Knowing it arrived – gets the biggest vote

To some, 2010 is witnessing the first “Internet General Election”.

It’s reckoned that Facebook, Twitter, web sites, podcasts and emails are playing a major role in the campaigns of political parties.

That said, traditional channels like direct mail are still rated as highly important.

There’s something reassuring about a piece of paper, an envelope, a stamp … and knowing that it WILL arrive (even if it’s binned two seconds later).

Electronic invoicing goes further. Suppliers don’t just send invoices – and hope for the best.

With a quality e-invoicing system, they can log in, confirm the arrival of their invoice … and watch its progress through the approval process. There’s no need to check and chase.

Something similar would appeal to the politicians. Imagine if they could track your movements … from opening their flyer … all the way to casting your vote at the ballot box.

On second thoughts, what a chilling prospect!

Sealed with a loving click. Love letters & invoices scanned and emailed!

As you may have read, Finland's post office has taken a controversial decision.

It’s going to scan people’s mail – and deliver it to them by email. That’s everything from pay slips and overdue bills, to birthday cards and love letters. And it's not an April Fool's prank.

The idea has only got as far as a pilot scheme for now. That said, feathers have been ruffled and Big Brother-style concerns have been voiced. But it’s won support too.

If adopted widely … think of the poor posties that no longer have to fight their way through frozen wastes, reaching far-flung cabins. And what about all the forests they pass … the trees that no longer need turning into paper?

Clearly, the idea has merit. And it’s not a million miles away from the business of scanning paper invoices submitted by suppliers – and then receiving them electronically.

In fact, the principles are very similar for both schemes to work:

• Security: It’s got to be 100% trusted and confidential.
  
  
• Accuracy: Must be spot-on. Disastrous if a crucial date is blurred or a number mis-read.
  
  
• Speed: It must be delivered faster if anything. No good if a wedding invitation arrives too late – or a cash-strapped supplier doesn’t get paid.
  
  
• Cost: If it doesn’t save money, why bother? Automation means savings.

But there’s a big difference when it comes to how the information is read.

For tax statements and love letters, viewing the contents on screen may lose some of the hands-on impact (for better or worse). No quivering fingers tearing at the seal, or that whiff of familiar perfume. A flat jpeg image will probably suffice in most cases.

However, for scanned invoices in the UK procurement business, much smarter tools can be used.

Newer technologies such as Enhanced OCR will store an image of the invoice – and also harvest its contents automatically into a business-ready format for hands-free financial processing, saving hours of time.

While Finland’s post office may be taking a giant step forward … it’s yet to become really useful in a similar way.

Maybe one day, postal services everywhere will become truly responsive ... texting your builder to question his bill against the original quote, or activating the vacuum cleaner to spruce up the spare room when Great Aunt Maude writes to say she’s visiting?

Pulling out the designer bathplug will expose everyone’s duck islands

Like most people, the e-Procurement Guru reacted with a mixture of amazement and cynical sighs to recent news of extravagant expenses claims by our MPs.

But what’s particularly interesting is a running theme among the shame-faced politicians … to blame ‘the system’ rather than admit to personal greed.

Of course, things only started to change when ‘the system’ … a procurement system of its own unique kind … became visible to everyone via the media. But what if the House of Commons had a state-of-the-art, purchase-to-pay (P2P) system? And how could all the clever tools and spend analysis capabilities be used? Now, at this point, we started to have some fun, albeit tongue-in cheek … For example, maybe the Commons expenses team could have identified their precise spending on bathplugs, plasma screens and horse manure. Next, they could have consolidated suppliers and negotiated more favourable open contracts – perhaps even reducing prices by as much as 30%!

All possible. But joking aside, where a P2P system could really add value would be to allow visibility to all stakeholders (including the public!) and to enforce compliance. This is where the new-look MPs’ expenses system is sure to be headed. Less colourful. But fewer column inches to worry about. Plus significant savings for the public.And that’s the bottom line. Visibility + compliance = less maverick spending = savings.

But without the correct P2P system in place, it’s too easy for wasteful expenditure to go undetected, year after year. Where did all those budgets go?

Lastly, to put our politicians’ demands into perspective, take a look at the exotic backstage perks allegedly demanded by our honourable rock and pop stars. Makes those House of Commons lunches seem rather modest.

Rule 3: Giving suppliers visibility of their invoice in progress

Unlike many other retailers, Amazon has not yet been hit hard by the consumer credit crunch. In fact, its fourth-quarter profits rose by nine per cent, having enjoyed its best Christmas ever.

Aside from its broad product range and outstanding user interface, what consumers really appreciate is its tracking mechanism - it’s hugely reassuring to check your account and see the words ‘item dispatched’ next to your order with a predicted delivery date. But being able to check the status of a transaction easily can be life-critical if you’re a supplier. In today’s cash-strapped economic climate, it can make all the difference to cash-flow, business survival and fingernails.

The ‘disaster scenario’ that suppliers dread is waiting weeks for payment – only to then call to discover the invoice has been either misplaced, entered incorrectly on the system or is waiting to be checked because it fails to tally with the original order.

At the same time, what purchasing organizations really don’t need is hundreds of anxious suppliers phoning up each day to plot the progress of every payment. Thankfully, there is a pain-free solution to all of this … that takes us back to the Amazon example.

