Learning about Mexico e-Invoicing from an Expert, Part 3

This is Part 3 of this interview with Mexico e-Invoicing expert Jason Jones of Crossgate, a company SAP co-owns and a global e-Invoicing managed service provider.  Your can read Part 1 and Part 2 here.

Kevin:  Jason, can you walk us through the SAP process and how it integrates with Mexico's e-Invoicing processes?

Jason:  Sure.  The process works as follows:

1. The outbound, standard invoice process in SAP is VF01.  
2. The invoice process creates a billing document. 
3. The billing document invokes a function module which generates an IDoc. 
4. The IDoc is transmitted to the real time connector which converts it to an XML document. 
5. Crossgate picks it up and manages the entire Mexico e-Invoicing process and returns it to SAP with the digital signature.
6. Crossgate also provides the archiving of the data for each invoice and digital signature

Kevin:  What data does Crossgate need to add to a standard invoice to make it compliant with Mexico’s requirements?

Learning About Mexico e-Invoicing from an Expert, Part 2

This is Part 2 of an interview I conducted last week with Mexico e-Invoicing expert Jason Jones of Crossgate, a company co-owned by SAP and global provider of e-Invoicing managed services. 

Read Part 1 here.
Read Part 3 here.

Jason:  Companies that receive an electronic invoice in Mexico after January 1, 2011, need to validate it before they pay it.  If not, it could be considered fraudulent. They need to validate the timbre through the Mexico SAT or PAC to ensure it is accurate and digitally signed.

Kevin:  Who needs to be compliant with these new requirements in Mexico?

Jason:  Companies that have annual revenue over 4 million pesos and that issue invoices over 2,000 pesos.

Kevin:  What are some of the biggest challenges that SAP users will face in supporting these requirements?

Jason:  For SAP users the biggest challenge is to seamlessly integrate, in real time, their SAP ERP with Mexico's SAT or authorized PACs. It needs to be perfect.  No data can be lost or go missing.

Learning about Mexico e-Invoicing from an Expert, Part 1

The following is an interview I did last week with Mexico e-Invoicing expert Jason Jones, the VP of Services with Crossgate, a company co-owned by SAP.

Kevin: What are the biggest challenges you are seeing companies face with Mexico e-Invoicing?

Jason: Number one, there is much confusion about what the new rules really mean. Many companies have been using the preprinted versions of folios.  They have learned, over time, about the first set of Mexico SAT requirements and as a result think they understand the new set of requirements.  The problem is that much has changed in the new set of enhancements.  Many companies are confident in their ignorance.  They think they know all the requirements, but what they know is outdated.

Two things in particular have changed.  In the new enhancements that are mandated for January 1, 2011, there is a mandate to use electronic invoices rather than have a paper invoice option, and you have a mandate as to how you must handle invoices in real time.

New Computerized Excise Movement and Control System (EMCS) Requirements In Europe

For companies doing business in Europe, there are some new electronic message (EDI/B2B) requirements that must be in place by January 1, 2011.  Don't you just love governments telling you where to spend your IT budgets?

Since April 1, 2010, companies which transport excisable goods under duty suspension have been required to migrate from traditional paper-based ADD systems to a computerized Excise Movement and Control System (EMCS) that uses electronic messages to monitor movements of excise goods.  The migration must be completed by January 1, 2011.  You didn't have anything planned for the holiday season did you?

Interview with Mexico e-Invoicing Expert Scott Lewin, Part 2

This is Part 2 of this interview on Mexico e-Invoicing.  Read Part 1 here.

Kevin: How much needs to change on the backend ERP to support these new Mexico e-Invoicing requirements?

Scott: Not very many changes are required in the ERP if you use a managed service like Crossgate. If one of our customer's outbound invoices does not contain all the required fields for compliance, we can often add those fields for them as part of our managed service. We have the ability to help companies gain compliance without a lot of backend work. Inbound invoices also will need to be validated. Some companies receive both paper and electronic invoices from suppliers. Starting next year they need to send the inbound invoice information to the SAT and then store the validation in their system. We can also help them set this all up and be compliant.

Interview with Mexico e-Invoicing Expert Scott Lewin, Part 1

I had the opportunity last week to interview Mexico e-Invoicing expert Scott Lewin about the new requirements announced by Mexico's SAT on September 3, 2010.  In this announcement Mexico's SAT said the following, "The impact on business processes will be significant for companies that haven’t prepared in advance."  With that warning, let's jump into the interview.

Kevin: What are you hearing in the Mexico e-Invoicing market today?

Scott: Many big companies are still not aware of the upcoming e-Invoicing requirements. Mexico announced these changes in early September, but many remain unaware or confused.

Mexico e-Invoicing and an Interview with e-Invoicing Expert Scott Lewin

I am attending SAP's TechEd this week and noticed that International Flavors and Fragrances is speaking on the topics of SAP EDI and e-Invoicing.  They are an SAP user and have chosen to use a BPO service provider to support the e-Invoicing requirements of Argentina and Brazil.  The service provider is a global e-Invoicing service provider that SAP co-owns called Crossgate.

I had the opportunity to recently interview Crossgate's President Scott Lewin about e-Invoicing.  He said there is a lot of interest in e-Invoicing today that is being driven by recent changes and deadlines for compliance coming from Mexico and other places. 

New NF-e 2.0 Mandates - Brazils e-Invoicing Requirements, Part 2

This is Part 2 of a series on the changes to Brazil's e-invoicing, NF-e 2.0 requirements.  To read Part 1 of this article, click here.

More from electronic invoicing expert, Scott Lewin, President of Crossgate, Inc. “We analyzed the new regulations and have updated our solutions accordingly.  We studied  the requirements for outbound, contingency, and inbound compliance so we could manage these changes."  Staying on top of these fast changing regulations and mandates is important for companies like Crossgate that provide electronic invoicing services so their clients can avoid implementation delays or costly fines for non-compliance.

New NF-e 2.0 Mandates - Brazils e-Invoicing Requirements, Part 1

Yikes! The new requirements for complying with Nota Fiscal Electronica mandates (Brazil's e-Invoicing requirements) total more than 200 pages. I hope you are ready to make some changes.

Let me give you some history. Regulatory compliance laws in Brazil changed earlier this year (2010), mandating the replacement of the traditional hard copy nota fiscal (invoice) with an electronic invoice, the Nota Fiscal Electronica (NF-e).

Video Comments on Mexico e-Invoicing

I have been researching the new enhanced requirements for Mexico e-Invoicing and recorded a few comments on video for your reference.  This 3 part series covers the basic concept of e-Invoicing, some of the specific requirements for supporting Mexico e-Invoicing, and finally the impact these requirements may have on your backend ERP or business application.

