Tungsten Insights: E-Invoicing Lessons From a Panel of Suppliers

Earlier today, I facilitated a panel of 4 suppliers at Tungsten’s customer conference. I’ll spare all the details to protect the names (and companies) of the innocent, but a few key lessons surfaced today and in other recent conversations with suppliers:

  • Larger suppliers are clearly learning to play the e-invoicing game with vendors and network providers. They are negotiating global deals just as they would negotiate when buying CRM, procurement or other technology. If you have material volume with a network and you have not negotiated, you should. This goes for everyone with a fee structure spread between buyers and suppliers (or entirely with one party) including Ariba, Tungsten, Basware, etc.
  • There seems to be a material difference between suppliers willingness (within this small sample) to take real-time discounts offered via a network or e-invoicing provider compared with smaller suppliers, given that discounts (in the case of some of the participants I questioned) were previously negotiated into contracts. Note, a broader sample of research we have looked at suggests conflicting data to this.
  • Best practice (from a supplier perspective) is clearly investing the time to create a single “map” to a network provider’s infrastructure versus either portal connectivity or customer-by-customer connectivity. However, the map must be dynamic and adjust to changing requirements (think of it as a supplier-driven SaaS deployment spread to many customers – via the network) to accommodate specialized requirements and needs. It’s not simple, and suppliers should put a sharp technical resource with EDI experience in charge.
  • Suppliers are often the best advocates of e-invoicing and how to position it to other suppliers. From a supplier angle, the advantages to avoiding paper are numerous, and the vendors sited numerous benefits including improving A/R efficiency and reducing A/R costs, straight through processing, faster exception management, being able to improve KPIs around first pass approval, faster invoice approval (reduced cycle time) and, of course, not funding the antiquated post office.
  • Suppliers generally are in the early stages of defining their own set of KPIs to quantify the benefits of e-invoicing. While the benefits are clear, the overall TCO and metrics are not. This is a big opportunity for network providers to help showcase the value of networks overall by defining the right set of benchmarks to suppliers to feed internal KPIs and TCO calculations – as part of broader supplier-centric offerings in the future.

Of course, this is by no means a scientific list of findings. It’s merely a few lessons learned from a panel of 4 generally larger and experienced suppliers. Stay tuned for further observations from Tungsten Insights in the coming days – including other supplier lessons and how best to market e-invoicing to suppliers.

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