a glimp into the future of electronic invoicing

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Vision statement on the future of e-invoicing .

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a glimp into the future of electronic invoicing

  1. 1. A glimp into the future of Electronic Invoicing the revised and updated edition Be ready for green d®iving on the electronic business highway November 2011
  2. 2. DanGa Enter Date Enter Title in Header and Footer 2 My Vision on Electronic Invoicing is of an electronic business highway in the cloud above us E-merging technologies & growing business networksE-merging technologies & growing business networks are shaping the future ofare shaping the future of Electronic BusinessElectronic Business intointo an open and intelligent information service highwayan open and intelligent information service highway whereinwherein Electronic InvoicingElectronic Invoicing fits as a tiny littlefits as a tiny little exchange instanceexchange instance that enablesthat enables smart and fast reachsmart and fast reach toto connected partnersconnected partners
  3. 3. DanGa Enter Date Enter Title in Header and Footer 3 The focus of the electronic business highway is on the Exchange Domain, … business exchange services in the end-to-end trade process Electronic Invoicing is part of the end-to-end trade process …  Business Services are provided in the Entity Domain, focus on automation of Buyer and Seller processes  Exchange Services are provided in the Exchange Domain, focus on interoperability between trading entities (Purchase-2-Pay and Order-2-Cash cycle) Six Actors in the trade process  Buyer (invoicee, payer)  Seller (invoicer, payee)  Seller’s Bank  Buyer’s Bank  Seller’s Tax Authority  Buyer’s Tax Authority processes data
  4. 4. DanGa Enter Date Enter Title in Header and Footer 4 The electronic business highway unlocks the wilderness of business exchange processes & systems Reducing complexity and risks while still being able to respond quickly (agile) to changes in the market is one of the main objectives of most companies. DanGa Move core business functions into the inner circle AND guide non-core functions to the outer circle Imagine what happens when you pull all the complexity (functionality and technology) into the enterprise inner circle One can not reduce complexity and risks on its own, there are too many aspects involved. Green driving on the electronic business highway requires business service connectors that bring you online for exchanging information, let others worry about these complex exchange processes! If everyone builds its own highway, there will be chaos
  5. 5. DanGa Enter Date Enter Title in Header and Footer 5 Idea’s & concepts R ealSolutions challenge collaborate THE PATH SH APE TO The electronic business highway enables real-time business exchange services between trading partners Multiple highways managed by intermediaries get linked and transform into the super-highway that enhances the reach of receivers and senders all over the world Leadership influences evolution of electronic invoicing but does not control it Culture stimulates collaboration, innovation and information sharing People made electronic invoicing happen, people took away all hurdles
  6. 6. DanGa Enter Date Enter Title in Header and Footer 6 Are you already motivated to start driving on the Electronic Invoicing corridor ? Are you still hesitating to get onboard of Electronic Invoicing ? Consider the risks of not being prepared for the e-questions of tomorrow and lacking the strategic advantage of Electronic Business, bear in mind  The European Commission cleared legal and fiscal hurdles recently  Technology and standardisation are well on the way to maturity Have you been thinking recently to move your e-mail to G-Mail or alternatives ? Now go green and think again about G-Invoicing or Y-Invoicing ! Why pull complexity into your enterprise when exchange of invoices is all you are after, just realize / think about  Electronic Invoice exchange is non-intrusive, why make it a core function  There are strong players that made Electronic Invoicing their Core Business Need to hear and see how far you can get, continue reading !
  7. 7. Electronic Invoicing, the current reality. Breaking through the hype into the realm of real business strengths
  8. 8. DanGa Enter Date Enter Title in Header and Footer 8 The journey of electronic invoicing observations on the present and future The thoughts & view on the evolution of Electronic Invoicing, the first steps towards the Electronic Business Highway where data integration & process Functionality and Technology Operational and Legal requirements E-invoicing E-business Market Models Costs and Benefits challenge sim plify journey the to Stay tuned for this journey
  9. 9. DanGa Enter Date Enter Title in Header and Footer 9 The journey 1. Introduction 2. Communication / Exchange Models 3. Building blocks 4. Legal and regulatory compliance 5. Influencing the Business Case 6. Trends – Proposed scenario’s 7. Steering on-boarding
  10. 10. DanGa Enter Date Enter Title in Header and Footer 10 What is Electronic Invoicing? Different people have different perceptions Electronic Invoicing Electronic Invoicing Electronic invoicing is the production of electronic compliant documents for customers, making the (current) paper invoicing redundant. Electronic invoicing is the fully integrated and electronic process of order intake, processing measurements and sending invoices to customers. Electronic solution for invoices with the customer being able to process electronic invoices (in any format) and advantages for the customer are realized. Being able to present digital invoices is not the same as doing business electronically. Electronic invoicing is sending the invoice electronically accordingly customer requirements Digital invoicing is offering customers a PDF-File with detailed lines digitally. Electronic invoicing is offering an electronic invoice that is compliant with relevant laws & regulations E-invoice E-invoicing eInvoice eInvoicing Keep in mind electronic billing and invoicing is not the same , they have a lot in common but there are less stringent rules for invoicing to consumers (billing)
  11. 11. DanGa Enter Date Enter Title in Header and Footer 11 Why is Electronic Invoicing important ?  Possibility to achieve cost savings & obtain benefits  Quantitative – direct and indirect costs  Sender: 3 – 5 € per Invoice  Receiver: 15 – 25 € per Invoice  Qualitative – expected effects  Less errors / disputes  Faster payments / better use of Early Payment Discounts  Possibility to achieve competitive advantages  Enable Customers to achieve savings in their processes  Faster invoicing to end-customers  Improve the quality of the invoicing process and realize higher customer value  Government demands electronic invoices from its suppliers  10% by the end of 2010  80% within 3 years
  12. 12. DanGa Enter Date Enter Title in Header and Footer 12 Traditional Exchange of Trade Documents SUPPLIER Issue Product Catalog CUSTOMER CUSTOMER Issue Forecast Receive Confirmation Process Shipment Issue Purchase Order Issue Partner Data Process Product Catalog SUPPLIER Process Forecast Confirm Sales Order Create Sales Order Submit Shipment Process Partner Data Issue Product Catalog Submit Invoice Process Dispute MRP Inventory Process Product Catalog Process Forecast Confirm Sales Order Create Sales Order Submit Shipment Process Partner Data Submit Invoice Process Dispute Process Payment Issue Forecast Receive Confirmation Process Shipment Issue Purchase Order Issue Partner Data Process Invoice Submit Dispute Submit Payment order response invoice despatch forecast Process Invoice Submit Dispute Submit Payment forecast order response invoice despatch Process Payment product info product info e-mail fax post e-mail fax post e-mail fax post e-mail fax post party info party info Most enterprises operating in the business-to-business domain are still – even today – supporting their trade processes by the exchange of information on paper, by fax or email. The data is manually taken over by administrative people and entered in the business supporting systems.
