Understanding the factors driving adoption of e-Business

When companies consider implementing e-Business they need to understand that there are several factors steering the adoption of e-Business. Adoption is the process during which an enterprise becomes capable of transacting electronically.

The adoption process starts with acquiring knowledge of e-Business concepts and exploring the solutions available on the market. During an interactive awareness workshop stakeholders will learn more about e-Business models and trends.

In the next step organizations form an attitude toward the behavioral intent to pursue or reject e-Business. This requires understanding the factors that influence the “Intent to Adopt” of companies and their trading partners. Gaining more insights in the magnitude and impact of these factors improves decision-making.

The most significant factors driving and inhibiting the intent to pursue or reject adoption of e-Business are perceived benefits, external pressure, perceived costs and organizational readiness. These factors emerge from the internal and external business environments of organizations and have different effects on decision-making.

Perceived benefits and perceived costs relate to the anticipated economic and strategic advantages and disadvantages. The more the perceived benefits outweigh the perceived costs the more likely decision-makers are willing to consider adoption. Likewise, the more perceived costs outweigh perceived benefits, the less likely decision-makers will pursue adoption.

Moreover, even though there is a considerable amount of evidence that benefits exceed costs, companies may still be reluctant to adopt due to an apparent lack of organizational readiness.

On the other hand when decision-makers face extreme external pressure that may affect the well-being of the company they become increasingly vulnerable to adopt.

When overlooking these considerations there are good reasons for organizations to examine and evaluate the characteristics of drivers and inhibitors more in depth.

Perceived Benefits

Perceived Benefits are the perceptions of managers and the level of recognition by decision-makers of the relative advantages that e-Business can provide their organization. These relative advantages are considered predictors of the intent to adopt. They represent the degree to which an organization believes that value can be created. Value creation takes place on strategic and operational level.

There are two main types of Perceived Benefits, which can be categorized as direct and indirect advantages or benefits.

1) Direct advantages refer to immediate and tangible benefits that companies would enjoy by using e-Business such as reduced transaction costs and efficiency improvements.

Examples:
- Reducing manual paper handling and data entry leads to time savings.

- Reducing postage and storage needs leads to cost savings.

2) Indirect Advantages refer to less tangible (intangible) benefits that are difficult to justify and measure. These are mostly opportunities that result from the impact of changing business processes and relationships, such as improved interfirm relationships, better business control and increased ability to compete.

Examples:
- Strengthening of customer relations leads to long-term partnerships.

- Closer collaboration between supplier and buyer leads to improved customer loyalty.

Perceived Costs

Perceived Costs are the perceptions of managers regarding the relative disadvantages of e-Business for the organization. These relative disadvantages are inhibitors of the intent to adopt. They strengthen the concerns of decision-makers about the value e-Business brings on short term.

There are two main types of Perceived Costs, which can be categorized as direct and indirect disadvantages or costs.

1) Direct disadvantages refer to immediate and tangible costs that companies would incur when adopting e-Business. The tangible costs address the parts of an investment which decision-makers can easily identify and attach a quantifiable value to such as implementation and operation costs.

Examples
- Installation and integration costs.

- Cost of trading partner on-boarding management.

2) Indirect disadvantages refer to less tangible (intangible) costs that are difficult to identify and measure, such as the cost of unexpected downtimes and the cost of non-compliance with government legislations and industry regulations. These intangible costs are often closely related to actions that should be taken to ensure business continuity and to rapidly respond to changing conditions.

Examples
- Demand for increased effort and resources to support both new and existing practices.

- Risks of constantly having to adapt to changing business needs and technological requirements.

External Pressure

Over the last years External Pressure has become a significant determinant for the intent to adopt. Beyond the walls of an organization there are several types of pressure that encourage companies to achieve adoption. These types of pressure are competitive pressure, governmental enforcement and pressure from trading partners.

Competitive pressure is

Organizational Readiness

When looking at readiness organizations should realize it is not quite as simple as just being able to receive and send business documents electronically.

Organizations have to research and understand what motivates and de-motivates companies and decision-makers. Making informed decisions based on a foundation of knowledge and sound reasoning will determine the success of the business.

Organizations must learn and understand the enabling and restraining forces behind the adoption of e-Business.

The impact of Interrelationships between drivers and inhibitors on adoption

Apart from understanding the influence of these factors on the intent to adopt it is important to assess the nature and extent of the interrelationships between drivers and inhibitors.

These interrelationships and their effects on decision-making are the most significant determinants for adoption of e-Business. They dictate how the key drivers and inhibitors influence the attitude of decision-makers. When assessing the interrelationships companies will discover their main drivers and inhibitors.

The two most important relations to evaluate are Readiness - Costs - Benefits and Pressure - Costs - Benefits.

1) Readiness - Costs – Benefits

Companies that have a high level of Organizational Readiness in terms of information technology need only low investments to gain high benefits.

2) Pressure - Costs – Benefits

Companies that experience high competitive pressure and/or pressure from trading partners are more likely to invest to obtain or maintain high indirect advantages - benefits - opposed to other firms.

These interrelations show that Readiness and Pressure are key drivers and impediments of the intent to adopt while Costs and Benefits form the main constraints to decision-making behavior.

This analysis leads to the conclusion that without pressure companies feel no need to look at implementing e-Business and without some degree of Enterprise Maturity organizations will not be able to respond to pressure. As such a minimum level of pressure and readiness is needed and required to establish a positive attitude to pursue or reject adoption.

Determine the maturity of the Enterprise Architecture of the firm

Upon exploring the effects of interrelationships on decision-making organizations will find Organizational Readiness the main factor influencing the intent to adopt. Organizational Readiness refers to the level of technology currently incorporated into business processes.

For determining the readiness of an organization companies need to assess the maturity of their current Enterprise Architecture. The Enterprise Architecture provides the framework for achieving interoperability within the enterprise and across enterprises.

Interoperability is the ability of information systems to seamlessly exchange data between enterprises, to process and understand the meaning and purpose of exchanged data, and to enable business processes and software applications to interact.

There are different forms (types) of interoperability that strengthen the capabilities of the Enterprise Architecture elements. Two such types of interoperability are directly related to elements of the Enterprise Architecture:
* Information Interoperability – Information Architecture – is the ability to exchange information in a uniform manner across multiple organizations as such that the precise meaning of exchanged information is understandable by separately developed applications.

* Business Interoperability – Business Architecture – is concerned with establishing business relationships, aligning and streamlining business processes, reviewing and revising working procedures, and setting up and formalizing cooperation agreements.

The other type of interoperability, Technical Interoperability, relates to the system and integration architectures. Technical Interoperability is concerned with the connectivity of systems and applications for the purpose of exchanging information with focus on the conveyance of data, not on its meaning.

These key Enterprise Architecture elements and Interoperability types form the base criteria for the maturity level classification scheme, called the e-Business maturity ladder. The maturity ladder contains five maturity levels and provides insights as well as guidance on the future direction in e-Business, including realization of benefits.

technological and business domain of their Enterprise Architecture. These domains encompass three main types of interoperability which determine for the greater part how ready the organization is:
* Business processes - process interoperability relates to the Business Architecture.