• Kevin's Video Comments

************************************************
Kevin R Benedict SAP Mentor, SAP Top Contributor, SAP Blogger
Independent e-Invoicing and EDI Analyst and Consultant
www.linkedin.com/in/kevinbenedict
Follow me on Twitter @krbenedict
Join the SAP EDI and SAP Information Interchange group on Linkedin:
http://www.linkedin.com/groups?about=&gid=2884582&trk=anet_ug_grppro

*Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

Accenture Acquires Parts of Ariba

This morning I read in EEIPlatform  some very interesting news.  Accenture is acquiring some of Ariba's BPO and managed services business.  It seems Accenture is growing their managed services and BPO services for sourcing and procurement services, while Ariba is leaving that area and focusing more on their technology solutions.  Here is an excerpt from the article:

Kevin's e-Invoicing News - September 30, 2010

This newsletter is for those interested in global e-invoicing.  There are a lot of new requirements in places like Mexico and Brazil and deadlines coming up that makes this an important and relevant topic.  Contact me if you would like more information on any of these requirements, and I will do my best to answer them or introduce you to the right experts.

********

At a time when every penny counts and companies are looking to operate with maximum efficiency, major national retailers are turning to e-Invoicing to help make bottom line gains. Companies such as 7-Eleven, Tim Hortons and Restaurant Depot have found that e-Invoicing not only cuts costs, it eliminates the inefficiencies inherent in the process of receiving paper invoices from suppliers -- resulting in the ability to do more with less.

Educational Webinar on Mexico e-Invoicing

I have received a lot of inquiries about the latest mandates in Mexico for e-Invoicing.  Crossgate, a company that SAP co-owns and the developers of SAP's SAP Information Interchange has just put up a link to an educational pre-recorded webinar.  You can watch it now at:

http://www.crossgate.com/index.php?id=103&webinarID=996&no_cache=1

The PDF that goes along with the webinar can also be downloaded.

http://www.crossgate.com/fileadmin/specdown/Crossgate_Overview_with_Mexico_eInvoicing_Webinar_c2.pdf

The following slide from the webinar is enough to motivate you to watch it:

Click image to enlarge

The idea that your backend systems needs to produce and send new data in real time to SAT, and receive and integrate a certificant in real time makes things interesting.

I will keep posting new developments as I hear about them.  Let me know if you have specific questions and I will do my best to get them answered.  You can contact me here.

************************************************

Kevin R Benedict SAP Mentor, SAP Top Contributor, SAP Blogger

Independent e-Invoicing and EDI Analyst and Consultant

www.linkedin.com/in/kevinbenedict

Follow me on Twitter @krbenedict

Join the SAP EDI and SAP Information Interchange group on Linkedin:

http://www.linkedin.com/groups?about=&gid=2884582&trk=anet_ug_grppro

*Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

The Real Time Component of Mexico e-Invoicing and SAT Enhancements, Part 3

This is Part 3 in the series The Real Time Component of Mexico e-Invoicing and SAT Enhancements.  In Part 1 we identified four key enhancements of the Mexico e-Invoicing enhancements that could require work.  In Part 2 we identified follow-up questions that we all have and IT departments are going to need to know.  In Part 3 we will list out some potentially impacted IT systems.

Let's first list the four key enhancements that were recently announced by the Mexico SAT:

The Real Time Component of Mexico e-Invoicing and SAT Enhancements, Part 2

This article is Part 2 in this series on The Real Time Component of Mexico's e-Invoicing and SAT Enhancements.  In Part 1 we listed four new requirements that the Mexico SAT authorities identified recently as enhancements for e-Invoicing.  In this article we will explore some questions IT departments will ask themselves upon reading these requirements.

1. Companies will be required to integrate with the SAT for invoice approvals in real time.  How do I integrate?  What am I integrating with?  What is the data format?  What fields are required?  "Real-time?"  What data exchange standard do I use?  What are the header and footer requirements?  What kind of B2B/EDI system will I need?  Where am I going to pull the data that SAT requires?
2. Outgoing invoices must be prepared in a specific XML format and authorized in advance as part of the logistics process before shipments can be delivered. How do I convert my invoice format to SAT's XML?  How do I map my data to their formats?  How do I get authorization in advance of shipping?  What will this do to my shipping process?  Will this delay shipments?
3. Incoming invoices must be externally validated.  I must now validate my vendors' and suppliers' invoices?  How?  How do I trigger a validation process when an invoice comes in?  What does a validation look like?  Where do I store a validation?  How do I associate a validation with an invoice?



e-Invoicing Panelist

4. Incoming invoices must be archived and stored. Where must they be archived?  What format?  How long do I archive them?  How can I find them quickly when audited?  What are the format requirements for archiving?

As you can quickly see there are some issues that need to be learned, and in a hurry.  If you would like to be introduced to some Mexico e-Inovicing experts, let me know and I can put you in touch with them.

I also know that Crossgate, a company co-owned by SAP, is planning a webinar on Mexico e-Invoicing.  You may want to check out their website for dates and times.

************************************************
Kevin R Benedict SAP Mentor, SAP Top Contributor, SAP Blogger
Independent e-Invoicing and EDI Analyst and Consultant
www.linkedin.com/in/kevinbenedict
Follow me on Twitter @krbenedict
Join the SAP EDI and SAP Information Interchange group on Linkedin:
http://www.linkedin.com/groups?about=&gid=2884582&trk=anet_ug_grppro

*Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

The Real Time Component of Mexico e-Invoicing and SAT Enhancements, Part 1

e-Invoicing Networks

The evolution of e-Invoicing in Mexico is very interesting to me. The most recent announcement (in Spanish) is a significant mandate that requires IT organizations to change architecture, business processes and methodologies. Let's take a look at a few sentences regarding the requirements.

1. Companies will be required to integrate with the SAT for invoice approvals in real time.
2. Outgoing invoices must be prepared in a specific XML format and authorized in advance as part of the logistics process before shipments can be delivered.
3. Incoming invoices must be externally validated.
4. Incoming invoices must be archived and stored.

It doesn't take much pondering to realize these requirements involve significant change and work.

I came across this warning last week from e-Invoicing expert Scott Lewin from Crossgate, the developers of SAP's SAP Information Interchange.  “With these new regulations, the government will be intimately involved in every step of the shipping process.  Traditional invoicing processes will not be able to support the real-time interactions between a company’s IT systems and the Mexico SAT."

I would encourage IT organizations to meet quickly and review the four requirements listed above.  Each of those four points can require a separate IT project that may involve B2B/EDI systems, integrations, database development and other work.  The alternative, of course, would be to discuss your requirements with an e-Invoicing managed services provider like Crossgate and learn if they can save you effort and time.

Real Time Component of Mexico e-Invoicing and SAT Enhancements, Part 2 

************************************************
Kevin R Benedict SAP Mentor, SAP Top Contributor, SAP Blogger
Independent e-Invoicing and EDI Analyst and Consultant
www.linkedin.com/in/kevinbenedict
Follow me on Twitter @krbenedict
Join the SAP EDI and SAP Information Interchange group on Linkedin:
http://www.linkedin.com/groups?about=&gid=2884582&trk=anet_ug_grppro

*Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

Crossgate Offers e-Invoicing Solution to Comply with Mexico SAT Enhancement

Today I received this announcement from Crossgate about their support for the new Mexico e-Invoicing requirements.  For those not familiar with Crossgate, SAP co-owns them, and Crossgate developed SAP's SAP Information Interchange EDI and e-Invoicing managed services hub.

