e-invoicing in the UK public sector – still somewhere over the rainbow?

- December 10, 2013 10:29 AM
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Yesterday I attended a  Roundtable, titled “Creating an interoperable eco-system for e-public procurement & e-invoicing”, hosted by the Department for Business, Innovation and Skills (BIS) in Westminster and organised by the UK National e-Invoicing Forum. It was a bit more than a round table – unless you had a very large table – as there were at least  50 people present. That was one of the reasons why Nigel Taylor (ex GXS and recently joined Taulia), who chairs the Forum and chaired this event very well, struggled a bit to get the group to a clear final consensus after some hours of presentations and lively debate.

The Forum is looking at how to drive the adoption of e-invoicing in the UK public sector, which is well behind many countries in the EU and beyond. There are also implications to consider arising from the forthcoming  EU directives, that may mandate e-invoicing in the not too distant future. So yesterday saw members of the Forum plus other interested  parties – including very senior people from Ariba, Basware, ProcServe, OB10, Taulia, and other providers, plus assorted civil servants and analysts like me – get together to try and thrash out some of the key issues.

Despite a certain amount of commentary I’ve provided on this site, I am far from an expert on e-invoicing, so I must say it was a very informative and illuminating day for me personally.  It doesn’t exactly set my pulse racing in the way a really good category strategy or commercial negotiation does, but as we see the coming together of effective procurement processes, e-invoicing and opportunities for supply chain financing, dynamic discounting and the like, things are definitely getting more exciting in this field.

But in the UK, central government has actually gone backwards on this in recent years – as we have said before, invoicing processing work has been moved into shared service centres that are virtually prehistoric in their approaches (post an invoice to us please – and don’t even try to find out where it’s got to in the system). We would hope that the involvement now of Arvato and Steria in these centres might see some rapid improvements. At the moment though, the prospect of the UK government taking the lead or being an exemplar in e-invoicing seems fairly distant.

And although it was a good and useful day, the session yesterday probably raised more questions that it answered. Here are just a few – and we’ll come back to this in more detail later.

  1. When exactly might e-invoicing actually become mandated by the EU? The Forum has talked about 2016 but it seemed like it might be rather later. So does the public sector actually  perceive any real ‘burning platform’ to move this up the priority list?
  1. Does the Cabinet Office (CO), who should really take a lead on this, take this seriously? Despite the presence of a knowledgeable CO civil servant at the event, I really didn’t get the impression that the key people – Maude, Crothers, Kelly, Collier etc – really see this as a high priority.
  1. This is another area where the increasingly devolved nature of the UK public sector – with health organisations, schools and universities, even police forces all becoming more independent – which means mandates and compulsion of anything is getting harder and harder. Even if Cabinet Office were to take a lead, is a mandate likely to work?
  1. The industry side clearly suffers from some non-alignment based on the final discussion yesterday  – on issues such as platform inter-operability and even whether the group should push for a mandate for public organisations to use e-invoicing. Can the industry side get their act together enough to present a clear set of actions and recommendations to government?
  1. Can you look at e-invoicing in relative isolation – or is it essential to consider as part of wider procurement transaction cycle? Do you need to re-engineer your whole P2P process perhaps to get the benefits from e-involving? There was some dispute about that issue too.

So, more to follow, but there’s some way to go it seems before the UK public sector can reap the benefits from e-invoicing in the way that any other countries, from Denmark to Mexico, have already achieved.

Comments

  • Ronald Duncan:

    Hi Peter,

    On one level I was a little frustrated by the progress on the day. There was a mix of einvoicing operators with minimal public sector customer experience, and representative bodies with one off horror stories, that hid some major successes and universal agreement that the UK public sector is ready for 100% einvoicing.

    However, at the end when I made the point that we already had all the parts in place along with confirmation from all the major ERP vendors to the public sector that the existing systems fully support einvoicing, the feed back from the group was that we all agreed on this and needed to address how we get people to use our systems.

    I think the way to get the UK public sector to use our systems is to show them that large parts of the public sector already lead the world in this area, so it is clear to policy makers that their is no risk in adopting ebusiness and we have enough best practice to spread out in each of the areas.

    The UK public sector has been leading the world in this area. The problem is that every part of government, schools, local authorities, police fire and rescue, NHS and Central Government have pockets of excellence some of which turnover more than Norway or Denmark!

    We have customers with 100% of their contracted spend fully electronic and 100% of their invoices electronic since the einvoice is the last part of the equation.

    The GeM marketplace for Universities and Colleges goes further since it is fully electronic from contract through to payment.

    The challenge is rolling out this best practice to the rest of public sector. Our good implementations are a long long way ahead of Denmark and Mexico. Denmark did not even have an order message, and talking to the local providers they are just getting into “ecommerce”, which to them means sending out orders for the first time. To us ecommerce means providing a B2C ecommerce experience with 100% accurate shopping through to fully integrated payment!

    One of the benefits of the GeM model used by Universities and Colleges is that we can drop in an entire contract to payment solution to a public sector organisation with no requirement for integration or delay, and clearly this is a much better solution than a point einvoice solution.

    However, I strongly support a mandate for UK public sector to use best practice and even if it is just an einvoice mandate that would be an improvement since a number of organisations are spending more putting in scanning solutions than the cost of a complete p2p solution.

    Clearly the EU legislation and drive is towards P2P and it would be better if the UK mirrored this in a mandate for public sector bodies, but just einvoicing would be a start.

    This is why, I have personally spent the last 4 years working with Laser and the major Utilities to create the BASDA Utilities XML extension as an extension to the existing BASDA XML format which all the operators and finance systems support. Thus the last major group of einvoices (Utility Bills) can now automatically go via all the operators into all the finance systems.

    There is no longer any excuse for organisations to call for 100% einvoicing, and they should be doing 100% eordering at the same time.

    Best regards

    Ronald Duncan

    Chairman

    CloudBuy (previously @UK PLC)

  • Nigel Clifford:

    Good questions Peter…it was a very good session to get a feel for activity in this space.

    The paradox is while there is a clear drive from consumers to get transactions on-line (80% of us use online banking, 64% of John Lewis customers use internet shopping) this impetus is lost when we step into the workplace.

    Why is that? More difficult to change an organisation’s behaviour than our personal behaviour? Vested interests? Mixed priorities? Lack of leadership? System and standard clashes?

    Whatever the reason, the friction in current 20th century methods is absorbing public money and needs addressing.

    I think the room hoped the EU directive and 2016 deadline would be a ‘cliff edge’ to force change…however, it looks more like a gentle slope as ratifying standards and ‘transposition’ processes add years more to the date!

    So an opportunity for UK Government to get ahead of the Eurocrats, state targets, hold people accountable and to follow common sense for the common good.

    One immediate suggestion is for the public sector to use the Government’s eMarketplace supplier portal more – it is free to use and already has 12,000 suppliers ready to trade electronically. https://buyers.procserveonline.com/otis/preregistration/splash_page.html

    Regards

    Nigel Clifford

    CEO at Procserve

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