* Information - data and semantic interoperability relates to the Information Architecture.

* Systems and applications - technical interoperability relates to the Application Architecture.

Additionally there is the level of integration already supported by the enterprise - the Integration Architecture - consisting of Enterprise Application Integration and Inter-Enterprise Integration. Integration describes to what extent connections are implemented internally between different systems and externally with trading partners, suppliers and customers.

Together these types of interoperability and levels of integration form the base criteria for the maturity level classification scheme, the e-Business Maturity Ladder. The e-Business Maturity Ladder contains five maturity levels and provides insights as well as guidance on the future direction in e-Business, including realization of benefits.

Again the maturity of the Enterprise Architecture provides the foundation for Organizational Readiness and forms the basis for responding to External Pressure.

The base criteria for classifying the maturity are:
1. Business Architecture
2. Information Architecture
3. Application (System) Architecture
4. (Internal) Integration Architecture
5. (External) Integration Architecture

Guidance on future direction

Organizations looking for guidance need to understand that firms on different maturity positions deal differently with adopting e-Business given that some strategies lead to full enablement of their trading partner community reaping high benefits whilst others do not.

The Organizational Readiness of the enterprise forms the starting point for determining the appropriate approach to adopting e-Business. Organizations should prepare to understand the opportunities and challenges arising from the strengths, weaknesses and shortcomings of their technological maturity. Companies should also assess the organizational readiness and willingness of their trading partners.

The positions of organizations on the e-Business Maturity Ladder holds implications and possibilities for targeting e-Business. Most important aspects are the level of technology currently incorporated into business and administrative processes and the adaptive power of the enterprise architecture.

Companies with greater technological maturity and sophistication are better prepared than less mature enterprises. Normally these companies can reap higher benefits – lower investments and faster savings – as they have a larger number of trading partners in reach. Often they only need to strengthen their ability to communicate and collaborate by leveraging the interoperability and integration capabilities of their systems and applications. These companies should strive to attain full enablement of their trading partners by providing multiple communication and collaboration channels as part of a multi-channel approach.

A typical multi-channel approach builds on the logic that electronic business documents – structured files containing data – can be transformed into any format and presented / communicated via several means, including paper and mail, whilst processing of unstructured files is also supported via scanning and OCR techniques.

Companies that have a high technological readiness and adhere a multi-channel strategy are better prepared to reach all of their trading partners as can be seen hereafter.

These companies are ready to enable e-Business with all of their trading partners also those who still work with paper.

The state of technological readiness of firms depends on the maturity of their enterprise architecture. Higher maturity levels have significant and positive impact on adoption of e-Business since they require none or low investment to engage in cross-enterprise communication and collaboration.

Yet the adaptive power of enterprise architectures may enable less mature companies to achieve positive results at reasonable costs. An adaptive dynamic enterprise architecture builds on design principles such as modularity, componentization, reusability and standardization that permit firms to rapidly increase their maturity level.

However companies not necessarily need to invest in increasing their maturity if all of their trading partners have a lower maturity level. Depending on the maturity of their trading partners companies could even sustain

The Organizational Readiness level of the enterprise forms the starting point for determining the most appropriate and cost-effective approach to adopting e-Business.

Organizations should prepare to understand the opportunities and challenges arising from the strengths and weaknesses of their current technological maturity when determining their future direction. The current position on the e-Business Maturity Ladder incorporates certain implications and possibilities.

Apart from their own internal technological readiness companies should carefully evaluate their external environment and take into account the technological capabilities of their trading partners.

In general companies with greater technological maturity and sophistication can reap higher benefits for they have a larger number of trading partners in reach than the less mature enterprises. These companies should leverage the interoperability and integration elements of their systems and applications to enable multi-channel network connectivity and interaction.

The multi-channel approach builds on the concept that electronic documents – structured files containing data – can be transformed into any format and presented or communicated via several means, including paper and mail, while processing of unstructured data is also supported using scanning and OCR techniques.

When customers or suppliers are able to send and receive business documents in any format using any means they can reach all of their trading partners almost in real-time.

Understanding the factors driving and inhibiting infusion

In that respect companies should take into account the readiness of their trading partners.

While adoption refers to the actions taking by a single firm it is important to realize that adoption by several firms, customers or suppliers, brings real value. Greater diffusion or “wide-spread adoption” of e-Business delivers higher benefits and a better Return on Investment.

Forming an attitude toward adoption

Once decision-makers understand the position of their company and their partners they are able to define their goals and ambitions.

“Awareness of what is and understanding of what is possible leads to envisioning where to be!”

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Last update: 26-11-2011

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Simplify Electronic Invoicing with the help of Adobe

A few months ago, during the CEN/ISSS meeting in Brussel, the scenario below was presented as a solution to enable Electronic Invoicing for SME’s.

The scenario is based on provisions that are currently available to companies such as XML message standards and readable document formats (PDF, Word, Open Document). When organizations want to establish Electronic Invoicing with all of their trading partners they are obliged to maintain two different formats: a data file and a readable image. The presented scenario is not going to make it easier for participants because senders and receivers need to take into account the capabilities of their partners.

For realizing general adoption, a message exchange environment is needed that enables all companies to participate whatever their maturity level and capabilities. This technical environment should ensure that all trading partners can reach each other regardless of the message standards being used.

Extending the reach is not only about connectivity but also about being able to process the content of an invoice as an image or as data.

The solution for this issue is a multi-purpose exchange standard, an XML Data Package that contains a readable image of the invoice as well as the document data. The exchange standard requires a technical platform for generating the XML Data Package at the sending side and processing the data at the receiving side. Apart from that a “reader” for viewing the image is required for companies that are not yet able to process the data automatically in their financial applications.

There are potentially two solutions available that can be used as the basis for the multi-purpose exchange standard:
- the Adobe XDP (XML Data Package) format

- the OASIS Open Document format.

Both formats are XML-based containers that are able to support all of the available international data exchange standards. The solution of Adobe has already been implemented for exchanging documents. Adobe wrote a white paper, “Using Intelligent PDF to support compliant eInvoicing solutions” to explain their solution approach.

The Open Document format is also an XML container and supported by several Open Standards minded companies. A working example based on the Open Document format is not yet available.

Although both formats lend themselves perfectly for realizing the multi-purpose exchange approach there still is much work to do before the multi-purpose exchange standard can be processed and transmitted by everyone.

On the weblog of Adobe you can watch a video that explains the power of their intelligent PDF forms. During the video they also indicate that every international message standard can be used as the basis for data storage.

Tags: electronic data interchange, HR-XML, UBL, e-Invoicing, e-Business

Last updated: 27-11-2011

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Vereenvoudig Elektronisch Factureren met de hulp van Adobe

Een aantal maanden geleden werd tijdens de CEN/ISSS bijeenkomst in Brussel het onderstaande scenario voorgesteld als de oplossing om Elektronisch Factureren voor het MKB toegankelijk te maken.

