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EIPP: The issue is about customer pain relief…and not who is going to pay

Frank Bennett of Impaq raised the following point today on AccountingWeb in response to one of John Stokdyk’s articles published sometime ago.

EIPP who’s gonna pay?
There is an abundance of vendors offering solutions for EIPP. So what? It is gonna boil down to: Who pays and how much? Put yourself in the role of a supplier serving 500 customers. 400 of your customers use post and fax. 85 of them use email. 15 of them have implemented electronic XML document exchange. The supplier has fully absorbed the cost of post, fax and email, it is taken for granted as a cost to doing business. Whoever asked if they could put a stamp on an envelope or send a fax? In those situations where a customers sends XML orders and expects the supplier to reply with XML invoices then these costs are highly visible to a supplier and can be allocated to each customer. I have seen this force suppliers to look at the associated costs and the impact on their gross margins achieved with a customer. Some have said NO thanks based on this analysis.Among those 15 customers some will expect the supplier to meet their own costs to serve up the XML documents they need (crave) and others will subsidise this so there is NO COST to the supplier.Supplier must be confused? Why do some customers insist I pay while others insist they pay? This is the big debate that needs to be resolved before EIPP takes off.

I do not believe the issue here is about who is going to pay. It is really about how we bring relief to customer pain. In this process how do we add value to both parties, the supplier and the purchaser. If we can resolve their pain, then they would be happy to pay an acceptable fee for the services rendered. And this is the starting point for ebdex.

Frank has an interesting blog that I have not spend enough time on. This needs to be corrected.

Some point in near future, ebdex Document Exchange needs to be inter-linked with Impaq/Elcom supplier portal/network. My view is that within 5 years, all these networks/exchanges will be linked, resulting in significant upside for users of such solutions, whether they operate as suppliers or purchasers.

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  • NextGen Commerce

    This reminds me of the introduction to EDI in the 80’s. If it goes down the same road whi I am guessing it might then eventually there will be intermediaries and both sides will be paying for transactions or an investment into technology of some sort. The EIPP industry may emerge down the same road and I don’t think this issue will be resolved anytime soon or at least until there is some industry standards around EIPP.