Atlanta, Georgia, September 13, 2010 Crossgate Inc., the global expert in business-to-business integration (B2B) and eInvoicing, releases an e-invoicing solution that provides real-time compliance with newly announced regulations by Mexico’s Servicio de Administración Tributaria (SAT).

In a press conference held on September 3, 2010, Mexico’s SAT announced new compliance laws for electronic invoicing which will take effect January 1, 2011; and the impact on business processes will be significant for companies that haven’t prepared in advance. Many companies are still adapting to the major changes that went into effect in 2009 requiring companies to either obtain invoice forms from the government or adopt an e-invoicing solution to replace traditional paper invoices.

When last year’s regulatory changes were announced, Crossgate immediately stepped up to help global businesses meet the new requirements with a fully compliant, on-demand e-invoicing solution that uses the Firma Eléctronica Avanzada (FIEL) and meets all of the technical specifications and standards specified by the SAT. Now, with new mandates on the horizon, Crossgate is again ready to help companies meet the challenge with an even more robust and streamlined e-invoicing solution that is fully integrated not only with the SAT, but also with SAP.

The new compliance mandates being instituted next year in Mexico will:

• Take effect January 1, 2011

• Eliminate folio numbers which are replaced by digitally signing and archiving an invoice with a valid timbre number

• Require regulatory compliance checks with government certified organizations for both senders and receivers of invoices

• Invoices in excess of 2,000 pesos must be approved digitally

Companies will be required to integrate with the SAT for invoice approvals in real time. Outgoing invoices must be prepared in a specific XML format and authorized in advance as part of the logistics process before shipments can be delivered. Similarly, incoming invoices must be externally validated, then archived and stored. “With these new regulations, the government will be intimately involved in every step of the shipping process,” said Scott Lewin, President, Crossgate, Inc. “Traditional invoicing processes will not be able to support the real-time interactions between a company’s IT systems and the SAT. Global companies need a managed B2B service that can remain in compliance with the changing mandates of the SAT while providing real-time operational support in Spanish. Crossgate also supports the electronic invoice requirements in Brazil, Argentina and Chile, enabling companies to access one solution and comply with all major LATAM eInvoicing regulations. Since Crossgate’s B2B 360 Services and e-Invoicing Network is already fully integrated with SAP, companies can leverage their existing IT investments to interact seamlessly with our network based service.”

The new regulations are still a few months away, but companies should start planning now. “With a large influx of implementation requests, we are encouraging organizations to lock in solutions and service personnel by the end of September,” adds Lewin. “We know the required processes and can help companies adapt to the changing regulatory landscape in Mexico but there is only limited time remaining for companies to adapt.”

Crossgate’s B2B 360 Services and e-Invoicing Network is a proven solution that makes it easy for companies around the world to comply with government regulations in 38 countries including Mexico, Brazil, Argentina, Chile and the European Union.

I have a lot of friends and contacts that are working on Mexico e-Invoicing projects, so if you have any questions about it contact me and I will do my best to get some answers for you.

************************************************

Kevin Benedict

SAP Mentor, SAP Top Contributor, SAP Blogger

Independent e-Invoicing and EDI Analyst and Consultant

www.linkedin.com/in/kevinbenedict

Follow me on Twitter @krbenedict

Join the SAP EDI and SAP Information Interchange group on Linkedin:

http://www.linkedin.com/groups?about=&gid=2884582&trk=anet_ug_grppro

*Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

New e-Invoicing Requirements for Mexico - Read Here!

Crossgate, a company co-owned by SAP and developers of the SAP Information Interchange, announced this week support for the new e-Invoicing requirements coming out of Mexico.  These new mandates from Mexico SAT are set to take effect in January 2011.  I am told that some ERPs and backend systems will need signifcant work to support these requirements.

Here is an excerpt from one of my readers this week:

In a press conference held on September 3, 2010, Mexico’s SAT announced new compliance laws for electronic invoicing which will take effect January 1, 2011; and the impact on business processes will be significant for companies that haven’t prepared in advance. Many companies are still adapting to the major changes that went into effect in 2009 requiring companies to either obtain invoice forms from the government or adopt an e-invoicing solution to replace traditional paper invoices.



Based on the released information, the new compliance mandates being instituted next year in Mexico will:

• Take effect January 1, 2011 
• Eliminate folio numbers which are replaced by digitally signing and archiving an invoice with a valid timbre number 
• Require regulatory compliance checks with government certified organizations for both senders and receivers of invoices
• Invoices in excess of 2,000 pesos must be approved digitally

I will be gathering additional information over the next few weeks and posting it here.  I have many friends and contacts working on Mexico e-Invoicing projects, so please contact me with any questions and I will try to get them answered for you.
 
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Author: Kevin Benedict SAP Mentor, SAP Top Contributor, SAP Blogger, Independent Consultant
Join SAP EDI and SAP Information Interchange group on Linkedin:
http://www.linkedin.com/groups?about=&gid=2884582&trk=anet_ug_grppro
www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned. ************************************************

EDI, Transactional Content Management and Social Networking

Several recent events in the business world are rapidly changing the way businesses communicate and exchange electronic data.

1. SAP (a large ERP vendor) announced it will offer its own "business ready network" entitled SAP Information Interchange by Crossgate, which will support EDI and other B2B e-commerce exchanges for SAP users.
2. GXS (the world's largest EDI provider) announced its intent to acquire Inovis (another of the world's largest - top five EDI providers).
3. IBM announced its intent to acquire Sterling Commerce (the world's second largest EDI provider).

Why are all these events happening now?  I have some thoughts.

GXS, Inovis and Sterling Commerce are all EDI companies that are rapidly innovating and setting up business networks. They recognize the impact that the social media revolution is having on businesses. They realize the power of social networks and can see that it will change the way traditional businesses have operated and communicated.

Business networks are EDI/B2B e-commerce hubs that enable companies to efficiently exchange business documents. Business networks are similar in some ways to LinkedIn and Facebook. Companies can join and set up a profile and then search for their customers, suppliers and service providers and easily connect with them and begin exchanging messages using electronic data interchanges. How is this different than in the past?

In the past, if company A wanted to exchange EDI messages with company B, it would have to call company B and negotiate data requirements and data formats. It was often a complex and time consuming effort each time you wanted to connect with a new partner. Business networks let you join the network and simply ask permission to connect. The data formats and data requirements are all handled by the business network (hub).

What do business networks have to do with transactional content management (TCM)?  First let's understand TCM.  TCM refers to business documents (paper or electronic) that are moved through a business process.  An invoice that comes into a company and is scanned, validated and routed through an automated approval process is a good example.  BancTec has two solutions for this purpose.  One is CenterVision for operating digital mailrooms and the other is AP Master for managing invoices.