  13. 13. DanGa Enter Date Enter Title in Header and Footer 13 EDIFACT-based Exchange of Trade Documents SUPPLIERSUPPLIER Issue Product Catalog CUSTOMER CUSTOMER Process Product Catalog Process Forecast Confirm Sales Order Create Sales Order Submit Shipment Process Partner Data Submit Invoice Process Dispute Process Payment Issue Forecast Receive Confirmation Process Shipment Issue Purchase Order Issue Partner Data Process Invoice Submit Dispute Submit Payment ORDERS ORDRSP INVOIC DESADV SLSFCST MRP Inventory Issue Forecast Receive Confirmation Process Shipment Issue Purchase Order Issue Partner Data Process Product Catalog Process Forecast Confirm Sales Order Create Sales Order Submit Shipment Process Partner Data Issue Product Catalog Submit Invoice Process Dispute Process Invoice Submit Dispute Submit Payment SLSFCST ORDERS ORDRSP INVOIC DESADV Process Payment PRODAT PRODAT PARTIN PARTIN Several national and international standard bodies, accounting and industry associations have long propagated the use of Electronic Data Interchange with XML or EDIFACT for direct exchange of business documents between trading partners.
  14. 14. DanGa Enter Date Enter Title in Header and Footer 14 The evolution path of Electronic Invoicing Traditional: Phone, fax, paper Communication: e-mail, web presentment Integration: XML standards, Web Oriented Architecture Collaboration: Networked organisations Synchronisation: Pure Peer- to-peer networking, Ecosystem Oriented Architecture Technology is shaping the e-invoicing world ! Need to have a high awareness of technology, data security and control From tightly coupled to loosely coupled systems
  15. 15. DanGa Enter Date Enter Title in Header and Footer 15 The journey 1. Introduction 2. Communication / Exchange Models 3. Building blocks 4. Legal and fiscal compliance 5. Influencing the Business Case 6. Trends – Proposed scenario’s 7. Steering on-boarding
  16. 16. DanGa Enter Date Enter Title in Header and Footer 16 Communication / Exchange Models – Evolution  There are 3 commonly accepted exchange models in the world:  bilateral models  three-corner models  four-corner models  Presentment Portals  Seller Direct Model / Sales Portal  Invoice Presentment over the Web  Buyer Direct Model /Procurement Portal  Invoice Entry over the Web
  17. 17. DanGa Enter Date Enter Title in Header and Footer 17 Seller Direct / Buyer Direct Models Seller creates 1:N Connection with CustomersSeller creates 1:N Connection with Customers Buyer creates 1:N Connection with SupplierBuyer creates 1:N Connection with Supplier Invoice Presentment – Seller Direct Model The seller/biller is the dominant party and makes the invoice data available to customers over the web or through e-mail or EDI / XML transmission. Supplier Customer Seller’s Bank Buyer’s Bank register notification receive & process complaint handling payment P O R T A L e-mail / XML /EDI Biller benefits most of Online Invoice Presentment: • Lock-in of Customers • Improve cross- and up-selling • Reinforce Seller’s brand identity • Invoice looks and feels the same as paper-based document Buyer benefits most of Online Invoice Entry • Lock-in of Suppliers • Reinforce Buyer’s brand identity Invoice Presentment – Buyer Direct Model The buyer is the dominant party and requires their suppliers to deliver the invoice via the web or through e-mail or EDI / XML transmission. Supplier Customer Seller’s Bank Buyer’s Bank register complaint handling P O R T A L e-mail / XML /EDI invoice payment
  18. 18. DanGa Enter Date Enter Title in Header and Footer 18 Bilateral Models Disadvantages of bilateral models: An electronic connection need to be established with each customer and supplier. Lack of common standards makes alignment of processes and technology difficult. Small and medium-sized enterprises (SME’s) find point-to-point connections expensive. Point-to-point connections demand continuous changes in systems and processes to keep up with trading partners and these changes will have an impact on all partner connections. Retailer Production Supplier Government Buyers Staffing Storage & Distribution Logistics & Transport Retailer Production Supplier Government Buyers Staffing Storage & Distribution Logistics & Transport Many enterprises, in the past, entered into bilateral agreements with their trading partners and established point-to-point connections. With the growing number of electronic trading partners the number of individual arrangements needed to reach all their counterparties becomes hard to manage. From a technological point of view the bilateral models almost always end up in “digital spaghetti”.
