In January, Basware announced its acquisition of First Businesspost, one of the top e-invoicing network and software providers in Germany. For our initial insight into the financial and high-level solution, customer, competitive and marketplace dynamics of the deal, check out our initial coverage. After the announcement, we also caught up with Purchasing Insight's Pete Loughlin, and he provided a few other observations. He said that two things about the transaction are fairly obvious, but elements might be lost on those not close to the e-invoicing market.

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Brussels (Belgium), Jan. 27, 2012 /E-Invoicing Newswire via Spend Matters/ -- Regulators in the European Union and Member Countries passed legislation, officially published in the 7 January 2012 Council of the European Union Summary of Monthly Acts that includes updated requirements for electronic invoicing (also referred to as "e-invoicing") providers serving public and private sector organizations within member countries. Act 2012/421/EU represents Council Decision of 4 January 2012 to regulate e-invoicing transaction tariffs at a nominal value per invoice. Act 2012/422/EU (4 January 2012) regulates the purchase (acquisition) price of network operators and providers.

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Please click here for related posts in this series:

An Electronic Invoicing Maturity Model: P2P, Data and Systems Linkages (Part 1)
An Electronic Invoicing Maturity Model: P2P, Data and Systems Linkages (Part 2)
An Electronic Invoicing Maturity Model: Discounting and Payment (Part 1)
An Electronic Invoicing Maturity Model: Discounting and Payment (Part 2)
An Electronic Invoicing Maturity Model: Supplier Enablement (Part 1)

When organizations hit Advanced or Level 3 on the Spend Matters e-invoicing maturity scale, 100% enablement is typically the goal. Getting to this level may require engaging in multiple enablement options inclusive of machine-to-machine connectivity, supplier portals, email and even scan/capture/conversion services to capture the tail-end of small suppliers (although we would argue that scan/capture should not really count as electronic invoicing because of the latency involved at different stages of the process). Perhaps most important at the Advanced maturity level is that procurement and AP organizations do not tolerate supplier fall-out in the process. To achieve such a high level of supplier enablement success, it is common for organizations to begin to dangle carrots to suppliers for participation. This could range from the basic (e.g., visibility into invoice and payment status) to the more sophisticated (benchmarks/KPIs provided back to suppliers).

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Please click here for related posts in this series:

An Electronic Invoicing Maturity Model: P2P, Data and Systems Linkages (Part 1)
An Electronic Invoicing Maturity Model: P2P, Data and Systems Linkages (Part 2)
An Electronic Invoicing Maturity Model: Discounting and Payment (Part 1)
An Electronic Invoicing Maturity Model: Discounting and Payment (Part 2)

We've written before that supplier enablement is fundamental to a range of procurement initiatives, but absolutely core for eProcurement and electronic invoicing. All too often, this area was an afterthought in early P2P implementations, yet when organizations devote enough focus to it themselves -- or work with a partner to do it on their behalf -- successful supplier enablement and on-boarding programs can drive high levels of overall vendor adoption. As part of the on-boarding process, AP and procurement organizations are often focused on a handful of key fields to capture and maintain including supplier contact information, TIN numbers, banking details and VAT/tax requirements (especially in Europe). Increasingly, the supplier enablement step may also include additional data enrichment and risk checks (e.g., parent/child relationship, diversity status, financial stability) covering all, or a subset, of suppliers.

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Please click here for related posts in this series:

An Electronic Invoicing Maturity Model: P2P, Data and Systems Linkages (Part 1)
An Electronic Invoicing Maturity Model: P2P, Data and Systems Linkages (Part 2)
An Electronic Invoicing Maturity Model: Discounting and Payment (Part 1)

Organizations at the intermediate stage (Level 2) of e-invoicing maturity begin to take a much more consistent approach to measuring KPIs such as on-time payment. In the area of discounting and payment, these companies typically have on-time payment rates of approximately 90%, owning in large part to the visibility their systems afford. For budgeting and forecasting, this visibility can lead to better working capital planning, another hallmark (and benefit) of e-invoicing maturity and sophistication.

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Sometimes a picture can tell a thousand words -- or a thousand transactions. Electronic transactions, that is. Purchasing Insight's Pete Loughlin has come up with a simple and useful map that explores electronic invoicing's global footprint (see the photo below and also over on the Purchasing Insight site). In his summary of world activity, Peter notes that "estimates vary, but only about 15% of the world's invoices are transmitted electronically and the level of adoption across the globe varies tremendously." Moreover, as we have explored extensively in our research as well, Peter suggests that the reasons for adoption are quite different in various locales. To wit, "In some countries, despite the approval of the tax and regulatory authorities, take up by business has been slow while in other parts of the world, it is governments' reluctance to accept e-invoicing that is acting as a blocker."

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The adoption of electronic invoicing and broader P2P programs varies widely between North American and Europe. In a recent Spend Matters Compass paper, E-Invoicing Comes of Age -- Discovering What's Possible From the Latest Electronic Invoicing/ Invoice Automation Capabilities, we highlight some of the reasons why adoption is different across different regions. As an example, "throughout a number of countries in the EU, VAT compliance, collection and reporting has become a central part of the value proposition in electronic invoicing environments and has helped drive aggressive adoption of such programs, especially in the Nordic countries...the majority of organizations in these [geographic] markets have better developed electronic invoicing and invoice automation programs than they do requisition-based search, shopping, approval and buying systems on the transactional procurement side. This is in marked contrast to the US market, where eProcurement adoption dominates relative to electronic invoicing penetration."

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Earlier this week, Ariba announced it had acquired B-Process, which claims to be France's largest electronic invoicing provider. Yet no one in the sector I know who is close to the electronic invoicing market in Europe has ever heard much from B-Process. Formally owned by a number of financial institutions and investors (Axa, Natexis Banques Populaires, the Caisse des Dépôts, the BRED bank and I-Source), B-Process processed "over 68 billion euros" through its platform in 2009 and had over 100 employees in the business at that time according to its own marketing claims. It also currently supports "3,000 French and international companies of all sizes" in the e-invoicing process. Further, Ariba suggests in their acquisition announcement that "b-process transacts more than 40 million invoices annually with an estimated value of over $80 billion."

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Electronic invoicing (e-invoicing) and invoice automation can deliver a range of hard-dollar savings and working capital improvement benefits to procurement (both sourcing and supplier management/development teams) and finance (treasury and A/P, rolling up to the CFO) organizations. If you need any proof of this (or how to effectively build a business case for electronic invoicing), download our latest research on the subject (available for free, courtesy of Basware, Coupa, OB10, Rearden Commerce and Verian). This paper, E-Invoicing Comes of Age -- Discovering What's Possible From the Latest Electronic Invoicing/Invoice Automation Capabilities, provides an ideal primer on the opportunity for e-invoicing, put into business terms. But country-specific regulations still appear to be the key motivating force for organizations to adopt a set of key technologies that they should be doing anyway.

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