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Pave the way for a broad-scale adoption of E-InvoicingBruno Koch, CEO, Billentis@kochbillentisApril 10, 2014

@ariba

© 2014 Ariba – an SAP company. All rights reserved.

“The European Commission has today proposed a draft directive on E-Invoicing in public procurement, accompanied

by a communication setting out its vision for the full digitisation of the public procurement process, so-called

'end-to-end e-procurement”.European Commission, 26 June 2013

In Italy, about 11,000 Public Administrations and 2 to 2.5 million companies will be affected by the

E-Invoicing obligation coming in place step by step from June 2014.

Quaderno del FARE - Fatturazione Elettronica verso la PA, Politecnico di Milano, 27 May 2013 & Umberto Zanini

>40%

15-40%

<15%

Expected marketpenetration in 2014

Electronic share 2009 2010 2011 2012 2013 (E) 2014 (E)

B2B/B2G/G2B 7% 10% 13% 15% 20%* 24%*) Jump due to new EU legislation considering also unsigned PDF invoices in the statistic

Market Penetration(Electronic share of total invoice volume in B2B/B2G/G2B segment)

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E-Invoicing users in Europe(issue and/or receive)

0%10%20%30%40%50%60%70%80%90%

1-9 10-49 >250

% o

f all

ente

rpris

es

Number of Employees

• Electronic invoice exchange among larger companies mass market, easy-to-use services

• Domestic International• Standards and technology process optimization

Some trends in Europe (1)

• Developing beyond pure E-Invoicing:♦ Multi-message & multi-format services required♦ Pure E-Invoicing support the entire O2C and P2P process♦ Spend analysis♦ Trade Finance / Supply Chain Finance♦ Some countries in progress to push (near) real-time-auditing

instruments based on electronic invoicing and payment transactions (similarities with the Latam model)

Some trends in Europe (2)

Success factors in E-Invoicing projects (1)• Awareness by senior executives about the

potential of E-invoicing in a broader sense• Management Support• One very active project owner• Implementing it step-by-step including a quick-win

result • Internal and external communication to key

persons affectedpage 7

Success factors in E-Invoicing projects (2)• Being realistic regarding mid- and long-term

technical capabilities in your organisationincluding workflow and archiving right decision for make/buy and direct or network model

• Don’t re-invent and develop solutions which are already available

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Success factors in E-Invoicing projects (3)• Being realistic regarding technical capability of

your counterparts to send, receive and archive E-Invoices

• Being a rollout champion

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Success rates dependent on used method

0102030405060708090

100

0 1 2 3 4 5 6 7 8 9 10

% E

-In

voic

es

Year after starting the rollout process

Loop E-Order+ E-Invoice

Powerplay

Pressing

Classicapproach

Two different implementation strategies

Low HighDegree of process automation

Port

ion

of E

-Invo

ices

Low

Hig

h

Status 2014

Objective

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Major barriers and how to overcome them (1)• Legal requirements are unknown or confusing Involve experienced network operators supporting you with tax compliant cross-border E-Invoicing services

• Change/adoption of internal organisationprocesses Ensure sufficient management attention and involve key persons in the project in an early stage

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Major barriers and how to overcome them (2)• Divergent requirements of trading partners

regarding formats, methods and processes Involve network operators with the capability to address all sizes of trading partners with various requirements

• Trading partners do not support the electronic invoice Contact them. Often the trading partners just need inspiration to do it now and some guidance on how to do it. Higher acceptance if value added services are offered.

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Major barriers and how to overcome them (3)• Lack of budget In-house developments cause high initial and follow-up costs. Field-tested applications and services from third parties are typically significantly cheaper. If services on demand or SaaS are preferred, the initial investments are moderate.

• Lack of resources to manage automation Shift E-Invoicing to the enterprise’s number 1 priority.

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Major barriers and how to overcome them (4)• Lack of understanding of current available

solutions Independent market reports are available; involve market analyst or experienced consultant

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Main drivers for optimisation

Reduce costs

Optimisation of corporate financewith E-Invoicing

Improve Working Capital

Increase elasticity of costs

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Receive

1.10€

EnteringC

odification

3.00€

Validat./Matching

Exception handling

4.00€

Dispute

Managem

ent

2.50€Archiving

2.20€

Payment & C

ashM

anagement

4.80€

Real business case of consulting customer

Full-Costs

17.60€

6.70€*

Paper

Electronic,automated 0 0 1.20€ 2.00€ 0.80€2.00€

Saving per Invoice 10.90€ = 62% *) considered is 0.70 € processing costby third party service provider

Process costs for recipient

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Key findings and conclusions (1)• E-Invoicing is a strong and global trend.• The business case especially for larger recipients is

excellent.• Your trading parties are anticipating E-Invoicing.• The market maturity meanwhile achieved an advanced

level.• Appropriate solutions for any size of businesses are

available.

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Key findings and conclusions (2)• Divergent requirements of trading partners regarding

formats, methods, processes, added-value services and tax compliance however still build major barriers. Even for large multinational companies is this hard to overcome without third party assistance.

• For good luck is there already a rich offering of some experiencedand international service providers.

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17.04.2014

Why still thinking about ituntil you have to react?

Better do the next step nowand in a proactive manner!

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About Billentis

• Highly specialized consulting company: E-Invoicing, optimisation of Purchase-to-Pay and Financial Supply Chain; More than 150 customers in 50 countries: Federal administrations, large invoice issuers and recipients, solution providers

• Market analyst; issuer of market reports and newsletters• Company founded in June 1999• www.billentis.com