EIPP (e-invoicing) and StartUp World

Yesterday, I had the pleasure to speak to Marcus Hughes of Abbey UK Corporate Banking, and learn bit more about the solution they have brought to market jointly with OB10. Abbey calls this reverse factoring. Let’s review the business process:

1. Supplier sends the invoice to buyer through OB10 e-invoicing platform. I assume everyone knows how this works, so no point in repeating it here other than to say, like every vendor out there, OB10 also claims that they can take data out from any back-office system, translate it and present it in the desired format to the recipient’s back-office system. The general rule of thumb here is that as a vendor, if you have not supported a particular format in the past, the hub/network operator (in this case OB10) will build a connector to read/write data accordingly. Sad news is that no one makes this point publicly clear (including ebdex). Readers should be aware that there are cost and time implications associated with interface development work. It is not always plain sailing unless your back-office system is a popular product such as Sage Line 100, SAP, Oracle, etc (even that’s not straight forward sometimes!).
2. Buyer process the invoice and if there are no anomalies (or if there were, after resolvement), forwards the invoice confirmation to Abbey for payment.
3. Accordingly, Abbey transfers the invoice value less commission to Supplier’s bank and forwards the remittance advice to OB10.
4. OB10 forwards the remittance advice to Supplier.
5. Purchaser pays invoice value to Abbey as per agreed payment schedule

(click image to enlarge)

I like to question why is that the “invoice confirmation” has not been routed from Buyer to Abbey through OB10? The above configuration requires an connector between Buyer’s back-office system and Abbey’s front end. Or the Buyer to upload invoice confirmation manually to Abbey. Maybe there is a valid reason that I could not think of why it has been designed this way.

For the business process to take place:

1. Supplier must have an account with OB10 and pay subscription and transaction fees.
2. Buyer must have an account with OB10 and pay subscription and transaction fees.
3. Supplier must have an agreement with Abbey for charges/commissions
4. Buyer must have an agreement with Abbey for accepting invoice confirmations and release of funds prior to payment by Buyer.

Now here is a perfect illustration of a time line, which shows:

1. Payments to supplier within 6 working days of invoice receipt by Buyer. Obviously, this is the ultimate scenario once everything is running smoothly (at supplier end, buyer end and Abbey end). OK! in reality, getting paid within 6 days might be tricky, but this product can certainly make sure it happens within, say one calendar month. What you cannot automate is those actions still undertaken by humans - the exceptions management, handling unexpected volumes, people off work, etc.
2. However if the Buyer behaviour is to change in such a manner that approval is split into parts. Pre-approval being “yes it looks like an invoice from one of our approved suppliers - I am happy to forward the invoice confirmation to Abbey and then pick up any anomalies later”. This behaviour can ensure definite payment on Day 6. But this can increase the query/dispute resolutions and financial reconcilliations.
3. Buyer actually pays on day 55, 10 days after his norm. Who finances for this period? Looks like it is the supplier.

(click image to enlarge)

Few characteristics of above product:

1. Aimed at large UK buyers
2. Supplier needs to fit into “key supplier” category for above to function - the 20% of suppliers, who happen to be large and regular.
3. This may not work well with 80% of the supply chain due to their infrequent invoicing. Setting up above agreements may be unjustified or too complex if supplier is invoicing few times a year.

Simple solutions works! This looks like a simple solution irrespective of some of the potential drawbacks I highlighted. This solution is clearly provided for the buyer, but bringing equal benefits to the supplier. There are number of ways to improve one’s working capital arrangements. Abbey can easily reverse this “reverse factoring” to “invoice discounting” or “factoring” services without too much of a hassle. But it will certainly complicate the product’s simple approach, but on the other hand, can bring even greater supplier benefits including to those 80%. Now that might be a first!

I am excited about this product. Whilst Burns e-Commerce seems to cater for this market, to date I have not seen any case studies nor real sales and marketing campaigns. So, perhaps this is the first in the UK market! We want more of these solutions.

References:

• OB10 # 6 - Abbey UK Partners with OB10 and becomes a customer at the same time!

Update 1

I had number of communications with Marcus Hughes, and now have a better appreciation for the product and service offered. Few clarifications, according to Marcus:

1. The deduction is a small discount (i.e. interest) charge from the payment to the supplier, which reflects the credit quality of the buyer, who is Abbey’s principal client.
2. This opportunity will attract more than 20% of suppliers, since many of the smaller suppliers will be willing to key invoices onto the web portal or use a PO flip module in order to get the faster cash flow at a lower cost of finance than they themselves can achieve direct from their existing bankers or factors.

Popularity: 35% [?]

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Just to let you know that I am experimenting with a new page titled “News”, which tracks Google News on “EIPP” and “e-invoicing”. There is not much value addition here, as you can set this yourself. But it will help me to find stories easily. In the past, I have received news releases directly from OB10, American Express and Accountis. Feel free to e-mail your story to manoj [at] ranaweera [dot] name.

Popularity: 5% [?]

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Note (1st October 07) - I have tone down the following article which was posted on 27th July 2007.

There has been numerous occasions when I wanted to write about Mark Morahan but have resisted the temptation. But this article caught my eye. I came to know Mark through Morahan International, he set-up with few colleagues in 2003/04. Instead of talking about his previous business, lets look at his new business. One thing I can congratulate Mark on is about “never giving up”. Unfortunately or fortunately (depending on your view point) I have become bit like Mark, but in my case you get what you see. The purpose of this article is to review his new business and not the past business which I know very well of. So, let’s get on with it!

The new name of his business is United Data Ltd and the product is called ExDox. Mark is a great sales man, and a great persuader. I can criticise every sentence he has written on this job advert. But that would not help you or me.

According to Mark:

“When an organisation receives a structured document, such as an invoice, it has to employ data entry staff to copy the fields of data back into their accounts package. The cost of this is typically �1 to �5 per invoice. Until now, there has been no cost effective way of linking computer systems so that those invoices could be sent electronically. With the launch of ExDox � in June 2007, that is about to change. An organisation just needs an internet connection and a piece of software called a ?connector?. It can then send and receive invoices electronically. The result: An organisation receiving 250 paper invoices per day would need to employ two to three people to complete the data entry. This same task can no be completed in minutes, simply by pressing a button. The cost? There is no capital outlay, organisations pay for what they use, which is 25p per transaction. This is cheaper than the stamp they use!”

