P2P Marches on Two Sides of the Atlantic: The Continental Separation of eProcurement and E-Invoicing / EIPP (Part 1)

Coming from the States, it’s been fascinating to watch how purchase-to-pay (P2P) has evolved in different regions over the years. In the early days of P2P in the US from 1995 to 2000, Ariba, Commerce One, Intellysis and a handful of other smaller players battled together in hopes of emerging victorious in the indirect transactional purchasing automation space. Back then, no one placed much emphasis on those mundane items such as supplier enablement, catalog/content management, supplier connectivity, services procurement, etc. Nor did we stop and think much about what it meant to pay suppliers (which, from a last mile standpoint, was and still often is done by cheque in the US).

The electronic invoicing market wasn’t even what I’d describe as nascent across the pond back then … it was embryonic. Working capital was something that a few eggheads in treasury supposedly cared something about, yet was not well understood by those having anything to do with making either indirect or direct (e.g., SAP, Oracle, PeopleSoft) requisitioning systems work.

In the UK back then, things were even worse (or better, depending on your perspective, given that most early eProcurement implementations were a failure that came at the expense of blue-chip companies). At least the Brits had a chance to learn from the mistakes of those in the US (included but limited to the billions companies spent with the major system intergators trying to get all of their enterprise applications to work as promised).

Throughout much of the early growth of eProcurement in the US, parts of Europe – with a direct correlation in interest the further North you went – were beginning to invest in a nascent sector that would eventually become known as invoice automation or electronic invoice presentment and payment (EIPP). The interest and growth within this market on the continent emerged in part from the need to consider automated tools to capture and automate the VAT process. In addition, I’d argue that the general need for automation stemming largely from the cost and concept of “lifetime employment” in Europe helped companies prioritize earlier investments that helped replace labour with technology. And this, in fact, was one of the reasons that I’ve come to believe why P2P did eventually take off in countries not usually known for leading-edge efficiency (e.g. France), despite the fact that investments would still materially lag the US at least 2-3 years behind in such areas as spend analysis, sourcing and contract management.

In the next part of this post, I’ll investigate in more detail some of the differences driving P2P adoption in Europe today relative to the US. From catalogue management to network connectivity, the rank-ordered lists and perceived needs and priorities of companies on both sides of the Atlantic are often surprisingly different for a sector of the procurement market you'd think would have universal requirements.

Voices (2)

  1. Purchasing Insight:

    Great thread Jason. It inspired me to respond on Purchasing Insight.

    http://purchasinginsight.com/the-future-of-p2p-look-to-lapland/

    I look forward to more

Discuss this:

Your email address will not be published. Required fields are marked *