05 Feb 2013 Research just released reveals a new driver for electronic invoicing
This is an important piece of research. For the first time, independent evidence points to a rapid growth in the adoption of e-invoicing and a significant change in the motivation for implementation.
A wide range of organizations, from SMEs to large global businesses were surveyed in 2012 to understand their experiences and aspirations for payment technologies. Some of the results of the research are, to be frank, predictable, while others were a surprise. Overall, the research paints an optimistic picture for technology vendors and their clients who are benefiting from their solutions.
Key Research Insight – Electronic Payments, checks and PCards
The United States is out of step with the rest of the world when it comes to B2B payments. We’ve known for some time of the unique preference of American organization for checks and their unusual aversion to electronic payments. This appears to be changing as more and more US businesses move away from paper but they still lag the rest of the world. Not so with Purchasing Cards. The extraordinary growth in the use of Purchasing Cards in America shows no sign of slowing, again in contrast to the rest of the world where their use appears to have plateaued.
Key Insight – Electronic Invoicing
Despite the compelling case for the use of electronic invoicing, the argument was never won and the rapid growth we saw in the adoption of other B2B technologies like e-procurement never happened. It’s not unusual. Marketers refer to the ‘chasm’ – the gap between the early adopter and the early majority phase in the adoption of new technology – e-invoicing has been languishing in the ‘chasm’ for a few years and some have cast doubt on whether it would ever emerge. This research suggests that it has indeed emerged and we will see very rapid growth in the coming years. It is consistent with the mergers and acquisitions that we have seen in the market and there is little doubt that the investments made over the last decade by vendors and their customers will show a return.
Key Insight – Financial Supply Chain Management
The research found, quite unexpectedly, an interesting trend. When we look at the ambitious plans of some of the respondents and correlated that with their drivers, it is evident that the opportunity to collaborate with suppliers to better manage cash and working capital is becoming the dominant driver for AP automation. It seems that while the business case based on efficiency and cost reduction stacked up, it was not compelling. Now that more and more businesses see the opportunity to utilize financial supply chain management techniques to secure discounts, the benefits side of the e-invoicing business case has become much more attractive.
This is one of the most important pieces of research you will see this year. To download the full report visit Paystream Advisors here.
Pete Loughlin can be found on twitter @peteloughlin