Het scenario gaat uit van de voorzieningen waarover bedrijven vandaag kunnen beschikken zijnde XML berichtstandaarden en leesbare documentformaten (PDF, Word, Open Document). Wanneer organisaties Elektronisch Factureren met al hun handelspartners willen realiseren zijn ze verplicht om twee verschillende formaten te ondersteunen: een gegevensbestand en een leesbare afbeelding. Het wordt hierdoor niet eenvoudiger omdat verzenders en ontvangers rekening moeten houden met elkaars mogelijkheden.

Voor het realiseren van algehele adoptie is een berichtenuitwisselingsomgeving benodigd waaraan alle bedrijven ongeacht volwassenheid en mogelijkheden kunnen deel nemen. Deze technische omgeving moet ervoor zorgen dat alle handelspartners elkaar kunnen bereiken onafhankelijk van gebruikte berichtstandaarden.

Het vergroten van bereik gaat niet alleen over connectiviteit maar eveneens over voorzieningen om de inhoud van een factuur als een afbeelding of als gegevens te verwerken.

De oplossing voor deze problematiek is een multi-purpose exchange standaard, d.w.z. een XML Gegevens Container waarin zowel de leesbare factuur als de gegevens liggen opgesloten. Deze exchange standaard vereist een technisch platform voor het genereren van de XML Gegevens Container aan de verzendende kant en het verwerken van de gegevens aan de ontvangende kant. Daarnaast is een “lezer” benodigd voor bedrijven die niet in staat zijn om de gegevens automatisch te verwerken in hun financiële systemen.

Er zijn twee potentiële oplossingen beschikbaar die als basis kunnen dienen voor deze multi-purpose exchange standaard:
- het Adobe XDP (XML Data Package) formaat

- het OASIS Open Document formaat.

Beide formaten zijn gebaseerd op XML containers die in staat zijn om ale beschikbare internationale berichtstandaarden te ondersteunen. De oplossing van Adobe is reeds op een aantal plaatsen geïmplementeerd voor de uitwisseling van documenten. Adobe heeft de werking van deze oplossing beschreven in een white paper “Using Intelligent PDF to support compliant eInvoicing solutions”.

Het Open Document formaat is eveneens een XML container en wordt ondersteund door bedrijven die hun vertrouwen hebben uitgesproken voor Open Standaarden. Een werkend voorbeeld op basis van Open Document is nog niet voorhanden.

Niettegenstaande het feit dat beide standaarden zich uitstekend lenen voor het realiseren van deze multi-purpose benadering moet er nog veel gebeuren voordat de multi-purpose exchange standaard door iedereen verwerkt en verstuurd kan worden.

Op de weblog van Adobe kunt u een videoopname bekijken waarin de kracht van intelligente PDF formulieren worden toegelicht. Tijdens deze video wordt eveneens verteld dat elke internationale berichtstandaard als basis voor de gegevensopslag gebruikt kan worden.

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Laatste update: 27-11-2011

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Is het MKB klaar voor elektronisch zakendoen?

Het vraagstuk “Waarom komt elektronisch zakendoen / factureren niet van de grond ?” houdt mij al geruime tijd bezig.

Op 28 januari 2009 heeft de Europese Commissie het voorstel - COM(2009) 21 - tot wijziging van de BTW Richtlijn geadopteerd onder voorbehoud dat alle lidstaten de bepalingen aannemen uiterlijk op 31 december 2012. Als één van de eersten heeft Nederland de administratieve verplichtingen en factureringsverplichtingen op het gebied van de omzetbelasting geactualiseerd.

Met name de regels voor elektronisch factureren zijn sterk vereenvoudigd met het Beleidsbesluit van 12 februari 2009, nr. CPP2009/263M, Stcrt. nr. 32

Het uitgangspunt van de vereenvoudigde regels is “equal treatment of paper and electronic invoices” of “gelijke behandeling van papieren en elektronische facturen”. Dit resulteert in twee belangrijke wijzigingen:
- de vormgeving en implementatie van oplossingen voor elektronisch factureren wordt aan marktpartijen overgelaten waardoor de wijze van opmaak en versturen van de elektronische factuur vorm- en middelvrij kan plaatsvinden

- de ondernemer is niet verplicht om de aanvaarding van de elektronische factuur door zijn afnemer vast te leggen in zijn administratie

De vereenvoudiging van deze regels vindt plaats omdat een brede acceptatie en toepassing van elektronisch factureren belangrijk is voor het bedrijfsleven. De versoepelde regels gelden alleen voor belaste prestaties die in Nederland plaatsvinden.

Met het vereenvoudigen van de regels rondom elektronisch factureren verwachtte iedereen dat bedrijven massaal aan de slag zouden gaan. Niets is minder waar, de interesse in elektronisch factureren is weliswaar toegenomen maar grootschalige implementaties blijven achterwege.

Nu de technische en fiscaal / juridische drempels zijn aangepakt heeft bij het bedrijfsleven onduidelijkheid en onzekerheid toegeslagen.

Het blijft gissen maar een aantal redenen waarom e-Zakendoen niet van de grond komt zijn:

- de belangen van marktpartijen en de Overheid
Alle aandacht van de Overheid gaat uit naar Elektronisch Factureren richting de Overheid, natuurlijk omdat aan de ontvangende kant de meeste besparingen te realiseren zijn. De Overheid zou zich moeten richten op Elektronisch Bestellen en Factureren zodat alle deelnemers kunnen genieten van de voordelen.

- de Standaarden - UBL en UN/CEFACT - en Open Source gereedschappen
De standaarden - OASIS UBL en UN/CEFACT - zijn gratis beschikbaar en in de Open Source wereld zijn voldoende gereedschappen aanwezig om een B2B platform te realiseren.

Zie: Transformatie van een UBL Invoice naar een OAGI Invoice met ChainBuilder ESB IDE

De Overheid heeft gekozen voor UBL , de OASIS Universal Business Language. Daar is de Overheid besluitvaardig te werk gegaan en zal het niet aan liggen wordt geroepen. Echter het is noodzakelijk dat Nederland tot duidelijke afspraken komt over de gegevens die wel of niet moeten worden meegegeven in een bericht en de bijbehorende processen. Dan kan men daarop de structuur (semantiek en syntax) van het bericht afstemmen en een subset definiëren die door iedereen gebruikt moet / kan worden.

Dat niet volstaan kan worden met slechts het selecteren van een berichtstandaard toont de pilot Elektronisch Bestellen en Factureren voor Inhuur van personeel van de Belastingdienst aan. De Belastingdienst koos voor de berichtstandaard HR-XML SIDES, de SETU (Stichting Elektronische Transacties Uitzendbranche) standaard. Samen met de Belastingdienst hebben de deelnemers aan de pilot hard moeten werken om tot afstemming van de processen en afronding van de berichtspecificaties te komen. Dit heeft uiteindelijk op 20 mei 2009 geresulteerd in opname van de standaard op de lijst met open standaarden van de Overheid.

De Overheid had er goed aan gedaan om tijdens het Congres e-Factureren voor het MKB de beschrijving van de Nederlandse UBL - Factuur te presenteren. Het opstellen van deze beschrijving is op zich niet meer zo moeilijk als men weet dat om ons heen genoeg voorbeelden en specificaties beschikbaar zijn (NESUBL, UBL die door de Belastingdienst wordt gebruikt, ...).