Imagine being able to visit a web site where you can ‘flip’ purchase orders into electronic invoices automatically, so there’s no room for errors at the payment end? And how about streamlining the payment process, so ‘human approval’ is quick and easy? And what if everyone – buyers and suppliers – can track payments online, 24-7 so they know exactly when payments are being made?It’s an approach that the London Borough of Enfield, helped by EGS, and many other organisations are now adopting, fully aware that it will ease the financial pressures faced by their valued suppliers. If you want to improve supplier relationships – and reap the rewards of their greater loyalty and better service – then improving the efficiency and visibility of your payment process will work wonders. There are few things that focus the mind so sharply as fast payment. Especially now.

And it means there’s a better chance your favourite suppliers will be around provide the goods and services you need tomorrow.

Rule 2: Make e-invoicing easy for ALL suppliers

Here are some facts that will put this issue into context: There are approximately 20 million European businesses. Of these less than one million have greater than 250 employees. The rest are small companies. Over one third of the total 30 billion invoices per year within the EU involves a small company, yet they have to date been neglected by many of the recent e-invoicing initiatives.

In addition, there is still widespread beliefs amongst SMEs that e-invoicing is tricky, unsafe and disliked by the tax office. The dematerialisation of the invoice into HTML, PDF or XML with transmission across the Internet can appear a big leap from printing and posting. Not surprisingly the tried and tested practices remain hard to replace.

Actually, e-invoicing doesn’t have to be difficult, is more secure than ordinary post and can be the tax man’s preference if implemented correctly. At EGS we work with many large buying organisations to ensure that even the smallest suppliers can simply, safely and legally issue electronic invoices. Those suppliers unable to create structured e-invoices on their own can generate and send e-invoices using other EGS services, including:

• A paper to electronic transformation facility where their printed invoice is scanned, the image analysed by optical character recognition software and the output file validated against purchase order and master data records before being transmitted to their customer
• A purchase-order-flip facility, which simplifies the on-line creation of an invoice using data taken directly from the purchase order. This done via a browser at EGS's supplier portal
  

This really is a win-win for both parties:

The buyer achieves the efficiencies associated with full end-to-end e-invoicing from all of their suppliers.

The supplier speeds up their bill presentment, gets online visibility of the progress of their invoice in their customer’s authorisation and payment processes and has access to comprehensive records and reconciliation data

This should make every happy – even the VAT inspector.

Next time: we will look at rule 3 - give suppliers and buyers visibility of the electronic invoice approval process.

Rule 1: Sell the benefits to suppliers - don't assume if you build it they will come

We all know that persuading suppliers to participate in e-procurement is in itself a change programme. Let’s face it; your supplier base is probably a mixed bag ranging from multi-national suppliers through to one-man bands, and convincing this range of suppliers to change the way they work is no mean feat.

Like anybody else Suppliers need a reason to participate and having someone dedicated to supplier change is essential. A good structured communication plan is essential, and engaging those suppliers at the correct time is vital, and timing that communication crucial. Suppliers can be keen, but if they don’t see the return in investment in orders being generated they become pretty well turned off.

Any organisation today needs to reduce expenditure, and buyers need to ensure that they are not increasing supplier costs of doing business with them, but ensuring that any changes they instigate offer some benefits.

One example I came across the other day was with a photographer who by doing business with their local authority was reluctantly faced with e-enablement, and the thought of having to raise electronic invoices was a complication he didn’t need. The outcome is that he has seen a month on month increase in cash flow and can actually sends the invoice from his blackberry whilst out on location, as he stated “brilliant – so quick and efficient”, and now takes just 20 minutes a month instead of a day.

Next time: We will look at rule 2 - make it easy for suppliers of all sizes and all levels of technical ability to generate and send you electronic invoices.

The golden rules for getting suppliers to adopt eInvoicing - Introduction

They have recently introduced “Park by Phone” in my local town car parks. It sounds great. Pay for your parking by mobile phone, no need to carry change, receive an alarm 10 minutes before your time expires and pay for more time remotely.

Being curious about technology, I asked the traffic warden how she knew who had paid. She proceeded to show me how, on a mobile device, she could call up a list of anyone who had paid by phone in the car park we were in. The list revealed that no-one had paid by phone – everyone was still buying tickets at the machine. Not to be defeated she pulled up the list for a car park nearby where phone parking was “really popular”. The list revealed that only one person had paid by phone. Two car parks – capacity 400 – both full – only one person had paid by phone – hmmm!

How often have we seen ideas which are great on paper and which are executed crisply from a technological standpoint, fail because the really important link in the chain, the end-user, didn’t get it? Remember Hutchison’s Rabbit, a mobile revolution in the 1980s which withered on the vine because no-one used it? I am sure everyone reading this could think of as similar example.

This is a very current issue in e-procurement. Several companies have technology that does the job well on both the e-procurement and e-invoicing front. EGS is one of these. However the winners, particularly in the e-invoicing space, will be those companies who are able to get suppliers to join their eco-system. On the face of it the proposition is compelling for suppliers. No more paper invoices to create; invoices are received and processed instantly by buyers and payments are made faster. Surely suppliers should be beating a path to our door – but they aren’t. There are several reasons why not but one of those is that suppliers already have an invoicing method that works, so many see adopting e-invoicing as a cost.

We have spent a lot of time focusing our minds on this subject. We call it “supplier adoption” and it is a complex subject – too complex to tackle in a single blog entry. But complex or not, it is a nut that we must crack to be successful.

We have developed a list of “Golden Rules” that we believe we have to make work in order to maximize supplier adoption. In a series of blog entries of the next few weeks we will look at each of these rules in detail.

Next time: We will look at the first of these rules which examines selling the benefits of e-invoicing to suppliers.