  19. 19. DanGa Enter Date Enter Title in Header and Footer 19 Three-Corner Models Advantages of three-corner models: Trading partners need to establish / build only one connection with the Electronic Communication Network to reach all their trading partners SME’s find the B2B ECN a low cost and user-friendly solution and service. Connection to the B2B ECN does not require high investments and the B2B ECN hides systems and processes from the outside world. Changes only impact the connections to the B2B ECN and not those with all trading partners In the three corner model a service provider, consolidator, handles the process of distributing and/or receiving business documents on behalf of sellers and/or buyers, or other trading partners. The service provider manages the data translation and ensures that the processing and transfer of data is compliant with all types of regulations. CONSOLIDATOR - HUB B2B Electronic Communication Network Retailer Production Supplier Government Buyers Staffing Storage & Distribution Logistics & Transport CONSOLIDATOR - HUB B2B Electronic Communication Network Retailer Production Supplier Government Buyers Staffing Storage & Distribution Logistics & Transport
  20. 20. DanGa Enter Date Enter Title in Header and Footer 20 Four-Corner Models Advantages of four-corner models Several connected hubs provide a virtual electronic communication network extending the total reach to more suppliers and customers. Interconnecting e-Hubs requires  Interoperability agreements  Addressing and routing  Standardised format  Format conversions  Roaming agreements  Inter-network roaming charges  Guarantee authenticity of origin and integrity of content across networks  Operator Certification  Validation criteria for operators Four corner models involve connections between service providers, consolidators, and these multilateral networks naturally emerged from the efforts of consolidators to increase reach to better serve senders and receivers using their networks. These models are currently actively deployed and established between service providers through bilateral linkages between them or the creation of multilateral network solutions. CONSOLIDATOR - HUB B2B Electronic Communication Network CONSOLIDATOR - HUB B2B Electronic Communication Network CONSOLIDATOR - HUB B2B Electronic Communication Network CONSOLIDATOR - HUB B2B Electronic Communication Network CONSOLIDATOR - HUB B2B Electronic Communication Network CONSOLIDATOR - HUB B2B Electronic Communication Network
  21. 21. DanGa Enter Date Enter Title in Header and Footer 21 Mapping Distribution Models on the evolution path for Electronic Invoicing There is no ONE-SIZE-FITS-ALL model because every buyer and seller has unique characteristics and demands A combination of models is more suitable for large companies  Seller or Buyer Direct model for presenting business documents and direct interaction with trading partners  Consolidator model for exchanges documents using international standards Consolidator model is more appropriate for small and medium enterprises Ecosystem model is still experimental, digital business ecosystem projects started in 2003 and are still evolving.
  22. 22. DanGa Enter Date Enter Title in Header and Footer 22 Consolidators need to increase Interconnectivity among Electronic Invoicing hubs to better serve senders and receivers Interconnecting e-Hubs requires Interoperability agreements  Addressing and routing  Standardised format  Format conversions Roaming agreements  Inter-network roaming charges  Guarantee authenticity of origin and integrity of content across networks Operator Certification  Validation criteria for operators e-networking hub e-networking hub e-networking hub Emerging initiatives  Common eInvoice Address Registry (eGreen Pages)  Venture Hub Alliance  Adoption of the XML Advanced Electronic Signatures (XAdES) by European countries Roaming is interconnecting networks to provide real cross border reach, in a way that an operator can reach another operator’s users directly, nationally and internationally
  23. 23. DanGa Enter Date Enter Title in Header and Footer 23 The journey 1. Introduction 2. Communication / Exchange Models 3. Building blocks 4. Legal and fiscal compliance 5. Influencing the Business Case 6. Trends – Proposed scenario’s 7. Steering on-boarding
  24. 24. DanGa Enter Date Enter Title in Header and Footer 24 Building blocks for realizing electronic exchange services Message Broker TRANSFORMATION DISTRIBUTION WEB BPM FORMATTING E-Mail Server DWH RECEPTION  Transformation engines / ETL tools  Translate from internal to external message standard  Extract or load data from a database / ERP system  Distribution & reception  Distribute internal message from the transformation engine to the message broker or the web.  Receive external message and deliver to the transformation engine  Message broker  Transport message to and from external parties using different transport protocols  Deliver or receive message to and from the transformation engine  Document Storage / Archive  7 years fiscal storage obligation Business Process Management (BPM) & Workflow  Web presentment and online entry  Present in PDF or HTML  Enter or retrieve documents online  Download or upload as CSV, PDF or XML  E-Mail server  Send PDF to trading partner  Send e-mail notification or SMS message  Formatting  Reformat print file to the company style layout in PDF or AFP for print factory OCR SCANNING Scanning and Optical Character Recognition (OCR)
  25. 25. DanGa Enter Date Enter Title in Header and Footer 25 Building blocks from a Buyer Direct perspective Web Transformation Distribution Reception Message Broker Formatting E-mail Server Document Storage BPM Scanning & OCR
  26. 26. DanGa Enter Date Enter Title in Header and Footer 26 Building blocks from a Seller Direct perspective Web Transformation Distribution Reception Message Broker Formatting E-mail Server Document Storage BPM Scanning & OCR