Zie ook mijn bloart: Transformatiedefinities voor de elektronische factuur

- de overvloed aan aanbieders en de verscheidenheid aan benaderingen:
De voornaamste reden waarom e-Zakendoen niet van de grond komt in Nederland zou te wijten kunnen zijn aan het grote aantal aanbieders van en de verscheidenheid aan oplossingen die worden aangeboden.

Daarnaast is de beïnvloeding van de markt door de verschillende marktpartijen de laatste jaren sterk toegenomen.

De Overheid stimuleert dit verschijnsel door voor beantwoording van complexe vragen over e-Factureren (technisch, functioneel of juridisch/fiscaal) het bedrijfsleven door te verwijzen naar Billing Service Providers. De vraag rijst meteen hoe het dan met objectiviteit van deze providers is gesteld en of bedrijven de juiste antwoorden krijgen in het licht van hun situatie.

- onduidelijkheid over het fiscaal toezicht (Horizontal Monitoring) van de belastingdienst
De Belastingdienst richt zich de komende jaren op Horizontaal Toezicht en laat het aan de bedrijven over om aantoonbaar te maken dat zij het proces van e-Factureren onder controle hebben. Het is voor bedrijven moeilijk om precies in te schatten wat dan van hen verwacht wordt en waar ze moeten aan voldoen.

Het is verstandig te streven naar een situatie waarbij de Belastingdienst de controle op transacties in eigen hand neemt zonder bedrijven hiermee lastig te vallen. Naast Horizontaal Toezicht dus controle op de achtergrond van Taxable transacties, zelfs over de landsgrenzen heen. Op Europees niveau zien we soortgelijke initiatieven om Tax fraude tegen te gaan.

Wel moeten dan een aantal randvoorwaarden worden ingevuld. Zo moet(en) de Belastingdienst(en) toegang krijgen tot de transacties die hebben plaatsgevonden bij bedrijven.

Met de ontwikkelingen op het gebied van XAF , SBR en SAF-T is in elk geval de basis gelegd waarmee deze informatie ter beschikking gesteld kan worden. De Belastingdienst zal duidelijke keuzes moeten maken voor de toekomst.

- volwassenheid bedrijven en flexibiliteit oplossingen
Het feit dat niet alle bedrijven volwassen genoeg zijn om nu in e-factureren te stappen is een belangrijke factor om rekening mee te houden. Deze bedrijven moeten over de streep gehaald moeten worden. Dit kan door het aanbieden van alternatieve voorzieningen zoals dat ook in Denemarken gebeurt: scan-straten, ... maar eveneens intelligente document-formaten zoals Adobe XDP en ODF kunnen daarbij helpen.

Dit zijn voorzieningen die het voor deze bedrijven mogelijk maken om in beperkte mate te participeren.

Samenvattend zijn een aantal initiatieven nodig die het voor de Belastingdienst mogelijk maken om transacties beter te controleren en fraude te identificeren ALSOOK het voor alle bedrijven mogelijk maken deel te nemen aan elektronisch factureren. Zie: The new approach for bringing adoption of e-Invoicing by SMEs to the next level ! voor een aantal mogelijke benaderingen.

- een openbare informatiesnelweg met digitale handtekeningen van de Overheid
Het voorstel om via de Kamer van Koophandel digitale handtekeningen te verstrekken is in een aantal landen op een vergelijkbare wijze gerealiseerd:
- in Mexico kunnen bedrijven naar de overheidsbalie stappen en aangeven dat ze elektronisch willen gaan factureren. Binnen een aantal minuten hebben ze een certificaat en kunnen ze starten op het overheidsnetwerk.

- in Denemarken kunnen alle partijen gebruik maken van de Deense SOA Infrastructuur, een platform dat nu in Europa als basis is genomen voor de ontwikkeling van de PEPPOL infrastructuur (Pan European Public Procurement OnLine).

Hoe staat het met de belangen van bedrijven?
Wat mij betreft zouden bedrijven zich moeten verenigen in een platform dat zorg gaat dragen voor hun belangen. Er is behoefte aan een platform en discussieforum waarin alle bedrijven vrijwillig en gratis kunnen deelnemen, dat het beste voor heeft met e-Zakendoen in Nederland en waar bedrijven terecht kunnen voor beantwoording van hun vragen.

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Last update: 25-11-2015

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The new approach for bringing adoption of e-Invoicing by SMEs to the next level!

The European Commission on 28 January 2009 adopted a proposal to change the VAT Directive 2006/112/EC (from 28 November 2006) with respect to invoicing rules. The main objectives are to reduce burden on business, increase the use of e-Invoicing, support small and medium sized enterprises (SMEs) and help member states tackle fraud.

Regulatory requirements for Electronic Invoicing will change with the advent of the measures aimed at further simplifying, modernizing and harmonizing the VAT invoicing rules. The foundation of the proposal is based on “equal treatment of paper and electronic invoices” in a technologically neutral way by removing the conditions for an Advanced Electronic Signature (AES) and Electronic Data Interchange (EDI).

While in the world of electronic agreements and contracts the need for electronic signatures is apparent the reasoning is that e-Invoicing is part of a larger process where every process step contributes to authenticity and integrity of the trade transaction. Nevertheless many Member States will continue to believe these guarantees can only be provided by electronically signed e-invoices.

Therefore removing the requirement to guarantee the authenticity of origin and integrity of content by means of pre-defined technological solutions, such as EDI and Electronic Signatures, is the most challenging from a political and governmental perspective. It requires a “paradigm shift” in thinking about audit management processes and strategies by Tax Authorities.

Apart from that increasing the use of e-Invoicing requires more than simplification of VAT invoicing rules. Although standardization efforts in Europe are huge the progress of standards bodies is slow with respect to data exchange standards. In response new initiatives emerge from humble beginnings, underpinned by new technologies, with potential to grow into creatures of substance and significance. The a priori standard for e-Invoicing, UN/CEFACT, starts loosing ground due to the growing need for inclusion of all types of companies, the rigidity and slowness of development, and the increased adoption of the Universal Business Language (UBL) as the European data exchange standard.

Although everyone is entitled to their own opinion creating the next wave of e-Invoicing requires re-alignment of views and goals. Hence there are two fundamental questions to answer:
- What is understood by the term “Compliant e-Invoicing”?

- What do SME’s and large companies need to jump on the bandwagon of e-Invoicing?

What is Compliant e-Invoicing ?
One such definition comes from the CEN/ISSS and Fiscalis e-Invoicing Compliance Guidelines as expressed in the section “e-Invoicing Basics Introduction”. Compliant e-Invoicing is about auditability of invoicing processes, verification whether VAT obligations are met and whether the invoice is an accurate reflection of sales and purchases.

Many people believe that e-Invoicing is the first step towards full automation of the end-to-end-trade process. Talking about “Compliant e-Business (Electronic Business)” is more appropriate in view of drafting the rules for the near future.

What do SME’s need to adopt e-Invoicing ? It should be clear that e-Invoicing for SME’s and for large companies requires more than simplification of VAT invoicing rules. There is a need for a multi-purpose exchange standard that enables companies to participate regardless whether they are able to process the invoice data automatically in their financial system.

