ADP has been a quietly growing e-invoicing player for many years, focused mainly on the oil and gas industry. Some might describe “quiet” as an understatement – the e-invoicing market is full of buzz, self-promotion, controversy (supplier fees) and confusion (explain to us the workflow, process and specific document exchange that must occur between buyer, supplier and the government in Brazil for an e-invoice in two minutes or less – go!)
Yet when the fog of the market clears, ADP emerges as one of the significant e-invoicing players. In fact, until we came across them in 2012 through a series of detailed briefings, demonstrations and reference discussions, we were only loosely aware of what they did in the first place. If we’re to make an excuse for this, it’s because ADP had focused largely on oil & gas until last year (although current expansion is pushing them aggressively into other sectors). This initial emphasis on invoicing enablement for the oil & gas sector came from their acquisition of specialist provider, DO2 Technologies (once known as Digital Oilfield), whom ADP lassoed up in Calgary in 2010.
Based on our estimates, invoice volume going through the ADP e-invoicing solution has increased over 400% over the past five years to $125 billion in 2012 (representing an annual 40% increase in transactions and a 90% increase in what ADP defines as “spend processed”). The growth rate under ADP has stayed consistent with DO2’s independent numbers. But most important for Spend Matters readers, even though ADP may lack the marketing awareness outside of the oil & gas market as a Basware, Ariba, OB10 or SAP (not to mention SAP’s e-invoicing/discounting ecosystem players such as Hubwoo, IBX, Taulia, etc.), it’s handily taken the most market share in this vertical across customers. And now it’s turning its guns on the broader market.
The ADP customer count for e-invoicing increased 50% in 2012 and now, according to ADP’s own numbers, 35% of its customers are outside of its core oil and gas market. Most customers still remain in the US and Canada, but global momentum is starting to build. As ADP looks to gather global, cross-industry e-invoicing steam, it’s high time we begin to cover them on Spend Matters. However exciting and frothy the news is to come from new entrants in the market like Tradeshift – and we admit our coverage bias is to race after the shiny red sports car sprinting away in front of us – ADP has become the diesel workhorse of the industry.
While some players like Tradeshift have opted to go extremely broad and redefine the sector around intra-company platforms, ADP has focused on building out a set of rich functional capability. Recent enhancements include a range of advanced coding, document routing and management capabilities that tackle some of the harder issues companies run into in e-invoicing enablement beyond the basics, especially in category industry or role-specific situations. If we examine ADP’s new smart coding approach, for example, we see a system that’s developed some of the brains of pure-play AP/invoice automation players around applying historical coding attributes to future invoices (based on provider, location, product/service, quantity, amounts, etc.) but integrated this with a true e-invoicing package.
This emphasis on the configuration details, integration (especially with SAP, among others) and enterprise scale requirements is what causes ADP to stand out in the market, not to mention listening to what larger customers – and increasingly complicated middle market organizations – need. What’s behind the solution curtain – and how they’re achieving this growth – will be the subject of our analysis in a multi-part Spend Matters series coming soon. We’ll conclude our analysis on Spend Matters PRO, providing recommendations and commentary about how ADP’s capabilities and recent enhancements stack up in the market, and what types of companies are most likely to be included to choosing their solutions.