OB10 and the e-generation gap

OB10 and the e-generation gap

Posted by Pete Loughlin in AP Automation, e-invoicing, Electronic Invoicing, Purchase to Pay, Purchasing Card, Supplier Networks 14 Nov 2011

OB10 can make some great claims. They might like to claim to be the biggest and they’d certainly want to claim best. I think they can legitimately claim to be the first. But these superlatives are very much double edged. “First” also means oldest and “biggest” can mean least agile.

So how can OB10 maintain their leading position? Last week I had the great pleasure of meeting Luke McKeever, their new CEO, who told me.

A brief history of e-invoicing

Purchasing Insight logoOB10 were the first of the major e-invoicing players.

I know, I know, EDI predates OB10 and there were lots of “electronic” invoices being passed well before OB10 were even conceived but EDI was – and still is – different. To understand this, you need to understand the business climate of the 1990’s.

The internet was beginning to boom and businesses were investing massively in technology, partly fueled by the fear of the Y2K bug and partly by the enormous growth in interest in e-business. The opportunity to streamline B2B interactions was compelling and the internet presented a cost effective way of reaching many suppliers and many customers. But there was a major obstacle facing businesses who wanted to send and receive invoices electronically – tax. There were only two ways of sending an invoice in a tax compliant way and that was either on paper or via EDI and EDI, at that time, was a prohibitively expensive affair.

The whole point about e-business was to get away from proprietary networks and technology and to use the increasingly ubiquitous internet. The OB10 business model was about creating a means of transmitting and receiving tax compliant electronic invoices, over the internet, and the way to do this was not through technology. It was to be achieved by speaking to the tax authorities and developing a model that allayed their concerns – in exactly the same way that Amex, Mastercard and Visa had developed and gained agreement for the use of Purchasing Cards.

In the very early days it was no walk in the park for OB10 and despite the collapse of the dot com bubble and the very understandable reluctance of investors in the early part of the 21st century, they survived and indeed thrived. The emergence of significant competitors, notably Ariba, who had already grown a large supplier network through their e-procurement product, and the growth of the Nordic market from where companies like Basware have been able to develop a global footprint, has helped OB10 by further stimulating the market. But in 2011, with 85% of the potential market for e-invoicing remaining untapped, OB10 still has a fight on its hands to maintain their leading position.

The e-generation gap

One of the problems with being the first and arguably the strongest is that it’s very difficult not to develop a self confidence that can be confused with arrogance. Every industry has┬áleaders that suffer this reputation. Wal Mart in the US and Tesco in the UK. Microsoft has been hated for years and OB10 is no exception. OB10 have suffered at their own hands too I have to say. They got themselves a reputation for applying unwelcome pressure on suppliers – not to mention unwelcome costs – even though the supplier costs were paltry compared to the EDI costs, and pressure, that were imposed on suppliers in the retail supply chain. The message got mismanaged and it’s the management of the message that gives OB10 it’s biggest challenge.

The last time the “cheaper than the cost of an envelope” pricing model was revised was in 2005 – 6 years in the real world but in internet years, that’s a generation. There are some new kids on the block, and while they may not have the heritage in technology and taxation that OB10 has – they sure as hell understand communication. They’re the new e-generation and the older generation, not just OB10 but Ariba too, need to take notice of them.

Keeping it current

The underlying message about e-invoicing hasn’t changed but the audience has. Keeping it current and fresh is critical for OB10. We’re already seeing it. Their image got a refresh last year and the appointment of Luke McKeever was absolutely about taking a new approach to win a new generation of customers. The style of communication is changing too. The new OB10 blog is refreshing and it’s got a 2.0 feel to it.

Luke McKeever, apart from being a thoroughly likeable bloke, is an important new leader for OB10 and an appointed at just the right time. We can expect some very interesting moves from him over the coming months because he gets it. He get’s the importance of communication – he gets the importance of keeping it current,┬áhe’s not afraid to make changes and, importantly, he doesn’t come with the baggage that could have held others back.

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