B2B E-Commerce News Weekly

This is a weekly update of the most interesting articles related to EDI, e-Invoicing and electronic payments that I have found this week.  I am specifically looking for information about market trends and market numbers.

Now for the news:

The U.S. Department of the Treasury is going electronic. And in switching from paper checks to electronic payments to pay all federal benefits, the Treasury expects to save $120 million a year.


http://www.banktech.com/payments-cards/229400223

Organizations can save the equivalent of 1-2% of their turnover by replacing paper invoices and optimising the related processes. Compared to traditional paper-based systems, electronic and automated invoice processes can generate savings of 50-80%. Consequently, the payback period on e-Invoicing projects can be as short as six months.

http://www.your-story.org/e-invoicing-e-billing-from-evolution-to-revolution-236545/

It is estimated that over 150 billion invoices per year are exchanged worldwide, and these are to a large extent still paper-based. However, a rapidly increasing number of companies and consumers are adopting electronic channels.

http://www.prnewswire.com/news-releases/e-invoicing--e-billing---from-evolution-to-revolution-118827439.html

Research shows that e-mail bill and e-mail statement delivery is the top consumer choice for electronic delivery.

http://www.itweb.co.za/index.php?option=com_content&view=article&id=42321:ebilling-and-estatements-are-you-listening-to-your-customers&catid=239

Research shows companies can save 60-80% compared to traditional paper-based invoice processing. Projects typically result in a payback period of 0.5 - 1.5 years. In 2011, roughly 5 million European businesses and 75 million consumers are expected to send or receive electronic invoices.

http://www.xyzmo.com/en/NewsEvents/news/Pages/e-Billinge-Invoicing-Report-2011.aspx

Irish businesses can save 2% of their turnover by cutting out paper invoices and optimizing related supply chain processes. Based on Irish GDP of €1.23 billion in 2010, this equates to €246m in untapped potential savings. In 2011, more than 5m European companies are expected to exchange more than 3bn e-invoices, but the majority of businesses in Ireland continue to send and receive paper invoices.


http://www.irishexaminer.com/business/e-invoices-could-save-businesses-246m-annually-148847.html

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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.

SAP Information Interchange and Carter Johnson

EDI/B2B Communities

I had the good fortune to be able to spend time with SAP Lab's VP, Line of Business Solutions, Carter Johnson yesterday discussing SAP's strategy around EDI and B2B E-Commerce. I actually attempted to record a podcast of our conversation that did not record (^*&%#@$%^)!!!!  So, I will try again and post it here.

One of the questions that I asked Carter was, "Why is SAP getting involved in EDI now with the SAP Information Interchange by Crossgate, since EDI/B2B e-commerce has been around for three or four decades." Carter responded, "It is about time SAP got involved in EDI." Carter makes a good point. Until SAP's recent involvement in EDI, SAP customers were each left to their own devices to figure out how to independently support EDI/B2B and connect with their trading partners. This was an incredibility inefficient way for SAP customers to support EDI. There is no way to leverage the work of the SAP community, and no re-use of trading partner maps in this model.

Carter says that SAP learned a lot from companies like Linkedin. Linkedin created an online community for individuals to upload their work and contact information. Each person connects once and sets up their account and personal information. If a person changes jobs, contact information or positions, all parties that are connected to this individual receives the update. Wouldn't it be cumbersome, if we all individually, had to manually update our address books each time someone in our network updated their data? Carter added that SAP EDI should work the same way and it does with SAP Information Interchange. SAP customers should be able to connect their EDI business processes to the SAP Information Interchange once, and then connect with all the other companies that make up the community. This is smart EDI and smart B2B e-commerce.

I asked Carter if SAP customers should rip out legacy EDI systems and replace with EDI in the cloud via SAP's Information Interchange? He said that is an unlikely scenario, but when companies are consolidating ERPs, merging businesses, or need to renew their maintenance agreements with legacy EDI vendors, then these are the times companies want to look for a smarter way to do EDI.

