This is the first in a short series of articles by Jo Harris, Director of Programme Management at OB10. They are extracts from The Supplier Enablement Handbook, a best practice guide for e-invoicing and we’re especially pleased to feature them in Purchasing Insight.The deepest and broadest hands-on experience of implementing electronic invoicing comes from the e-invoicing vendors themselves and as more and more organizations take on board the benefits of automating finance processes, sharing some of the lessons learned is extremely welcome.
e-invoicing - the supplier engagement plan
Before you start talking to your suppliers about e-invoicing, you must have a detailed plan in place to support your enrollment campaigns. Internal stakeholder support, clear messaging and a thorough understanding of your supplier-base demographics will mark the difference between an easily dismissed email and a set of strategic communications.
It depends how you interpret e-invoicing. In its EDI guise it’s been around for over 20 years but its modern incarnation, XML data transported over the internet, grew out of the dot com boom of the late 1990s so which ever way you look at it, e-invoicing has been around for more than a decade. And we’re now moving into a new era. Its take up has grown to an astonishing level partly due to mandates in various parts of the world and partly because, frankly, it’s a no-brainer.
When a technology is new and untested, there is a natural and pragmatic suspicion that prevents widespread adoption. We have, collectively, had over a decade to understand how to get it right. For established electronic invoice programs, they have had time to iterate and refine and for those just embarking on the e-invoice journey, there are well-established paths to follow. There is no need to create methodologies from scratch, no need to reinvent the wheel. Even the business case is simple because it can be based on others’ experience, not some theoretical savings exercise. The latecomers have got it easy and that’s great for everyone.
So where can you access sources of best practice? How can you get at the experience of the last decade or so?
Moving away from paper invoicies to electronic invoices isn’t just about delivering business efficiency and the automation of business processes. It’s as much about eliminating paper and saving the planet – right? And in places like Mexico where e-invoicing is soon to be compulsory, we should see a dramatic improvement in the carbon footprint of finance departments all over the country shouldn't we?. What will happen to printer sales? Will printer manufacturers go out of business? And what about print supplies?
It’s ironic but, as a direct result of the introduction of mandated e-invoices, there may well be a boom in printer sales in Mexico.
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.
Governments in many countries are considering how best to capitalize on the opportunities that electronic invoices present. Some countries like Brazil and Mexico have used the force of law to insist on the use of electronic invoices - other countries have mandated that suppliers to public sector use e-invoices. But some of the biggest economies in the world, notably Germany, the UK and the United States seem hesitant. Perhaps they don't want to interfere too closely in commerce. Maybe it's the fear of the bureaucracy of new legislation that puts them off. It could be lack of political will. But by providing no encouragement or leadership, these governments are depriving their economies of literally $billions in efficiency and liquidity and as a stakeholder in this, I'd like to propose a three point plan to persuade businesses to use electronic invoices.
It's clearly the right thing to do. So why isn't everybody doing it?
I'm going to have to come clean. I was, for years, one of those people that was reluctant to recycle. I wasn't a global warming skeptic or anything like that. My formative years were in the 1970's when we thought the oil was about to run out. Green was good and what is now called sustainable energy sources were seen as the way of the future. I have a scientific education so when I hear that a large majority of scientists agree that there is an urgent need to control carbon emissions I don't think twice about ignoring the conspiracy theorists and crackpots that claim we can carry on regardless.
So why was I reluctant to recycle? Why was I not in the least bit motivated to turn off my standby lights? And why do I love plastic bags? And what's any of it got to do with electronic invoicing?
Question: When is an standard not a standard? Answer: When there’s loads of them. In Europe, there’s more e-invoicing standards than there are languages spoken so, when the EU Commission in it’s draft directive on e-invoicing in public sector calls for more consideration into developing a common standard, is it suggesting we need more?
I spoke to Mikkel Hippe Brun, Chief Strategy Officer at Tradeshift, to get his thoughts.