Taulia: Putting Discounting First to Slip Under the e-Invoicing and SCF Radar (Part 1)
Over the years, we've been as guilty as any research or analyst firm in prioritizing coverage of technology and ideas that truly push the limits of an existing sector -- or those that create an entirely new uncontested Blue Ocean. In the e-invoicing space, there's no doubt that we've certainly sipped the P2P Kool-Aid from TradeShift, which has arguably done more than any other P2P vendor in continuously injecting new ideas into the space -- some better than others, no doubt. But there are other vendors quietly slipping in under the e-invoicing and broader P2P radar, gaining more commercial traction than some of the shooting stars, however bright they may burn.
Taulia's consistency and speed is quietly capturing an impressive number of SAP customers who leverage its capability to drive effective dynamic discounting programs while also automating how suppliers interact with AP departments, improving service levels, enabling foundational e-invoicing, and reducing staff requirements. In a series of posts looking at Taulia, we'll first examine the vendor's background, products and recent traction before turning our attention to an in-depth look at their solution capabilities. We'll conclude with a look at the Taulia customer experience.
It's our view that procurement organizations -- not just AP -- should investigate Taulia as a means of getting more from indirect SRM and direct ECC purchasing investments. Taulia can help drive better supplier relationships through enabling greater transparency and the potential for early payments at attractive APRs -- which can vary dramatically based on what buyers define across their supply base -- that not only drive a return for the buying organization, but also provide a new, reliable means of accessing growth and working capital for suppliers. But to make these payment (and discount) options possible, there's a lot of plumbing behind the scenes. And it's plumbing that is integrated tightly into SAP environments from the get-go.
Taulia got its start knowing that a partnership and deep technical working knowledge of not only how to connect into SAP environments but also how to provide an interface directly within SAP for AP users. It's clear that while the organization is headquartered in the states, nearly all the thinking that informed the creation of its product originated close to Waldorf (someone who knew the inner halls of SAP's products and how to get a glass of wine at lunch in the SAP executive dining room). While Taulia is only three years old, it already is, in their words, expanding from "15 to 20" customers, of which the majority are headquartered in North America and from "2 to 5" in Europe, with the greatest current activity in Germany and the UK.
Taulia users are pushing over $70 billion annually in invoice volume through the platform. This number is "growing extremely fast" (in their words) and should soon "hit $100 billion" in annual volume. From a business model perspective, there are numerous ways to contract with Taulia, including funding the program through a gain-share approach as well as annual subscription licenses (i.e., SaaS). Because the discounting element of the program provides the hard-dollar means of tracking savings/returns, Taulia essentially can provide what amounts to a free e-invoicing program, funded by "financial optimization" of the supply chain.
Yet Taulia's plumbing is anything but simple, given all the requisite hooks into SAP (i.e., this is not a loosely coupled e-invoicing bolt-on). The solution consists of a core terms management component that covers all the functionality associated with managing discounting programs. Other elements include dispute management (including logging threads/discussions), a web invoicing component (including PO flip and invoice automation elements) and a supplier self-service portal (which includes basic supplier information management -- AP-driven -- registration and management capabilities as well).
Given all of the elements of the application were specifically designed for an SAP environment, initial installation can take place in as quickly as a week, following by the regular acceptance testing and customization/development Q/A (when required). Larger Taulia customers, including John Deere, Pfizer and PG&E will likely have go-live deployments that take significantly more than one week given their standard deployment approach and testing periods when other solution elements including AP automation are involved. Budget three months in these cases. Yet the one-week ballpark is more than possible for targeted deployments into standardized environments.
While we'll get into the details of Taulia's product in the rest of the posts in the series, it's important to consider how the application is deployed. The product sits inside the SAP environment as a certified "add-on" and most important, has access to all data independent of the submission method (e.g., paper, EDI, check request, Taulia or a third-party e-invoicing toolset) regardless of whether or not Taulia's portal and invoicing capabilities originated a payment request. Moreover, the system is directly integrated into ECC and other SAP components in a real-time environment. For example, if you receive a dispute message from a supplier and want to look at an actual PO, you can navigate to the PO itself with one-click (and can update the PO information if necessary).
Stay tuned as our analysis of Taulia continues.