P2P Marches on Two Sides of the Atlantic: The Continental Separation of eProcurement and E-Invoicing / EIPP (Part 2)

In the first installment in this mini-series I proffered up a bit of commentary around how P2P (as in “purchase to pay” for you types who have better things to do than memorize a bunch of silly acronyms) adoption and company requirements have evolved differently in the US, UK and European markets. In this next installment, I’ll tackle some of the cultural and economic differences driving procurement and invoice automation systems adoption in the different regions today.

A few months back in the US, I interviewed B-Pack’s, CEO Julien Nadaud, on the subject of regional procurement technology adoption trends in Europe and the US. B-Pack is a French-based source-to-pay vendor that got its start in the P2P area. Julien recently relocated to the US, and I had the chance to have dinner with him in Chicago earlier in November. On the topic of geographic and cultural variation in P2P adoption patterns (read our full interview HERE). Julien suggests that, “In Europe, the cost of labor and therefore the cost of operation are very high because of regulation and social taxes. In addition, the legal number of hours a worker is supposed to work is very low (we take a lot of vacation, and work few hours a week). But companies are still competing with the rest of the world on a globalized market level.”

He adds, “the only way to keep afloat is to improve global efficiency, and purchase-to-pay automation and optimization is a clear winner in that field, allowing companies to significantly increase their productivity … Procurement is a very good candidate for automation in countries where all low value added services have been replaced by machines because of high labor cost.”

Moreover, services procurement in Europe weighs heavily on P2P adoption and history as well compared with the US. To wit, “labour regulation and worker protection is very important in Europe, but this has the side effect of lowering company flexibility. To compensate, companies are using a lot of temporary labor (a lot of service orders), but in general, they just try to avoid hiring people they do not absolutely need. Executives look at any solution to avoid non-operational tasks, such as administrative tasks, and again, automation is what has been found as the most effective way of doing so.”

Julien also told me that invoice automation and payment technologies have seen strong growth in Europe in part because of the strong relationship procurement has with finance (in addition to VAT requirements). Yet the two sides of the P2P equation can’t stand independent of each other.

“When companies start thinking of automating the invoice process,” Julien suggests, “they find that most of the cost and complexity comes from the matching, which is directly related to procurement. That's why procurement automation is the only way to perform efficient invoicing, accounting and payment.”

Stay tuned as we continue to investigate regional variation in US and European P2P adoption.

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