Such a multi-purpose exchange standard should incorporate a readable image and processable data in one packaged container.

Bringing adoption of the new VAT directives to the next level
The CEN/ISSS e-Invoicing Workgroup Phase II Task Group 2 on Compliance recently presented their e-Invoicing Compliance Guidelines. The CEN/ISSS Task Group 2 and the Fiscalis e-Audit Project Group are paving the way for harmonization of VAT - Compliant e-Invoicing processes.

The principles in “the Guidelines” stimulate the use of a single coherent Business Control Framework (BCF) - Tax Control Framework (TCF) - across Europe. The aim is to attain a sufficient degree of auditability and legal compliance of e-Invoicing from a Tax perspective and to provide a solid foundation for performing tax audits in situations where e-Invoicing solutions are used.

The Guidelines provide practitioners a perfect instrument for self-regulation and self-certification of processes and technologies that are used to ensure invoices are reliable. Primarily enabling organizations to prove that invoices are processed and stored correctly within their individual spheres of governance and liability.

However, if well-understood, “Compliant e-Invoicing” is not about auditing e-Invoicing solutions or Service Providers but about auditability of invoicing processes and fraud prevention by validating whether VAT transactions are accurately administered (paid and deducted). e-Invoicing is part of the total Purchase-To-Pay and Order-To-Cash cycle and orders, deliveries and receipts need to be registered for legally valid transactions.

For most companies the three-way match at the end of their cycle provides means to control the integrity of the content and the authenticity of origin.

The focus of the recommendations should therefore have been more on the auditability and validation of VAT transactions from a Tax Authority’s perspective instead of on auditability of e-Invoicing solutions and Service Providers.

Currently Tax Authorities lack functionality and information to validate whether tax deducted and tax paid are correct and therefore force companies to guarantee authenticity and integrity. Reducing fraud is only possible if Tax Authorities are able to validate sales and purchases, deliveries and receipts, as well as the related invoice and tax transactions between the different involved parties.

Bringing adoption of the new VAT directives to the next level requires a mind shift of Tax Authorities, internal and external Tax Auditors, Businesses and Solution / Service Providers. This “paradigm shift” in thinking about Tax audit management processes and strategies has an impact on all stakeholders.

They all need to consider and establish a new “Compliant e-Business (e-Invoicing) approach” with less focus on the processes and technologies used (technologically neutral) but more on the end-to-end-trade process.

The foundation of the new Compliant e-Business approach is based on two important concepts:
- e-Invoicing is part of a larger process
- a multi-purpose exchange standard

e-Invoicing is part of a larger process
Study of the Purchase-to-Pay (P2P) and Order-to-Cash (O2C) processes with respect to legal and auditability requirements, arising from VAT, manifest that one important step, the exchange of trade related transactions to Tax Authorities, is missing. Based on practical experience with implementing electronic ordering and invoicing architectures a few ideas evolved. These ideas need further widespread elaboration and buy-in from stakeholders to define strategies for development and realization.

Looking at the Purchase-to-Pay (P2P) and Order-to-Cash (O2C) processes e-Invoicing is the last step before payment takes place.

All these steps contribute to proving the authenticity and integrity of the trade transaction to involved business partners. Reporting VAT to Tax Authorities at current is not a part of the end-to-end-trade process in most European countries. As such from a Tax Authority’s viewpoint trade transactions are difficult to follow and validate.

The future of the new VAT directives requires re-defining the position and importance of e-Invoicing in view of the total trade process. New ways of reporting, processing and validating tax-related transactions as part of the total trade process are required. These new ways of working should provide trust to all parties and be easy to implement once standards and procedures are in place.

The new Compliant e-Invoicing approach is based on the act of reporting all financial Tax related transactions from the General Ledgers and Sub-ledgers of Suppliers and Customers in a timely manner to Tax Authorities. The data exchange standards for reporting tax related financial data already exists and are implemented in some European countries. However there is no commonly accepted standard across Europe. SAF-T and XBRL-GL are data standards that qualify for the goal of reporting the related transactions.

The end-to-end-trade process flow will include one of these standards for reporting of transactions to Tax Authorities including corrections made as result of disputes.

Establishing the new Compliant e-Invoicing approach will require all stakeholders to join forces and work together on extending Business and ICT architectures for inclusion of Tax Authorities.

In the Business domain the focus should be on administrative and process-oriented elements. Governments and Businesses will have to ensure that Tax reporting is adequately embedded in policies and laws. Most work has to be done in the ICT domain to ensure technology, information and applications support the new flow of information. All involved parties face significant investments in infrastructures, application systems and exchange standards.

However adoption of e-Invoicing in Europe with a view to the future advent of electronic business will only become successful when Tax Authorities have a clear and complete view on trade transactions. They will gain more control and better understanding of businesses. Moreover the technology drift of e-? will come to an end and businesses will applaud for the transparency in the end-to-end-trade process.

A multi-purpose exchange standard
At current when organizations want to establish e-Invoicing with all their trading partners they will have to send two types of documents: a data message and a readable image. This will introduce additional complexity at both sides because companies will have to deal with the different capabilities of their receiving and sending trading partners.

Global adoption of e-Invoicing requires a business and technical environment that enables all types of companies to participate regardless their capabilities and maturity.

The technical environment must provide reach to all their business partners irrespective of data exchange standards. Providing reach is not about connectivity but about being able to process the invoice content as an image or as data.

The multi-purpose exchange standard is an XML Data Package that contains a readable image and document data. The exchange standard requires a technical platform for generating the XML Data Package at the sending side and processing the data at the receiving side. Apart from that a reader for viewing the image is required for companies that are not able to process the data automatically in their financial applications.

There are potentially two solutions available that can be used as the basis for the multi-purpose exchange standard:
- the Adobe XDP (XML Data Package) format

- the OASIS Open Document format.

Both formats are XML-based containers that are able to support all of the available international data exchange standards. Although Adobe is much further in providing a total working solution, Open Document is based on an Open and Collaborative Community supported by several Open Source minded companies.

Still there is much work to do to ensure these solutions fully support the processing and transmission of the multi-purpose exchange standard.

Building the new Compliant e-Invoicing approach
Establishing the new Compliant e-Business (e-Invoicing) approach requires all stakeholders to support the development of Governmental and Business ICT architectures for reporting, processing and validating the tax related transactions.

These efforts include:
- a data exchange standard for tax related transactions based on SAF-T or XBRL-GL

- a European-wide infrastructure for the communication and storage of tax related transactions including Business Intelligence functionality for analyzing transactions reported by businesses across Europe

- interfaces for generating the data exchange messages from data stored in the General Ledgers and Sub-ledgers from the financial and ERP systems of Suppliers and Customers

Data Exchange Standard based on SAF-T or XBRL-GL
Compliant e-Invoicing will be valid for all types of invoices for sales and purchases of goods or services.

Compliant e-Invoicing in the Staffing Industry where the focus is on delivery of services by hourly workers looks as follows:

Compliant e-Invoicing for non-product and product related (B.O.M.) goods and material looks as follows:

European-wide infrastructure
European Member States have to design and implement an ICT architecture that supports the exchange of trade related tax data between Tax Authorities of different Member States. Conceptually there are a few scenario’s for realizing such a collaborative infrastructure. These range from totally centralized to decentralized service oriented architectures.