  27. 27. DanGa Enter Date Enter Title in Header and Footer 27 Building blocks provided by the consolidator (thin/thick) Thick consolidator:  Processing and exchange of a complete range of documents  Multiple types of presentment and exchange services  Connect directly to the business applications through EAI  Exchange XML with backend systems Thin consolidator:  Processing limited number of documents  Connect to internal exchange components / services  Exchange XML and/or PDF
  28. 28. DanGa Enter Date Enter Title in Header and Footer 28 ……but Investment is a Concern in this Economybut Investment is a Concern in this Economy On-Premise Cloud Hidden Costs Transparency….. no hidden costs
  29. 29. DanGa Enter Date Enter Title in Header and Footer 29 What kind of software is available and where can we get the building blocks ? Only a fraction of the players in the field of Business-2-Business IntegrationOnly a fraction of the players in the field of Business-2-Business Integration Buyer Direct Seller Direct Consolidator Own development Open Source Commercial O N P R E M I S E O N D E M A N D Two ways to install these building blocks:  On-premise solutions  Commercial software or  Open source software  On-demand solutions  Integrated or  External Three types of software:  Own development  Open Source  Commercial on-demand on-premise components total
  30. 30. DanGa Enter Date Enter Title in Header and Footer 30 Building blocks and distribution models mapped on the evolution path The componentization of these building blocks allows for a staged implementation approach alongside the evolution path of electronic invoicing AND with the freedom of choice for in- house or out-house solutions. There is no ONE-SOLUTION, multiple channels are required
  31. 31. DanGa Enter Date Enter Title in Header and Footer 31 E-Invoicing Communication Channels  Direct integrations  EDI or XML Invoices  PO Flip  Supplier ‘flips’ purchase order into an e-Invoice in the Web Portal  Web Invoice (Web-based Forms)  Supplier submits Invoice via Web Portal  File Upload  Supplier uploads invoice data via Web Portal  Scan to e-Invoice  Paper Invoices are transformed into e-Invoices  PDF Invoices received via e-Mail are transformed into e-Invoices
  32. 32. DanGa Enter Date Enter Title in Header and Footer 32 Align Accounts Receivable Automation with your broader sales strategy  When selecting technologies, remember the best solutions are often the simple ones.  Take a strategic view – look at the whole procurement process  Look for a holistic solution – integrate, re-use and communicate.  Points to consider:  the interoperability needs of your technology. An integrated technology strategy will need to fit with the components of your procurement processes. Limit your risk – don’t use technologies that would be difficult or might not integrate.  scalability – make sure your solution fits your needs  open or modular products – look at all the possibilities. Ask the question – can you use software that conforms to standards and supports the interchange of data using open standards and formats?
  33. 33. DanGa Enter Date Enter Title in Header and Footer 33 Ensure all functions for the future are available INTEGRATION E-INVOICE SERVICE Communication Input Channels integratedPOSTAL NETWORKS SUPPLIERS EUROPE, US, ASIA-PACIFIC AP Invoice Management PO SAP INV PARTNER MANAGEMENT Integration SELF-CARE ON-BOARDING SCANNING & OCR CORRECTION OF INVOICES WEB / INTERNET MESSAGING EDI PERFORMANCE ANALYSIS / KPIs PARTNER COMMUNICATION USER MANAGEMENT DISPUTE HANDLING LiveLink Archive PO FLIP XML / CSV UPLOAD INVOICE ENTRY INVOICE VALIDATION SELF-BILL PO XMLPDF PDF VM SELF-BILL WEB 1. Multi-format  EDIFACT  HR-XML  UBL 2.0  UN/CEFACT  ISO 20022  RosettaNet  PAPER  … 1. Multi-channels  POSTAL PAPER  E-MAIL PDF  WEB  NETWORKS
  34. 34. DanGa Enter Date Enter Title in Header and Footer 34 Current Players  Crossgate / Hubwoo  IBM Sterling Commerce  Ariba  Liaison  Descartes / interCommit  B2Boost  Certipost  E2Open  Bostecht – Chainbuilder  XAware  Talend  Jitterbit
  35. 35. DanGa Enter Date Enter Title in Header and Footer 35 The journey 1. Introduction 2. Communication / Exchange Models 3. Building blocks 4. Legal and fiscal compliance 5. Influencing the Business Case 6. Trends – Proposed scenario’s 7. Steering on-boarding
  36. 36. DanGa Enter Date Enter Title in Header and Footer 36 Electronic Invoice Authenticity of invoice VAT Refund Readability Controllability by Tax Authorities Technical Interoperability Integrity of data Storage Acceptance in other European jurisdictions EDI Agreement or Advanced Electronic Signature EDI plus authenticity or Electronic Signature EDI Agreement or Advanced Electronic Signature Audit requirements 7 – 11 years 7 – 11 years Regulatory requirements for electronic invoicing in Europe are developed iterative European Council Directive 2001/115/EC  Supplier must ensure that an invoice is issued, either by himself or by his customer or, in his name and on his behalf, by a third party.  Acceptance (of the e-invoice) by the customer  Ensure Authenticity of origin (sender is the true source) and Integrity of content (no alteration of data) of the invoice is guaranteed by:  Electronic Data Interchange (EDI) with contracted security processes  Advanced Electronic Signature (with or without a qualified signatures)  Other means to be accepted by Tax Authorities  Place of storage and time period for secure storage of electronic invoices.  Ten mandatory items of information with the possibility of an additional four items in specific circumstances Different countries mean different regulations. To ensure a internationally compliant solution it is imperative to understand the differences in order to overcome these differences.