EDI and B2B data exchanges are part of the transactional content management's chain of custody. Data can originate at a customer or supplier and travel through the business network (via the EDI hub) into a company's internal transactional content management system. Invoices are an example of a business document that originates at a supplier and must be received, processed, approved and paid. The efficient flow of external business data between businesses, and then internally using transactional content management solutions enables near real-time processing and end-to-end visibility of transactional data. In these environments many areas of latency are removed from the business process.

The impact of business networks and social media on large enterprises is just starting to be understood. The implications are enormous and will be interesting to watch.

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Author: Kevin Benedict CEO/Founder Netcentric Strategies LLC
SAP Mentor, SAP Top Contributor
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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IBM to buy AT&T's Sterling Commerce for $1.4 billion

IBM acquiring Sterling Commerce is big news in the world of EDI.  2010 has turned out to be the year of consolidation among the big players in EDI.  First came news that GXS was acquiring Inovis, SAP committing to the SAP Information Interchange by Crossgate, and now IBM is buying Sterling Commerce from AT&T.

Why is this happening in 2010?  In the article EDI Competition in the SAP Ecosystem, I shared my thoughts on this trend.  Legacy EDI companies realize they must form business networks to remain relevant in the long term.  Networks that operate in a cloud computing environment and provide fast, efficient, reusable, and cost effective EDI and B2B connectivity to the members of the networked community are the future.

Let's talk about the term "networked community."  The most natural networked community is a community of software users that share the same ERP (think SAP or Oracle).  These companies share similarities in software applications, integration points, business processes, data requirements, knowledge, and technology platforms.

SAP's earlier investment in Crossgate, and now their release of the SAP Information Interchange, is a good example of this move in the market.  AT&T must have realized that maintaining a legacy third party EDI system is not the future.  Independence is not a virtue in a world of Facebook, iTunes and LinkedIn.  The power is in the linked and connected community!  EDI and B2B technologies and managed service hubs must be associated with technology platforms, ERPs, and industry communities where connections and links can be reused and the entire community benefits from each new member.

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Author: Kevin Benedict CEO/Founder Netcentric Strategies LLC
SAP Mentor, SAP Top Contributor
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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SAP Information Interchange at Sapphire 2010

2010 will be the first year that the SAP Information Interchange will be unveiled and demonstrated by SAP at Sapphire.  In 2009 SAP's CEO announced the strategy of business network transformation and identified SAP's relationship with Munich based Crossgate as being an important part of it.  In 2010 that relationship has advanced and matured to the point where SAP private labels Crossgate's Business Ready Network as the SAP Information Interchange by Crossgate.

Here are a few of the sessions and events where you can learn more about SAP Information Interchange:

• SAP Information Interchange - Featuring the International Flavors and Fragrances Case Study - Exchange ideas regarding your business-to-business network, and learn how to leverage standard content to collaborate with suppliers, customers, logistics providers, and toll manufacturers. Space is limited – 12 seats are available on a first-come, first-served basis! Date/Time: Monday, May 17, 2:00 p.m. Location: Microforum 208 Industries.
• Connectivity of Finance (Payments, Invoice-to-Pay, Customer-to-Cash, Business-to-Business) - Businesses of all sizes can benefit from improving invoice payment cycles, while eliminating manual, paper-based systems. Discover how SAP Financial Supply Chain Management, SAP Invoice Management by Open Text, and SAP Information Interchange by Crossgate can help cut costly manual processes and strengthen relationships with suppliers and customers, while improving profitability. Date/Time: Open during exhibit hours at Pod Number 407.
• Invoice-to-Pay Process Overview with SAP Partners Open Text and Crossgate - This session is for any business of any size interested in improving its invoice payment cycles and eliminating manual, paper-based systems. Discover how invoice-to-payment automation provided by SAP Invoice Management by Open Text, SAP Information Interchange by Crossgate, and SAP Financial Supply Chain Management can help cut costly manual processes and strengthen supplier relationships, while improving profitability. Speakers: Mr. Tom Walker (Open Text Corp.), Portfolio Manager, Mr. Joseph Pacor (SAP), Marketing Director - Date/Time: Wednesday, May 19, 3:30-4:00 p.m, location:  Theater 3 Lines of Business.

The concept of having a global network of SAP customers all connected to an SAP co-owned EDI/B2B exchange and leveraging each other's maps and connections to trading partners continues to fascinate me.  A recent article I wrote discusses the enormous volume of business that flows through SAP systems.  Upwards of 70% of the world’s economy is executed by organizations running SAP Applications.  To be able to bring order to that flow of business through a powerful EDI exchange that is supported by SAP is exciting and the possibilities intriguing.

Traditionally, each company seemed inclined to develop their own complex and expensive in-house EDI department and to purchase their own servers, software, and training.   The SAP Information Interchange just may be compelling enough to change that paradigm going forward.


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Author: Kevin Benedict
CEO/Founder Netcentric Strategies LLC
SAP Mentor, SAP Top Contributor
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
http://www.netcentric-strategies.com/
www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
************************************************

Eight Issues to Consider When Selecting an E-Invoicing Service Provider

There are a variety of different business models for global e-invoicing networks and network operators.  Some are more advantageous than others to the companies connected.  Let's take a look at some of the different models and understand what they mean to the companies that connect to them.

1.  Network Ownership

With many e-invoicing networks the goal of the network operator is to control the relationship of all participants and the pricing. If the network operator wants to increase their fees, they can do it.  The participants do not have a voice in the fee structure.  This does not sit well with many companies that invited their business partners to all join a particular network operator that then had their fees raised and their relationships exploited.  Understand your risks and vulnerabilities in these kinds of relationships before inviting your trading partner community to join them.

Some e-invoicing networks like Crossgate, which is co-owned by SAP, understand this concern and do not attempt to own the Trading Partner Agreements or trading partner relationships.  They simply provide a managed e-invoicing service on behalf of their client.

2. Trading Partner Fees

Many e-invoicing network operators require both the sender and receiver of the e-invoice to pay fees.  This is unacceptable to many trading partners, and it inhibits e-invoicing participation and diminishes the ROI.  Alternatively, other e-invoicing network operators only charge their clients for the managed e-invoicing service not their trading partner communities. This is a very attractive model for trading partner communities and encourages participation and rapid adoption.  Consider how the various fee structures can impact your implementations and community participation before agreeing to them.

3. Security

A number of industry groups have encouraged their members to give up their autonomy and commit their e-invoicing efforts to the industry standard and shared e-invoicing system.  Because these services are shared by your industry peers and competitors, you are often limited to only the services used by all members.  This prevents you from implementing new processes and business practices that may in fact provide competitive advantages.  At what point do the limitations imposed by the industry group limit the individual member's ability to customize, innovate and exploit new business opportunities?  The managed e-invoicing services provided by SAP/Crossgate is developed around your SAP system not your industry peers' systems.  This enables you to exploit business opportunities and customize your services in a manner that maximizes the benefit to your organization.

