Author: Pete Loughlin

There’s a perennial discussion about supplier fees for electronic invoicing. Should there be no fees to suppliers because all of the business benefit is on the buyer’s side of the equation? Should there be at least a small fee to suppliers that reflects the benefits of eliminating postage costs? Or should the fees be akin to purchasing card fees and be proportionate to the value of the invoice? While some see it as an ethical debate, it isn’t. It’s a commercial discussion. Everyone’s in it to make money and the debate is no more than an industry squabble. The fact is, most suppliers see supplier fees as a cost of doing business – you don’t get anything for nothing – and as far as suggesting that suppliers will pass the costs back to the buyer, even a junior procurement professional knows how to mitigate that risk and insist on no increase in pricing. What’s really important is the benefits that are delivered in terms of efficiency. This is one way of looking at it but there is another way and that involves doing the math.

I recently made some comments about Basware that were somewhat critical. It was positive, constructive criticism. I wanted to point out that Basware was ideally placed to become a monster. With one of it’s largest competitors sidelined somewhat by their acquisition by SAP, Basware could fall into the trap of becoming complacent – indeed, I have , from personal experience seen hints of this on the horizon. But I overlooked something – something that to an observer from outside of their organization could go unnoticed. It is the astonishing turn-around that Basware has performed, the foresight they have shown making that change and the energy and determination they have exhibited in completing it.

You wait for ages without meeting any then two turn up at once. I had a rush of reacquaintances some time ago. I met Mike Zealley, a former colleague from KPMG with whom I had the pleasure of working very closely about 15 years ago. After a stint elsewhere he’s now a partner at KPMG doing great things leading a Public Sector practice. Not long after, I met Roberto Moretti, CEO Europe of Oxygen Finance, for the first time. His first words to me were “Mike Zealley sends his regards.” Roberto had just come from a meeting with Mike and he’d mentioned he was seeing me. But before Roberto and I got down to business, I spotted another familiar face in the Oxygen Finance offices - Mark Hoffman, formerly of lots of businesses but most notably Sybase and CommerceOne. I last met him in 2000 at a CommerceOne event in Berlin. It felt like it was a trend. Things were coming round in full circle. Bumping into old colleagues and business acquaintances was almost to be expected but then nothing. For ages I didn’t bump into any one – until last Friday when I bumped in to two at the same time.

This week we’re delighted to welcome a new sponsor, Nipendo, to Purchasing Insight. Nipendo is fairly new on the P2P scene but in the five or so years that they’ve been about they’ve already made quite an impact with an impressive customer list which includes HP, IBM, Motorola, Pfizer and Office Depot. I was excited to speak to Nipendo’s CEO, Eyal Rosenberg,  a couple of weeks ago – I wanted to know what makes Nipendo’s proposition stand out from the crowd. We covered a lot of ground but the thing that stood out for me was the concept of E2E-invoicing. At first, I was a little skeptical but as Eyal explain more, enhancing his explanation with case study examples, the Nipendo vision became clearer.

Sometimes, great ideas just never take off because some prerequisite solution to a problem hasn’t been solved. E-procurement was a great idea in the 1990’s but until the internet was ubiquitous and trusted, it was slow to take off. Looking back, the trust and ubiquity grew quite quickly but in 1996, if we had a crystal ball that said it would take the best part of a decade to become an established way of doing business, I wonder whether we’d have given up. We didn't know that the problem was trust and ubiquity until it was solved.

Do you recognize this business? They are a market leader. They have a significant - perhaps largest market share in their industry. Everyone knows their brand. They recruit the best people and their brand looks great on a CV. They have the confidence to know that they can retain their market share and still win business without having to compete on price. Can you tell who I'm thinking of? Here's a few more characteristics.

We have highlighted many times the challenges of working capital management. It’s become a cliché to refer to the “perfect storm” – the combination of virtually zero interest rates and constrained liquidity that gives both cash rich, large businesses and cash strapped suppliers a headache. But every cloud has a silver lining. Better working capital management provides an opportunity and now, REL, the specialist working capital arm of Hackett, has revealed the size of the prize, in Europe - a total of €762bn is tied up in excess working capital - equivalent to 6 per cent of EU GDP!