Q: For me, the really interesting thing about e-invoicing at the moment is the increased possibilities for business that it raises. What’s your take on it?

A: Well, in the past OB10 was convinced that e-invoicing was the be all and end all - but in many ways it’s just a conduit to better business practice.  Apart from all the obvious advantages – reduced transaction time, fewer errors etc – e-invoicing is nudging its way into the world of supply chain finance and leveraging the data gems which lie within the network. Take for example the amount of bad press surrounding the payment behaviour of the large corporates, and despite the fact that many could pay their suppliers on time, many don’t. Yet, given the right kind of business incentives – i.e. ones where the ROI is tangible – many would like to be able to do so. The right kind of e-invoicing solution can provide both the rationale and the capability.

Q: Like your express payments solution launched last year. Has it been a success?

Yes. We knew it would be attractive, but the demand has been even greater than we anticipated – perhaps as a reflection of the economy and also I guess, the almost obvious nature of the proposal. A good flow of cash which keeps both buyer and supplier happy is always going to be a winner and our initial invitation programme has resulted in a 60% take up.

Q: Sounds like good news. So how does it work?

A: We work with a large financial institution (FI) to supply 3^rd party capital for early supplier payments. Because the vast majority of our buyer customers have a AAA credit rating, the supplier is able to use their buyer’s financial strength to benefit from early payment discounts when they want them. We’ve also partnered with San Francisco based vendor, Taulia for when buyers wish to use their own capital to pay their suppliers early.  With more than $158bn flowing through our network over the past 12 months there’s a lot of early payment opportunities to be had! The beauty of Express Payments is that as far as the supplier is concerned, it’s immaterial where that capital is coming from - it’s the same discount, same timeframe.

Q: Which leads me on to how our relationship with banks could be changing. Do you see e-invoicing becoming a driver to enabling or forcing a change – or even side-stepping banks to some degree?

A:The banks have been incredibly slow to respond to the challenges of the networked economy. To be fair – perhaps they’ve had other things on their minds, and banks like RBS are now beginning to get involved. Most corporates operate at a global level so if you e-invoice, you also need to be sure that you’re compliant across borders and that you have the capability to maximise currency exchanges and make electronic payments. What was traditionally thought of as the preserve of banks is no longer black and white, so there are definitely opportunities for networks to co-exist and even displace these B2B core banking services over time.

Q: And what do you say to those who suggest that initiatives such as dynamic discounting are simply bullying tactics to force suppliers to accept lower prices?

A: Well, really the answer’s simple. No-one is being forced to take the discounts, at least not on OB10. The supplier doesn’t have to do it if they don’t want to. And let’s face it, it’s a much better solution for generating cash flow than Factoring where finance may or may not be given, and quite often the terms are punitive – in some cases more akin to pay day loans. Dynamic discounting and FI backed early payments done properly are brilliant services – and if it’s a solution which keeps people employed by ensuring that come the end of the month, people get paid – then it’s something which is definitely worth having in the armoury. In fact it’s common place across Europe with between 10 -15% of people accepting dynamic discounting as standard – mostly on 2% within 10 days of invoice terms.

Q: So - we’re talking about the evolution of e-invoicing and how it’s developing and growing – where does that leave OB10 when it comes to interoperability? Some people have accused you of sitting on the fence – what do you say to that?

A: Well, I think it suits some people to say that. Perhaps if we weren’t able to defend our stance I’d be worried, but I think our commitment to interoperability is clear. As it stands we already interoperate with 30 different service providers in Europe. At the moment the level of transactions is tiny – but in the next five years it’s going to be a big deal for us and other networks. It’s important that we set core standards around compliance that all the vendors must adhere to – which is one of the reasons European Einvoicing Service Providers Association (EESPA) was formed. This isn’t about forming some sort of cartel, it’s about finding ways to sensibly drive the adoption of e-invoicing across Europe. In fact, I’ve often thought that as the industry develops, EESPA could morph into an association for good practice – i.e. being a member means you adhere to industry standards.

Q: Do you blame a lack of interoperability on the relatively slow take up of einvoicing? If not that – what do you blame?

A: It’s not interoperability. Some of the blame has to lie with the solution providers (ourselves included) not being as helpful as we could have been with adoption in the past. Couple that with a lack of education as to the supplier benefits - and that’s going to slow growth. But, I think we’ve grown up over the last few years and we’re now much more assured in our guidance and best practice – driving up adoption rates at unprecedented levels. That doesn’t mean we don’t still have flexibility – we just know what works now and we’re not afraid to say so, meaning the time to success for our clients has dramatically reduced.

Q: You’ve recently formed a collaboration with Coupa Software – do you see a growth in collaborations/take overs in this space during 2013?

A: I think it’s likely that there’ll be a few mergers and new commercial partnerships to extend solutions. For example we were a dedicated e-invoicing company then a dedicated e-invoicing and early payments company – moving forward we could very well be an e-invoicing, payments and supplier risk management company. Things evolve and I expect we’ll see organisations like SAP also broaden their suite this year.

Q: Yes, and healthy competition drives innovation and drives prices - which ultimately is good for the industry and customer. So what’s new for OB10?

Well in the last few months we’ve got our new supplier portal up and running all over the world - a major catalyst to the rapid enrolment of the “long tail”. Buyers get savings straight away and our ability to enrol the total supplier community of a buyer has resulted in a step change in our organisation.

Q: Of course some people offer this service to their customers for free. Is it becoming a problem for you that you don’t?

A: This is an obsession about nothing. It’s an argument which has been skewed by social media. It rarely comes up in conversations with clients. And, if you’re an SME issuing fewer than 12 invoices, then it is free on the OB10 network. If you’re a corporate sending a large volume of invoice transactions then there is a flat fee structure. Because the level of service the supplier receives actually saves the them time and money – in invoice tracking, cross border compliance , and on time or early payments - the value they gain is strong enough to counteract any query over fees.  Some of the free networks say that they provide compliance ‘guarantees’ – but these comments must be taken with a pinch of salt. Of course, the arguments shake the story – but at the end of the day it’s serious stuff and ultimately customers want to do business with someone with a keen eye on innovation and growth and someone they trust.

Past Interviews:

Face to face with Esä Tihilä

Face to face with Rob Bernshteyn