Carter shared that recently a large SAP customer called him and said that had employed 200 people to just keep the maps to their EDI trading partners updated. This represents millions of dollars in expense every year to support and keep updated their existing trading partner community. They were very interested to learn how the SAP Information Interchange could reduce this costs and make the entire EDI support system smarter and more efficient.

It is fascinating to me to think about an online community of SAP customers all connecting to an online community for business-to-business e-commerce, finding each other and exchanging business transactions in the cloud.

Click here to read more about SAP Information Interchange.

I will try again to record a podcast with Carter and share it with you.

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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

Mexico e-Invoicing and Good Business

Many of us involved in the e-Invoicing industry understand the importance of being compliant with the local tax authorities (Nota Fiscal Electronica, Servicio de Administración Tributaria, Administración Federal de Ingresos Públicos, etc.) and their mandates around e-invoices, but what about supporting e-invoicing simply because it is good business? 

Let's take a look at a simple financial supply chain:

First let's look at it from the perspective of the manufacturer:

• Send Purchase Order
• Receive products
• Receive an invoice
• Clarify or dispute an invoice
• Issue payment (and thus impact working capital)
• Archive invoice and payment information

Now let's now look at the supplier side:

• Receive product order
• Deliver product
• Submit invoice
• Clarify or resolve invoice dispute
• Receive payment
• Clear receivables

When you review the above processes and see the words, "receive" or "send" they can both represent slow, costly and efficient postal services and manual handling of paper documents.  The more you can eliminate these inefficiencies with cost effective EDI, electronic invoicing and electronic payments, the better.

My point is there are more reasons to eliminate paper processes, than just being compliant with governmental e-invoicing mandates.

If you are an SAP user, you may want to discuss your e-invoicing needs with Crossgate, a global e-invoicing service provider co-owned by SAP.

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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.

e-Billing, e-Invoicing and Virgin Media

I write mostly about e-invoicing on this blog, but a close cousin is e-billing.  In this article, Virgin Media  and their e-Billing partner, ebpSource, announce that 66 percent of their new customers are opting for electronic billing.  Very good!  These are easy savings that every company, especially companies with a large customer base, should be capturing.

Have you thought about how many ways e-Billing can improve your business?  Here are a few ideas:

• Reduced Days Sales Outstanding (DSOs)
• Reduced Cash Conversion Cycles - Best In Class companies are 5x faster at converting Sales into Cash
• Faster Invoice/Bill dispute resolution
• 60 percent Print & Postage Reduction – from $5 to $2 (Gartner)
• Lower Call Center Volumes –up to 60 percent of calls relate to invoice disputes
• More environmentally friendly (Go Green)
• Compliant with local tax regulations

Let's now ponder where cost savings and the ROI are found from implementing e-Invoicing and e-Billing:

1. Reduced paper costs
2. Reduced printing costs
3. Reduced handling costs
4. Reduced postal costs
5. Reduced payment processing costs
6. Reduced data entry costs (entering payment information from paper)
7. Reduced data entry errors
8. Reduced billing disputes
9. Reduced paper storage costs

All of these positive benefits that are available to those converting from paper invoicing to e-Invoicing, are simply a bonus for those in Brazil, Mexico and Argentina that are now being mandated to support e-Invoicing.

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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.

Global e-Invoicing Services is in Growth Mode

Servicio de
Administración Tributaria

I just read about the 2010 growth numbers for one of the leading global e-invoicing companies.  They were an impressive 30 perceny year-over-year.  What is even more impressive is they were able to sustain that growth through the recession.  This growth was due to both new customers and increased e-invoicing by existing customers.  Their transaction volume increased by 54 percent year-over-year.

New e-invoicing mandates all across Latin America may be one of the reasons for growth in the e-invoicing services business.  As reported in an earlier blog, Crossgate, a company co-owned by SAP, just announced they added 11 new global companies to their Mexico e-Invoicing services business.  Mexico had a January 1, 2011, deadline, and Argentina has an April 1, 2011, deadline which certainly creates a sense of urgency in the market.

