Epca2010 Final
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The document discusses challenges with the existing e-invoicing systems controlled by banks. It argues that banks will fail to solve the "SME problem" of getting small and medium enterprises to adopt e-invoicing because their business model focuses on controlling processes rather than collaborating in open ecosystems. It suggests that introducing new open e-invoicing ecosystems from the bottom-up, focusing on small businesses, could help connect more suppliers and solve the SME adoption problem that existing top-down solutions have faced.
Epca2010 Final
- 1. Why banks will fail (With electronic invoicing) . If they don’t stop trying to control processes instead of collaborating in open ecosystems
- 2. Who am I? * 31 years old, sociologist, geek, web 2.0 type, have done several start-ups, youngest Head of Division in Danish Government. * Lead the implementation of the worlds largest open- source invoice infrastructure “EasyTrade” * One of the initiators of the EC PEPPOL project for open procurement infrastructure, sat on the board until October 2009 * Launched Tradeshift with Mikkel Hippe Brun because we were tired of hearing the same old stupid arguments about why, it was not possible to change the existing business models of invoicing
- 4. GOT IT? (It’s fairly easy, we offer the worlds first transaction free business to business infrastructure, which is hosted in the cloud, based on open standards and API’s, and offer an alternative way for the long tail of small business to connect to large suppliers, while getting real-time analytics on the content of transactions send to them)
- 5. So what is the problem really? * “A major market issue that is hampering e-Invoicing adoption is the lack of education among SMEs” - EU E-invoicing Expert group final report * “This all naturally needs a new attitude from SM E” - Bo Harald chair of EU E-invoicing expert group * “do not think that new services should be free - naturally ask around for the best prices - still it usually pays off to concentrate buying” - Bo Harald chair of EU E-invoicing expert group * “The sooner SM Es really embrace this digitalization ladder - and take the e-invoicing step on it - the sooner we can reach the paradigmatic platform” - Bo Harald chair of EU E-invoicing expert group
- 6. SO, BLAME SMALL BUSINESS? (Not the existing business model?)
- 7. A quick history e-invoicing: It started with the railroad industry implementing data interchange in the 60’s But soon spread to a lot of different industries, such as cargo, airlines, shipping, and retail It was mainly used between very large actors who were all convinced they had “special” requirements for the content of invoices Resulting in more than 5.000 different implementations of EDI, basically rendering it a non-standard Creating a very lucrative “conversion” and “transaction” business for the operators At the same time banks decide e-services is the savior for shrinking transaction revenue Together the banks and operators decides to attack the “SME problem”
- 8. What is this “problem” worth? Est. 64B € pr. year
- 9. The SM E problem as seen from other actors? BANKS EDI BIG BUSINESS Invoice is gateway We just want Forced message to to connect small business banking suppliers, “educate” if model, we services necessary can charge what we want
- 10. The long tail of paper Supply chain lock-in, top- down push = increased cost, low supplier satisfaction (but cost reduction, on paper…) 20% Are connected using EDI or B2B providers like OB10 80% of suppliers are paper-based (23 million in Europe)
- 11. Result:
- 12. WHY IS IT SO HARD TO SOLVE? High security, Complex Trust, processes, Costly Multi-domain, Has to be Payments Procurement flexible, Long tail So is Invoice this where e- SEPA is going? Technology Fast, Innovation Low cost, disruptive, low security
- 13. ONLY PROBLEM… BANKS SUCK AT TECHNOLOGY (Or rather the principles of technology innovation)
- 14. Examples * Banks had an ubiquitous identity platform 10 years before Facebook * But focused so hard on controlling all services on it, that they lost a strategic ecosystem * Transaction cost is good for revenue, but bad for software design * The industry security requirements, make banks natural technology laggards and not leaders (in all tech areas except security)
- 15. State of affairs: * The small suppliers loose, there is no offering that match their needs * The large enterprises loose, they can only connect to a small part of their supply chain * Software developers loose, there is no platform to innovate on (ERP systems are still islands in 2010) * The banks loose, having a hard time extending their business model…
- 16. CAN THIS PROBLEM BE SOLVED? (With other means than force feeding bad solutions to small and medium sized business?)
- 17. SM E’s using open e-invoicing in Denmark: So maybe it’s not just about attitude or Salesforce customers education, but introducing new open eco systems? 70.000 companies (25%) in 11 months
- 18. SO WHAT COULD THE FUTURE LOOK LIKE? (With other means than force feeding bad solutions to small and medium sized business?)
- 19. The future * Not 2, 3 or 4 corner models, but any-to-any transactions (just like the Internet) * All-you-can eat subscription plans commoditizing basic messaging, making it about software and innovation * New generation of payment services like X.com winning because they create open ecosystems * Collaboration and social networks become the norm also for business to business transactions (business is social), real-time becomes king
- 20. Ecosystems? Payments Business processes Invoice Technology
- 21. IS ALL HOPE LOST? (No)
- 22. The long tail of paper Bottom-up growth = viral, small business focused, open ecosystem (cost saving for 20% Are real, loyalty building) connected using EDI or B2B providers like OB10 80% of suppliers are paper-based (23 million in Europe)
- 32. Want to learn more about partnering with Tradeshift: partner@tradeshift.com
- 33. web: www.tradeshift.com email: chl@tradeshift.com twitter: @tradeshift / @christianlanng cell: +45 31189100