I for one fully agree with Mark except for making it sounds so simple and the claim for being the first in the market place. Extracting data from a system is much easier than writing into. You could use data import/export facility built into accounting and financial systems as well as APIs. Most APIs were developed without any consideration given to data exchanges with trading partners. They were meant for simple exchange with spreadsheets and similar office applications. The other route is through the printer driver, which is gaining more attention. But printer driver technology only works one way. I for one would like to see more clarification on how ExDox intend to exchange documents. Other competitors in the market place for printer driver technologies includes Accountis and Transcepta, both proven with real customers.

In the case of ExDox, I have not yet seen any case studies. Given that it was intended to be launched in June 2007, most likely the deadline would have not been met, given my experience of software development. But in any case, I welcome another player to the market, especially one that has similar thoughts to myself. Based on my understanding, ExDox (whatever the name used now) would have taken more than 3 yrs to built. I can only congratulate Mark on surviving this long with his original idea. Most people would have given up way. But hey! that’s part of the startup scene.

Let’s look at the franchise model Mark continues to sell. The idea seems to be that you sell franchises to number of local businesses who would enroll customers on to ExDox platform. I assume they are on a revenue share model. The price for each franchise used to be couple of grand in 2005 but this may have gone up considerably (remember Mark is a great salesman!) by now.

Mark also states:

“We already have thousands of organisations across the country that will be MANDATED to join ExDox. Trials have shown that there is an 80%+ closing rate. The Partners role will be deal with those organisations that have been MANDATED to join. United organise the appointment for you. You will typically earn �1,000 to �5,0000 per annum for every mid and large sized organisations that you sign up to become a member of the ExDox network.
United will organise one to four seminars per month. Typically these will attended by 40 to 60 SME organisations to learn more about ExDox and to undertake training on how to use ExDox. Your role will be to present those seminars. You would get paid between �1,000 and �1,500 for every seminar.

Who can resist above! Great once above actually starts to take place. At this stage you are selling dreams. I understand that there are lot of “letter of intents”. But doing it for real, overcoming deployment challenges and those human beings at the other end is the nightmare scenario. Over optimism sometime could turn round to bite you, making people frustrated and wondering what happened to their investments.

Mark goes to say:

“After passing a three month probationary period you will receive an exclusive licence for your area. You will be given a limited company, which you will have a 100% shareholding. This will be yours to sell in the future. Your earnings will in excess of �100,000 p.a. in 12 months or you will be below target. This figure will grow substantially in the next two years. You will be in at the start of a business opportunity that many have stated will be the fastest growing sector since the advent of the mobile phone industry? A significant shareholding in United Data GB Ltd, subject to reaching qualifying targets. The intention is to go public in four to five years. Those shares, if we reach our targets, could be worth seven figures.
A Regional Director will assist you in every conceivable way, in building your business.

And lastly:

“Who we are: A consortium of IT / document management & business services companies throughout the country formed United Data GB Ltd. We need other like minded people and companies to join us in this partnership. Your skills and attributes: Above all we want people who share our vision and want to build a business not just perform a ?job?? We especially welcome applications from people who have run their own companies and have exceptional communication skills.? Hungry to succeed.? Extensive experience of presenting to tier 1 organisation OR selling to the SME market OR within the training industry. ? Can work unsupervised, setting own targets and priorities.? No IT experience is necessary. This is a business services sale. Full training will be given. Apply via email to Mark Morahan with a covering letter stating your suitability”

From my point of view - history is history. No one else would dare attempt to franchise a document exchange hub. So, Mark is without any doubt a first in this!. I wish him all the best! I am for one like to see much more competition in this market place. I am a great believer of partnerships. Selling direct is hard, but convincing other companies to sell on your behalf is even harder. I will continue to watch the space with interest. Perhaps I will also do an article on Robin Colla and the team, the other startup to emerge from the past business.

Disclaimer: I have not reviewed the website, but will do on another occasion including introducing other personalities driving this initiative forward.

Technorati Tags: Mark Morahan, Morahan International, MI Document Network, ExDox, United Data GB Ltd, eipp Hubs, eipp, e-invoicing, Robin Colla

Popularity: 30% [?]

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On 19 July 2007, OB10 and GXS announced a partnership to build an integrated e-invoicing solution. Few years ago, perhaps this would not have happened. XML was going to rule the world - EDI was dead, they said. Today, the level of market penetration by both EDI and XML combined is still very small. Paper continues to rule the world. Hence the realisation that we all need to work together whilst safe guarding competitiveness at bid level.

Take Causeway’s Tradex for an instance; it has the capability to convert paper to/from data as well as XML to/from EDI. Tradex links with GXS for document exchange on behalf of number of clients. Whilst we all want all transactions to go through one’s hub, we must realise that customers may not be too keen to scrap their EDI investments. So, the EDI and XML worlds have come to co-exist, as same as XML and paper/scanning/OCR solutions.

According to Jamie Gunn, CEO of OB10:

“From OB10’s perspective, this partnership represents the coming together of two leading technology companies that advance the automation of the global supply chain, helping it move faster and eliminating costly errors. It also satisfies a need for customers making investments in supply chain outsourcing where the invoice process is just one component of the full order-to-cash process. Customers will benefit from a high percentage of first-time, straight-through, regulatory-compliant order-to-pay processing.”

According to Bobby Patrick, SVP and Chief Marketing Officer of GXS:

“By partnering together, GXS and OB10 will offer customers a global e-invoicing solution that utilizes the scale and functionality of GXS Trading Grid and the unique nature of OB10’s E.U.-compliant e-Invoicing service. We look forward to working closely with OB10 to explore the ways in which this service can benefit our customers in Europe and abroad.”

So what does this mean? It means another sales and marketing channel for each of the company involved. Each has a better opportunity to increase electronic/paper ratio, giving higher level of benefits to customers. How will the competition respond to this announcement? The only other real challenge in the town is the Hub Alliance (ignoring Amex/Harbor Payments and Xign/JP Morgan for a minute). However, one should not under estimate the power of sleeping tigers such as Causeway’s Tradex.