4. Supported Processes

Many e-invoicing network operators provide only a basic PO-Flip service or other limited process support.  What if your organization would benefit from automating a wide range of business processes like ASNs, PO Changes, Partial Line Item Acceptance, etc. It is important to consider the full range of processes supported by your managed e-invoicing service provider before committing to the implementation effort.

5. Service Level Agreement

What is the Service Level Agreement provided by your e-invoicing network operator?  Have you read the fine print? Often the response time in the SLAs is 48 hours.  Is that sufficient to meet your goals?  Often a motivation for implementing e-invoicing is to improve invoice processing speeds so companies can take advantage of early payment discounts.  Ensure your SLA is acceptable and supports your plans and purposes.

6.  Global Coverage

Do you conduct business in Latin America?  Latin America involves some of the most complex and challenging e-invoicing requirements in the world.  Many e-invoicing network operators do not support these requirements.  Ensure the countries where you operate are covered by your service provider before committing to the effort.

7. ERP Integration

Many e-invoicing network operators pride themselves on being ERP agnostic.  They do not care what back-end ERP you use, because they simply pass on a file.  The problem of course, is that many countries have e-invoicing requirements that impact the ERP and require editing your ERP to be compliant.  Using an e-invoicing network operator with deep ERP knowledge and experience helps you meet all of the processes and data requirements needed to be fully compliant with each country.

8.  Language Support

Many e-invoicing network operators may have the technology knowledge to send and receive invoices, but do not have the language support required to implement with trading partners in specific countries.  This is an important consideration.  SAP/Crossgate have native Spanish and Portuguese language specialists to help with implementations.

These are eight issues for you to consider.  If you can think of more, please comment below, and I will add them to the list.

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Author: Kevin Benedict, SAP Mentor
Principal Consultant/Founder Netcentric Strategies LLC
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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SAP Customer Kellogg Meets Brazilian Nota Fiscal Eletronica (NF-e) Compliance Mandates

I have written several articles about Brazil's new and changing regulatory compliance laws for electronic invoicing over the past few months.  Brazil's requirements are some of the most complex in the world and SAP customer's have been contemplating how to support them and meet the compliance deadlines.

Recently the Kellogg Company, which is the world’s leading producer of cereal, had to meet a tight timeline for compliance with the Ministry of Finance (SEFAZ) in Brazil.  They needed to find a managed B2B/e-Invoicing solution quickly for sending and receiving the XML formats required by the new regulations, and they wanted to implement the solution with as little impact as possible on their existing SAP/IT infrastructure.  The new SEFAZ regulations require companies to prepare outgoing invoices in an XML format and have them authorized in real time before shipments can be delivered.

The Kellogg Company has a consolidated global SAP landscape but with only six weeks until the new mandates went into effect, they didn’t have time for a lot of SAP customization and configuration.  They asked Crossgate, a company co-owned by SAP, to provide the managed e-Invoicing and bill of lading service.  Crossgate's global e-Invoicing services are fully integrated with SAP and provided on a cloud computing platform that utilizes SAP's NetWeaver and offers real-time integration with SEFAZ.

"Our experience with Crossgate was extremely positive as a solution partner to implement the Nota Fiscal Eletronica in Brazil,” said Eduardo Zendejas, EDI IT analyst for Kellogg.  “The solution was deployed with minor impact to our current operations and SAP ERP.”

In the managed service that Kellogg implemented, each nota fiscal e-Invoice (NF-e) is converted to the government-required XML format, validated, and transmitted to SEFAZ for comparison to their master data.  If the address information doesn’t match, the NF-e is not approved and the master data must be corrected manually before the invoice can be reissued. Kellogg hadn’t cleansed their master data for customers in several months, but the managed service included an automated solution that was able to clean their master data quickly so that it would be ready when the new mandates went into effect.

Kellogg realized an immediate ROI from using the managed service because it eliminated expensive internal application augmentations and fully complied with the Nota Fiscal Eletronica initiatives.  Another important benefit for Kellogg was that the service is managed with a local office staffed by people who speak the local language.

The implementation project was completed within six weeks and did not cause any significant business disruptions.

Related Articles:

• Brazil's Complex Nota Fiscal Eletronica (NF-e) Requirements
• More on Brazil's NF-e (electronic bill of lading) Requirements
• SAP/Crossgate Support for Brazilian e-Invoicing - Nota Fiscal Electronica (NF-e)

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Author: Kevin Benedict
SAP Mentor, Principal Consultant/Founder Netcentric Strategies LLC
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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Electronic Invoicing and ERP Processes, Part 3

This article is Part 3 in a series on Electronic Invoicing and ERP Processes and focuses on the challenges that third party, ERP agnostic, electronic invoicing service providers face delivering global solutions.

First let's recognize that there are at least two different kinds of electronic invoicing service providers:

1. Independent, third party, ERP agnostic, e-invoicing service provider.
2. Electronic invoicing service providers tightly integrated with one ERP solution and vendor.

Service providers like OB10 promote their any-to-any data formatting and e-invoicing expertise.  They are a third party service provider unaffiliated with an ERP solution.  In contrast, an e-invoicing service provider like SAP's co-owned Crossgate is dedicated solely to supporting the global e-invoicing needs of SAP.

As discussed in Part 1 and Part 2 of this series the biggest challenges with supporting global e-invoicing requirements are often in the ERP processes themselves, and because of that fact, the closer and more tightly an e-invoicing service provider is aligned with the ERP vendor the better.  Service providers like Crossgate that are co-owned and deeply integrated with the ERP vendor (SAP in this case) find it much easier to coordinate changes to the ERP that are required to support global e-invoicing requirements.  Service providers like OB10, which are unaffiliated with an ERP, must simply wait for the dozens of ERPs used by their customers to figure out how to be compliant.  They have much less influence and control over when and how the ERP vendor supports a country's mandates and requirements.

For SAP users engaged in electronic invoicing, EDI and other B2B message exchanges, it is worth a long and hard look at what SAP is doing with Crossgate and the increasing value that the SAP/Crossgate services are offering SAP users. As the SAP/Crossgate business ready network swells with more and more SAP users, the value increases exponentially for the SAP community.

See related articles:

• Electronic Invoicing and ERP Processes, Part 1
• Electronic Invoicing and ERP Processes, Part 2

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Author: Kevin Benedict
Principal Consultant/Founder Netcentric Strategies LLC
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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Electronic Invoicing and ERP Processes, Part 2

In Part 1 of this series we discussed the challenges third party, and ERP agnostic, electronic invoicing service providers experience trying to be compliant with government and tax authority mandates due to the need for ERP's to support specific and unique business processes.  The bottom line is that ERPs must be set-up and configured by ERP experts to support many e-invoicing requirements.

