Purchasing Insight

Purchase to Pay, Purchasing & Procurement Process, Electronic Invoicing

Browsing Posts in Financial Supply Chain Management

The soundtrack to my formative years was the Sex Pistols, The Jam, The Clash, Deaf School, Gregory Isaacs and Aswad. It was fun that the generation I was a part of had music that was revolutionarily different from previous generations yet there were still those older people who wished we would all just calm down and listen to Bing Crosby and Doris Day as though Elvis, the Beatles, The Doors and Pink Floyd had never happened in the preceding two decades.

Punk rock had woken an older generation and reminded them of how much they enjoyed their heyday. And this is exactly the impression I got today when I read that the International Chamber of Commerce is to rationalize the language used to describe supply chain finance. continue reading…

Francis-MaudeIt was announced yesterday that the UK Government will be fully supporting the introduction of electronic invoicing in public sector. Speaking at the launch of a Parliamentary Report: ‘Electronic Invoicing – the next steps towards digital government’, Francis Maude, the Minister for the Cabinet Office, expressed with enthusiasm his commitment to see the use of e-invoicing as part of the UK’s ‘Digital by Default’ agenda.

The venue for the launch of the keenly anticipated report was the Strangers Dining Room in the Palace of Westminster, London. I was amongst a group of about 50 people, experts in electronic invoicing from both public and private sector, who listened with some excitement to the strongest endorsement yet by a UK Government Minister of a policy to see payables processes in public sector automated in order to liberate, an estimated £2 billion per year. And despite the wealth of expertise in the room, we all would have struggled to articulate the opportunities with greater clarity than Francis Maude. continue reading…

I’ve become a fan of Nipendo. Nipendo offers, in many respects, what I see as the next evolutionary stage in Purchase to Pay. Rather than simply offering clever means to automate the traditional steps in the purchasing process through things like e-procurement and e-invoicing, they offer what I think of as ‘Packaged P2P’. When I visited some of their customers recently I spent time with Eyal Rosenberg, their CEO and we spent quite a bit of that time discussing how the Nipendo platform could be leveraged to offer supply chain finance. And now they’ve done it and the press release that accompanies their new partnership with Integrate Financial explains the synergy. continue reading…

New-World-of-B2B-FinanceIt has become a cliché. Since the global financial crisis of 2008, the combination of constrained liquidity – shortage of available credit – combined with very low interest rates and the emerging maturity of technology like eInvoicing has created a perfect storm. While cash rich buyers are getting paltry returns on their cash, they can see value in their supply chain. At the same time their suppliers are cash poor and eager for affordable and available sources of working capital. Indeed, the crisis of 2008 highlighted how critical the supply chain is to everybody.

Governments, concerned to stimulate industries, still punch drunk from the worst recession in living memory, are looking at ways of supporting small businesses who are operating under the constant threat of running out of cash. It’s a tragic irony that for many small businesses the worst thing that can happen to them is to see their order book grow.

In times of economic uncertainty, cash is king and the plight of smaller businesses has been made worse by their customers extending payment terms in order to bolster their own cash position.

This is why Supply Chain Finance (SCF) is a hot topic. But what is it exactly? Ask a dozen experts and you’ll get a dozen different answers. Some will lead you to believe that it can deliver the panacea to address our economic woes. Others will explain that far from being the solution, it’s part of the problem. And they’re both right. The fact is that SCF is a complex business field that encompasses a wide range of business strategies, financial products and technologies and it’s easy to be blinded by science.

The aim of this paper is to unravel the jargon, distil complex business issues into bite size pieces and attempt to demystify Supply Chain Finance.

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As technology matures, industries are transformed. It is very rare that a single technology inspires or effects the change. It is more usual that a gradual evolution of a mix of technologies lowers the barriers and opens up the opportunity for business models that would previously not have been worth serious consideration.

There was a time when the natural gas trapped in rocks under the ground, while known about, was simply not worth the effort to extract. But develop technologies like fracking that can tap this resource profitably and the future of a nation and its power needs is transformed.

If you understand the signs, it’s possible to see these fundamental changes coming and there is one such change in the financial services industry that is visible quite clearly on the horizon. A mix of technology has matured and a new business model, barely feasible until very recently, has become compelling. It’s good news for business. It’s not so good news for the banks.

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Nearly 18 months ago now in the fall of 2012, I was delighted to attend Taulia’s 1st customer conference in San Francisco. There was a quality turnout – small but quality. It was a cosy affair. What was so memorable was the enthusiasm of Taulia’s customers. It reminded me of the pioneering days of e-commerce when the early adopters struggled to contain their excitement. At that time, the technology was no secret and neither were the techniques particularly difficult, but to those that had passed over the internet threshold and actually implemented something, the results were more exciting than they’d dreamed. We might take Amazon for granted now but in the 90′s it was nothing less than a retail revolution. Remember how Dell transformed a whole industry? And of course once the secret (that was never a secret) was out, the adoption of internet based business exploded and the world changed.

And that’s what the 1st Taulia conference felt like. A bunch of intrepid pioneers – walking the walk while the rest were watching, waiting, wondering whether it would work.

So 18 months after that 1st Taulia event – where are they now? Was that excitement and confidence the prelude to the huge growth Taulia were promising? What does that cosy crowd look like now? continue reading…

A couple of weeks ago, I sat down with Tony Duggan, CEO of Crossflow Payments, an organisation looking at alternative ways to bring together suppliers and corporate buyers and strengthen supply chains.

Supply Chain Finance is a bit of a buzzword at the moment. The old guard, the banks who seem to have tunnel vision for the very big trade finance deals, and the factors who exploit to a greater or lesser extent the vulnerabilities of small and medium sized businesses view the new SCF players with a mixture of  doubt, suspicion and (although they’d not admit it) – fear. And they’re right to. Some of the new models emerging are innovative and impressive and they promise to take business away from the traditionalists. Crossflow is going to do just that in my view. Inspired by hands on experience in industry, Crossflow Payments has taken the concept of ‘Just In Time’ manufacturing and applied it to the financial supply chain. Tony believes that this can help transform the way financial supply chains operate. continue reading…