Based on research from Ardent’s latest report – ePayables 2013: AP’s New Dawn, Ardent Partners’ annual market research report focused on the state of accounts payable. The report is available by clicking here, here, here, here, here, or here.
eInvoicing solutions remove paper from the AP process by creating invoices electronically and maintaining that format through the validation matching, and approval processes. While an eInvoicing solution is deployed by the buying organization, it requires participation from the supplier base to become truly effective. Suppliers that choose to participate on an eInvoicing platform go through an enablement process that sets them up in the system and allows them to create and submit eInvoices directly to their customers. These systems can also enable suppliers to review invoice and payment statuses, send communications and updates, and work collaboratively to resolve exceptions. Figure 11 shows the current and planned usage of three types of solutions which enable and support eInvoicing. A network (discussed in more detail below) provides the backbone or infrastructure to the process and connects many-to-many while a supplier portal is the web-based solution that allows suppliers to link to their partners (directly or by network). These solutions are effective in connecting trading partners electronically and allowing them to share information and collaborate.
The demand for eInvoicing solutions is steadily growing; Ardent Partners’ research shows that 29% of enterprises are looking to use an eInvoicing solution in the next year.
While the biggest roadblock for most eInvoicing initiatives remains getting suppliers to participate in the initiative, Ardent Partners’ research shows that there has been a breakthrough and that many businesses are now overcoming this barrier. In Ardent’s 2012 ePayables study, 77% of all AP departments reported supplier participation as the main challenge; today, that percentage has dropped to 53%, representing a 30% reduction. A large part of this drop can be attributed to the growing use of supplier networks and interoperability agreements between networks, as well as the benefit to suppliers of being electronically connected to their customers. This is why 76% of AP organizations agree that suppliers are more favorable to submitting eInvoices today than three years ago and 67% agree that networks help accelerate the supplier enablement process.
Business Networks
Ardent Partners defines a business network (including a supplier, B2B, eInvoicing or payment network) as a web-based platform that enables interconnected buyers and sellers to trade, communicate, and/or collaborate with each other. With the drive to remove paper from the AP process, many businesses are looking to business networks as a mechanism to trade electronically and better connect entire supply chains. Although business networks started off being more buyer-centric, today, networks offer a variety of capabilities to both buyers and suppliers.
eInvoicing solutions, networks and supplier portals offer greater value when combined to function as a single solution. For example, an eInvoicing solution without the linkage to a network can make the process of enabling suppliers slower and more difficult. Similarly, a network without a supplier portal fails to add value to what is perhaps the most important component of a business network—the actual supplier.