I worked on a project where an American equipment rental company needed to be compliant with Mexico's e-Invoicing requirements (Servicio de Administracion Tributaria (SAT).  They were required to use the Firma Electronica Avanzada (FIEL), an advanced electronic signature authorized by the SAT.  The biggest problem we had on this project was not in supporting the required data formats (something most electronic invoicing service providers like OB10 could do), but getting the rental company's ERP to support the required processes.  The key point is that the challenges were not in the messaging and formatting but in the internal ERP processes.

Electronic invoicing service providers, that are ERP agnostic, must simply throw their hands up in the air and step back when there is an ERP process issue.  That means they are increasingly throwing their hands up, because more and more countries are mandating major changes to the way the business processes, including the invoice, transportation, data warehousing, and bills of lading processes must be completed.

In the case of the Mexico e-Invoicing requirements, companies must archive digital signatures and unique invoicing numbers issued by SAT on the physical premises of the business location in Mexico.  This in itself is a new process not included in ERPs without some new configuration and design.

The bottom line - third party, ERP agnostic, electronic service providers cannot in themselves support electronic invoicing globally.  The ERP vendor must be involved as the processes in the ERP must be configured to support each country's unique requirements.

See related articles:

• Electronic Invoicing and ERP Processes, Part 1
• Electronic Invoicing and ERP Processes, Part 3

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Author: Kevin Benedict Principal
Consultant/Founder Netcentric Strategies, LLC
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant www.linkedin.com/in/kevinbenedict
 ***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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Electronic Invoicing and ERP Processes, Part 1

The world is a finite place.  Companies have finite resources.  We all have a finite amount of time on this earth.  How can a third party electronic invoicing service hub be all-things-to-all-people?  The answer is, it can't.  The complexities that are mandated by the various country initiatives and tax authorities impact the way the business is run which is outside the expertise of third party e-invoicing service providers.

Let's first discuss independent and ERP agnostic, third party service providers like OB10, GXS, and Sterling Commerce.  These service providers often promote their any-to-any data formatting capabilities that enable their clients to send or receive invoices without having to agree on formats, file specifications, or communication methods.  That is a good feature, but it does not ensure compliance with electronic invoicing requirements.  The biggest challenges in supporting the electronic invoicing requirements of many countries around the globe are business process driven issues in the ERP which companies like OB10 cannot address.  Why?  Without knowing the intimate details of the customer's ERP they can't possibly manage compliance.

Let's take a quick look at Brazilian Nota Fiscal Eletronica (NF-e) requirements.   Under the new regulations, companies must prepare an outgoing invoice in an XML format mandated by the Ministry of Finance (SEFAZ) and have it authorized before a shipment can be delivered. The SEFAZ issues an electronic authorization key that must be transformed into a barcode and printed on the bill of lading (DANF-e) accompanying the shipment. Police or Customs Officials may stop the delivery truck and scan the DANF-e to ensure that the products on the truck match the authorization on file in the SEFAZ database. If there is any discrepancy, the company may face severe penalties or fines.

Notice that the SEFAZ requirement is for the XML formatted invoice to be authorized "before shipment."  Yikes!  This impacts all kinds of processes!  How does this new step in the process get added to your SAP ERP and transportation and logistics processes?  The key point to understand is that many of the business processes that are required to support electronic invoices happen inside the ERP, not in a third party ERP agnostic service provider's SaaS or hosted environment.  ERP experts must be involved in order to support many of these e-invoicing requirements.

See related articles:

• Electronic Invoicing and ERP Processes, Part 2
• Electronic Invoicing and ERP Processes, Part 3

************************************************
Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict
 ***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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Interesting EDI, e-Invoicing and Business Process Trends Reported

I read an interesting survey report from Fundtech Ltd. today about EDI, remittance, and electronic invoice presentment with the following results:

• 60% of bank respondents think that combining data, including remittance data, EDI data and electronic invoice presentment, with payment processing is an important trend and a value-added service they should offer to their business clients.
• Only 47% indicate their banks are already pursuing this strategy.

From this report it appears there is growing demand for these types of integrated and connected services.  I can attest from personal experience that e-Invoicing is a rapidly growing area, especially in Latin America and Europe.  I have personally worked on a number of e-Invoicing projects with Crossgate, a company that SAP co-owns.  Crossgate provides e-Invoicing services globally in a SaaS model that is operated in a cloud computing environment.

I spoke with the president of Crossgate, Scott Lewin, a few days ago about why e-Invoicing is a fast growing area, and he told me that companies are simply not able or willing to learn all the details of every country's electronic invoicing requirements.  Many countries in Europe and in Latin America (e.g. Brazil and Mexico) have very detailed business processes and tax authority mandated data formats that are hard to learn and support.  He said many multi-national companies have operations in dozens of countries, and it would take an army of staff to try to support all of the requirements for every country.  As a result, this seems to be a good area for BPO (business process outsourcing) services.

Nowadays companies like Crossgate are developing global e-Invoicing and other electronic business processing services for their clients in their central EDI/B2B exchange.  They have developed best practices for implementations and have global experts on staff to support e-Invoicing around the world.

************************************************
Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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EDI Competition in the SAP Ecosystem

For those of us who have been in the EDI and SAP ecosystem for many years, it is interesting to ponder how it has changed.  EDI vendors used to see supporting SAP and SAP IDocs as a sign of maturity, and SAP welcomed all EDI vendors into the SAP ecosystem.  Today, however, most of the legacy EDI vendors are competing directly against SAP which changes the dynamics of these relationships.

Take a moment to review the following list of application categories that legacy EDI vendors are now offering:

• Supply Chain Management
• Transportation Management/Logistics Management
• Global Trade
• Order Management
• Product and Price Management
• Catalog Management
• Supplier Web Portals
• Inventory Management
• Finance
• Master Data Management
• Enterprise Application Integration solutions

With these product offerings, traditional EDI vendors have chosen to compete against SAP in nearly every category.  It is not hard to understand why SAP has recently chosen to offer its own managed EDI service called the SAP Information Interchange.  SAP would rather displace the traditional EDI vendors from their customer base as they are considered direct competitors nowadays that have limited interest in supporting SAP's strategies, architectures, and future product roadmaps.

************************************************
Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict  

***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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Business Network Transformation, Mobility and SAP Information Interchange

I have been watching the evolution in the SAP mobility ecosystem with keen interest and pondering what it means to the EDI/B2B industry.  The mobility space is changing rapidly and dramatically as online mobile application stores take over much of the responsibility for connecting buyers and sellers of mobile applications.  Many of the traditional ways buyers and sellers connect and work together are being standardized in pre-defined business processes on these sites.  This is a great example of "business network transformation."  There are lessons here for those involved in EDI as well.

In the past, mobile application vendors each set up their own proprietary processes to upload software and/or update their customers' devices.  They all had different ways of marketing and selling their enterprise mobile applications and employed their own unique ways of developing applications and synchronizing data between mobile devices and backend databases.

Today in the enterprise mobility world there is a great deal of standardizing going on.  Apple and RIM have now defined many of the ways mobile applications work and move data.  What are the lessons for the EDI/B2B industry? 