References:

• OB10 # 6 - Abbey UK Partners with OB10 and becomes a customer at the same time!
• OB10 #5 - Teams up with KeyMark
• OB10 - steaming ahead with e-invoicing
• capturing the essence of e-invoicing by OB10
• Jamie Gunn on Sky Radio
• East Riding of Yorkshire Council selects OB10

Popularity: 30% [?]

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According to the press release today, OB10 has announced a partnership with Abbey UK Corporate Banking, part of Santander Group. The emphasis is on cash flow benefits and processing cost savings to businesses in the UK, Europe and internationally. According to the press release:

The new service, Supplier Payments, is aimed at large corporates, mid-corporates and public sector entities who wish to make their supply chains more competitive by improving working capital management and cutting the costs of Accounts Payable and Accounts Receivable processing.

Nothing new here! According to David Goucher, Managing Director of Abbey UK Corporate Banking

?Supplier Payments is a proven global working capital solution that allows your suppliers to be paid quickly while you realise value through extended payment terms or lower cost of goods and services. The solution enhances business?s cashflow, reduces cost and strengthens supply chains. Integration with OB10’s global e-Invoicing network accelerates the Supplier Payments benefits, invoices can be processed quicker, costs are reduced and it completes the purchase-to-pay cycle with e-remittance advices.?

Ah! does this means OB10 can now cater for exchanging remittance advices electronically? If so, then that is a positive development for OB10. What took you so long? Other hubs have been offering these services for number of years. Better late than never!

Abbey is leveraging Santander Group?s technology and extensive experience in reverse factoring - a specialist form of supply chain finance - to enable suppliers to be paid quickly at a lower financial cost than generally available to small and medium enterprises through more traditional borrowing products. This in turn helps large buyers at the top of the supply chain to extract value through benefits such as free Supplier Payments, lower cost of goods or an extension in trade credit terms.

Yes! its all about stretching the invoice cycle (time between raising an invoice and actually seen the cash in your bank account), which is generally termed as supply chain finance. The purchaser wants to pay as late as possible. Supplier wants the money yesterday. Here comes the invoice financing industry to fill the gap. Supplier gets bit less money as fees and commissions have to be paid. But 90-95% money in the bank today is better than waiting 30 to 90 days. To fully understand their offering, one need to engage in a detailed discussion.

So, let’s hear from Jamie Gunn, CEO of OB10

?The partnership will provide the next level of e-Invoicing, something quite revolutionary within the buyer/supplier relationship. By combining OB10?s knowledge of global invoicing with Santander Group?s extensive experience in supply chain financing customers will be able to leverage a unique solution to deliver significant cash flow benefits as well as processing cost savings.?

Now what I am still not sure is what additional functionality has OB10 added to their standard product. Rumour is that they are building added functionality. This was hinted by Jamie when I met him earlier this year. So has he done it? Is this the first of a series of announcements?

Marcus Hughes, new Head of Financial Supply Chain Solutions at Abbey says:

?This joint proposition from Abbey and OB10 gives us a unique position in the market, combining faster cash flow with efficient processing and improved control and visibility. The accelerated matching and approval of invoices and purchase orders enables us to purchase receivables from suppliers earlier in the trade cycle, hence delivering faster cash flow to suppliers.?

Did I hear it right, matching invoices and purchase orders! Is this within OB10 functionality block or outside it? The last sentence almost sounded as it is Abbey UK who has bought the product/service from OB10, rather than offering a joint proposition to the market. I am confused? If one is confused, there is only one thing to do, yes you guessed right, pick up the phone.

Outcome:

• Left voice mail for Clare Briggs at OB10.
• Spoke to Steve Ainger, Press Officer at Abbey. Perhaps I will hear from Marcus Hughes, who knows. Does Abbey speaks to bloggers?

It’s not worth hassling Jamie Gunn for this, even though this is strategically important for the UK market place. With respect to Supply Chain Finance, Burns e-Commerce is trying to do something similar and others are way behind. Yet as expected Americans are way ahead of us - hence the recent acquisitions by JP Morgan Chase and American Express into Xign and Harbor Payments respectively. When is Accountis going to bring a similar solution with, you know who?

References:

• OB10 #5 - Teams up with KeyMark

• Could Hub Alliance be bigger than OB10 and Ariba Supplier Networks?
• OB10 - steaming ahead with e-invoicing
• capturing the essence of e-invoicing by OB10
• Jamie Gunn on Sky Radio
• East Riding of Yorkshire Council selects OB10
• Burns e-Commerce, Accountis, OB10 and Causeway get new facelifts in 2006

Technorati Tags: OB10, Abbey, Abbey UK Corporate Banking, Marcus Hughes, Jamie Gunn, David Goucher, supply chain finance, suppliers, purchasers, buyers, accounts payable, matching

Popularity: 30% [?]

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OpenCoffee Manchester 5th event was held on past Tuesday at the same venue. Here are some pictures:

Attendees

1. Stewart Townsend - Sun Microsystems - Stewart and I are collaborating on number of initiatives
2. Aldo De Leonibus - Director of Inventya. He also brought two of his colleagues
3. Siobhan Clarke - MBA Student from Manchester Business School
4. Khurshid Valli - Halliwells - He is interested in working with start ups as well as those companies who wants to do business in India
5. Paul Rouke - PRWD- Paul may take up office space at Daresbury Innovation Centre
6. A new face who specialises on maps

Coming Up 

1. OpenCoffee Manchester - 6th Event - 25th Sep
2. NW StartUp 2.0 - 20th Sept
3. Mashup* Manchester - 18th Oct
4. Girlie Geek Dinner Night - Nov organised by Valerie De Leonibus and supported and promoted here (among other places).

