce. The real secret behind CloudTrades growth is that they don’t actually have customers.

Consider this: e-invoicing is rarely, if ever, implemented as a standalone project. Normally it would be part of a wider program of AP automation or Purchase to Pay. It’s tempting for solution providers to build functionality to meet the broader requirements of their customers in order to address their customers’ wider project needs. That can work but it can also lead a vendor down the path of trying to be all things to all men. CloudTrade had avoided that. Rather than solve the whole AP automation problem they have specialized. All they do is make it easy to adopt e-invoicing. Nothing else. And while that appeals to suppliers, it appeals even more to the complimentary solution providers – the e-proc vendors and even the e-invoicing and EDI service providers. CloudTrade don’t have customers – they have partners, and they are making their partners successful by solving the supplier adoption dilemma.

This is the secret sauce. There is actually quite a lot of very sophisticated technology under the hood of CloudTrade but nobody is really interested in that.  A good product is a product that customers want. Nobody wants XML. Nobody wants portals. Nobody really wants e-invoicing. What businesses want is a legally compliant way of reducing the  cost of doing business and what P2P solution providers want is high adoption rates. That is what CloudTrade delivers.

Pete Loughlin can be found on twitter @peteloughlin

  • Hugh Chatfield April 24, 2014 at 8:05 pm /

    This article seems to be using the word “disruptive” as a negative – perhaps something “disrupting” the current practices, workflow, systems of both suppliers and their customers.

    I prefer the following usage as outlined in my article
    https://www.ibm.com/developerworks/library/x-ind-disrubl/ disruptive technology .

    Disruptive technology as coined by Bower and Christensen describes a technology that unexpectedly displaces an established sustaining technology. Sustaining technologies usually rely on incremental improvements, while a disruptive technology may come from a source that wasn’t designed for how it is finally used to displace the other technology.

    To be even more precise, I like the term disruptive innovation that has the potential of “allowing a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill”.

    What we all trying to do, is move from a paper based exchange of business documents between supplier and customer, to a fully electronic exchange.

    Suppliers are reluctant to adopt e-invoicing, not because they are laggards, but because they are sometimes expected to adopt somebodies proprietary (and potentially expensive) solution to solve a particular customers problems, not a single solution that will solve the problem for all their customers.

    Cloudtrade’s principles are correct. In my article http://www.itbusiness.ca/blog/ubl-seeks-to-create-tower-of-babel-for-document-exchange/35770 I outline similar principles that any solution to e-invoicing adoption problem has to adopt to be successful.

    – Technical changes to existing customer/supplier systems should be minimal – ideally zero
    – Process changes to current current workflows for both customer and supplier should be minimal – ideally zero
    – Suppliers will not pay to send invoices. Cost should be minimal – ideally zero

    I am part of a business eco-system (goUBL.com) that promotes the use of the OASIS Universal Business Language (UBL) as the single neutral form for the content of business documents exchanged between suppliers and customers. With a single form, suppliers only need a single conversion between whatever form their systems generate and UBL, while the customer requires only a single conversion between UBL and whatever form their systems require (rather than some middleware product doing an N-to-N conversion pf transactions.

    It is not enough to have a common form for all transactions, you also need a transport layer that handles the exchange of documents between supplier and customer. I assume Cloudtrade provides one, as does Tradeshift.

    Already we see software vendors such as Intuit create an export facility for UBL based transactions, and SAP create an import facility for UBL based transactions. In the case of Intuit, without any change to the usage of their Intuit systems, Suppliers will also be interfaced to the transport layer provided byTradeshift, that allows them to exchange electronic invoices with anyone on the transport layer, and email/PDF with anyone not on the transport layer.

    I expect most software suppliers will eventually provide such an interface. Multiple transport layers are unimportant provided they all support UBL and a interface between transport layers.

  • Pete Loughlin April 25, 2014 at 8:18 am /

    Hugh, Thanks for your comments – always very welcome.

    I get your point about the use of the word disruptive but in this context I’m pointing out that it has a positive or a negative meaning depending on your perspective. Salesforce is described as “disruptive” in a positive way in that they changed the established CRM paradigm but I’m not so sure that Siebel will have seen it in such a positive light.

    As far as CloudTrade are concerned, they’re are disruptive in a sense in that they are challenging some of the accepted wisdom about e-invoicing but they turn the concept on it’s head by making non-disruption a virtue. It’s a play on words Hugh and quite effective in explaining to the market – particularly the existing e-invoicing, e-proc and EDI vendors – where CloudTrade’s USP is.

Post a comment