Insights for Procure-to-Pay and Finance Leaders

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Failing to deliver? The draft EU directive on e-invoicing: Part 1

What’s happening with public sector e-invoicing in the EU? All the first mover advantages and great lessons learned by countries like Denmark, Austria, Sweden, Finland and Norway are being wasted with the proposed directive on e-invoicing. Have we not learned anything from our successes and failures of the past? Are the lobbyists from banks and narrow minded e-invoicing service providers going to prevail?

This is the first of a three piece series about the draft EU directive on e-invoicing.

This post looks at the success of the GSM standard in Europe and what it meant for the European telco industry. We make the comparison to the successful PEPPOL infrastructure and wonder why the draft directive on e-invoicing calls for a blank slate – effectively ignoring the success and hard work of several member states in demonstrating a scalable solution for Europe.

Lessons from the past: Convergence on the GSM standard was the tipping point for the European mobile telephone industry

Lets do a quick rewind to one of the great IT successes of the European Union – the convergence on GSM as a pan European standard for mobile telephony in 1987 with the Bonn declaration. A simple decision to back a common standard for digital telephony created the foundation for a prospering industry that for many years fostered innovation, growth and jobs. The European providers quickly got to a critical mass of consumers several years ahead of the competition abroad that did not build their solutions on common standards.

The decision to converge on GSM was inspired by a similar nordic standard for mobile telephony (NMT) that was used extensively in Sweden, Norway, Denmark and Finland. Local lessons learned were implemented across the EU.

Are we now missing a similar opportunity in the field of e-procurement and e-invoicing? The Nordic countries were quick to develop e-invoicing solutions and quickly joined forces on to converge on a common standard – the NES initiative based on a standard called OASIS Universal Business Language.

Ignoring a successful Pan European e-invoicing solution

Based on the lessons learned with the demonstrated success stories of e-invoicing around Europe the European Commission then sponsored the 30 million Euro PEPPOL project. The goal was to create a pan European infrastructure for e-procurement based on open standards and open infrastructure. PEPPOL has now successfully been implemented in countries like Norway, Denmark, Sweden, Finland, Ireland and now the Netherlands is also joining forces.

So what have we learned from PEPPOL?

  • There is a common standard that supports the whole procure to pay process called Universal Business Language and European localization has been handled by CEN BII for several years.
  • PEPPOL is operational and successful in several countries and has demonstrated that cross border trade is possible based on a common standard.
  • Suppliers only need one service provider connected to PEPPOL in order to send invoices to any contracting authority also connected to PEPPOL.

PEPPOL is the standard and the infrastructure that makes it possible for any company or public sector institution to exchange a business document (i.e an invoice) to any other company or public sector institution in a way that is neutral to technology used and the individual choice of service provider.

In my second blog post – The draft e-invoicing directive: a detailed look, I examine the draft directive piece by piece. Some would perhaps say that I rip it apart.

The final blog post – The ideal e-invoicing directive, I give my input to a vision for how an e-invoicing directive that could put European businesses at the front of the “procure-to-pay” digitalization curve with better access to financial liquidity while at the same time saving European taxpayers billions of Euros.