Sponsors

• Sun Microsystems will continue to support all my event initiatives. With Stewart’s help, we will get a monthly mail shot out. Please add your details here if you wish to be included in the mailing list.
• In addition KPMG Manchester continue to support NW StartUp 2.0 events. I am looking for other sponsors, one each from industry sector/segment, e.g Wanted: Bank, Legal Firm, Software House, etc etc

Facebook

I started using Facebook few weeks ago as my Internet buddies such as David Terrar, Dennis Howlett and Paul Walsh started sharing their great experiences with Facebook. I believe now I am trully converted. I have also set-up following groups within Facebook:

• OpenCoffee Manchester - 22 members so far. Please sign up
• NW StartUp 2.0 - 4 members

Upcoming.org

• Events will continue to be added to upcoming.org as well as Facebook for the time being until everyone has switched to Facebook.  

References:

• OpenCoffee Manchester - 4th Event
• OpenCoffee Manchester is moving in the right direction
• OpenCoffee Manchester - 2nd Event
• First OpenCoffee Manchester

Popularity: 16% [?]

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Andrew K. Reese and Sarah Murray recently published a comprehensive article on Supply Demand Chain Executive honoring the Supply Chain leaders of 2007. If you are interested in the Supply Chain, I recommend you to read the full article here.

As you very well know, Supply Chain continues to have a significant presence within the Board Room environment. CEOs, CFOs and CPOs around the world now have better tools and Knowledge Workers to help them steer towards Supply Chain Excellence, delivering both bottom and top line results, as well as helping those companies who understand the subject well to achieve a competitive advantage from Supply Chain Excellence.

2007 Pro of the Year - Milton Young, Subsea Global Sourcing Director, FMC Technologies

Practitioner Pros to Know

1. Jean Baderschneider - Vice President, Procurement, ExxonMobil Global Services Company
2. Tim Beauchamp - Senior Vice President, Distribution Operations, Corporate Express
3. Karl Braitberg - Senior Director of Global Demand Management and Planning, Cisco Systems
4. Scott Brown - Manager Supply Chain Analysis & Design, Plexus
5. Steven J. Cassady - Director ? Global Procurement, Kohler Co.
6. Richard Garza - CIO, The Navy Exchange Service Command (NEXCOM)
7. Myron Gramelspacher - Vice President, Global Logistics & Indirects, Greif Inc.
8. Steven Lee - General Manager, Global Indirect Purchasing, The Timken Company
9. Chris Martin - Senior Director, Purchasing, Universal Orlando
10. Dana Mathes - Global Supply Chain Director of Logistics Operations, The Dow Chemical Company
11. Eugene McCabe - Executive Vice President for Worldwide Operations, Sun Microsystems
12. Mary McDaniel - Vice President, Materiel & Corporate Sourcing, FedEx Corporation
13. Robert Moon - Senior Vice President, CIO, LeapFrog Enterprises
14. John Paterson - Chief Procurement Officer, IBM
15. Mitch Plaat - Chief Procurement Officer, Con-way Inc.
16. Peter Russano - Vice President of Operations, Inviro Medical
17. Larry Rydzewski - Chief Operating Officer, Berlin Packaging, LLC
18. Heather L. Sheehan - Corporate Director of Strategic Sourcing and Logistics, Danaher Corporation
19. Harold Upton - Vice President, Strategic Business Processes, Sunsweet Growers Inc.
20. Roger Weingarth - Senior Vice President, Product and Manufacturing Operations, Calix

