First of all, let me wish readership of PaystreamVoices a happy and prosperous 2008.

The European e-invoicing market continues to remain fragmented and small but potential market size remains significantly high. Unfortunately, not much has changed since the early 2000’s except for the increasing number of vendors entering the market place, as reported by Bruno. This is obviously a positive side of a maturing market and has led to minor improvements in the overall market share. However, the optimistic predictions of analysts continued to be missed, year after year. We are still addressing the fundamental problem of replacing paper based solutions with electronic systems. We also seems to have forgotten that our key competitor is none other than paper.

Whilst much has been spoken of supply chain finance, dynamic discounting and the second p (payment) of EIPP, none of these solutions are going to achieve traction until the fundamental problems are ironed out including the significant barriers faced in implementations. This is not to say that the best-in-class companies, as regularly reported by Aberdeen Group, are not enjoying the benefits of e-invoicing. All I am highlighting is that current deployments are a drop in the ocean, when compared to the potential market size, and significant drive from vendors, consultants and governments are needed if this market segment is to be taken seriously. Lack of profits within the service providers continues to dampen the spirit of the enthusiasm.

Niche players such as OB10 has worked tirelessly to promote e-invoicing globally whilst companies such as Ariba has entered the market as part of its product diversification strategy. The scanning and OCR providers, EDI houses and accounts payable specialists all admit that EIPP is the way forward. Many of these companies I have spoken to remain convinced that EIPP is yet to arrive. I do not think they are been ignorant. If a company does not change to satisfy changing market conditions, the survival of the company will be short lived. Their stand is simply based on customer requirements, i.e. none of their customers are asking for EIPP or e-invoicing. So something is missing from the market place. I put this simply down to lack of awareness which can only be addressed by EDUCATION EDUCATION EDUCATION.

Lately, many financial organisations have taken a vested interest in purchase-to-payment or e-invoicing document exchange. Most of the global leading banks are either offering services through partners or currently in discussion with partners to offer these services. At the same time, there are commercial lending organisations such as invoice discounters and factors taking an interest in the segment. This has also created an environment where traditional vendors for the financial sector is taking a closer look at EIPP, e.g. FundTech. Forrester has claimed this is the year for consolidation. No doubt there will be one or two major transactions, but it is more likely 2009 will be the year for consolidation.

What all of above means that the e-invoicing or EIPP market should start to make progress this year. More work is needed to encourage service providers to collaborate with each other. I would like to see much more activity at Hub Alliance and other initiatives this year. The problem with Hub Alliance is that there is no budget to drive the “alliance” forward. In addition, the members’ aspirations are limited by their own personal needs, rather than offering a “alliance” for everyone interested in e-invoicing.

Whilst I remain pessimistic about the market segment, I am hoping that I will be proven wrong this year. I see 2008 not as a year of consolidation but as a year of growth.

I would also like to see more debate taking place at edocr. Please note that you need to first register with edocr before taking part in any of the discussions. Others leveraging edocr include Ariba, Crossgate Group, Accountis, Causeway Technologies, Paystream Advisors, United Data, CashTech (part of FundTech) and ebdex. Why not join the debate today and build edocr into your market communications strategy? It’s all free! Do let me know if anyone is interested in championing special interest groups on “accounts payable automation”, “e-payments”, “supply chain finance”, “banking”, “purchasing cards”, etc.

We all need to speak more about e-invoicing if we are to give this market segement a chance. And part of that is you, as readers to engage in conversation. We need to hear your successes, your horror stories of implementations, and your aspirations for the months ahead. Start engaging today, either here or at my place.

Last 5 posts by Manoj Ranaweera

• TBiConnect joins a foray of e-invoicing startups to be funded by Venture Capitalists - January 29th, 2008
• European Market Outlook 2008 for e-invoicing - January 17th, 2008
• Get buy-in from senior management, if your EIPP project is to be successful - November 15th, 2007
• Calling all StartUp and Early Stage EIPP Vendors - November 7th, 2007
• BasWare acquires my neighbour Digital Vision Technologies - September 29th, 2007

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