  37. 37. DanGa Enter Date Enter Title in Header and Footer 37 Good news, regulatory requirements are changing on short notice! Tackle fraud  Coincide the date of supply of intra-community transaction and the date of chargeability of tax. Tax becomes chargeable on the date of supply (the chargeable event)  The invoice has to be issued before the 15th of the month following the date of supply. Remove legal barriers  Treat the transmission of paper and electronic invoices equally by removing the conditions for (advanced) electronic signatures and EDI.  Notification and acceptance by the receiver of the invoice and Tax Authorities is no longer required instead normal commercial practice will apply. Storage of invoices  Period of storage: Common storage period of 6 years within Europe for VAT invoices.  Format of storage: Paper invoices may be converted into electronic form for storage purposes. Storage of invoices in original format is no longer required.  Place of storage: No conditions for the place of storage other than that the invoice must be available without undue delay. The invoice should no longer be online available when held outside the Member State of the supplier or customer. Notification of the place of storage is no longer required. Translation of invoices  Translation of invoices may still be requested but for particular invoices only. Reduce burdens on business, increase the use of e-invoicing, support small and medium sized enterprises (SMEs) and help Member states tackle fraud Reduce burdens on business, increase the use of e-invoicing, support small and medium sized enterprises (SMEs) and help Member states tackle fraud The proposal COM/2009/21 simplifies, modernises and harmonises the VAT invoicing rules.
  38. 38. DanGa Enter Date Enter Title in Header and Footer 38 VAT Directive 2010/45/EU of 13 July 2010  On 13 July 2010 the Council adopted Directive 2010/45/EU amending Directive 2006/112/EC on the common system of value added tax as regards the rules on invoicing. This Directive, which will be transposed by 1 January 2013, sets out new VAT rules as regards e-invoicing and removes the obstacles to the uptake of e-invoicing by creating equal treatment between paper and e-invoices, while also ensuring that no additional requirements are imposed on paper invoices.  The authenticity of the origin, the integrity of the content and the legibility of an invoice, whether on paper or in electronic form, shall be ensured from the point in time of issue until the end of the period for storage of the invoice.  “Authenticity of the origin” means the assurance of the identity of the supplier or the issuer of the invoice.  “Integrity of the content” means that the content required according to this Directive has not been altered.  Each taxable person shall determine the way to ensure the authenticity of the origin, the integrity of the content and the legibility of the invoice. This may be achieved by  any business controls which create a reliable audit trail between an invoice and a supply of goods or services.  using certain existing technologies, such as Electronic Data Interchange (EDI) and advanced electronic signatures. Note: Taxable persons should not be required to use any particular electronic-invoicing technology.
  39. 39. DanGa Enter Date Enter Title in Header and Footer 39 Adoption of e-Invoicing / VAT Directive in European Member States  Denmark (2005)  Netherlands (February 2009)  Norway (2012)  By 1.7.2011 all state agencies and health authorities should be able to receive invoices electronically in designated standard format.  By 1.7.2012 all members of the public sector (including municipal sector) must be able to receive invoices in standard format.  By 1.7.2012 all suppliers (incl. SME’s and sole proprietors) must sent invoices to the public sector electronically. The invoices must be sent in the national standard EHF (Elektronisk handelsformat) which is based on the PEPPOL Business Interoperability Specifications (BIS)  Germany (September 2011 – Steuervereinfachungsgesetz 2011)  Belgium  Finland  …
  40. 40. DanGa Enter Date Enter Title in Header and Footer 40 The journey 1. Introduction 2. Communication / Exchange Models 3. Building blocks 4. Legal and fiscal compliance 5. Influencing the Business Case 6. Trends – Proposed scenario’s 7. Steering on-boarding
  41. 41. DanGa Enter Date Enter Title in Header and Footer 41 Cost drivers e-Invoicing with Customers
  42. 42. DanGa Enter Date Enter Title in Header and Footer 42 Cost drivers e-Ordering with Customers
  43. 43. DanGa Enter Date Enter Title in Header and Footer 43 Cost drivers e-Invoicing with suppliers
  44. 44. DanGa Enter Date Enter Title in Header and Footer 44 Cost drivers e-Ordering with suppliers
  45. 45. DanGa Enter Date Enter Title in Header and Footer 45 Critical factors driving the Business Case for Electronic Invoice Adoption  Technological readiness and process maturity determine the cost of implementation  ‘Sustainability’ – the positive economical, social and environmental aspects influence the willingness to adopt  External pressure (customers – competitive pressure, government – regulations) accelerate commitment  Pro-active On-boarding enables success On-boarding Approach / Effort Adoption Time & Rate Costs Savings & Expenses Technological Readiness Willingness & Commitment Incentives & Charges Transaction Volume
