It’s funny when you read some vendors’ marketing material claiming to be at the bleeding edge of technology when the audience knows full well that what they’re talking about is well established, “business as usual” stuff. Take this example explaining how business is just beginning to discover the internet: “It wasn’t so long ago that the Internet was viewed as just a playground for consumers with little-to-no-value for businesses. But it’s a completely different story today. The Internet has come a long way, baby” Guess when that was written? 1998? 2003? No. Actually, it was written a few weeks ago by Ariba’s Rob Mihalko aka Rip Van Winkle.
The internet isn’t new. E-Procurement isn’t new. Supplier networks aren’t new. Neither is e-invoicing or supply chain finance. They’re all old, well established business tools. So what happened to innovation in P2P?
Innovation in Purchase to Pay is alive and well
There’s nothing wrong with the old. It’s grown old because it works. E-procurement, using the internet to provide a low cost connectivity and rich collaborative functionality between buyers and suppliers, was highly innovative late last century. Ariba was amongst the first to get it absolutely right and Ariba Buyer remains best in class for e-procurement. But it’s not innovative and it’s difficult to put an exciting spin on it any more. But that doesn’t mean there’s nothing innovative out there. Taking established technologies and joining them up in an end to end way – that’s new. It’s not the technology that’s new, it’s the execution. Look at Basware’s Alusta product, a true end to end approach to holistic purchase to pay. Look at Coupa – a real cloud solution with a pricing mechanism that only kicks in when savings are delivered or Vinimaya providing innovative new add-ons to e-procurement.
It’s as old as the hills – well perhaps not that old but EDI invoicing predates the internet which makes it pretty old. OB10 claims to have invented e-invoicing in its modern sense – a claim that they can back up by the way – but that was almost 15 years ago. E-invoicing is old hat. But in a good way. Mature would be a better word and as it’s matured, so it has taken on a new lease of life. Now that the business benefits are clearly established, new business models are emerging that meet the demand of the modern age. Charges have dropped and ‘free’ e-invoicing, pioneered by Tradeshift, is gaining traction. And while it may be old and not very interesting, electronic invoicing is being seen as an essential prerequisite for financial supplier chain management with products like Express Payments from OB10. The old bloke of e-invoicing, (that’s not what the OB stands for by the way),is both an established player and an innovator.
Supply Chain Finance
Supply Chain Finance has got itself a bad name. traditional buyer led trade finance products work well for large organizations who want to optimize their working capital but often at the expense of their supply chain. Extortionate interest rates from some factoring firms have led to comparisons with pay day loan sharks which has not helped the reputation of the banking industry, already seen as the bad guys. There is nothing new about supply chain finance – not in its traditional guise. But there is something very new and very sexy that is threatening to turn supply chain finance on its head. Dynamic discounting does everything that traditional trade finance does except cost the earth. By buyers and supplier collaborating directly, the middle man costs are removed. Companies like Taulia who only do dynamic discounting are making supply chain finance current and exciting.
They say there’s no such thing as a new idea and there’s nothing wrong with an old idea that works. Don’t pretend it’s new if it’s not – just say how good it is.
Pete Loughlin can be found on twitter @peteloughlin