Complexity, Costs, Global e-Invoicing and SAP

Complex Networks

I served as an EDI Manager for a large electronics firm in the late nineties, and I thought that was challenging enough.  However, these days I continually read about all the different changes around e-invoicing in each country.  Here is a recent blog article on changes to the e-invoicing requirements in Germany that I submit as a reference case.  It is hard enough keeping your EDI messages and mappings updated with your existing trading partners, not to mention trying to keep up with all the deadlines, mandates and systems requirements of each countries' tax authority.

Here is an example of complexity.  Brown-Forman, one of the largest American-owned spirits and wine companies sells its brands in more than 135 countries.  Each time they enter a new market it creates complex customer and supplier integration projects in order to comply with government mandates such as EU, Argentina, Brazil and Mexico's e-invoicing initiatives.  If you are growing rapidly, the cost of supporting these fast changing requirements can be enormous.

Here is another example of complexity.  LSI Corporation provides silicon, systems and software technologies.  In their product and services portfolio are capabilities and services including custom and standard product ICs, adapters, systems and software that are used by many businesses to power solutions in the storage and networking markets.  LSI Corporation had been using traditional EDI translator systems to communicate with their trading partners.  However, in a recent change they selected SAP Information Interchange to reduce costs and have the direct connectivity to their trading partners using a standard SAP integration.  SAP recently acquired Crossgate, the developers of SAP's SAP Information Interchange.

Brown-Forman, the spirits and wine company mentioned above, also chose to use the managed global e-invoicing solution available in the SAP Information Interchange.

Why are these global companies choosing to outsource their global e-invoicing and EDI communications to a managed service?  Their core business is not EDI and e-Invoicing.  The effort to develop and maintain all of their own EDI communications and e-invoicing was cost prohibitive.  Think about it - you would need people dedicated simply to trying to learn and keep up with every country's fast changing requirements.  I know from personal experience that many countries make their requirements available only in the local language.  Translation talent is also needed to understand many of the technical documents.  

SAP users especially are at an advantage supporting global e-invoicing these days.  With SAP's recently announced acquisition of Crossgate, and its pre-existing SAP integration and support, SAP users have only to subscribe to the service and allow the SAP Information Interchange and associated services to handle the complexity.

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Kevin R Benedict EDI and e-Invoicing Veteran, SAP Mentor, Analyst and Blogger
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 *Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.