Provider Pros to Know

1. Demand Management/Forecasting & Planning
   • Robert F. Byrne, president and CEO of real-time forecasting solutions specialist Terra Technology
   • Michael Gilliland, product marketing manager ? forecasting at business intelligence solution provider SAS Institute
   • John Sicard, executive vice president, development and service operations at Kinaxis
   • Charles N. Smart, president and CEO of demand and inventory management solution provider Smart Software
2. Sourcing & Procurement/Spend Management
   • Jay Baitler, executive vice president of office supply giant Staples
   • William Blair, CEO of sourcing and supply chain solution provider Co-exprise.
   • Kevin Costello, chief commercial officer at spend management solutions provider Ariba
   • Philippe Courregelongue, director of consulting services for EMEA at supply and contract management specialist Emptoris
   • William (Bill) DeMartino, director, spend analysis at supply and contract management specialist Emptoris (www.emptoris.com)
   • Charles Dominick, SPSM, president of procurement training provider Next Level Purchasing (www.nextlevelpurchasing.com)
   • Michele Flynn, CEO of business advisory services provider Expense Management Solutions (www.expensemanagement.com)
   • Burton M. Goldfield, CEO of on-demand spend management solutions provider Ketera Technologies (www.ketera.com)
   • Dr. Robert Handfield, Bank of America Distinguished Professor of Supply Chain Management at North Carolina State University, founded and directs the Supply Chain Resource Consortium at NCSU (scrc.ncsu.edu)
   • Albert Jacobs III, vice president of procurement solutions stalwart Puridiom (www.puridiom.com)
   • Tim McEneny, president and CEO of PurchasingNet (www.purchasingnet.com)
   • Milap Shah, senior director with supply chain technology and consulting firm Global eProcure (www.globaleprocure.com)
   • Jai Shekhawat, CEO and co-founder of contingent workforce management and services procurement software company Fieldglass (www.fieldglass.com)
   • Steve Simko, vice president of operations at procurement services provider ICG Commerce (www.icgcommerce.com)
   • Bilal Soylu, chief technology officer at Verian Technologies (www.verian.com)
   • Ronald D. Southard, president and CEO of Intesource (www.intesource.com)
   • Jim Wetekamp, vice president of consulting and solution strategy at supply management solution provider Verticalnet (www.verticalnet.com)
3. Fulfillment/Logistics
   • George Abernathy, executive vice president and chief marketing officer at lead logistics provider Transplace (www.transplace.com
   • Subhash Chowdary, CEO of Aankhen Inc. (www.aankhen.com)
   • Gary Girotti, vice president with the Transportation Practice at supply chain consultancy Chainalytics (www.chainalytics.com)
   • Rene’ Jones, founder of Total Logistics Solutions (www.logisticsociety.com)
   • Gerald McNerney, senior director, transportation, distribution and logistics solutions at Motorola ? through its acquisition of Symbol Technologies (www.symbol.com)
   • Mark Millar wears two hats as honorary chairman of the China Supply Chain Council (www.supplychain.cn ) and also as director of strategic business development at UPS Supply Chain Solutions (www.ups-scs.com)
   • Dr. Nissim Ozer, chief technology officer at RF Code (www.rfcode.com)
   • Jim Parker, chief technology officer at warehouse management and fulfillment systems provider Supplier Systems Corporation (www.suppliersystems.com), cited as one of the founders of the electronic data interchange (EDI) industry in North America, promotes the vision of a rational, seamless and visible supply chain, from supplier through to end customer, with the supply chain strategically poised to manage the smooth flow of the goods ? and information about the goods ? that ensure the success of the broader enterprise.
   • Ann S. Price, president and CEO of supply chain execution software provider Motek (www.motek.com)
   • Jim Smith, president of Avnet Logistics (logistics.avnet.com)
   • Rick Tucker, vice president of product development with LeanLogistics (www.leanlogistics.com)
   • Mark Wick, co-founder and senior vice president of engineering at Blue Agave Software (www.blueagavesoft.com)
4. Consulting/Analysis/Education
   • Andrew Bartolini, Vance Checketts and Vishal Patel constitute the Global Supply Management Team at industry analyst firm Aberdeen Group
   • Pat Bower, Supply Chain Planning Practice manager with supply chain management consulting services firm Plan4Demand
   • Shoshanah Cohen, Rick Hoole, Hiroyuki Irie and Joseph Roussel, of the Supply Chain Innovation Practice at PRTM Management Consultants
   • Sergio Retamal, president and CEO of supply chain consulting and services provider Global-4PL
   • Tracy B. Stephens, CEO of the Global Supply Chain Management Practice at services firm Resources Global Professionals
5. Enterprise Systems/ERP
   • Joey Benadretti, president of SYSPRO USA (www.syspro.com).
   • Edward (Ned) Blinick, vice-president of sales and marketing at Blinco Systems (www.blinco.com.
   • Donald A. Hicks, president and CEO of supply chain optimization and simulation specialist LLamasoft (www.llamasoft.com).
   • Narayan Laksham, founder and president of lean manufacturing software provider Ultriva (www.ultriva.com).
   • Bob Moyer, president of enterprise product information management (PIM) solution provider FullTilt Solutions (www.fulltilt.com
   • Jeff Nigriny, chief security officer at aerospace and defense industry collaborative business network Exostar (www.exostar.com) and president of data security not-for-profit CertiPath (www.certipath.com)
   • Dr. David F. Ross, senior learning consultant with enterprise application provider Lawson Software (www.lawson.com)
   • Sunil K. Singh, president and CEO of Informance International (www.informance.com)
   • Jeffrey Smith, vice president of marketing at Instill Corporation (www.instill.com)
   • John Zepecki, senior vice president of supplier relationship management at enterprise solution provider SAP (www.sap.com)
6. The Bloggers
   • Jason Busch, founder and managing director of Azul Partners, a marketing consultancy that advises software and services companies, focuses his popular and astute Spend Matters blog (www.spendmatters.com) on all matters related to spend management.
   • David Bush, vice president of business development at on-demand e-sourcing specialist Iasta, offers his daily insights on e-sourcing and procurement best practices at eSourcing Forum (www.esourcingforum.com).
   • John F. Martin, senior vice president of strategy and technology at enterprise services procurement IQNavigator, has spread the word about software-as-a-service (SaaS) technologies on his Building SaaS blog (buildingsaas.typepad.com).
   • Tim Minahan, the widely recognized expert (and former Aberdeen analyst) on spend management and currently senior vice president of marketing at on-demand supply management solutions provider Procuri, now champions the strategic role of the Purchasing function at Supply Excellence (www.supplyexcellence.com).
   • Annrai O’Toole, CEO of technology company Cape Clear Software (www.capeclear.com), has authored a blog called “Clear Thinking” that is regarded as an industry resource that cuts through the clutter running rampant in the service-oriented architecture (SOA) space. More at www.capeclear.com/annrai/.
   • John Radko, chief technology strategist with B2B connectivity and integration specialist GXS, promotes the advancement of B2B integration and supply chain automation on his On-Demand B2B blog (blogs.gxs.com).
   • Dave Stephens, CEO of open source e-procurement solution developer Coupa (and former head of Oracle’s Procurement Applications division), promotes “the power of effective procurement” at Procurement Central (procurement.wordpress.com).
7. Former Practitioners
   • Dave Gleditsch, chief technology officer for Pelion Systems (www.pelionsystems.com)
   • Mary Beth Green, director of account management with advanced sourcing technology provider CombineNet (www.combinenet.com)
   • Richard McCluney, vice president of account operations at E2open (www.e2open.com
   • Robert A. Rudzki, president and CEO of supply management consultancy Greybeard Advisors (www.greybeardadvisors.com)
   • Jim Schoessling, VP of supply chain services with on-demand supply chain management solutions provider Click Commerce (www.clickcommerce.com)
   • Jeffrey Wincel, principal partner with lean supply chain management specialist LSC Consulting Group (www.lscconsultinggroup.com) got firsthand experience managing supply operations for Donnelly Corporation and TRW-Vehicle Safety Systems, among other companies, before moving on to the consulting side. His book Lean Supply Chain Management: A Handbook for Strategic Procurement is considered a groundbreaking work in bringing together lean manufacturing methodologies and supply chain management.
8. Supply Chain Greens
   • Dr. Jack Mason, president and co-founder of EnergyWindow (www.energywindow.com)
   • Dan Sanker, president and CEO of logistics outsourcing services provider CaseStack (www.casestack.com)
   • Mark Wysong, CEO of Dolphin Software (www.dolphinmsds.com)
9. Indirect Spend Gurus
   • Mike Boult, president and CEO of StarCite (www.starcite.com)
   • David Clevenger, vice president with group purchasing organization Corporate United (www.corporateunited.com)
   • Joe D’Andria, senior vice president of operations with NewlineNoosh (www.newlinenoosh.com)
   • Priyan Fernando, executive vice president and chief operating officer at American Express Business Travel (corp.americanexpress.com/gcs/travel/us/default.htm), has helped evangelize the need for Procurement organizations to achieve greater control over, and savings from, all aspects of their travel and entertainment (T&E) spend, including the so-called “long tail” of employee business services. Last year Fernando spearheaded the launch of the American Express Intelligent Online Marketplace (AXIOM), an online corporate travel booking platform.
   • Patrick Grady, founder, chairman and CEO of employee business services procurement platform provider Rearden Commerce (www.reardencommerce.com)
   • Gary Hare, president and CEO of supplier enablement specialist Vinimaya (www.vinimaya.com
   • John Matthews, executive director of indirect procurement services provider DSSI LLC (www.directsourcing.com)
   • Jason Treida, vice president of operations, founder and senior partner with e-sourcing software and services provider Iasta (www.iasta.com)
   • Janet A. Whitcomb, executive vice president at services procurement specialist ProcureStaff (www.procurestaff.com)
10. Public Sector Supply Management Evangelists
    • Tom Jones, senior vice president and general manager of supply chain solutions at Ryder System (www.ryder.com)
    • James Kelly, CEO and managing principal with sourcing and procurement services firm JVKellyGroup (www.jvkg.com)
    • Gary Lambert, vice president of consulting with IT services provider CGI Group (www.cgi.com)
    • Raj Sharma, president of supply management consultancy Censeo Consulting Group (www.censeoconsulting.com)
    • Ben Walker, vice president for strategy and client solutions at ProcureStaff (www.procurestaff.com)
11. Service Supply Chain Gurus
    • Greg Baxter, president and CEO of service parts planning and logistics provider Baxter Planning Systems (www.bybaxter.com)
    • Zack Bergreen, CEO and chairman of Astea International (www.astea.com)
    • Dr. Morris Cohen, founder and chairman of the board at service supply chain specialist MCA Solutions (www.mcasolutions.com)
    • Keith Forshew, General Manager of the Supply Chain Solutions Group at on-demand supply chain management solutions provider Click Commerce (www.clickcommerce.com)
    • William Huyler, president of Servigistics Pricing Services at service parts management solutions provider Servigistics (www.servigistics.com)
    • John Reece, president and CEO of ClearOrbit (www.clearorbit.com)
12. Extended Enterprise Gurus
    • Mike Anguiano, president data solutions for vendor management solution provider CVM Solutions (www.cvmsolutions.com
    • Jim Frome, executive vice president and chief strategy officer for EDI outsourcing specialists SPS Commerce (www.spscommerce.com)
    • Mary Gallagher, VP of global professional services with supplier management and procurement automation company SciQuest (www.sciquest.com)
    • Raj Khoshoo, vice president of strategic initiatives at product lifecycle management solutions provider UGS (www.ugs.com)
    • Michael Lyle, president and CEO of InfinityQS (www.infinityqs.com)
    • Rajan (Raj) Penkar, vice president for global solutions and implementation management at UPS Supply Chain Solutions (www.ups-scs.com
    • John R. Sharman, Jr. , president and CEO of Perfect Commerce (www.perfect.com)
    • John Zepecki, senior vice president of supplier relationship management at enterprise solution provider SAP (www.sap.com)
13. Financial Supply Chain Evangelists
    • Joe Juliano, CEO of PrimeRevenue (www.primerevenue.com), has been a thought-leader in the emerging field of supply chain finance, and he has worked to promote the role of Supply Chain in contributing to the enterprise’s bottom line by helping to remove inefficiencies in financial flows that drive the physical and goods supply chain.
    • John Brockwell, global supply chain practice lead for JPMorgan Chase Vastera (www.vastera.com), believes that companies must work to increase efficiency not only across the physical supply chain but across the financial supply chain as well, integrating the two and ensuring that critical information about the value chain is visible across the enterprise to ensure better decision-making.
    • Tom Glassanos, president and CEO of Xign Corporation (www.xign.com), a provider of electronic invoice and payment solutions for accounts payable and accounts receivable, has worked to educate supply chain executives on how enterprises can turn accounts payable into a profit center for the enterprise, emphasizing that, with the right tools, payables can pay significant dividends and increase working capital.
    • Graham R.F. Napier, president and CEO of global trade management solution provider TradeBeam (www.tradebeam.com), evangelizes the importance of the supply chain in executive management during his regular speaking engagements before industry audiences, and he has pushed executives to focus on the value in concurrent management of the physical and financial supply chains, pointing to the opportunities to integrate these chains to take maximum advantage of global trade.

