A Guide for the Perplexed (Part 3): Final Observations on A/P Automation, E-Invoicing and Trade Financing

Today we will wrap up our list of a dozen observations included in our P2P, e-invoicing, A/P automation and trade financing guide. As noted in Part 1 of this series, there are a number of challenges that arise when A/P automation, e-invoicing and trade financing intersect. (You can also check out Part 2 here.) Below are observations Nos. 9-12 on this subject.

  1. Technology vendors are often competing in “markets of one.” It is irresponsible to directly compare Taulia, Tungsten and C2FO, for example, as one might compare Ariba, Coupa, BuyerQuest, SciQuest, Verian and others in an e-procurement selection. The capabilities and nuance each brings to the table make them very different solutions – potentially as substitutes, yes, but not as direct competitors. As a potential customer, it pays to really do your homework. And don't write a narrow RFI/RFP. Ask the provider what they can do to support your business and its overall requirements with their own unique approaches  -- not just "hard and fast" specifications that someone in procurement or IT has come up with.
  2. Procurement and finance are still very much at odds over competing priorities (e.g., reducing supply risk versus extending payment terms and actually increasing it) rather than generally building business cases and working together in the areas of e-procurement, A/P automation, supply chain and working capital management. Procurement’s ownership of A/P and/or a joint reporting structure into finance has not really helped the matter in most organizations.
  3. The traditional procurement and supply chain consulting and systems integration ecosystem does not understand this market, nor does it really appear to care to invest to develop practices areas within it (outside of rudimentary A/P automation tied to purchase-to-pay alone). Part of the challenge could be one of the cross-functional expertise required to provided advice in all of these areas; another could be that many of the providers competing in the space are not just straight SaaS/software providers (some are closer to "managed services"). There’s also the broader question of tax- and accounting-related concerns and treatment that further complicate many – but not all – discussions the trade financing area.
  4. If you think that your card company or bank will have a broad-based solution for your P2P and trade financing needs, guess again. Generally speaking, the card companies (with the exception of Mastercard and to a lesser degree Discover) have done very little in the sector to address end-to-end challenges outside of selling or enabling the sale of individual bank-centric products. We applaud PNC in North America for its partnership with Tungsten, but we also hope to see greater traction overall with banks in OEMing different types of third-party solutions. Citi is also stepping out in front here as well (it deserves to be said). But the legacy of JP Morgan Chase and American Express failing in the market (the latter in many cases) should be a lesson to financial services firms to partner rather than build/acquire technology.

This list is obviously a work in progress – and just a start (we could probably add another dozen ideas to it). We welcome your observations and input. And stay tuned as we flesh out these ideas in more detail on Spend Matters throughout the month of May.

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