Cash & Liquidity ManagementCash ManagementAccounts ReceivableFriends Reunited? – e-invoicing and the Compatability Question

Friends Reunited? - e-invoicing and the Compatability Question

Currently, e-invoicing solutions are “service provider-specific”, unique offerings
from each vendor, precluding these solutions from being fully-compatible across
different platforms. The concerns therefore faced by Billers can be best explained
by looking at the Biller-Centric model with the following scenario (see illustration
below):

1) Organization B1 with customers CS-1, CS-2, CS-3, CS-4 and CS-5
decides to implement an EIPP solution to deliver invoices to their customers
for processing and payment.

2) B2 is another billing organization that is implementing EIPP using a different
service provider or system to B1. B2’s customers are labeled CS-4, CS-5, CS-6,
and CS-7.

3) Both B1 and B2 are competing organizations operating within the same industry
that have common customers, i.e., CS-4 and CS-5.

The main issue with compatibility of EIPP systems relates to user adoption.
In this scenario, customers that are supplied by both B1 and B2, such as CS-4
and CS-5, may be unwilling to adopt two different EIPP services. This could
be for multiple reasons:

  • the higher adoption costs as a result of the need to either integrate with
    or become trained on another EIPP system,
  • the reluctance to have multiple internal processes, if each EIPP system
    requires the user to adapt to their workflow and peculiarities, and
  • the fragmentation of information across different EIPP systems resulting
    in greater expense when consolidating information.

The customer may dictate to B1 and B2 the service of their choice. B1 and B2
are therefore faced with the problem of having to rely on external parties that
have influence over the success or failure of their investment decisions.

Is incompatibility an obstacle to EIPP adoption?

The incompatibility of EIPP solutions has not yet become a barrier to acceptance
because of the following:

1) Organizations that have clearly identified the benefits of EIPP for themselves
and their trading partners are more focused on the acquisition and implementation
of this technology. They put higher priority on considerations such as:

  • which EIPP solution will best cater to their needs – the “build” or “buy”
    decisions, including the core functionality required to meet their business
    requirements and objectives
  • effectively integrating the EIPP solution into their organizations’ enterprise
    resource planning (ERP) or back-end systems and processes
  • business partner adoption and roll-out of the service to achieve the optimal
    usage that drives cost reduction and payback for the investment
  • continually learning and leveraging this technology to deliver greater efficiencies
    and benefits within the organization and for their business partners

2) The majority of EIPP adopters today are using the technology for first-mover
advantage. As such, when the organization rolls out EIPP to their business partners
it will usually be their first encounter with this technology.

3) The usage of EIPP has not yet reached a critical threshold. As demand for
EIPP accelerates and the incompatibility of these solutions becomes a recognized
industry problem, service providers will act to address this issue. Many in
the EIPP industry will consider this to be a “healthy” problem and look forward
to the opportunity of dealing with this challenge.

4) EIPP service providers maintain a close working relationship with their
customers and are responsive to their requirements. As such, if their customers
do recognize compatibility to be an issue, it can be expected that the established
EIPP providers will be ready to deliver solutions that meet this requirement.

Learning from Industry Experience

The market has its own self-correcting mechanism to deliver solutions based
on its needs. A prime example of this is RosettaNet, a consortium of over 400
global organizations from the information technology, electronic components
and semiconductor manufacturing disciplines that banded together to create,
implement and promote open e-business process standards for the supply and purchase
of goods and/or services in the high technology sector.

What’s Next?

It is safe to assume that EIPP service providers do recognize that the compatibility
issue exists and some may have even identified solutions. For now, service providers
are directing resources to other more pressing priorities, such as working on
getting greater awareness, higher usage and adoption of this technology by the
business community. Collaboration between EIPP providers together with their
customers and possibly the establishment of standards will be key to resolving
this issue down the line. All it requires is for the market to mature and for
this need to come to the forefront!

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