If you can't innovate - we can

I attended the Regent conference in London last week. Always a high profile affair with the great and the good from the world of IT in attendance. This year we even had the pleasure of Jeremy Paxman as our compere. Great fun for the audience - but speakers got a grilling from him that wouldn't have been out of place on Newsnight.

Jon Moulton of Alchemy gave an entertaining talk about IT in a recession. He believes that companies don't innovate in a recession because they are focusing all their energy on survival. I think this is true to an extent, but take issue on this as a generalisation.

Companies innovating for themselves may see this activity as less important in a downturn. But many companies outsource much of their IT activity. If you are paying for it, you don't expect your service provider to stop innovating on your behalf.

Tens of thousands of users across many companies rely on EGS's "on demand" platform for their e-procurement and electronic invoice processing. Because our proposition is fundamentally a cost reduction one, we are seeing more pull from our customers than ever. Our development team are as busy now as they have been at any time in the last 5 years building innovative new features for our customers.

Perhaps Jon Moulton's hypothesis would be better expressed as "Companies want to innovate in a downturn but choose not to because they have to deploy their money and resources on staying alive". Sounds to me like a very good reason to look for an outsourcing partner or a managed service.

And finally......like Jon Moulton, I was intrigued by sponsors Barclays Bank's gift to delegates of an empty Barclays carrier bag. A fitting metaphor for the parlous state of the banking industry.

A small dash of technology but a large helping of expertise

Last week we were invited to host and moderate a “Learning Lab” session at the SharedServicesLink.com conference on Electronic Invoicing held in London. We spent 3 hours with a number of companies who are on the brink of implementing e-procurement or e-invoicing solutions. We kept the session very practical drawing on the decades of experience our team have of deploying such solutions across our customer base.

A very interesting thing happened at the end of the session. A member of the audience took one of our team to one side and told him that he had evaluated our technology alongside several other companies a few months earlier. There was nothing to distinguish one company’s technology from the others. They all had much the same features. For reasons he was unable to remember EGS was not taken forward to the short list. But here is the really interesting part. He told our man that having listened to us for 3 hours that afternoon, he was so impressed with our knowledge and our practical advice, that he was not only going to put us back on the short list, he was going to put us to the top of it.

We thought this was interesting. We have always had complete confidence in our ability to deliver what we promise, when we promise. What was most significant about this and what this customer believed set us apart, is that our accrued expertise and domain knowledge enables us to help organisations make the big decisions. That doesn't come out of a box or from clever developers. It takes years to accrue.

So the lesson learned is that it is not always about the technology. Much of our value is the expertise that we bring with the technology.

Are you a "must-have" or a "nice-to-have"

Recently at EGS we have been trying to look into the future. No not a sudden conversion to astrology - we have been reviewing our product road map as we try to decide what the next generation of our e-procurement platform will look like. As ever we are driven by our customers on this. We are lucky to have a very active user group which has no shortage of ideas. Our job is to sort the “nice-to-have” ideas from the “must-have” ideas. The definition of those categories got us thinking.

Last week a few of us attended the UK’s networking event of the year – Entrepreneur Country. 300 invited businessmen from all walks of life descended on the Institute of Directors to share ideas, view demos and hear presentations. You won’t be surprised to hear that the current market conditions were a recurring story of the day.

And it was here that the theme of “nice-to-have” and “must-have” appeared again. It struck me that a year ago at similar events all the buzz was around companies like Blyk (cheap mobile service with ads), Flurry (mobile email) and Buddi (GPS pet tracking). None of these companies make you money or even save you money – they just make life a little easier. Great fun when times are good, but when times are difficult you can easily do without them. Surely the definition of “nice-to-have”.

At Entrepreneur Country there was a lot of interest in EGS and the savings our services deliver. One of the key speakers described EGS thus: “EGS….if ever there was a company to work with in a downturn”. As I reflected on that I thought to myself, what would happen if you turned off EGS’s service to our customers? The simple answer is at worst their entire supply chain would fail and at best it would cost them a lot of money in a number of ways. Surely that is the definition of “must-have”

So as we build our Development Roadmap for 2009 our challenge is clear. Keep building “must have” tools into our “must have” service.

And finally....... The Entrepreneur Country dinner saw over 100 people sumptuously fed and watered at The Mint Leaf on Haymarket. Now the food there is “must have”!!

How to procure temporary staff electronically

At EGS, all of our customers are implementing some type of corporate service for the provisioning of temporary staff. The use of electronic procurement tools is key no matter which flavour of managed service you select.

We estimate that UK business spends over £25bn per year on temporary labour. We know that the procedures associated with the provision of temporary specialist staff have to date been paper intensive, relying heavily on signatures and paper audit trails. The reconciliation of invoices remains a time-consuming, imprecise manual task leading to delays in payment with high risks of errors and fraud.

The more innovative of EGS’s customers are now achieving major savings by replacing the paper-based practices with an integrated, closed-loop process comprising of the three central electronic P2P procedures:

1. Order Placement, which provides the base document for financial authority against which timecards can be approved and invoices presented. The requirements for specialist workers are complex, but not impossible to capture in a structured purchase order format. Contrary to often cited concerns, when correctly implemented e-ordering speeds up the procurement process and can be used for even the most time critical of requirements, such as, sourcing emergency social care.
2. Receipting, or in this case, the authorisation of timecards. The compiling, routing and authorisation of timecards is particularly well served with internet accessible workflow. Why would you do it any other way?
3. Invoicing - no need for consolidated invoices (they never did reduce work, anyway). Invoices are kept simple and delivered electronically. If the purchase order is in place and the timecard authorised, the invoice can be automatically matched and sent on its way for timely payment. As the PO is approved and timecard is fully auditable, Buyers can safely “self-bill” if they choose.
   