Let's talk a little more about these deadlines.  I have been working in the e-invoicing world for some time now, and there seems to always be new deadlines.  How can the IT department execute their own strategic initiatives, when they are always being forced to support a new mandate or requirement from the national tax authorities?  Yikes!  How do you manage an IT development budget and schedule when you are always being distracted by new requirements.

I think working with a global e-invoicing services bureau sounds pretty good right now.  In fact, a lot of global companies are feeling the same way which is why we are seeing such growth in the e-invoicing services market.

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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.

SAP, Mexico e-Invoicing and Servicio de Administración Tributaria

Most of us are aware by now that Mexico mandated some new real time requirements for e-invoicing that went into effect on January 1, 2011.  I have been in conversations with several folks within the SAP ecosystem that are now having difficulty supporting these requirements with on-premise SAP solutions.

These new requirements are changes from 2010's e-invoicing requirements.  The concept of the folio number is now gone, and there is a requirement to support real-time exchanges of data with SAT.

Some of the new requirements, as identified in this press release from Crossgate are:

• Regulatory compliance checks with government-certified organizations for both senders and receivers of invoices.
• Outgoing invoices must be prepared in a specific XML format and authorized in advance.
• Invoices in excess of 2,000 Pesos are required to be approved digitally.
• Incoming invoices must be externally validated, then archived and stored.
• Folio numbers have been eliminated and replaced by the Timbre Fiscal, which includes the signed “Sello del SAT,” along with a 32-character UUID code that is assigned by the SAT and remains globally unique throughout all invoices created in Mexico.

The press release that listed these requirements also stated announced that Crossgate, a global e-invoicing services company (co-owned by SAP) that specializes in supporting SAP customers, has recently implemented support for these requirements in 11 global companies.  They support these new requirements in a cloud computing SaaS business model that is integrated with SAP.

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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.

European Commission Details e-Invoicing Plan

I found a great article today detailing the European Commissions thoughts and plans for e-invoicing.  The commission has identified 16 specific deliverables to help support their plans.  The EU was quoted as predicting, "In 2020 e-invoicing has to be the predominant method of invoicing in Europe."

The 16 action items and deliverables listed seem to be focused on ensuring that "stakeholders" are effectively represented, and that the steps and plans that each member state makes are in alignment with the other states' plans and frameworks. 

In addition, much of the effort seems focused on promoting e-invoicing and its value to SMEs (small to medium sized enterprises).  The majority of all businesses are SMEs, and there is a great deal of efficiencies to be realized by getting your SME customers to support e-invoicing.  Large companies can assign IT resources to specialize in EDI, e-invoicing and e-invoicing systems, but SMEs often don't have the resources to invest in learning and supporting e-invoicing and EDI requirements.  As a result, SMEs will often look to managed e-invoicing and EDI services companies to help them.

Even large companies, like most of SAP's customer base, seem inclined to use managed e-invoicing services to manage their global e-invoicing initiatives.  This Spring, even SAP announced their own solution called SAP Information Interchange which manages EDI and e-Invoicing services on behalf of SAP customers.

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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.

Nestle Takes the Plunge in EIPP

It appears from this recent article that Nestle USA has taken the plunge into electronic invoice presentment and payments (EIPP).  I believe this is a good move by Nestle as many SMEs (small to medium sized enterprises) do not have the knowledge or budget to support traditional EDI systems and services for sharing electronic business data with Nestle.

Pete Knox, head of Nestle USA Credit and A/R Administration, explains that Nestle’s investment in EIPP will allow them to interact with a greater numbers of customers electronically, and this will streamline accounts receivable functions and accelerate cash.

The ability to support electronic invoicing is becoming a required best practice in many places in the world and a government mandate in many others. Over the last couple of years there have been many developments around e-invoicing in Latin America.  Here are some of the latest mandates for your reference:

• In Mexico there is a mandate to support e-invoicing.  The details can be found here.

• In Brazil there is a mandate to support e-invoicing.  The details can be found here.

• In Argentina there is a mandate to support e-invoicing.  The details can be found here.

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Kevin R Benedict Independent e-Invoicing/EDI Consultant, Analyst and Blogger
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.