e-invoicing

The debate on these pages on e-invoicing and interoperability has been fascinating. It was inspired by the EU’s consultation designed to solicit views in order that e-invoicing in public procurement can be stimulated and encouraged. But there’s more to this than interoperability and we think that there are three things that the EU can do to get electronic invoicing really motoring in Europe - mandate, regulate and educate.

Jason Busch at Spend Matters recently used an expression “drinking the Kool-Aid” when referring to the unquestioning beliefs of software vendors’ marketing people. I didn’t even know what Kool-Aid was but I knew what he meant. It’s what I call believing your own bullshit and we see so much of this whenever the topic of e-invoicing and interoperability crops up. Despite the fiercely opposed arguments, there is something very consistent about the views expressed on interoperability. They are all very biased. I’m not 100% objective myself – I have my own personal likes and dislikes based on over 15 years’ experience in this market and I don’t pretend to be the most informed but nevertheless, I will attempt to filter out the crap that reverberates around this debate and share my point of view on e-invoicing and interoperability.

The European Commission is seeking input from interested parties on interoperability between electronic invoice service providers. (Look here for more information on how to contribute.) This issue has implications that are much wider than the European Union. As businesses and governments increasingly adopt e-invoicing for a range of reasons, the debate will reverberate globally. Given a cursory glance, interoperability is a no brainer. But take a closer look at the business issues and it’s not so obvious. In a previous post I presented an argument for interoperability and in this second piece, I’m presenting an argument against. If you have strong views on either side of the debate, leave a comment.

The European Commission is seeking input from interested parties on interoperability between electronic invoice service providers. (Look here for more information on how to contribute.) This issue has implications that are much wider than the European Union. As businesses and governments increasingly adopt e-invoicing for a range of reasons, the debate will reverberate globally. Given a cursory glance, interoperability has distinct advanges. But take a closer look at the business issues and it’s not so obvious. Here, I want to present an argument for interoperability and in a following piece, I’ll present an argument against. If you have strong views on either side of the debate, leave a comment.

Some companies in our industry might encourage you to “hurry up” while you’re in the procurement phase but maybe it’s because there’s something they don’t want you to stop and think about. For example, the question of business models. In what we do, you have two options. The first is pretty simple: make your money from enterprises in proportion to the value you create for their business. That means putting in a solution that makes their supply chain more efficient and accompanying it with the processes and technology that makes suppliers want to use it too. The second is a bit more old-fashioned, a bit less elegant, indeed, somewhat parasitic. This way involves using the enterprises you’re supposed to be helping as a direct sales route to their suppliers, where you’ll make most of the money. Basically turning your customer into your sales channel and pushing the majority of the financial burden down the supply chain to the guys it’s going to hurt most.

[caption id="attachment_6736" align="aligncenter" width="480"] Bertram Meyer - CEO Taulia[/caption]

The British can make strong claims to the invention of the computer (Babbage) and the World Wide Web (Tim Berners-Lee) but examine the DNA of the modern world of technology and it's mainly American with a strong Northern Californian flavor. Ariba, Oracle, Google, Twitter - Silicon Valley born and bred.

But it's not just Americans that are behind this innovation. This phenomenon has more to do with geography. Two of the most interesting innovators in the P2P space, Taulia and Tradeshift, although San Francisco based, are European - well their founders are. Why is it so important, indeed, is it important, for tech start-ups to have a Bay Area address? I was in San Francisco a few weeks ago and took the opportunity to speak to Christian Hjorth, Head of Sales at Tradeshift and Bertram Meyer, CEO of Taulia to understand why Silicon Valley is still important.