Wow! Importance of bloggers has also been recognised. Andrew and Sarah has certainly done a marvellous job of putting this list together. What a treasure!

Technorati Tags: Honoring Supply Chain Leaders 2007, supply chain management, procurement, spend management, financial supply chain

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All of us are in business (with respect to B2B) to provide a product and/or service to satisfy a business need and in most cases to relieve a pain suffered by a business customer. In doing so, we all have two broader options that could be followed, these being:

1. Provide a solution combining product and/or services to meet the customer need near to 100%.
2. Offer a standard product and/or services with minimum or near zero customisation.

The above two approaches attract many different challenges for the supplying organisation.

Fully Customised Offering:

1. Your ability to standardise your offering becomes a near impossibility.
2. You would need to maintain a broader skill base attracting a higher wage cost.
3. Maintaining up to date technology and knowledge becomes a costly exercise.
4. Suddenly the overheads start to go up.
5. Your offering becomes expensive for the customer.
6. Your offering becomes affordable by only the largest customers.

Standard Offering:

1. Convincing customers to change their business processes to meet you standard offering is prone with challenges.
2. Your standard offering must work in most circumstances. Simplification becomes the key to success.
3. Overheads can be kept low.
4. Therefore, it becomes affordable by large number of customers.
5. Becomes an affordable solution for smaller companies as entry price can be kept low.
6. Possibility of the competition getting an upper hand overtime diminishing any current market share becomes higher.

