Prior to my work as a business consultant at Basware, I was a P2P specialist at a Swedish multinational telco in their global finance Shared Service Centre (SSC) handling the implementation of their e-invoicing solution. The SSC served locations in 150 different countries and handles an invoice volume of 6 million invoices every year.
Electronic processes in a Finance Shared Service Center are intended to help standardize and automate the increasingly complex invoicing process and to make it more efficient overall. This increases the transparency of the processes, increases the quality and lowers costs. But in a global Shared Service Center such a project is bound to have its challenges. Here’s an overview of the biggest three challenges I faced, and how I solved them.
Challenge 1: Responsibility for supplier relationships
The Finance Shared Service Center had the task of promoting e-invoicing, reducing the volume of paper invoices and thus increasing the degree of automation of accounts payable. However, the contact with the suppliers ran through the procurement department, which had other priorities. As a result, it took us longer to switch to e-invoicing.
The solution to this conflict of interests came from the price model of the Shared Service Center. In general there are five established models which can be used depending on the initial situation and the offered services: fixed price, time & material, transaction-based, gain sharing or effort-based. The Finance Shared Service Center opted for a pricing model depending on the type of transaction. The processing of paper invoices is therefore considerably more expensive than that of e-invoices. Since these costs are charged to the respective departments, the incentive for procurement to convince suppliers of e-invoicing is significantly increased as the department's expenses can be reduced.
Challenge 2: Different compliance requirements internationally
In order to understand the complex local markets and compliance requirements for e-invoicing in different countries, we had numerous meetings with local stakeholders. However, intercultural misunderstandings, language barriers, lack of technical know-how, and general resistance to e-invoicing in individual countries made this a lengthy issue that involved an enormous project delay.
Collaboration with an e-invoicing provider is the solution. Because of their expert knowledge and experience, a provider can clarify all requirements of the different countries much faster and more effectively. As a rule, existing partnerships with representatives on the ground already exist. This saves international companies time, resources and money in the implementation of e-invoicing.
Challenge 3: Internal resistance to change
Within the company, as in the case of any change, there was also resistance in the departments involved in the P2P process (purchase-to-pay: from purchase to payment). In order to lead e-invoicing projects to success, critics must be convinced.
Change Management is the keyword here. Four points were of great importance:
1. Governance structure
An organizational structure was set up, which enabled the exchange of information between the Finance Shared Service Center and the relevant departments. On a quarterly or monthly basis, goals were jointly developed and implemented in top level management or on an operational level and services adapted to the needs of the departments.
2. Reporting / KPIs
Numbers don’t lie: The advantages of e-invoicing in the Finance Shared Service Center were displayed in black and white on KPIs.
3. Global communication plan
Strategic communication creates transparency and helps to make the whole organization understand the importance of change. Studies also show that dual communication at different levels is very helpful in reducing resistance. Top level managers explain what the change means to customers and the company as a whole. Direct supervisors explain to their employees what personal impact the change entails.
4. Bonus model
For companies with a bonus model, KPIs that are associated with e-invoicing can be integrated into the individual employees' target, thus creating incentives to engage with the topic.
Of course, challenges can vary from one business to the next, as can the solutions to those issues. I’m more than happy to use my experience to help you along the way. Just contact us at [email protected].