What's most curious about the news and competitive win for Tradeshift is that the NHS trust did not see a positive ROI by paying for such a service. A decision maker quoted in the article suggests that they "did a feasibility study, looking at other e-invoicing systems, but the [return on investment] wasn't significant enough for us." Findings such as this should capture the attention of companies like Ariba, Basware, OB10, Perfect, Hubwoo, Transcepta and just about all the other providers of electronic invoicing capabilities and related supplier networks, all of whom have predicated key aspects of their business model on charging either buyers or suppliers for invoice connectivity and related matching. In fact Tradeshift, along with Pagero and just a handful of others, are the exception and not the rule when it comes to providing a free or nominal cost e-invoicing service with the intent of making money off of other means focused on transactions.
For further information on the costs of various networks (including Ariba and others) and the impact of recent supplier fee increases, you can check out our recent analysis on the topic Ariba Network Price Hike: Plan for Increased Supplier Fees in September 2010. It's our view that the basic benefits of electronic invoicing should pay for themselves in enhanced compliance and automation (i.e., AP staff reduction) at the most basic level. Still, we believe that since the benefits disproportionately aid the buying organization (often at the expense of the supplier, based on current revenue schemes), that procurement and AP organizations should offset any cost impact for suppliers -- or absorb the costs directly. Regardless, even if we quibble with the logic behind the NHS decision regarding ROI, the move to a free solution by such a large buying and AP organizations could signal a shift in the e-invoicing market that we should all be aware of.