Thoughts occasioned by the UK Parliamentary e-invoicing report

Thoughts occasioned by the UK Parliamentary e-invoicing report

Posted by Ian Burdon in e-invoicing, Electronic Invoicing 07 May 2014

I had the pleasure of attending the formal launch of “Electronic Invoicing, the next steps towards digital government” on 30 April.

The report is a welcome indication of the seriousness with which the issue is taken in government. It is also a sensible document which does not fall into the trap of underestimating the complexities of the subject. I particularly liked that, although it favours some form of overt or covert mandating of eInvoicing, it does not mandate any particular technical means of achieving this.

Inevitably, when reading the document, questions arise and I explore a couple of them here. These are not intended to be criticisms of the work of the inquiry team, more ‘thoughts occasioned by’ the document and also as indications of some of the difficult issues facing them.

Purchasing Insight logoOne issue for me is that the context is set as ‘eProcurement’ and, although this may be partly semantics, this doesn’t convince. Accounts payables processes tend not to be part of procurement and poorly understood by procurement officers.

But the core question is one that has been around for a very long time: the nature of the business case. Typically, the business case will be a financial case and that’s where the problems start.

Partly this is because there is a temptation to make spectacular claims of ‘savings’ potential and this leads to overclaiming. Of course these claims may sometimes be well founded, but it is very rarely established with any clarity that they are well founded. Very often financial cases are triumphs of optimism over empiricism.

A good example of the problem is found in the document itself in a case study highlighted on page 16. The case study offers two substantially varying suggestions of the potential transaction savings attributable to eInvoice. My first thought was to want to know what is being measured, against what baselines and in the context of what other variables? What is the explanation for the disparity? We don’t know.

Similarly, on page 18 it is asserted that, unless steps are taken towards early adoption of EU Directives, “[t]here is no doubt that the UK will be at an economic disadvantage”. Really? In an academic context, a strong assertion such as this would normally require to be properly evidenced with data. Without the evidence how are we to know that this is not a hyperbolic flourish?

What we find, in various places in the document, are references to ‘efficiency gains’ and ‘process savings’, those mainstays of IT business cases. Unfortunately efficiency gains rarely translate into bottom line savings unless the associated costs are removed, and generally that means cutting unnecessary posts.

For my part, and this is a personal view, I am more attracted to cases which resemble the highly successful ‘aggregation of marginal gains’ approach famously espoused by Dave Brailsford, former performance director of UK cycling. That approach, in looking for substantial gains as the outcome of a set of incremental small steps is also closer to business reality, I think.

It is also underpinned by focused concentration on empirical data.

Ian Burdon can be found on twitter @IanBurdon

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