1) a central European Tax reporting and Business Intelligence platform including:
- standardized connections for Businesses to provide tax related transaction data based on the European-specific data exchange standard via a web-enabled portal or data exchange services such as EDI

- a central data warehouse for storage of reported tax related transaction data

- Business Intelligence functionality for Authorities and Businesses to analyze, validate and when needed correct stored information

2) a decentralized country-based architecture including:
- country-specific standards and connections for Businesses to provide tax related transaction data

- decentralized local data warehouses for storage of reported tax related transaction data

- a Business Intelligence solution based on a service oriented architecture that enables analysis and validations of transactions across all Country-specific data warehouses

Conclusions
As many of us realize e-Invoicing is just the first step towards full automation of the supply chain. Only when the latter is accomplished all parties involved will realize the return on investment pursued.

Tax Authorities and/or the CEN/ISSS Work Group should launch a new Task Group in phase 3 that is going to formalize a standard for Tax reporting and define / develop European-wide functionality for processing the tax related transaction data by all Member States as such that they are able to validate cross-company transactions.

Tags: electronic data interchange, HR-XML, e-Invoicing, e-Business, UBL

Last updated: 26-11-2011

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A glimp into the future of e-invoicing

Vision on electronic invoicing (business) in the future
The most important theme on the agenda of companies and government bodies at this moment is electronic invoicing. Many companies see electronic invoicing as an instrument to realize cost savings and to improve the socially responsible undertaken - image. Not always will electronic invoicing lead to cost savings but generally it is assumed it will.

My advice is to conduct a thorough investigation of the impact on the organization, systems, applications, processes and information. Such a study should provide a view on the vision on electronic invoicing within the company and deliver information for drawing up the Business Case. Do not forget Electronic Invoicing is part of the end-to-end trade process (Electronic Business). The study will have to mind the overall trade process including purchase-to-pay and order-to-cash.

In addition Electronic Business refers to Exchange Services (exchange of messages) between customers and suppliers. An activity that takes place in the Exchange Domain, the domain area with focus on interoperability and not on the purchase and sales process.

Based on several investigation and implementation projects combined with extensive study of technological developments and innovative business concepts a vision emerged on the future of Electronic Business, more specific Electronic Invoicing.

“My vision on Electronic Invoicing is of an electronic business highway located in the cloud above us.”

My vision on Electronic Invoicing is of an electronic business highway in the cloud above us. Emerging technologies and growing electronic business networks are shaping the future of Electronic Business into an open an intelligent information service highway wherein Electronic Invoicing fits as a tiny little exchange instance that enables smart and fast reach to connected partners.

Actually I mean that intelligent instances on the electronic business highway make it possible to exchange information and establish processes to work together with others that are also using the highway. Companies will focus more and more on the reason of their existence and move core-functions like generate and send, receive and process invoices to the outside or transfer to third parties whom are specialized therein.

The electronic business highway will become a shielded area of the Internet or another IP-network comparable to Internet telephony (Voice over IP). The electronic business highway will be an open and for everyone accessible instance that is in no way identical to the Value Added Network (VAN) from the EDI age.

Three possible scenario's for the emergence of the electronic business highway
It is my expectation that the emergence of the electronic business highway will follow the same scenario's as developed by the World Economic Forum for the Digital Ecosystem. The Digital Ecosystem is about the digital space - the convergence between IT, Telecommunications, Media and Entertainment - where users evolve from mere consumers to active participants and governments face major policy and regulatory challenges.

Full version: Digital Ecosystem Convergence between IT, Telecoms, Media and Entertainment: Scenarios to 2015

Three scenarios are developed to gain a better understanding of the possible outcomes of the Digital Ecosystem in the near future. These scenarios deal with answers around two critical questions that influence the realization and adoption of the electronic business highway.

Firstly, will social and economic value creation be industry controlled and led, or organic and community-led. Secondly, will the digital business environment evolve toward a more open or closed system.

To the year 2015 three possible roads will be followed to arrive at the Digital Ecosystem:

1) Safe Havens describes a digital world in which the industry plays an important role and responds by vertically integrating to create secure walled environments that provide all digital services and is based on closed standards.

2) Middle Kingdoms describes a digital world in which consumers, governments and forward-looking businesses push for interoperability, enabling the emergence of a Digital Ecosystem dominated by intermediaries that effectively connect users to like-minded individuals and highly specialized suppliers that can best meet their needs. In the middle of the space between consumers and suppliers lie the kingdom where the power lies.

3) Youniverse describes a digital world in which the rise of organic grassroots communities as powerhouses of economic value turns traditional business thinking on its head. This leads to the rise of new organizational structures and to digital experiences that are highly personalized. This digital world will mainly be based on common standards and open systems. The line between users and producers will be further blurred as open source supporting software and collaborative community structures become more sophisticated.

Who is going to build the electronic business highway ?
The electronic business highway will evolve from safe havens to middle kingdoms whereby governments, communities and/or market sectors will play an important role in the realization of the superhighway. It is clear that in the coming years not everyone need to start building its own electronic business highway but that one umbrella highway will emerge to which every enterprise and existing electronic business (invoicing) network (e-hub) can connect.

It will still take several years before we are that far but this highway will surely be established. Currently suppliers of e-business (invoicing) networks already are confronted with questions from customers to connect trading partners that are not on their network.

Much attention arise for the phenomenon roaming that a number of players in the domain area define as “Roaming is interconnecting networks to provide real cross border reach, in a way that an operator can reach another operator’s users directly, nationally and internationally”.

In other words realizing the interoperability between the e-business (invoicing) networks, the régime of fees that form the basis for the usage of each others services / networks and the way the taxation takes place to the customer / client. Universal reach for clients is one of the most important drivers to realize interoperability between networks and will ultimately lead to a network of networks AND something or someone will in time grab the role of super administrator.

When are you ready for the electronic business highway ?
Many around us have presumably been thinking about going for gmail, yahoo-mail or live-mail abandoning their own e-mail server. A number of companies will take this step in the coming years. In my opinion the predominant argument is “why pull in complexity when others can do it better and cheaper”. I believe that in the near future G-invoicing or Y-invoicing or M-invoicing has much possibility to be successful. Yahoo, Google and Microsoft have the power-to-execute and are able to realize the dream of the electronic business highway.

Why pull the complexity of Electronic Invoicing into your own organization and systems when the only goal you have is “send, receive and process invoices” ? Electronic Invoicing is non-intrusive, in fact the invoicing process will not be hampered, and around us there are strong players that made Electronic Business their core-competence. Perhaps you ask yourself when you will be ready for Electronic Invoicing and where you stand at this moment. The evolution path of Electronic Business (e-Business) provides a notion on the growth and future of Electronic Invoicing.

“Technology is shaping the future e-invoicing world” and demands a growing understanding of technology, standards, data security and control. It should be clear to everyone that Electronic Business goes through a shift from “tightly coupled to loosely coupled systems” .

