E-Invoicing and Supplier Networks: Don’t Put the Systems Cart Before the P2P Network Horse

The last – and admittedly self-serving – recommendation that Danny Thompson makes in OB10’s new e-book, Rooting Out Invoice Exceptions: The Path to Straight-Through Processing (see our recent coverage and analysis of this e-book here, here, here and here), is to “Implement P2P Automation Solutions.” Thompson notes that his analysis spent time reviewing “the various technologies that can help companies achieve straight-through processing and drive out exceptions from the P2P process” and while “ these technologies don’t eliminate the need for [process] changes … they make it a lot easier to implement and enforce them.”

There’s certainly some obvious truth in this statement, especially when it comes to e-invoicing initiatives. But the broader question that companies need to ask themselves when considering implementing such solutions isn’t necessarily so cut-and-dry or mutually exclusive. Moreover, procurement and AP departments have important decisions to make together, such as whether to go broad, deep, or both across different spend types.

There’s also a lot of confusing information out there in the market. For example, Thompson argues in his analysis that the “main limitation of e-Procurement solutions is that they are often only used for consumables and indirect purchases, while the vast majority of transactions sit outside of the normal scope of an e-Procurement system.” But we suggest that this may or may not be true depending on the eProcurement system used and in what manner it is used, not to mention in what industries and based on what base level of spend mix by type.

Moreover, procurement and AP organizations need to consider linking e-invoicing and network enablement with other types of procurement tools, including vendor management systems (VMS) for both contingent and non-contingent services spend types. On the contingent side, the irony of course is that suppliers will not hesitate to pay double or triple digit transaction fees to managed services providers (MSPs) and VMS suppliers. But try sticking other suppliers with network fees that are pennies on the contingent dollar and the arguments begin. 

Spend Matters has published numerous papers on the topic of P2P enablement and building use cases in our research library. We invite our readers to download our research, analysis and commentary in the req-to-pay and supplier network areas:

Procurement Systems Integration Within the Enterprise: Exploring Integration In The Cloud

P2P and Working Capital–Bridging Technology & Collaboration to Drive Savings and Cash

Spend Matters PRO subscribers also have access to deeper research on the topic. Recent PRO briefs (subscriber only) can be found here:

A P2P Implementation Guide: Avoid the “Dumb Ways to Die”

A Foundational Look at P2P Technologies

“Surround Strategies” to Get More From Existing eProcurement and P2P Investments

Analytics and P2P: Using Spending and Payment Insights to Drive Savings and Working Capital Management Strategies

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