Newcastle hospital boasts rapid adoption of electronic invoicing

Posted by Pete Loughlin in CloudTrade, e-invoicing, Electronic Invoicing 03 May 2016

Listening is an important communication skill. When we don’t listen we don’t hear. Fairly obvious statements I’m sure you’ll agree, so why is it then that some of the best people in the industry have spent years failing because they are failing to listen?

Let me take a few steps back in order to get to the point. One of the biggest risks in an electronic invoicing project is the risk that suppliers fail to cooperate and they either refuse or are slow to send invoices electronically in the required format. You can have the best systems and processes in the world but if they are incompatible with what suppliers are prepared to do, it’s all a waste of space.

Site LogoBut why would suppliers not cooperate? Well here’s the top 3 reasons they don’t:

– Cost – they don’t want to pay to send invoices

– They don’t want to be told what and how they send invoices especially if it involves duplication of work.

– They don’t want to join multiple supplier networks

But the e-invoicing service providers are familiar with all of this. The more established networks have had the best part of two decades to understand these issues and overcome these objections.

Cost for example is an easy one. It’s all about value for money. A transaction fee is cheaper than a stamp after all and there are process efficiencies to be had on the supplier side. Typical arrogant solution provider response. The supplier says they don’t want to pay. If you actually listen to that you will conclude that they don’t want to pay. It is a service they never asked for. They don’t want to pay. It’s that simple. It’s not difficult.

And mandating a new process on suppliers? Well again, why would suppliers object to this? The customer’s always right after all. Except when the customer is wrong that is and it is wrong to take advice from a solution provider to mandate their system. Again it’s arrogant but it’s also an admission of defeat. If you have to bend a supplier’s arm to persuade them to go along with you then there’s no real win-win or if there is you’ve failed to communicate it.

But not all e-invoicing networks have poor listening skills. Some pay regard to suppliers’ concerns and don’t ask for a fee. Neither do they ask suppliers to adopt new or customer specific processes. They simply say to suppliers, “send us your invoices via email”. No fees, no hassle.

But does that work? It seems too good to be true. I’m not going to mention names but my benchmark is a large global business that embarked on an e-invoicing program about 2 years ago with one of the established supplier fee charging networks. To date, after 2 years effort, they are struggling to exceed 25% of invoices delivered electronically. So let’s compare with a real life example that I came across this week.

The Newcastle upon Tyne Hospitals NHS Foundation Trust

The Newcastle upon Tyne Hospitals NHS Foundation Trust is a large hospital – actually two hospitals – in the north east of England. It has an operating income of about £1 bn and employs about 13,000 people. They process approximately 200,000 invoices each year. And recently, they embarked on an e-invoicing programme. They are now receiving about 40% of their invoices electronically. So how recent is recent? Actually, less than 3 months ago. In another 3 months they’ll be at 60% when they plan to slow down or stop. (The remaining 40% are low volume suppliers).

This is going to be transformative. Not only will more efficient finance process divert more money to patient care, the Trust will eliminate something like 250,000 pieces of paper.

How have they done it? They’ve made it easy for suppliers. First, suppliers aren’t charged and secondly, suppliers only need a PDF invoice to be emailed. Clever software converts the PDF to XML and that allows the invoices to be input directly into the finance system.

It’s CloudTrade that is behind this technology. Working with the Trusts partner, Advanced, who manage and maintain their finance system, they’ve been able to exceed the Trust’s most ambitious expectations. What I like about it is the simplicity. There is clever technology under the hood but this is hidden. No one needs to know how it works. Suppliers just send a PDF invoice. It may not be glamorous, glittery high tech. Invoices aren’t delivered by drones. They’re not 3D printed. They’re just sent and the technology does the rest.

It’s easy to blind yourself to some fairly obvious realities when selling technology solutions. It’s easy to assume that everyone buys in to progress and the digital economy. But when critical collaborators like suppliers say no to a new way of working, they probably have very good reasons for saying so. They want to work closely with customers and they don’t say no lightly. So when they do, we should listen. When you listen you hear.

Pete Loughlin can be found on twitter @peteloughlin

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