I acknowledge above is not an exhaustive list, but I hope you get my point. Now bring the e-invoicing/EIPP hubs into this environment. Let’s look at those that falls into the customisable and standardise offerings (two examples for each to keep this article short):

Customised hubs

1. Accountis - I picked them not because of their customisable functionality, but because of their offering of dedicated hub for each large purchaser. This approach is certainly not one preferred by me, but if it generates revenues and profits for Accountis, then who am I to object. The problem with this approach is that it involves hardware installation (ok, Accountis may offer a partition within an existing server bank and/or may house it in the same rack in the data centre) as well as multiple entry points for companies that wants to trade with number of Accountis’s customers. I know they have a solution to reduce this nightmare. But I simply think that they have made their life difficult by taking this approach - perhaps driven by the first customer. This has also influenced their strategy to an extent that this has become their de facto offering, i.e. they would not dream of offering a single hub for multiple customers. So it has become one-to-many offering with possibility of many customisation requests.
2. Causeway’s Tradex - Over the last few months, the platform has evolved to be one with a rich list of connectivity options, incorporating paper to data as well as data to paper options. Yes, you heard me right! In addition, Tradex Active will give it that extra edge in convincing SME/SMBs to join. Being a founder of the Hub Alliance, it can exchange documents with businesses connected to 4 other hubs, 4 Europeans (2 British) and 1 American. It already exchange documents through the two British hubs. I have also been instrumental in collaborating with another competitor to explore the possibility of offering even more ambitious SME/SMB offering. The outcome is a single hub with many connectivity options as well as increasing number of value adding functions, e.g. receiver side business rules. This is great for the customers, as it provides a large number of priced options, to meet ever increasing customer needs. However, this approach makes the life difficult in terms of maintenance and support as well as sales and project execution. For example, for one particular option, I believe there is only one customer. I am not commenting here on profitability of each option, but the difficulty in managing them going forward whilst spreading the scarce resources too thinly. Without adding further human resources will continue to challenge them going forward.

Standard hubs

1. OB10 - Runs a single hub similar to Causeway’s Tradex. Up to now, they have catered for invoices only. Target has always been the larger customer that could generate high transaction volumes. As part of their bid strategy, they continue to give guarantees for trading partner roll out, e.g. bringing x% of transactions electronically within y number of months. Difficulty of giving such guarantees is that if you keep missing these, OB10 will end up paying significant penalties as well as loosing credibility in the industry. To overcome these, they need to have a standard proposition (i.e. product and services) that could be applied each time with minimum or near zero customisation. Otherwise, these projects will face significant difficulties to complete on time. OB10 takes a global view of the market unlike Accountis (global wannabe!) and Causeway’s Tradex (UK). With this in mind, they have set-up offices in the USA, UK and Malaysia covering the three time zones. So, their challenge is more of meeting multinationals’ global expectations. I always questioned their strategy with respect to single product. I believe they are now developing additional products with value adding functionality to meet customer requests and perhaps reposition the company. While this is great news for customers, this approach will no doubt create further challenges internally - managing multiple expectations. Will OB10 raise further funding to support growing resource requirements?
2. Transcepta - ah! the new kid in the block. Senior guys seem to know where their market ends, leaving specialists to undertake accounts payable automation. They are going after transaction volumes, which is directly proportional to revenues. If that is the case, their proposition must be simple and standard. At present, just like OB10, they cater exclusively for the invoice. Uses printer driver technology to extract and push the invoice to their portal (they do not favour the term, hub due to historical reasons). This has allowed them to bring customers (A/R side) on board within hours, leaving the harder work to their partners, i.e. A/P side. As a young company, this is a very sensible approach. In addition, they offer payment solutions through ACH, thereby offering an easy solution to settle payments. The challenge will come when customers’ demand more, and they will need to find ways to add new functionality whilst increasing the number of partners for A/P integration. Expansion outside US will present another set of challenges. On this regard, their closer association with Esker no doubt will be very helpful.

As your business continues to grow, you need to take a step back and identify potential business process failures or set-backs. This could be in sales as well as project execution (over sales is a nightmare!). Offering additional functionality without understanding their impact on your business will result in creating additional bottle-necks. A clear step by step approach to global domination ought to help ease these difficulties.

Longer post than I anticipated. Please let me know whether above makes any sense.

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I had the opportunity to attend OpenCoffee London yesterday morning, as I was in London for a private matter, having stayed the night before at Bourne End where Causeway Technologies is Head Quartered. As expected, the buzz is still there. But except for Saul Klein, I could not see any investors or deal makers among the entrepreneurs and those who thrive on providing services to startups and early stage companies. So, not much difference from OpenCoffee Manchester, except that we only have one real web 2.0 venture capitalist spread too thinly among Leeds, Sheffield, Manchester and Liverpool. Yes, that’s you Mr. Ed French.

I also had a chance to have a quick chat with Saul about my experience of running the OpenCoffee Manchester. We have a much smaller crowd, which creates an environment for much more deeper conversation than that could be provided in an event such as OpenCoffee London. In this case, I should use this to PR advantage rather than complain about the lack of numbers.

In addition to Saul, I also met Vincent Camara for the second time, only to learn he is part of the HMRC and Cap Gemini’s Aspire team that I pitched couple of years ago on behalf of ebdex before the first line of code was written.  I got in through the very top - a chap called David Varney. Vincent is involved in developing various form based solutions such as PAYE. Obviously, Vincent is popular among the startups because of his own startup Intruders.tv which focus on interviewing startup founders. I for one look forward to continuing my relationship with Vincent with the hope of seeing him and his camera making a trip north to one of the NW StartUp 2.0 events.

New faces I met included:

1. Nagib Tharani - Co-founder and CEO of Vorari Ltd - He has some sort MS Exchange type solution, which is worth having a look.
2. Eugene Kouumdjieff - Director of e.man - we had a long conversation, but forgot to ask how to pronounce his last name. Seems like a good chap to collaborate.
3. Michael O’Shea of Wicked Uncle - “how to buy cool presents for small people” - very clear message on his business card.
4. Ryan Sher -  Group Director, Managed Services of FLAG Telecom - He is working on an on-line game idea.
5. Patrick Hennessey of Squadgod.com - A football site. Knows Chris Haslam from footy247, who is based at Daresbury Innovation Centre, where I am based. Patrick was in the process of launching his site and was eager to get the attention of press, etc, so did not get much of a chance to have a decent chat.
6. Richard Solomon of Ourpetition.org - He has managed to get over 50 MPs including Tony Blair for an on-line campaign, which was set up to get attention on the quality of healthcare provided in the UK. He no longer blogs at ourpetition.org, and is working on an idea around an advertising platform.

