e-invoicing and interoperability – common sense – but who for?

e-invoicing and interoperability – common sense – but who for?

Posted by Pete Loughlin in e-invoicing, Electronic Invoicing 26 Aug 2011

There’s so much debate about interoperability and e-invoicing it’s difficult to know who is on which side of the fence. Indeed, if you look at it for too long the fence itself starts to move. But all will become clear within a couple of years because the balance of power is going to change.

Purchasing Insight logoLets look at some of the main players and take a critical look at their stance. OB10 and Ariba don’t care for interoperability. They would rather charge their buyers and the suppliers network subscriptions as well as transaction charges. They prefer a closed network because that way they get all of the revenue. It’s not great for the e-invoicing market because it is self limiting and it has constrained the growth in adoption of e-invoicing.

On the other side of the fence there’s Basware and Tradeshift. They love interoperability – but why wouldn’t they. To be able to access the vast supplier networks that OB10 and Ariba have invested in is like riding on the shoulders of giants.Why should Ariba and OB10 give up the rewards for a decade of hard work and investment?

Of course this is an over simplification of the situation. If you look at OB10 in a little more detail for example, they do in fact interoperate. Similarly, although Basware interoperate freely, they’d sooner enjoy the double bubble of having both ends of the supply chain. It’s all about commercial common sense – for the service providers at least. But there’s a player that has thus far remained silent and the future the invoice networks  and how they interoperate is in their hands. The customer.

The e-invoicing market has been shaped by the service providers. They’ve successfully sold the business case to buying organisations and fairly aggressively sold reasons to comply to the selling organisations. But as the market has grown, there are cracks appearing. Suppliers resent having to join multiple networks. Buyers are beginning to recognise their suppliers’ pain and are actively seeking to offer them choices.

e-invoicing is and never has been about generating further savings at the expense of the supplier – it has always been about reducing the cost of doing business – for both parties. In the newer, more mature world of e-invoicing we’re increasingly seeing customers  – i.e the buying organisations and their supplier partners – being more assertive in the way they tender for e-invoice service provision. The joint view of the suppliers and buyers is that suppliers should not be expected to incur charges with multiple service providers in order to send invoices to their customers. Does that mean interoperability? Probably. This is the customers’ commercial common sense and, as we all know, the customer is always right.

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