From left below to right above Electronic Business evolves from Traditional to Synchronization.

1) Traditional: phone, fax, EDI and paper
Paper is still the most important medium for the transmission of an invoice while e-mail has taken up a strong position for the exchange of product information and order data. However the amended European regulations will strongly stimulate the use of e-mail in the next coming years.

Electronic Data Interchange, in the last years became synonym for the exchange of documents via Value Added Networks based on non-XML standards such as EDIFACT and ASC X12. Especially international companies and certain industry sectors have embraced EDI in the past although this not always leaded to the desired success. Nevertheless Electronic Data Interchange For Administration, Commerce and Transport (EDIFACT) is still heavily employed in the automotive and retail industry.

2) Communication: e-mail, online web presentment
Invoices - like other documents - will be transmitted using e-mail in PDF or other format but at the same time Electronic Invoice Presentment solutions are further being implemented. These solutions enable us to present invoices in HTML format in a personalized environment. In addition it is possible to download the invoice in different formats. The said means of communication distinguish themselves in the way the invoice is offered to the customer. When using e-mail the invoice is send to the customer - push-mechanism - while when using online presentment a pull-oriented approach is followed. The customer receives a notification message, e-mail or sms, when there is an invoice available that can be downloaded.

3) Integration: XML standards and web-oriented architectures
The rise of the eXtensible Markup Language (XML) drifted the world of Electronic Business more apart. This seems a contradiction to those that scream XML is the Esperanto of the future. However the different industry-specific XML-based vocabularies that have been developed (OAGI, UBL, PIDX, CIDX, RosettaNet, ...) the past years lead to the well-known interoperability question, the lack of information (data) interoperability. These XML-vocabularies define business information-elements in the context of the industry as such that everyone can understand and process them. The XML-language takes care of defining the structure and the industry-specific methodology for modeling and representing the semantics, the meaning of the information elements.

In the EDIFACT era industry-specific subsets were developed to further restrict the number of data elements. The basis for these subsets is/was the EDIFACT syntax and semantics as defined in the EDIFACT directories (libraries).

The XML-vocabularies on the other hand are based on different methodologies (semantics) and have different structures (syntax). Ultimately these create the luxury problem that most companies wrestle with, “the business standards dilemma”. Enterprises are not able to make a choice between the multitude of standards.

Standardization is one of the biggest hurdles for global adoption of Electronic Business (invoicing) but not the end of Electronic Business. The interoperability question is in fact about systems and people not having a common understanding of the meaning of the underlying data because there is no shared grammar and library on which the meaning is based.

A few international initiatives are started that should lead to one universal grammar library:
- The UN/CEFACT Core Components Technical Specification (CCTS) is a syntax-neutral methodology for the development of a common set of semantic building blocks of information-elements. The Core Components Technical Specification is based on the ISO Standard 150000-5 (ebXML Core Components Technical Specification ebCCTS). More information can be found on the website of SAP, the driving force behind the CCTS, under Message Definition Languages.

- The Open Group Universal Data Element Framework (UDEF) is a method for categorizing information-elements by means of an alphanumeric key (tag) and assigning a simple name to an element.

Those initiatives will not directly solve the interoperability question because none of these will be implemented on short notice in all the available XML-vocabularies. The luxury problem will continue to exist for a while.

4) Collaboration: a process-centric approach stimulated by business processes that interact using standardized B2B protocols containing message-formats, transport protocols and business process management components.

This stage of Collaboration where companies apply all kinds of integration to realize Electronic Business goes through interconnected networks. Especially the e-business (invoicing) networks that support the exchange of messages between trading partners constitute the most important link in this stage.

5) Synchronization: pure peer-to-peer networks that have no central control and where data gets replicated. Further away in the future Ecosystem oriented architectures will evolve. This stage in the evolution path will not obtain the required level of maturity in the next few years to enable major adoption.

What influence do distribution models have ?
The last years several distribution models emerged or were identified by institutions. For simplicity I will identify four models whereby the difference is mostly based on the position of the trading partners.

1) Seller Direct Model
In this model the seller is the dominant party and makes the invoice available to customers via an online presentment environment, web-portal, in different formats (EDI, XML, CSV, PDF, ...). Invoices can also be transmitted in PDF format via e-mail.

The model is most appropriate from the perspective of the seller because of the opportunity to tighten the connection with customers (vendor lock-in), at the same time the seller can recommend more products and services (cross- and up selling) and strengthen its brand name. Moreover the invoice has the same look-and-feel as the paper invoice.

2) Buyer Direct model
In this model the buyer is the dominant party and forces the supplier to enter or deliver the invoice via the online environment or via EDI / XML.

The model is most appropriate from the perspective of the buyer because of the opportunity to tighten the connection with suppliers (buyer lock-in) and reduce the administrative burden when the seller delivers the invoice in a standardized format in the online environment. When this online environment is integrated with the financial system the buyer is able to automatically process the invoice. More benefits can be achieved if the sellers retrieve the purchase orders from the same online environment and also confirm delivery dates and pricing.

The choice for one of these distribution models is partly determined by the bargaining or market power, and the desired wish of flexibility of involved parties. When the power is concentrated in the begin of the supply chain, on the selling side, the result will most often be a Seller Direct model while a dominating customer result in a Buyer Direct Model. Both models benefit from a limited number of standards and transport protocols, leading the highest possible interoperability.

Soon or later both customers and suppliers are confronted with the digital spaghetti architecture.

This structure evolves from the growing number of point-to-point connections and requires increasing efforts to connect new trading partners.

The Seller and Buyer Model in time will not increase the reach of trading partners and certainly not when buyers and sellers are faced with strong dominating partners. For most small and medium-sized companies, but also for dominating buyers and sellers willing to establish electronic business the Consolidator Model is the best fit and less intrusive.

3) Consolidator model
In the consolidator model a third party, a service provider, facilitates the exchange of documents between sellers and buyers providing various exchange services among web-enabled presentment environments and all kind of methods and standards for exchanging messages.

This model is most appropriate for small and medium-sized companies because the provider takes the complexity of different electronic standards out-of-their hands. There is a one time costs for connecting to the network of the consolidator and a transaction or monthly fee for the use of the service depending on the agreements made.

The main advantage for enterprises lies in the speed of connecting a large group of partners that already use the network of the consolidator. Especially when the service provider is running an extensive network of companies in the same market sector. Such an e-business (invoicing) network can be decisive in the choice of a service provider.

A provider who understands the problems in an industry sector is able to respond faster and provide additional services closely related to the business domain. For example in the world of Telecommunications and Utilities (energy, water,waste) Expense Management Solutions will add significant value to connected users.

The increasing number of e-business (invoicing) networks requires extra efforts from these network operators (consolidators) to ensure reach of trading partners over these networks. This gave rise to the networked environments (multiple connected hubs). The networked environments enable hub-owners to respond quickly to requests for exchanging messages with partners that use another network.

The network operators are now facing the same challenges that originally, not so long ago, gave birth to the e-business (invoicing) networks and are still the main reasons for their existence. E-business (invoicing) networks need to ensure widespread interoperability and interconnectivity to better serve - and keep on serving - senders and receivers.