  46. 46. DanGa Enter Date Enter Title in Header and Footer 46 Perceived benefits are key determinants for adopting Electronic Invoicing Direct advantages: Increased internal efficiency of the organisation  Cost savings achieved by time savings, reduced paper usage and costs for postage  Freeing up staff resources for other tasks  Interest revenues and less invoice reminders Risk and obstacles:  Possible high investments and integrations costs  New competence requirements  Security and operational reliability  Relocation of people or possible made redundant Perceived benefits: direct advantages are measurable and account for 4,5 € Indirect advantages: Impact on business processes and relationships  Socially responsible business (care for people, animals, surroundings and environment)  Strengthening of customer relations risk indirect advantages perceived benefits adoption direct advantages
  47. 47. DanGa Enter Date Enter Title in Header and Footer 47 External pressure / Organisational maturity & readiness are key motivators for adopting Electronic Invoicing External pressure: Influence from the organisational environment  Bargaining power of strong trading partners  Pressure from competitors or market sectors (automotive, chemical, health) External pressure determines willingness & commitment Some industry sectors eliminated barriers by providing standardisation (messages, protocols) Technological and process maturity determines organisational readiness Organisations with highly integrated, computerised processes are better prepared competitive pressure external pressure adoption pressure from trading partners process maturity organisational readiness adoption technology maturity
  48. 48. DanGa Enter Date Enter Title in Header and Footer 48 Adopting Electronic Invoicing brings cost savings and requires vision on future steps & ambitions Setup and roll-out cost External Ambitions Internal Ambitions Current Costs Future Costs Inhibitors Maturity level Company Structure expenses savings Drivers On-boarding Power Number of invoices Distribution costs decrease  Lower printing costs  Less paper spoilage  Lower postal costs Cash flow acceleration  Immediate delivery  Faster processing  Less discrepancies  Faster dispute resolution Better Customer experience  Reduction of queries Internal and external ambitions  Most socially responsible company  Final goal is total electronic business  Most customer responsive and friendly company Cost savings result from the number of paper invoices that become electronic invoices BUT these are driven by the number of customers that go green
  49. 49. DanGa Enter Date Enter Title in Header and Footer 49 Questions to be answered  Perceived benefits  External pressure  Maturity & readiness  Legislation & regulation  Costs & revenues  Interoperability Important factors driving or inhibiting the adoption of electronic invoicing  What type of invoice-related information do your Customers receive and/or require ?  What do your Customers want and how ready are your Customers ?  How much pressure do you want to put on your Customers to adopt e-Invoicing ?  How willing are your Customers ?  How much effort do you want to put in on-boarding ?
  50. 50. DanGa Enter Date Enter Title in Header and Footer 50 The journey 1. Introduction 2. Communication / Exchange Models 3. Building Blocks 4. Legal and fiscal compliance 5. Influencing the Business Case 6. Trends – Proposed scenario’s 7. Steering on-boarding
  51. 51. DanGa Enter Date Enter Title in Header and Footer 51 The B2B Electronic Communication Network Approach ECN SUPPLIER Issue Product Catalog CUSTOMER Process Product Catalog Process Forecast Confirm Sales Order Create Sales Order Submit Shipment Process Partner Data Submit Invoice Process Dispute Process Payment Issue Forecast Receive Confirmation Process Shipment Issue Purchase Order Issue Partner Data Process Invoice Submit Dispute Submit Payment ORDERS ORDRSP INVOIC DESADV SLSFCST PRODUCT DATA POOL WEB Due to the large variety of solutions and standards implemented by business partners it becomes impossible to reach and meet the demands of trading partners in the near future. Besides the technological diversity some business partners have not yet, or insufficiently, automated their business processes. Establish a multi-channel communication network with your business community, complementing the traditional communication channels. Target a FULL multi-channel communication strategy via your B2B Electronic Communication Network (ECN) provider offering EDI – based documents (EDIFACT and XML) and PDF via the web triggered by e-mail.
  52. 52. DanGa Enter Date Enter Title in Header and Footer 52 The Electronic Communication Network is breaking down technological barriers The Electronic Communication Network is breaking down the technological barriers to enterprise-wide information exchange and business process collaboration between enterprises in- and outside Europe.  The E-networking Hub takes another approach in establishing connections between enterprises, processes and applications.  The E-networking Hub connects enterprise business processes in a similar way that the Enterprise Service Bus connects applications. The Electronic Communication Network enables seamless information exchange between enterprises in and across any value chain. Enterprises competing in today’s world business environment are forced to collaborate with multiple business partners AND business processes are spanning multiple enterprises  Such collaborative business processes require exchange of different kinds of information between heterogeneous enterprises and applications. Opportunities and Challenges for Enterprises and Governments in a Changing Global Business Environment The answer is the Electronic Communication Network !