Looks like I have not spoken to many people. All seems to be startups! Where were those who have started up and getting some traction? They were clearly not there! Without their participation, how can the guys and gals with ideas get that vital learning.

In conclusion, I did not feel the wow factor, this being my third visit to London event. Will this be sustainable in the long run - I fully agree it’s a great concept. Some point in time, the web 2.0 buzz will become a boring subject, what can OpenCoffee do to continue its survival? Seedcamp is one answer, but again its around web 2.0. Plugging enterprise 2.0 will have some effect. 3 to 5 years max is my gut feel. Enough time for Venture Capitalists to get some return, perhaps!

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Ryan Allis, CEO of iContact pinged me the other day to invite me to a party in Durham (USA) to celebrate closing of $5.35 million funding package from Updata Venture Partners and IDEA Fund Partners. How nice? Unfortunately, I hate to leave wet Manchester (UK) for no doubt sunny Durham. Ah! its time I do another mail shot using intelliContact, a product from iContact.

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As a target, I try to blog at least once a day. It seems that I have not blogged for six days, which feels like a month for a blogger. Professional bloggers such as Dennis Howlett aims to get 6 posts out daily, of varying quality. Some are pure originals and others are inspired by articles read in the blogsphere or the traditional press including web sites. This seems to be my fourth blog post today, certainly trying to catch up for the lost time. Dennis Keeling reckons getting couple of posts a year is sufficient - he put it down to quality vs. quantity. I do not quite buy that!

There are number of stories I have yet to write, these includes:

1. BASDA Marketing Forum and Dinner
2. CxO Event at Oracle organised by Library House - Doug Richards did not turn up
3. Meeting Ariba at SAP Sapphire 07 in Vienna in May 07
4. Bit more coverage on SAP GRC - a follow up to earlier post - Just learned Amit Chatterjee is leaving SAP GRC to take a post elsewhere within SAP. I was just getting round to understand SAP GRC
5. Acquisition of Xign by JP Morgan Chase - lost the original drafted post due to Qumana troubles
6. EIPP Vendors riding on Andrew Bartolini’s Aberdeen report - lost due to Qumana troubles
7. Hub Alliance - the value propositions

That’s enough for tonight. Its nearly mid night in the UK. I still got couple of hours work to do and pack my cloths for two days in Bourne End. Catch you soon.

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Having said how great Transcepta is with respect to helping the small guy, let’s quickly look at their accounts payable and accounts receivable products and services.

Accounts Payable (A/P) & Accounts Receivable (A/R) Automation

Once again, there are no surprises here with respect to Accounts Payable (A/P) integration. The target is the large company having an ERP system, i.e. your average Oracle (including PeopleSoft and JD Edwards) and SAP user with high transaction volumes and high number of suppliers (and customers).

However, its a different scenario at Accounts Receivable (A/R), where printer driver technology is used to extract data from supplier/vendor applications. This is what I called the secret weapon in my previous article. In the case of Transcepta, the translation from printer spool file to XML takes place at the hub. Whereas in the case of Accountis‘ ebPrinter, this takes place at client end. In the case of ebdex, this was supposed to have taken place at client end. Out of the two solutions, the cleanest is the solution from Transcepta. Different thought processes go into deciding where translation takes place, e.g. translation at client end means less resource utilisation at the hub end, but this also means potentially more things going wrong at client end.

Why not treat a company both as a Supplier/Vendor and Purchaser/Buyer?

This must be the ultimate goal of any e-invoicing and EIPP vendor, i.e. treat your customers both as a supplier/vendor and a purchaser/buyer. In a nutshell, integrate their accounts payable and accounts receivable systems, thereby increasing the transaction volumes and subsequent revenues. Here is a simple 3 step strategy of achieving this overall goal:

1. Bring suppliers on board as web form/interface users - perhaps offer this as a free service. In one respect, you are going after the typical Freshbooks customer.
2. Extract data from suppliers through printer driver technology - this is not as straight forward as one might thinks. You need to know how to read printer spool files and then translate this to XML (or similar) format for interpretation by the hub.
3. Develop a direct interface between the Supplier’s application and the e-invoicing/EIPP hub.

On the other side (i.e. accounts payable end), you have no option but to integrate purchaser’s/buyer’s application with the e-invoicing/EIPP hub on Day 1, as the solution perceived will deliver maximum benefit first for the Buyer/Purchaser. As the Supplier/Vendor moves to stage 3 above, the value will start to increase.

References:

• Transcepta #1 - A breath of fresh air

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Differentiation

Very rarely you find a company that wants to provide a value proposition for the small guy, especially in the e-invoicing and EIPP space. I believe Transcepta is one of these companies, who understands and has found a way to overcome the barriers faced by SME’s joining the e-invoicing evolution. ebdex also understood that without helping the small guy, the level of market penetration by e-invoicing and EIPP vendors with respect to paper will remain negligent. ebdex was about upsetting the status quo. It seems Transcepta is thinking in the same lines. Therefore bringing a breath of fresh air to the industry.

The trick is in getting SMEs to participate in the e-invoicing and EIPP evolution. You need a secret weapon for this. ebdex called it “ebdex ePrinter”, which our development team struggled to develop. Accountis calls this “ebPrinter”, which Rhys Jones developed whilst on holiday. Transcepta does not call this by any name, but have simply built their business around it. At Causeway Technologies, we are also working on a solution, perhaps plug in an existing product! In ebdex’s case, it was just another tool, but was expected to be an early winner. In Accountis’ case, this is a bid winner (e.g. DHL). But Accountis’ model still seems to be about targeting large companies (don’t get me wrong, everyone wants high transaction volumes), therefore without a clear marketing strategy for the small guy. I for one applied for Accountis ebPrinter account and yet to hear from them (perhaps they know me too much to create me an account). In summary, it is no point having the functionality if your sales and marketing plan does not support it. It’s down to either creating a buzz or just been a “me too”. As I said always, a new comer could easily overtake the market incumbents w