Bruno Koch

The international

E-Invoicing market

development and the role

of key stakeholders

Forum Elektronicznego Fakturowania

October 23rd, 2012

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 2 05/11/2012

Overview: Key stakeholders for E-Invoicing

• Large invoice issuers and recipients

Issuers with advanced on-boarding methods, incentives and

penalties

Recipients with the power play as large buyers

• Regulators and tax authorities

European Commission & national regulators push the digital

collaboration between suppliers and buyers

Countries in Latin America, Asia and South Europe defined

models to combat the tax evasion with (near) real-time audits

• Solution and Service Providers

• Market communicators

• Industries with high invoice volume

Issuers: Telco, Utility, Card, Media, Logistics, Healthcare,

Public Sector, Insurance

Recipients: Retail, Healthcare, Public Sector

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged.

Development of the European E-Invoicing

Market

page 3 05.11.2012

Recipient

segment

Annual bill &

invoice volume

estimated to be at

least

Estimated

electronic

proportion of total

volume in 2012

Estimated annual

volume increase of

electronic

bills/invoices

Consumer 17 billion 12 % 25 %

Business &

Government 16 billion 18 % 30 %

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged.

Market Penetration 2012 (Electronic share of total invoice/bill volume)

page 4 05.11.2012

>30% 10-30% <10%

B2C B2B/B2G/G2B

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 5 05.11.2012

Large invoice issuers and recipients as

innovator

Co

nsu

me

rs

B2B/B2G/G2B B2C

43.3%

5%

1.7%

Large companies (250+ employees)

11.6%

Medium sized companies (50-249 employees)

10%

Small/Micro companies (1-49 employees)

7.5% 1.7

%

7%

2.5

%

0.1

%

8.3

%

1.3

%

2

1

2 3

Source: Billentis & PostFinance; structure is valid for Switzerland and likely many other countries

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged.

Different preferences of large and small

companies in German speaking countries

page 6 05.11.2012

Source: ibi research 2011, Elektronische Rechnungsabwicklung – einfach, effizient, sicher – Teil III: Fakten aus der Unternehmenspraxis

(www.elektronische-rechnungsabwicklung.de)

Why these (irrational) preferences?

Most market participants and decision makers know PDF, but have

no idea, what EDIFACT, EANCOM or XML mean.

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 7 05/11/2012

Europe: used formats today and prediction

2000 2010 2020

Pure structured data

EDI, XML Hybrid

PDF + XML

Pure Images

PDF, …

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

The German Multi-Stakeholder Forum thinks actively about an

extensive usage of PDF/A-3 with embedded UN/CEFACT CII data.

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 8 05.11.2012

Current focus of regulators and tax

authorities

Supplier Buyer

Tax Authorities

Collaboration

Europe

Tax evasion, audit

LATAM, Asia

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged.

4

Delivery

page 9 05.11.2012

Real-time Audit – Example from Brazil

Supplier Tax

Authority

1

Invoice XML data

2

Digitally signed invoice

including 2D barcode

Buyer

2

Copy

3

Bill

of Ladin

g

5

GR

N

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 10 05/11/2012

European Commission pushes/supports many activities within

the Digital Agenda, e.g.

• Improve legal environment

• Promote the digital participation of SMEs

• Promote an E-Invoice standard model

• European Multi-Stakeholder Forum

Other supportive initiatives

• Directive 2011/7/EU on combating late payment; to be

implemented into national law by March 2013

• Revision of the E-Signature Directive

EU initiatives in Europe

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 11 05/11/2012

European Solution and Service Providers

educate and push the market

• E-Invoicing solution providers

200+ application providers for bilateral exchange among users

500+ E-Invoicing network operators (Service Providers)

Some of them employ 50+ sales and account managers

Assuming an average of 5-7 sales / provider, they are totalling

up to 5,000 market influencers

• The number of ERP and accounting software vendors is

estimated to exceed 10,000; many of them do not communicate

much/sufficiently

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 12 05/11/2012

Market communicators

• Shortcomings

Quantity: No or very little communication for organisation

internal stakeholders as well as for external trading parties

Quality: Often, the messages are inappropriate for the target

audience and confuse the stakeholders; problem focussed

discussions dominate and success stories are rare

• The better way

Communicate at least twice as often as you believe would be

necessary; one can never “over communicate”

Use a clear vocabulary / glossary

Practice an encouraging communication style

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged.

