The DataServ team has been hearing much chatter lately about the promise of “all electronic” vendor invoice processing. Whether it’s called E-invoicing or a Supplier Network, the concept remains the same: have your vendors submit all invoices in a standard electronic format acceptable to you. We’re reminded of the old Electronic Data Interchange (EDI) days, but there’s a fundamental flaw with this approach that companies should be aware of before they jump in.
If an alternative choice involved changing processes that are completely in your control, your odds of success would definitely be higher. It is an indisputable fact that ANY project that involves managing change in organizations outside of your control is less likely to succeed – no matter how good it sounds!
For proof, all we have to do is study the history of EDI. For many years, thousands of companies spent millions of dollars and countless hours trying to achieve 100 percent EDI. A 2011 Aberdeen Group study demonstrates the difficulty in trying force change across vendors, as even after all these years, nearly 8 of 10 invoices received by companies are still paper-based! If you talk to veteran finance people who lived through the EDI era, they will tell you that it was a grueling experience that led to limited success.
Look for additional thoughts regarding electronic vendor invoice processing on our blog over the next few weeks. In the meantime, please comment on this issue and share your thoughts and experiences with us.