Companies like SAP are now developing and launching their own EDI/B2B hubs with solutions like the SAP Information Interchange.  These are exchanges that define standardized ways for buyers and sellers and other trading partners to connect and share data.  This process is equally as interesting to watch evolve as it is in the mobile application industry.

************************************************
Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict 

***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
************************************************

Brazil's Complex Nota Fiscal Eletronica (NF-e) Requirements

I spent many years in the EDI world.  Most of my challenges were from trying to understand the various standards to be used and the data semantics and syntax requirements of my trading partners.  Today, with the rapidly increasing number of e-invoice and other e-form requirements by various governments the biggest challenges are supporting the processes. 

I could handle learning one or two countries' requirements, but what happens when you need to support the data and formatting requirements of 30 different countries, plus each of their complex process requirements?  I have worked with many EDI departments tasked with supporting the global requirements of their multi-national corporation.  One of the biggest challenges is just trying to ensure compliance with all the different legal requirements of every country.

The botton line is that it is not the role of an EDI department to also be the legal compliance team.  It makes far more sense to outsource the global compliance of e-invoicing to a specialist in global e-invoicing that can manage all of the international requirements on your behalf.

Read the press release below to understand the complex business processes that must be supported in order to be compliant with just Brazil's new Nota Fiscal Eletronica compliance requirements.

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Atlanta, Georgia, April 6, 2010, Crossgate Inc., the global expert in business-to-business integration (B2B), has announced the successful go-live of a turnkey e-Invoicing service for seven SAP customers in Latin America to help them meet governmental mandates.

Brazilian regulatory compliance laws are changing, with the hard-copy nota fiscal (invoice) that companies have traditionally used being replaced by its electronic counterpart—the Nota Fiscal Eletronica (NF-e). Under the new regulations, companies must prepare an outgoing invoice in an XML format mandated by the Ministry of Finance (SEFAZ) and have it authorized before a shipment can be delivered. The SEFAZ issues an electronic authorization key that must be transformed into a barcode and printed on the bill of lading (DANF-e) accompanying the shipment.  Police or Customs Officials may stop the delivery truck and scan the DANF-e to ensure that the products on the truck match the authorization on file in the SEFAZ database. If there is any discrepancy, the company may face severe penalties or fines.

“The regulatory compliance processes in Brazil are among the most complex and unique eInvoice requirements in the world, and many companies do not have the required infrastructure to support the real-time interactions between a company’s IT systems and SEFAZ,” said Scott Lewin, President, Crossgate, Inc. “With compliance deadlines approaching quickly and new requirements coming in 2011, companies need to find a managed B2B service that can send and receive the required XML formats and adhere to the mandates defined by SEFAZ, while leveraging their existing IT infrastructure investments.” For another seven SAP customers in Brazil, that solution is Crossgate’s B2B 360 Services and e-Invoicing Network.

Crossgate’s turnkey NF-e Service is fully integrated with SAP and offers real-time integration with SEFAZ. When a customer creates a nota fiscal in SAP, Crossgate converts it from IDOC format to the SEFAZ-compliant XML format and sends it to the Crossgate e-Invoicing Network. There it is logged, digitally signed, validated for compliance, and transmitted in real time to SEFAZ servers for approval. After it is approved, the message is archived in the Crossgate e-Invoicing Platform before being routed to the customer for printing and updating to SAP. The approved XML file is converted into a DANF-e for shipping, and a copy of the NF-e is transmitted to the receiver in advance of the shipment. Throughout the entire lifecycle of the nota fiscal, status messages are monitored using Crossgate’s Nota Fiscal Cockpit within SAP.

If a nota fiscal is rejected by SEFAZ because it does not match their master data, the steps required for reprocessing it can be time-consuming and cumbersome if they have to be done manually. The customer must cancel all of the billing documents, correct the master data in their system, and then reissue the documents to start the process all over again. But with the Crossgate solution, the customer can simply correct the master data and click one button. Crossgate creates a new IDOC, sends it out again, and it is automatically approved.

Crossgate’s solution also supports complete SEFAZ integration for receiving and validating electronic invoices. Because the Crossgate solution is completely integrated with SAP, companies can integrate their eInvoice process with MIGO and MIRO receiving processes. One-click MIGO and one-click MIRO, based upon inbound NF-e data, gives financial managers tremendous power in further streamlining their receiving processes.

Crossgate’s turnkey enablement is fully integrated with SAP, supports full sending and receiving processes, allows business to continue even when connectivity to SEFAZ is interrupted, integrates with the MIGO and MIRO receiving processes, and fully complies with the Nota Fiscal Eletronica initiatives. “The Crossgate solution provides integrated monitoring and validation in real-time, to help SAP customers meet compliance regulations much more quickly and efficiently,” says Lewin. “And we manage everything as a service, with a local office staffed by people who speak the local language. We know the processes, and we can help companies avoid potential non-compliance fines and implementation delays.” Regulatory compliance efforts can be time-consuming and difficult, but Crossgate’s B2B 360 Services and e-Invoicing Network make compliance easy for companies in more than 38 countries.

About Crossgate, Inc.

Crossgate offers the world's first Business-Ready Network, guaranteeing 100% integration of business partners, clients and suppliers. A single connection to the Network means electronic data exchange with any business partner regardless of their technical capability. In addition, Crossgate's B2B-360° Services powered by SAP provide clients direct access to all integrated business partners in the B2B transaction network via their SAP systems. With its legally compliant e-Invoicing Services, Crossgate also provides an innovative and 100% secure solution to cover the entire process of incoming and outgoing invoices, including signatures, global compliance monitoring, and secure automated long-term archiving.  More than 40,000 business partners, representing over 10 industries, currently exchange documents and data via the Business-Ready Network.

Crossgate is represented at four sites in Germany, with operations in Atlanta, London, Milan, Paris, and AsiaPac.  For more information, visit http://www.crossgate.com/.

************************************************
Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict

***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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Why Does SAP have an EDI Hub Now in 2010?

SAP recently announced the availability of their new managed EDI service called SAP Information Interchange (SII), which is an EDI/B2B hub.  This was not totally unexpected as SAP was already a significant owner in Crossgate, but it does invite the question of why now in 2010?

I believe the answer lies in these numbers, "SAP currently serves the largest network of businesses in the world. Over 89,000 organizations utilize SAP technology to run their businesses.  Upwards of 70% of the world’s economy is executed by organizations running SAP Applications."

I believe the key statistic above is - 70% of the world's economy.  That is a massive number.  That means 70% of the economy is in known systems. That means systems where the source and destination of the data is a known variable - SAP.  The ability and strategy for integrating with this system is known (IDocs, tRFC, web services, NetWeaver-to-NetWeaver, etc.).

SAP, with their efforts around MDM (master data management) and GDT (global data types), also have a relatively good idea of what the data means when it comes from an SAP system and goes into an SAP system.

When so many of these EDI/B2B and data semantic variables are known, the opportunities for standardizing and reusing processes increases.

