Lee Fisher of AP automation specialist Efficiency Leaders, explains where we stand on the adoption curve.

IDM: Lee, are there any particular barriers to e-invoicing?
Lee: EDI (Electronic data interchange ) was perceived by many to be the potential holy grail of invoicing as everyone would have the ability to order and invoice electronically. The fact that EDI has only been adopted by a very small percentage of organisations globally has lead to the question: What went wrong?

In my opinion, the factors influencing organisations adoption of EDI include:
* Each company may use the flexibility allowed by the EDI standards in a unique way that best fits their organisation’s needs and as such there are many different formats.
* Prior to EDI being accepted and thus effective for both suppliers and customers, both transacting organisations need to agree on a format prior to commencing the electronic data interchange.
* Depending on the document type e.g. Invoice, Purchase Order, there are potentially several EDI formats that organisations need to agree upon and implement.
* EDI setup costs have seen this technology generally only adopted by large corporations.

IDM: What is the penetration of EDI and is it likely that it will impact on many industry sectors to a significant extent?
Lee: Whilst many customers love the idea of transacting with their suppliers electronically, the fact is that many suppliers consider the cost of implementing EDI to be extreme. In my experience, EDI is fairly prevalent in the large supply chain organisations as well as in intercompany transactions throughout multi-national organisations. EDI also exists between organisations that have minimal suppliers or where a large percentage of their goods/services are ordered from only a handful of suppliers.

IDM: When does invoice automation make economic sense?
Lee: Volume of invoices is certainly a factor, however the real consideration should be based on the overall cost for the organisation to accurately process each invoice. Whilst it is often assumed that organisations with low invoice volumes are not a candidate for automation, we have found that several organisations have very large processing costs associated to each invoice due to complex review, receipt, approval and payment of invoices. Additionally, organisations with decentralised capture and or processing of invoices further exacerbates the cost to process.

IDM: Is adoption still low in Australia/New Zealand? Is that changing?
Lee: Due to the points mentioned above, adoption of EDI between customers and suppliers is still low. In my experience, the market generally has a perception that there is only one, expensive way to transact electronically.
Through this education process, organisations are slowly increasing their receptivity to change and therefore adoption of e-invoicing across a wider industry sector and organisation size is increasing. Managers with financial accountability are becoming aware that the cost of processing documents manually is excessive and extends beyond the accounts payable area.

Many organisations are moving away from silo products to handle business unit specific issues, to an enterprise approach where one platform handles document automation for all business units. ELAP (Efficiency Leaders Automation Platform) is able to assist organisations to transact electronically via our electronic transactions module.

This ELAP module is a very economical, intelligent ‘print queue’ at the sender which ‘prints’ and sends an xml document to the customer. The customer is provided with a server based receiver that ingests the data through the same common, auditable, input stream as paper, fax and email. Intelligent automated business rules are then applied at the front end, including automatic line item extraction and validation, before sending any exceptions out via workflow to the wider business users.

Importance on building significant logic into the front end should not be under estimated, as by taking this critical step, organisations are able to significantly reduce the amount of workflow required by the wider business and thus reduce their licensing and professional services costs dramatically.

www.efficiencyleaders.com