Main aspects to address are cross-network addressing and routing, (message) content standards and transformation rules (format conversion), authenticity of origin and integrity of content. Answers are needed for questions such as how can a sender and receiver be uniquely identified, which message standard or grammar will be used as the common library, and how to ensure authenticity of origin, integrity of content and security.

Currently e-business (invoicing) network providers are tackling these questions by establishing bilateral agreements to ensure interoperability and interconnectivity. The Hub Alliance, an affiliation of Business-to-Business e-Trading Service Providers (or ‘hubs’) who have implemented a ground breaking initiative to interconnect different hubs ensuring that electronic trading is easier for all the hub users. Participants are a few of the big players in Europe: Certipost, Basware, Burns Business Exchange, Liaison, Causeway and Asite.

The Alliance was established to enable hub-to-hub interoperation and to encourage the wider use of electronic messaging between businesses. Members are currently prohibited from charging additionally for documents that are processed between hub members. Message standards, communications protocols, service levels and responsibilities are all defined by the membership and are intended to be as broad as possible to encourage the ease and speed of interconnectivity.

4) Four Corner model
The last model is the Four Corner model where the banking world will take care of the exchange of invoices between customers and suppliers. The already mentioned benefits of a consolidator apply and additionally banks provide possibilities to directly issue the payment of an invoice. There is not yet a working example of this model but it probably will not take years.

Mapping the distribution models on the evolution path ?
Now that the distribution models passed the revue let us look on how these models are plotted on the evolution path.

Some valuable and informative business and technological considerations to take into account.
Small, medium-sized and large companies should carefully investigate the business models and technologies of available solutions and service providers. The current e-business (invoicing) service providers are coming from many different backgrounds. Some players literally are involved in the gaming industry like B2Boost, the leader in transaction management.

Others rolled into the game of e-business and e-invoicing because paper-based invoices in the future are no longer an option:
- Output and Document Management Solution providers: StreamServe, Bringing Documents to Life, and Bottomline Technologies.

- Document and Information Logistics companies: TNT Post, the Dutch mail and logistic company, Certipost, the former Belgian Post company and Itella Corporation, formerly the Finland Post Corporation.

Even companies that have been providing B2B and EDI solutions for ages are Jumping on the Bandwagon of the e-business (invoicing) networks: Axway, Tie Commerce and SEEBURGER.

What all of these players have in common is that during the past years they developed solutions for solving the lack of interoperability between their clients with the objectives to reduce the amount of spaghetti. These solutions are based on different architectures, standards and types of software.

Two architectural approaches are generally followed:
1) Firstly, the use of a Common Information Model as the backbone for the solution.

The standards and models from clients are transformed into the common information model in the middle which is mostly based on a proprietary standard. Data is stored in a relational database or in an XML file system or database.

2) Secondly, the digital spaghetti structure is transferred into the solution

The existing point-to-point connections between trading partners are restated in the solution. There is no common information model and the power resides in the transformation capabilities of the underlying software. For each information flow between supplier and customer two transformation mappings are developed.

Not the most cost effective and efficient approach to solve the lack of interoperability between trading partners. As long as these providers can live up to their promises and ensure 100% client satisfaction this approach will work.

Will XML solve the business standards dilemma ?
Once again it is a misunderstanding that XML is the solution, the Esperanto of the future. Some people even say XML is just plain text and does nothing. XML was created to structure, store and transport information. The XML-language takes care of defining the structure, the syntax, and the industry-specific methodology for modeling and representing the semantics, the meaning of the information elements.

The biggest challenge for all of us is solving the lack of interoperability between XML-based vocabularies and EDI libraries. True global electronic data interoperability requires more than an XML-based vocabulary.

For establishing global electronic collaboration and information exchange there must be a common understanding of the underlying data, the semantics of business information elements should be based on a standardized grammar, commonly available for everyone.

Many industry consortia and standardization committees have defined specific XML-based vocabularies. All of these vocabularies are based on different methodologies for representing the semantics of the business information elements. As such similar information elements in vocabularies are designed and named differently. This makes it hard to automatically translate these elements from one vocabulary to the other instead a mapping definition is required.

Due to the many XML-based vocabularies this becomes difficult and expensive, often identified as the business standards dilemma.

Standardization of the Content is not the breaking stone. It is not about speaking the same language but about understanding what we speak. Therefore standardization should focus on grammar, transformation rules and tools as such that both humans and machines are able to understand and work with it.

Initiatives that have been launched are:
- the UN/CEFACT Core Components Technology Specification (ISO 15000-5 ebCCTS)
- the Open Group Universal Data Element Framework

Adoption and incorporation of the UN/CEFACT CCTS methodology is agreed upon by most international standards committees but real cross-use of core components is not yet visible. Furthermore the UN/CEFACT CCTS is becoming a bit too complex with the extensive object-oriented approach propagated by the UN/CEFACT standardization committee.

Nevertheless it is the best initiative available at this moment and when the focus is brought back to the right perspectives, simply grammar, things will work out fine. The best architecture for an e-business (invoicing) network solution that has no problem with the business standards dilemma in the communication with other networks looks as follows:

This will also be the underlying architecture framework for the electronic business highway.

Will the electronic business highway fulfill the interoperability requirements ?
First of all it is imperative that the electronic business highway provides access to all sending and receiving trading entities and allows for inclusion of different e-business (invoicing) network providers.

Moreover there are common and open technology standards needed for message content and transport protocols including transformation and/or format conversions. These could best be based on a shared grammar and library such as the UN/CEFACT Core Components Technology Specification. These standards should be globally available to everyone without restriction and cost, or for a reasonable fee, ‘en principe’ no enterprise should feel excluded.

On top of these requirements enterprises need a smooth transition path from their existing integration approach to the new vibrating driving-experience on the electronic business highway. This demands ease of use, the ability to accommodate different existing and new solutions and free choice of service provider.

The road to Middle Kingdoms requires ‘government’ policies promoting innovation and competition, measures to encourage the industry to voluntarily contribute their best technology and to participate in the development of open standards.

Governments on a pan-European and international level with support of international standardization committees need to develop Common User Identifiers for addressing that are portable across Europe, similar to telephone numbers, open and independent from a service or network need to be developed. Two initiatives to mention are: the OASIS Customer Information Quality Technical Committee (OASIS CIQ TC) and the eGreen Pages Association.

The OASIS CIQ TC develops a set of XML specifications for defining, representing, interoperating and managing “PARTY (Person or Organization) CENTRIC INFORMATION” that are truly open, vendor neutral, industry and application independent, and importantly “Global” (ability to represent international data formats such as different types of party names and addresses used in 241+ countries).

Basware and Itella Information Oy are establishing a centralized directory containing messaging profiles and electronic addresses of ebusiness partners used for automated discovery and pairing of partners and routing of messages. The Open Initiative for Global Address Book in B2B Messaging - eGreen Pages - will be run by an open, non-profit e-invoicing operator association.

Is there a Business Case for e-business (invoicing) ?

Stay on board, more will come in a few days

Tags: EDIFACT, EDI, Interoperability-Frameworks, UBL, UDEF, e-Invoicing

[Last update: 26-11-2011]

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