Electronic Invoicing

When you read the news this week that the European Union has agreed a mandate for e-invoicing you could be forgiven for thinking that the policy makers in Europe have come to their senses. They estimate that a saving of €2.3 billion a year could be delivered by streamlining the back office processes in public sector by using a common electronic standard for transmitting invoice data. This all sounds very worthy - very 21st century, but as someone with a professional interest in this (as well as a personal stake in it as a European taxpayer), I’m less than impressed. Here’s why.

"As new Turkish e-Invoicing regulations come into force in January 2014, two leading service providers have partnered to bring world-class electronic invoicing to Turkey." So says the press release that many of you will have read over the past few days about OB10 and Digital Planet. But how big a deal is this? What is the significance of the Turkish regulation change? If you look into it, it seems only to effect a few corporations - those that trade in alcohol, tabacco and gasoline. Will it have a major impact or is this really just the Turkish Government piloting a concept or seeking to control industries within which tax evasion is common? As an outsider, it's easy to jump to these conclusions so rather than relying on my limited knowledge and intuition on this subject, I spoke to an insider, Adnan Vural, CEO of Digital Planet, who was able to demystify things for me. The new regime in Turkey I learned, is no pilot exercise.

The great American commentator and satirist Jim Boren (1925 – 2010) long ago coined the term ‘Dynamic Inactivity’ to describe a form of bureaucratic behaviour which we all recognise. Dynamic Inactivity is defined as the devitalisation of ideas by the promulgation of ‘viable concepts’ and ‘action plans’ which serve to mask the underlying formulation of ‘inaction concepts’. For Boren, Dynamic Inactivity means doing nothing, but doing it with consummate bureaucratic style. Perhaps the greatest disappointment in public sector eCommerce in the last decade and a half has been dynamic inactivity. Lots has happened: millions of Euros have been spent on policy development, technical studies, conferences and analysis, economic analysis, standards setting, monitoring, recommending and blah, blah, blah. In reality, f*** all has actually happened of any significance.

I attended the round table event on e-invoicing in London on the 9th December and I shared some thoughts on the event here. I want to share a few more thoughts, but this time I want to look at the way the debate is framed technically. I have previously criticised PEPPOL for being far too rooted in technology rather than business. I am not alone in making that comment although I seem to have my head above the parapet more often. A similar sense washed over me at the roundtable, partly from the contributions from the European Commission and Open PEPPOL but also from other industry insiders there. My feeling is that there is an industry agenda in play here, an agenda which ignores business realities. The impetus is to seek a ‘solution’ which ticks all the boxes of the industry ivory tower whereas if we really want eInvoicing to gain traction we need to look at what is already working in the market and at what participants actually want.

Recently I had the pleasure of being with both Pete Loughlin and Peter Smith of Spend Matters Europe at an eInvoicing roundtable event in London on 9 December. The event was both enjoyable and frustrating. Before I share some reflections on the event and to avoid any doubt, I say immediately that I support the use of eInvoices - but I am also sceptical about the way in which the debate is being framed. One of the oft-repeated assertions during the roundtable was that the business case for e-invoicing as an activity in its own right is “overwhelming”. One commenter from the floor said at least twice that the government is “sitting on” several £billion in benefits which, I presume we were to infer, would be available if only the UK Government would adopt eInvoicing. I do not believe this to be the case, at least in the terms it was presented.

It’s quite easy to “get” the benefits of e-procurement – electronic catalogues linked to a purchase approval workflow. It’s a no brainer and it was one of the most successful B2B technology of the 1990s as the opportunity was seen to emulate the ease of buying that amazon, Dell and eBay offered. But it was never as straightforward as the B2C equivalent. You don’t need to account for everything you buy on eBay and apply GL codes and cost centres and we don’t need a 3 way match. That’s why Amazon is easy. (How many times have you heard someone in business complain about their ERP purchasing module asking why it can’t be like Amazon?) And what about e-invoicing? That seems like a compelling proposition until you try to automate Accounts Payable in an environment where the purchasing process is out of control.

I wasn’t expecting a drama but when Sarah Chilman rushed to Nigel Taylor’s rescue following what appeared to be an unprovoked attack with a coat stand, I immediately thought of Wendi Deng’s intervention at the phone hacking hearing when her now estranged husband, Rupert Murdoch, was the target of Johnnie Marbles. “Surely Parliamentary business isn’t always like this” I thought but quickly realised that the coat stand had simply fallen on Nigel’s head. It was a moment of distraction during an otherwise fascinating session, the first sitting of the UK Parliamentary Inquiry on e-invoicing. [caption id="attachment_8723" align="aligncenter" width="576"]Parliamentary Committee on e-invoicing From left to right, Caitlin the stenographer, Luke McKeever from OB10, Tim Coleman from the Federation of Small Businesses (FSB), Nigel Taylor from Taulia and Chair of UKNeF, Nigel Clifford from Procserv and to the far right, the coat stand.[/caption] The coat hanger mishap wasn't the only surprise. The Inquiry that I was privileged to be a part of, sat on Tuesday of this week, the day after an intense, all-day debate hosted by the UK National e-Invoicing Forum (UKNeF) during which I sat with Ian Burdon and Peter Smith, both of whom brought fresh and expert views and insights to the public sector e-invoicing discussion. These two days, the UKNeF meeting and the Parliamentary Inquiry, led me to some conclusions about the direction of electronic invoicing in the UK and they were conclusions that I would absolutely not have predicted.