The industries with the highest volume

Government 7%

Utility 2%

Media 3%

Insurance 5%

Credit Cards 3%

Telecom 9%

Others 24%Government 2%

Media 3%

Healthcare 7%

Insurance 2%

Logistics 6%

Credit Cards 1%

Telecom 1%

Retail 6%

Utility 2%Others 17%

page 13 05.11.2012

to Consumers

to Corporates

Issuers:

Recipients: Retail (10%), Healthcare (9-15%) and Public

Sector with 9-12% of markets invoice volume

page 14 05/11/2012

Public sector is responsible for 15-18% of all

purchases made in a country.

45-65% of all companies are suppliers for the

public sector and send invoices to its

administration.

100% of all enterprises and households

receive invoices from the public sector.

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged.

any

31.12.12

BE

1.1.2013

CH

2012

AT

1.1.2014

1.1.2013

FR

1.1.2012

DK

2005

1.6.2012

NL

page 15 05/11/2012

Public Sector as Catalyst for Mass Market

Defines strict rules mainly affecting users outside the public sector

Optimized rules

Parts of the own administration are enabled for the voluntary usage of

electronic invoices

All administrative units are enabled to process electronic invoices

Pressure to trading parties up to an obligation for E-Invoices

Automate the full Supply Chain including e-Procurement

Deg

ree o

f o

pti

miz

ati

on

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. page 16 05/11/2012

Projects with high ambitions for the public sector as

E-Invoicing user, e.g.

• Austria (Invoices to the national administration have to be

100% electronically from 2014)

• Belgium (objective: 50% in 2015)

• Denmark (mandatory since 2005)

• EC: Adoption of E-Invoicing in all 48 Directorate-Generals

and Executive Agencies by January 2013

• Finland is already close to 100%

• Norway (mandatory since mid 2012)

• The Netherlands (objective: 80% in 2014)

• Switzerland (100% of all federal levels shall be enabled for

In- and Outbound E-Invoicing in 2016)

Some public sector objectives in Europe

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged.

Public Sector Saving Potential

05.11.2012 Seite 17

Sources: Federal Administrations of Denmark and Switzerland

Country Minimum public sector saving

potential (million Euro)

Country Minimum public sector saving

potential (million Euro)

Austria 600 Italy 3,000

Belgium 900 Spain 1,800

France 4,200 The Netherlands 1,200

Germany 6,500 United Kingdom 4,400

Source: Billentis Market Report 2012

Proportions within Public Sector

Denmark Switzerland

12% Federal Administration 5%

14% States, Regions 68%

74% Municipalities 27%

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. 05.11.2012 page 18 05.11.2012

Still wondering how others rapidly

achieve very high E-Invoicing penetration rates

and savings?

Very active stakeholders are key for the

success of E-Invoicing!

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. 05.11.2012 page 19 05.11.2012

Would you like to be informed about the E-Invoicing market development

and the international event taking place in Warsaw?

If so, please subscribe the free bi-monthly newsletter:

www.expp-summit.com

Soon, E-Invoicing stakeholders from

around the world will meet in Poland

© Bruno Koch, Billentis - Reproduction is authorised provided the source is acknowledged. Seite 20 05.11.2012

Bruno Koch

+41 71 911 60 32

www.billentis.com

Twitter: @kochbillentis

International E-Invoicing Event: EXPP Summit

05.11.2012

Billentis in brief

• Highly specialized consulting company: E-Invoicing, optimisation

of Purchase-to-Pay and Financial Supply Chain; More than 150

customers in 50 countries

• Market analyst; issuer of market reports and newsletters

• Founder & Chairman of an international congress with 300-400

particpiants

• Merger & Acquisition; consulting, enabler for expected market

consolidation

• Company founded in June 1999

• B. Koch (8 years PricewaterhouseCoopers, 4 years Credit

Suisse, 2 years SIX PayNet)

page 21