The cost of credit to many businesses is so high that it threatens their continued existence – that’s if they can get credit at all. And it’s not just a problem for them – it affects their customers and their suppliers. The full extent of the supply chains within their industry is affected. But it need not be like this. By taking a fresh view of risk, that cost of credit can be reduced significantly.
We’ve taken a detailed look at OB10’s Express Payment offering to understand how this new way of trading can work in practice.
Last month David Cameron announced a valiant government sponsored initiative. The primary objective of the UK-backed program is to provide small businesses with much needed access to liquidity - put in simpler terms: to pay small businesses faster. If you're unfamiliar with the current global economic environment, large organizations are taking longer and longer to pay their suppliers. In many cases, suppliers are paid 90 (or even 120!) days after they provide goods and services to their customers. This has been the case for many years. If you’re wondering why, the answer is money.
Yes, there have been innovations in e-invoicing in the last two years but compared to almost all other areas of technology, it has been standing still for about a decade.
The reason for this is simple, most players’ business models have not been driving a need for innovation. In all other spaces, intense competition has driven innovation in software, the technology behind it and how they use it. Which is all fantastic for users. But it’s just not the case here.
The growth of social networks is allowing a silent minority to become heard with a crystal clarity. People with the ambition and enthusiasm to make a name for themselves in their specialist field are building the infrastructure of a new type of community of special interests that is effectively competing with industry analysts. A community of experts who aren’t saying what they say because they’ve been paid to say it but instead are saying it because it’s a well-informed belief.
Whether your field is literature or linguistics, opera or soap opera, politics or purchasing, you can make a name for yourself by creating content on-line. Content is increasingly consumed on the internet, on the desktop in the office or via mobile devices anywhere. Blogs syndicated through social networks reach their audience far quicker and in a manner much more convenient than the traditional channels of printed media, TV and radio.
But should the traditional media be that worried about bloggers?
I don't think of myself, much, as a grumpy old man but I seem to have spent a lot of time recently reading blogs, LinkedIn, tweets and press releases, scratching my head and wondering "is it just me"?
There is a saying of which my old boss used to be fond: things that are 'well known' are rarely known well. These well known things tend to form our basic day to day operating assumptions. It is sensible to haul these assumptions into the sunlight every so often to give them a good dust down and re-examination. I am going to mention five of them today:
Despite their apparent compelling appeal, some great ideas just never take off the way you might have expected: 3D cinema; internet refrigerators; the umbrella hat.
It’s not just the frivolous inventions that don’t make it and in the business to business technology space there are as many examples. EDI is one. In some industries, such as retail, it’s well embedded as a core tool but is never really took off and the overlapping emergence of the internet in the 1990s saw growth in VAN based EDI plateau permanently.
Purchasing cards is another technology that promised more than it delivered. The benefits are compelling. To consolidate all of you supplier invoices into a single electronic statement that can be uploaded into your accounting system should be the default way we do business – but it never worked, apart from in a few niche areas.
And there’s a third – supply chain finance. The concept is far from new but despite years of marketing and product development, there are few examples of commercial organisations that have been able to prove its full potential. But that might just be about to change.