  53. 53. DanGa Enter Date Enter Title in Header and Footer 53 Logistics & Transport Storage & Distribution Buyers Staffing Government Transport Buyers Sellers Retailer Supplier Material Supplier Components Production Products Head Office Sales & Purchasing E.C.N. Head Office Sales & Purchasing transformation distribution reception formatting scanning & ocr message broker e-mail server Data Warehouse BPM The Electronic Communication Network Connected Business & System- wide Interoperability Connected Business processes & information Integration & Interoperability Systems & Services collaboration based on Open eXchange Standards
  54. 54. DanGa Enter Date Enter Title in Header and Footer 54 Fully electronic exchange using Product Data Pools (GS1 GDSN) + Web Portal + Direct ECNECN SUPPLIERSUPPLIER Issue Product Catalog CUSTOMER CUSTOMER Process Product Catalog Process Forecast Confirm Sales Order Create Sales Order Submit Shipment Process Partner Data Submit Invoice Process Dispute Process Payment Issue Forecast Receive Confirmation Process Shipment Issue Purchase Order Issue Partner Data Process Invoice Submit Dispute Submit Payment ORDERS ORDRSP INVOIC DESADV SLSFCST MRP Inventory Issue Forecast Receive Confirmation Process Shipment Issue Purchase Order Issue Partner Data Process Product Catalog Process Forecast Confirm Sales Order Create Sales Order Submit Shipment Process Partner Data Issue Product Catalog Submit Invoice Process Dispute Process Invoice Submit Dispute Submit Payment SLSFCST ORDERS ORDRSP INVOIC DESADV Process Payment PRODUCT DATA POOL WEB PRODUCT DATA POOL WEB EPCGlobal Network – Track and Trace
  55. 55. DanGa Enter Date Enter Title in Header and Footer 55 EPCGlobal Network / GS1 GDSN  GS1 Global Data Synchronization Network  GTIN = Global Trade Item Number – standardized product identification  Identifies a particular kind of product.  GLIN = Global Location Item Number – standardized location identification  ensure the accuracy of master data throughout the supply chain  EPCGlobal Network  EPC = Electronic Product Code is a unique number that identifies a specific item in the supply chain using RFID tags.  Identifies each individual instance of a product within the Supply Chain.  EPCGlobal Network allows Track and Trace  Track = manufacturers know when a product has been delivered to trading partners  Trace = manufacturers get a big-picture view of how their products move through the Supply Chain  The combination of GTIN and a unique serial number = Serialized GTIN (SGTIN) or EPC
  56. 56. DanGa Enter Date Enter Title in Header and Footer 56 Trends in business functions and processes  The Convergence of – business functions crawling towards each other  AP Automation and Electronic Procurement  AR Automation and Electronic Commerce  The Rise of automating the value chain  E-Q2C – Quote to Cash  E-R2P - Requisition to Pay  Employee Portal • Internal requisitioning using Catalogue or Free Form Buying  Supplier Portal • Presentment of Purchase Orders • Delivery of invoices via Upload or PO Flip functionality • Maintenance of Catalogues  Integrated channel – XML/EDI messaging  The Renewed attention for EDI  EDI is HOT. No, really! By Benoit Lheureux | March 25, 2011
  57. 57. DanGa Enter Date Enter Title in Header and Footer 57 AP Automation does / can not happen in isolation Source: Deliver on the promise, Deloitte Consulting Spend Performance Management
  58. 58. DanGa Enter Date Enter Title in Header and Footer 58 Trends in the European Government sector  Increased attention for Public Procurement platforms  PEPPOL = Pan-European Public Procurement On Line (www.peppol.eu)  Large Scale Pilot project under the European Commission Competitiveness and Innovation Programme (CIP) ICT Policy Support Programme (ICT-PSP)  Open e-PRIOR (electronic PRocurement, Invoicing and Ordering) is an open- source e-procurement platform that allows practical implementation of interoperable electronic services within any public administration.  e-PRIOR is a service-oriented platform that has been developed by the Directorate- General for Informatics (DIGIT) of the European Commission and allows the European Commission, the European Union Agencies and Institutions and their suppliers to exchange post-award documents by using web services or over the PEPPOL network.  Launch of the European Multi-Stakeholder Forum (EMF) on e-Invoicing (Launched 13 September 2011 in Brussel) and chaired by the European Commission, brings together delegates on a national level and key stakeholders from the user side of the market with the goal of broad-scale adoption of e-invoicing in the European Union.
  59. 59. DanGa Enter Date Enter Title in Header and Footer 59 Trends – consolidation of service providers in the marketplace.  Formation of the European E-invoicing Service Providers Association (EESPA)  EESPA’s purpose will be to represent the supply side of the industry and its customer interests in an area of increasing public policy advocacy and the ongoing roll-out of a number of European-led initiatives to foster adoption.  Consolidation of service and solutions providers  Automatic Data Processing Inc.: Acquisition of DO2 Technologies (January 2010)  Bottomline Technologies: Acquisition of SMA Financial (Oktober 2010)  IBM: Acquisition of Sterling Commerce (August 2010)  Ariba: Acquisition of Quadrem (January 2011)  Ariba: Acquisition of b-process (October 2011)  SAP: Acquisition of Crossgate (November 2011)  Dun & Bradstreet: Acquisition of SupplierForce (November 2011)  Descartes System Group: Acquisition of InterCommitIT bv (November 2011)
  60. 60. DanGa Enter Date Enter Title in Header and Footer 60 Emerging trends in Cloud: B2B Integration in the Cloud  Cloud Services Brokers and Cloud Integration Solution providers  Liaison Technologies  Hubspan – B2B Cloud Integration  GXS – Trading Grid  SnapLogic – Cloud to Cloud  IBM Cast Iron  Microsoft AppFabric  Babelway B2B Integration  Jitterbit Enterprise Cloud Edition  Cloud Services Brokers will aggregate, monitor, and manage multiple cloud services.
