I attended the webinar organised by 170 systems over webex yesterday. The speakers were Andrew Bartels, VP and Research Analyst from Forrester and Larry Concannon, Director of Product Marketing from 170 Systems. I was disappointed with the webinar as both speakers rushed to complete without interacting with the audience. However, webex allowed audience to send queries which 170 Systems promised to respond within days. The slide pack can be down loaded from 170 Systems website, which I recommend as it has some good information.
170 Systems provide EIPP solutions (invoice only) through OB10 network. As expected, their expertise lies in integrating with SAP, Oracle and PeopleSoft enterprise solutions only. For example, I know from been at BT, that Xansa runs the A/P Department of BT using 170 Systems and OB10.
I hope I did not misunderstand (at the time I was also chatting to CEO of another company through Skype), but Andrew was saying that it is better to have specific solutions such as e-invoicing for one of the eight parts of e-purchasing process his slide showed. The 8 parts being:
- Spend analysis
- Supplier assessment
- Supplier identification
- Contract management
- Order fulfillment
- e-Invoicing (invoicing reconcilliation and payment)
I disagree. If you can have a solution that provides all of the above cost effectively, surely it would be better than dealing with number of different systems and providers. So, what you in fact need is a spend management solution, perhaps similar to those offered by Ariba and Procuri, and not OB10. Now I am going to contradict my own argument by saying, it is better to have a solution that deals with e-Invoicing than not having one at all. But what you need is solutions that could grow as the requirements as well as the client company grows. Therefore I question OB10’s strategy of simply handling invoices and not any other documents. Niche is fine, but what happens when you deliver the ROI promised and your client is now asking you to extend the benefits to exchange of other document. Surely, your answer is not.."Sorry Sir, but we have no capability, would you like contact details of our competitor?"
I like Andrew’s slide on timing and sponsorship. Few points:
- Implement first e-invoices and then automate invoice validation
- Implement EIPP after eProcurement maximises gains
- Then go for creative funding and payment options
The validation has two meaning to me:
- Validation of incoming messages against business rules. This has to be done within the exchange/network – part of value addition. A business rule could well be checking against legislation or simply verifying that there is a purchase order number.
- Validation against purchase order and/or delivery note (2 or 3 way matching) – this could be done either within the exchange/network or within the enterprise solution.
The key themes:
- Market penetration is still low. Reference was 2001, which is a shame.
- Hybrid solutions are still needed, i.e. electronic plus scanning. I question this?
The problem is 170 systems and OB10 are purchaser-centric solutions and not true end-to-end solutions. I am not trying to mislead you here. They do connect both ends, but it is too costly to provide the same level of service to suppliers, unless they happen to be a large supplier. Their cost model does not allow this. So you need a player who can challenge this with the better revenue and cost structure.
I also like Andrew’s recommendations:
- Focus first on process efficiencies and then on cash flow and financing opportunities
- Find the sponsor for each stage – difficult one!!
Overall, it was a good presentation and if allowed, I would be happy to attend the next webinar.