   And, of course, management information is then available. We all need the flexibility of temporary resource to supplement our permanent staff through the peaks and troughs in workload and unanticipated absences. However, without the visibility and control that comes with e-procurement your temporary staff may well be costing you much more than you think.
   
   And you thought e-procurement was just for buying stationery!!

What will shine in '09?

As 2008 draws to a close we thought we would take the opportunity to gaze into the EGS crystal ball. We can’t tell you where the FTSE will end the year but we can have a better than educated guess at what the hot topics in procurement are going to be for 2009. Two areas excite us about the next 12 months – here they are.

1. Electronic invoice management

We have seen this issue gradually gather pace in 2008 and we think it masks a bigger issue. The bigger issue is that everyone is desperately trying to rein in costs and is suddenly catching on to how much can be saved by process automation. Traditionally not very exciting, but ask the CFOs of many large and medium sized corporations if they are excited by the huge savings they can make. E-invoicing will lead the way. With hybrid solutions combining true e-invoicing and scanning & OCR, implementation, uptake and therefore savings can be very quick.

2. Outsourcing

Outsourcing comes and goes with fashion – but we think that in the current climate, Chief Execs will be trying to turn fixed costs into variable costs as well as getting infrastructure costs off their balance sheets. So outsourcing of support functions such as procurements, IT, Finance will make a big comeback.

What is for sure is that any company that helps companies to reduce cost will have a receptive audience in 2009. We think the winners will be companies that are flexible enough to break their business model to embrace new opportunity. Those companies that own their own technology will be best placed. The other winners will be those sitting on some cash, for one other likely phenomenon of 2009 is that merger and consolidation opportunities will present themselves.

Whatever 2009 brings for you, we wish you all a very Happy New Year and we hope you will continue reading our opinions in 2009.

OCR & invoice scanning - one small step back technologically, one giant leap forward financially

So it’s official - the holy grail of P2P is finally realisable- a true closed loop from requisition to payment managed seamlessly through an automated and paperless process. It’s true - we have customers putting this into practise and making big savings as a result. Whilst there are still challenges, we think that the technology challenge has largely been overcome, judging by the number of transactions we are seeing our customers process.

One area that has captured our attention lately is electronic invoicing and the readiness and capability of suppliers to engage. Several years ago we built a ‘pure’ e-invoicing solution that enables suppliers of all sizes and capabilities to generate and transmit an e- invoice, whether from a PO Flip via our supplier portal or through an automated xml invoice. Once again no technical challenge - the challenge here that has got us thinking is the speed with which our customers can convert their supplier base to one of the ‘pure’ e-invoicing options. The problem here is that the supplier is required to be proactive when it comes to e-invoicing and will need to see a commercial upside if they are to change their processes to create e-invoices. Naturally they are resistant which can slow down uptake and therefore the savings that flow from it.

We went back to the drawing board driven by one thought; our customers, want to get as many invoices into their automated workflow, as quickly as possible. To bridge the gap we have launched an invoice scanning and OCR service. In English, we are turning paper invoices into e-invoices (not into images of invoices – there is a big difference)) which will provide a means of accelerating the volumes of e-invoices captured. Those suppliers who are slow to move to pure e-invoicing can continue to provide paper invoices which we convert to e-invoices meaning suppliers need to do nothing new.

We do not see this as the ultimate solution, but rather, as an interim one. However from the buyers perspective it has the same effect as virtually total e-invoice uptake. Meanwhile the parallel activity of moving suppliers onto ‘pure’ e-invoicing continues. The fact that the EGS OCR solution delivers invoices into a single validation and workflow, along with ‘pure’ e-invoices, provides customers with a means of significantly increasing the ROI. This additional component of the P2P solution will, we believe, bring our customers even closer to the vision of a truly automated and paperless process that unlocks real savings.

To own or not to own your platform

We often debate in the office whether owning our own platform (as we do at EGS) is the right strategy or not. Surely we would be better off outsourcing it all or using third party software so that we could focus on the sales side of things. Backers of the "third party opinion" were silenced by the events of the last week. Never have we been more grateful to be the owners of all of our code and intellectual property.

With a hastily announced and implemented 2.5% reduction in standard rate VAT, businesses are facing a £300 million bill as they have to change pricing and accountancy systems, not once but twice in just over a year. Offers of help (at a price) are not hard to find from the ever-opportunistic consultancy industry. Those businesses that rely on COTS (commercial, off-the-shelf) software are also at the mercy of their overworked suppliers who may, or may not, view a short-term change to VAT on a small island off-the-coast of Europe as important.

Fortunately at EGS we do not use other vendors products to guarantee HMRC compliance of our eProcurement platform. With only one week to respond to Mr Darling’s announcement, the benefits of having purpose built applications supported by a fully staffed in-house software development team became quickly apparent. Sure we had some late nights and a team worked through the weekend - but at least we had the opportunity to do so. Were pleased that the changes were in place for business-as-usual at EGS on Monday morning, 1 December 2009. Unfortunately some of those relying on third-parties face several more weeks of disruption. Luckily we all have plenty of notice for the next VAT change in 13-months’ time.