  61. 61. DanGa Enter Date Enter Title in Header and Footer 61 The journey 1. Introduction 2. Communication / Exchange Models 3. Building blocks 4. Legal and fiscal compliance 5. Influencing the Business Case 6. Trends – Proposed scenario’s 7. Steering on-boarding
  62. 62. DanGa Enter Date Enter Title in Header and Footer 62 Key facts to know before starting with customer on-boardingIdea’s & concepts Strategy & Solutions integrate consult operate Business Analysis Shared Vision Technical Analysis Technical Impact Cost / Benefit Analysis Blue Print Support / SLA System Administration On-boarding Roll-out Business Case Legal Fiscal Proof of Concept Project Management Pilot Helpdesk B2B platform Message Standards RFI / RFP Transport Protocol m any com petencies high diversity Drivers and enablers:  Readiness and willingness for change  Preparedness to make and implement the business case  Maturity levels of People (organisation), Processes (business), Technologies (applications & systems) and Information (data) Issues:  Certain trading partners or industries impose mandatory communication standards. Special attention for the work: Internally:  Trading partner selection and invitation,  Grouping partners,  Status feedback Externally: Guiding on-boarding in the stages: visit, education, connection, testing & certification process, trading partner acceptance, Go Live A Structured On-boarding Approach is the key for successA Structured On-boarding Approach is the key for success
  63. 63. DanGa Enter Date Enter Title in Header and Footer 63 Successful on-boarding requires flexible teams with specific competences On-boarding strategies for three types of Customer Groups Persuaded On-boarding sales oriented pressure on customers Self-Care On-boarding web based registration Guided On-Boarding client oriented methodology Trading partners differ in characteristics, willingness and readiness, product groups, level of authorisation, culture, geographic presence, IT landscape, … and Therefore, successful on-boarding requires that each customer group receives it’s own on-boarding strategy and communication approach, … and Requires a proven methodology and a readily available team with all required skills, competencies and backgrounds Manager Admin Sales Force Tool Technician Project Manager Business Analyst System Architect Software Engineer Domain Expert QA On-boarding Team
  64. 64. DanGa Enter Date Enter Title in Header and Footer 64 Guided and persuasive on-boarding accelerate the evolution of costson-boarding adoption validate challenge connect persuade release On-boarding rate determines adoption rate:  Ensure a perfect fit with ambitions and capabilities  Establish a corporate vision  Stimulate internal and external stakeholders  Obtain commitment from upper and lower levels Paperless trade is common business 3 months after customer starts on- boarding 100% adoption is a dream, between 75% and 85% is more realistic Adoption time & rate determines cost savings:  Validate feasibility before starting  Ask customers for their preferred choices  Utilise incentives to promote positive behaviour  Early payment discounts  Lower transaction costs (impact on savings) Ask money for the paper invoice and donate a fraction to the rain forest
  65. 65. DanGa Enter Date Enter Title in Header and Footer 65 Example of three types of customer groups and linked strategies for on-boarding Need trust & persuasive power  eg. Sales oriented pressure on Self-care  eg. Web based registration External domain Client domain e-mail web services web enablement Mid term Long termShort term paper Communication Integration Collaboration Synchronisation ecosystem ValueCapture Maturity Level edi interconnected networks Traditional Seller Direct Model Consolidator Model Ecosystem Model 1 2 34 5 6 On-boarding strategy In doubt Believers or starters practitioners Types of customer Guided on-boarding  eg. Client integration strategy
  66. 66. For more information please contact: Danny Gaethofs | Consultant / Adviseur Business to Technologies Email: Danny.Gaethofs@danga.biz Private: +31(0)6 288 02 106 | Mobile: +31(0)6 515 40 255 LinkedIn: www.linkedin.com/in/danga/ | XING: http://www.xing.com/profile/Danny_Gaethofs Twitter: @DannyGaethofs | Weblog: www.danga.biz | SLIDESHARE: http://www.slideshare.net/danga/
  67. 67. DanGa Enter Date Enter Title in Header and Footer 67 Establishment of strong Cloud Integration providers  IBM acquired Cast Iron Systems in May 2010  Cast Iron's OmniConnect cloud integration platform is designed specifically to integrate public- and private-cloud services with on-premise applications. Cast Iron will be integrated into IBM's WebSphere business.  GXS acquired RollStream in March 2011  RollStream is a SaaS provider of enterprise community management services and deepens GXS’s commitment to the Social Supply Chain, a vision that brings together information flows and information workers to radically break down long- terms barriers hampering supply chain efficiency.  Liaison Technologies acquired nuBridges in April 2011  nuBridges is a company that provides enterprise data security, managed file transfer (MFT), B2B integration, and compliance management solutions.
  68. 68. DanGa Enter Date Enter Title in Header and Footer 68 Process Flow Diagram Sales Order Management / Delivery Forecasting / Delivery / Billing CustomerSales Administrator Business-Ready NetworkProvider Warehouse Clerk Billing Administrato Create/Send Purchase Order Message Mapping ORDERS -> ORDERS05 Receive/Check Sales Order Create Delivery Create/Send Sales Order Confirmation Message Mapping ORDERS05 -> ORDRSP Receive Purchase Order Confirmation Create/Send Purchase Order Change/Cancellation Receive Shipping Notification Receive Billing Document Create/Send Delivery Forecast Message Mapping ORDCHG -> ORDERS05 Message Mapping DELVRY03 -> DESADV Message Mapping INVOIC02 -> INVOIC Message Mapping DELFOR -> DELFOR02 Receive/Check Sales Order Change/Cancellation Picking (Optional) Post Goods Issue Create/Send Billing Document Create Scheduling Agreement Receive/Check Delivery Forecast
  69. 69. DanGa Enter Date Enter Title in Header and Footer 69 Process Flow Diagram Procurement / Delivery Forecasting / Goods Receipt / Incoming Invoice VendorPurchasing Manager Business-Ready NetworkProviderPurchaserWarehouse Clerk Receive/Check Sales Order Message Mapping ORDERS05 -> ORDERS Create Purchase Order Receive Purchase Order Confirmation Message Mapping ORDRSP -> ORDERS05 Send Sales Order Confirmation Receive Sales Order Change/Cancellation Create/Send Shipping Notification Create/Send Billing Document Receive Delivery Forecast Message Mapping ORDERS05 -> ORDCHG Message Mapping DESADV -> DELVRY03 Message Mapping INVOIC -> INVOIC02 Message Mapping DELFOR02 -> DELFOR Create/Send Purchase Order Change/Cancellation Post Goods Receipt Receive/Check Shipping Notification Receive/Check Incoming Invoice Create Scheduling Agreement Create/Send Delivery Schedule AccountsPay Accountant Approve/Send Purchase Order

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