Tradeshift – Walking the walk with workflow

Tradeshift – Walking the walk with workflow

Posted by Pete Loughlin in AP Automation, e-invoicing, Electronic Invoicing, Supply Chain, Workflow 06 Aug 2013

Tradeshift has just  made a double announcement. Their new customer reference, Lear Corporation is impressive enough but it Tradeshift’s Collaborative Workflow that Lear is deploying that’s caught my attention.

Purchasing Insight logoTradeshift has signed an agreement with the Lear Corporation – the automotive supplier –  as part of a large shared services transformation project. Lear will be rolling out Tradeshift’s latest app, Collaborative Workflow, “revolutionizing how the company’s employees are able to work with each other and with suppliers” as Tradeshift put it.

This represents delivery on the Tradeshift platform promise. The Tradeshift platform allows apps developed by Tradeshift, their customers and third parties to bring countless business processes online including e-invoicing, payments, logistics, workflow and more.

Christian Lanng is quoted in the press release announcing the deal with Lear: “More and more multinationals are looking for ways to bring the different branches of their global companies together on one platform. As more governments begin to mandate e-invoicing and other business processes, having a unified solution that works across borders will be critical. Lear understands this and by working with the TRADESHIFT platform they’ll be able to ensure compliance and scalability in every region they do business.”

Lear operates in 36 countries worldwide – including Mexico – and is typical of those global companies who are coming face to face with the reality of dealing with new legislation in countries like Mexico who have already set a short deadline for e-invoicing compliance.

While this is all very impressive, it’s not the customer announcement that interested me. Tradeshift are winning business in spades – much of it unannounced for commercial reasons. It’s the launch of Collaborative Workflow that interests me. Why? Because it’s another example of the execution of the extended enterprise vision that has been talked about for years.

A word about workflow

Workflow isn’t new – not in technology terms anyway. AP automation relies on workflow to manage invoices that don’t match perfectly against a PO or a Goods Receipt. There’s lots of reasons why they might not match: price mismatch; quantity mismatch – whether that’s through a difference between what is ordered and what is delivered or a mismatch in units of measure; there could be errors in billing address or deliver address that could have a material impact on VAT calculations; there may be no PO. The combination of queries can get complex and it goes someway to explain why e-invoicing is not, and can never be – a panacea or a quick fix unless it is implemented in the context of a wider Purchase to Pay strategy. Integrated workflow is part of that. Being able simply to route an invoice around the buying organization in order to resolve queries is an important component of an holistic purchase to pay implementation.

AP workflow solutions exist – indeed they are mature – but they are hellishly complex. Every organization is different and customizations to on premise (old school) applications are expensive to develop and a nightmare to maintain. But worst of all, in a 21st century context, they just don’t deliver the way we’d expect them to.

For a simple query, the workflow will pass an invoice to the right person who will resolve the query and pass is back to AP who can match the invoice. Job complete. But if there’s something more fundamental wrong with the invoice – it’s rejected. The problem is thrown back over the wall to the supplier and it becomes invisible. The supplier creates a credit note to cover the original, incorrect invoice and generates a second – hopefully correct invoice. We now have three documents instead of one and three times as much paper and we’re back to square one.

Not so with Collaborative Workflow. This uses a cloud based app that spans the extended enterprise – buyer and supplier. In this scenario, the supplier is an actor in the workflow process. What that means in practical terms is that the supplier gets to see the issue with the invoice directly in the same workflow tool that the customer AP team is using. Incorrect billing address? Change it. Wrong price? Correct it. Technically, the cumbersome process of creating credit notes and reissuing new invoices may well have to happen for technical or compliance reasons but because the buyer and supplier are using a collaborative tool that stretches across the supply chain interface, the user experience is seamless. Queries can be resolved within minutes rather than days.

A cloud based collaborative workflow tool that extends across the supply chain is, in conceptual terms, not new. But there’s a country mile between conceiving of an idea and delivering it in a real enterprise. That’s what Tradeshift are doing – delivering.

Tradeshift are good at talking the platform talk – they’re now walking the platform walk – with workflow.

Pete Loughlin can be found on twitter @peteloughlin

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