SII is an EDI/B2B hub for SAP customers.  It is designed to be a centralized B2B exchange where all SAP users can register their EDI and B2B formats and then simply connect with all other SAP and non-SAP users in a subscription model.  Under this model SII is a simple utility service run in a cloud computing environment, in the same manner as your electrical or water utility.  When you need it you simply subscribe and connect.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict

***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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Operational Goals, EDI and SAP Information Interchange

This economic recovery looks to be a slow grind that will test management's capacity to increase production without adding significantly to headcount.  This will force companies to seek greater efficiencies in order to increase production.  Reducing paper processing and administration costs is one way to reduce costs.   Expanding EDI and B2B data exchanges with trading partners is an effective way to reduce costs, but not if it requires an increased headcount of expensive EDI professionals and consultants or more software and hardware.

Management today is wary of adding FTEs when the economy is still relatively unstable.  It is difficult to predict the speed and size of the recovery.  As a result, many recent studies have shown that business process outsourcing and hiring temporary workers seems to be the preferred first steps to increasing production.  Today, expanding EDI and B2B data exchanges can also fit into this category.

The SAP Information Interchange (SII) is a managed EDI service for SAP customers.  It is an EDI service sold and supported by SAP.  If a company determines that expanding EDI and B2B data exchanges with trading partners will enable greater efficiencies and cost reductions, then subscribing to the SII service for EDI/B2B is a very low risk and cost effective step.

SII requires a simple one time set-up for each SAP business process and then a low monthly subscription fee.  There is no requirement for more EDI consultants, staff, software or hardware.  All integration, implementation, operation and support is provided in the SII service.

Forrester's recent report stated that 85% of all companies (that participated in the survey) already use some sort of managed EDI services.  I believe that the number of companies using managed EDI services will rapidly increase for the following reasons:

• Companies must keep operational costs down but increase production now.
• The strongest survivors are now looking to gain through acquisitions of the weakerwhich will require more system consolidations.
• Companies are wary of hiring new FTEs (full time equivalents) until they are more comfortable with their sales forecasts and the state of the economy.
• Companies are adjusting to new economic models and views that they must be more flexible and be prepared to respond more quickly to changes around them.
• Companies must standardize more systems and processes to reduce complexity which causes higher TCO (total cost of ownership).
• Companies must shed non-core operations to reduce costs and increase staffing flexibility.
• Companies must focus their brightest minds on core value and competitive advantage processes and projects.  With fewer FTEs brain power must be focused on what will enable the company to survive and prosper, not on mundane and routine, non-core operational issues.
• Companies must focus on improving cash management - reducing DSO, recognizing early payment discounts from suppliers, reducing inventory, reducing transportation costs through better management visibility, etc.

SAP sales teams can answer your specific questions on how SII works with your current environment.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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EDI Problems and SAP Upgrades

I read two interesting numbers from AMR research today on EDI and EDI projects.

1. AMR research confirms that 84% of manufacturers experience a delay in ERP projects due to B2B integration issues. These ERP project delays can cost multi-billion dollar companies an average of $50,000 per day.
2. A recent AMR study confirms that over one-third of all data in ERP applications originates from external trading partners: customers, suppliers, third-party logistics providers and financial institutions.

Both of these numbers simply point to the importance of electronic data exchanges. Since one-third of the data coming into an ERP is commonly coming in via electronic data exchanges from trading partners, then any break in this system can cause massive problems. One common break point is an ERP upgrade.

SAP upgrades often break the legacy customized integration scripts that have been programmed over the past few decades. If the time to rebuild these integration scripts was not factored into the project plan, you are bound to suffer delays.

One of the solutions now available is using the SAP Information Interchange (SII) to process all of your EDI and B2B needs. The SII (a hosted EDI/B2B exchange) is SAP's solution for processing all EDI/B2B needs for the SAP user community. One of the benefits is that integration between the SII hub and the SAP ERP is simply a standardized one time set-up for each business process. Not dozens of different custom integration scripts for all the various formats of a purchase order or other B2B message. Since the SII hub also uses NetWeaver, many SAP users can simply plug-in using a NetWeaver-to-NetWeaver integration scenario. For those not using NetWeaver, simple IDoc or tRFC connections are easily implemented.

The bottom line is that you can abstract the EDI system from the ERP and integrate them with standardized integrations that are pre-defined and painless. As a result, any future upgrades to your ERP will not break thousands of custom integration scripts. The process would simply involve testing one standardized integration per business process. Since this is a quick and simple process no delays in future upgrades are anticipated as a result of your EDI/B2B environment.

If you are interested in the subject of SAP EDI/B2B and SAP's new SAP Information Interchange, then please consider joining the Linkedin Group called SAP EDI and SAP Information Interchange.

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.netcentric-strategies.com
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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More on Brazil's NF-e (electronic bill of lading) Requirements

Under Brazilian law, the NF-e is replacing the conventional, hard-copy nota fiscals (bill of lading)with an electronic counterpart which must be digitally signed and shaped into a particular government specified XML format. For many organizations this switch must be accomplished by April 1, 2010.

Brazil has put in place a different and far more involved electronic bill of lading requirement than other countries. The implementation of NF-e requires real-time reporting to the Ministry of Finance (SEFAZ), which then issues an electronic authorization (along with a bar code) that must be included on the printed paper Bill of Lading which accompanies the product delivery. This is in contrast to the requirements of most countries (see Mexico e-Invoicing) that only require reporting at the end of certain date ranges like months or quarters. Let's discuss this point in more detail.

Under these new requirements a company receives an order from a customer and must prepare a bill of lading in the SEFAZ designated XML format, submit to SEFAZ and receive an electronic authorization which must be added to the bill of lading and then printed before the product is shipped and sent with the product delivery. The term "before shipped" is important. There must be a real time electronic exchange of data that goes to SEFAZ, and an electronic authorization returned before it leaves the warehouse.

If the delivery truck is stopped by the police, the bill of lading can be scanned with a police bar code scanner which queries SAFAZ electronic authorization database and identifies the products associated with it. This must match or you are in big trouble.

Think about the IT infrastructure that must be in place to support these real-time interactions between ERPs and SEFAZ! These processes are new, different and unique and are not supported in traditional ERPs. Most companies will be searching for a managed B2B service that can perform these functions (send and receive the appropriate XML and follow the designated rules and processes defined by SEFAZ) and integrate with their existing IT infrastructures.

SAP and Crossgate (Crossgate is co-owned by SAP) have this service already in place and in production for SAP users. For more information and webinar schedules click here.

A related article:

• SAP Support for Brazilian e-Invoicing - Nota Fiscal Electronica (NF-e)
• Mexico e-Invoicing, Beyond the Basics
• Implementing e-Invoicing
• Electronic Invoicing in Mexico
• e-Invoicing Requirements for Mexico

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Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC
www.linkedin.com/in/kevinbenedict
http://b2b-bpo.blogspot.com/
http://kevinbenedict.ulitzer.com/
http://mobileenterprisestrategies.blogspot.com/
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.
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