Navigating the E-Invoicing Service Providers

by Gareth Lodge, July 25, 2012
EMEA

Abstract

The potential for e-invoicing has long been recognised by the banking industry. Even though volumes are steadily increasing, doubling in the last three years, the level of penetration is still below 10% in most countries. This report investigates how banks can best harness the opportunity that e-invoicing enables.

In a companion report, The Opportunity for E-Invoicing: And the Perils for Ignoring It, Celent looked at the reasons why e-invoicing has failed to gain traction in the banking industry. Much of this shortfall lies in the fact that banks are being driven by business cases that require returns on investments in very short timeframes. E-invoicing is unlikely to satisfy those requirements, but Celent believes that adopting e-invoicing could unlock many other benefits. In a new report, Navigating the E-Invoicing Service Providers, Celent considers the options available to banks to balance the ongoing challenge of budgets and the potential value and cost reductions that could benefit banks in the longer term.

Banks have looked at e-invoicing, and some have made acquisitions as a result. However, many in the industry believe that these have been unsuccessful. While Celent does not rule out further acquisitions, for many banks an acquisition strategy would not be appropriate. With some recent high-profile acquisitions being made in the multi-billion price range, they could find themselves priced out of the market.

For many banks, building in-house would be a natural response. Celent believes that this too is probably not the best approach.

“Most banks would struggle to name more than five e-invoicing providers, so it comes as a shock to some that there are over 700 in the marketplace,” says Gareth Lodge, Senior Analyst with Celent’s Banking Group and author of the report. “Many of these players have already built the functionality required, so why would a bank spend money replicating this? The trick will be how to harness investments that have already been made by others.”

This report looks at the current state of the market and broadly segments the approaches. By understanding these approaches, banks can identify which players are worth partnering with based on a number of criteria, such as reach, industry focus, and geographic coverage.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

Introduction

5

The Eternal Conundrum

7

 

Celent Recommendation

8

E-Invoice Service Offering

9

The E-Invoicing Vendor Marketplace

11

E-Invoice Service Models

16

E-Invoice Provider Models

18

Reach

24

Conclusion

26

Leveraging Celent’s Expertise

29

 

Support for Financial Institutions

29

 

Support for Vendors

29

Related Celent Research

30

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