Four trends on how SAP users are deploying e-invoicing

It will come as no surprise to you that, according to one of our recent surveys, SAP is the most widely used ERP in the European shared services market.  Once shared services have spent three or so years rolling out one of the biggest IT investments signed off by a CFO, most SSOs turn their attention to continuous improvement.  It’s a priority to ensure that every continuous improvement application feeds the SAP ROI.  So when accounts payable meet with the CIO to tell him they want to do e-invoicing, the first thing he’ll say is ‘we have the ability in SAP and we’ve already paid for it – use that.’

So it was interesting to hear what SAP users had to say about their e-invoicing activities.  We conducted the survey as part of our ‘e-Invoicing Europe’ conference which took place in Paris in July.  Around 30 companies participated in the survey – a small group, but big enough to be meaningful.  Not all respondents used SAP, but 67% did.  Interestingly this percentage matched the result of a Hackett survey of ERP usage in Europe in 2009. 

I wanted to find out how these respondents were getting on with rolling out e-invoicing.  You can imagine the nature of the respondent.  Not everyone wants to go to an e-invoicing conference.  It will attract a certain delegate from a specific type of company – a company which is either doing e-invoicing well, and wants to extend their superb programme, or they’re falling at every hurdle and need help to get them on track, or they’ve yet to go live and need direction on how to make it work.  So with this context in mind, what did the findings tell me?  Four key findings came from the survey:

1/ SAP users are rolling out e-invoicing with…

The survey asked the entire group who they were partnering with on their e-invoicing project.  34% of respondents said they weren’t yet live.  The two most used solutions by the active group were OB10 and Ariba.  Other solutions used included Tieto, Certipost, B Process and Basware.  SAP has partnered with Crossgate for the purpose of e-invoicing but none of their clients were represented in the room that day.

All service providers will integrate with SAP.  Most will be ERP agnostic.  The important consideration is the make up of your service provider – are they an internet based service or a software requiring an install.  The latter will require more of your own IT resource, and its intimacy with core SAP may cause your colleagues in IT to have anxiety sweats, but generally e-invoicing technology is unintrusive.

2/ Regarding fulfilled expectations, the respondents were generally…

We asked to what degree had e-invoicing fulfilled their expectations.  The most popular responses were: “Mostly”, “Partly” and “Not at all”.   One participant said they had had their expectations “Completely” fulfilled, yet their conversion rate was 0%.  Similarly one respondent said their expectations had been met to “A little” degree, yet their conversion was 81%. 

The point here is that it is crucial to be very clear about what your expectations are.  When you enter into your e-invoicing project, be clear about the number of invoices that are in project scope and be clear about the pace of conversion you are expecting.  Converting 70% 12 months after project kick-off probably isn’t realistic, but hitting this figure 24 months after project kick-off is wholly realistic if certain best practices are followed.

3/ Did finance understand the importance of procurement’s role in their project?

Interestingly one best practice is the alignment of finance and procurement.  The second biggest contributor to the e-invoicing market moving at a slower-than-expected pace, according to the survey respondents, was ‘supplier push back’.  Yet only a handful of finance respondents wanted to attend e-Invoicing Europe to better understand how to work with Procurement.  The disconnect between these two responses is stark.  If finance and procurement were more aligned on their objectives, intentions and actions, supplier push back would begin to dwindle.

4/ Something has happened in the past 18 months which means that…

A very positive outcome of e-Invoicing Europe is that 100% of respondents who had secured 81% conversion or more had been live with their programme in the last 24 months.  e-Invoicing is still relatively new as a technology, so it may not come as a surprise that early adopters made a few mistakes and failed to follow best practice – largely because no one was sure what best practice looked like.  Now, service providers are much more educated on what works, and they are very keen to share this with clients.  This is very positive for the companies evaluating e-invoicing now - they really will learn from the mistakes of their predecessors.