May 2008 Electronic Invoicing As A
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Electronic Invoicing as a ‘keystone’ in the collaboration between companies, banks and PA Report 2008 Observatory on Electronic Invoicing and Demateralisation May 2008 In collaboration with Index pages Introduction by Umberto Bertelè and Andrea Rangone 7 Executive Summary by Alessandro Perego 9 1. Electronic invoicing: the framework of reference 13 The various meanings of electronic invoicing 13 The “value” of electronic invoicing 15 The adoption 17 The barriers 19 The priorities 21 2. Electronic invoicing models 23 The adoption paradigms 23 The service fruition modes 28 The supply market 32 3. Adoption process 35 The diffusion of electronic invoicing models 36 The size of investments 39 The project sponsorship 40 The operational management of projects 42 The benefits 42 The critical operational features 43 The barriers 44 4. Assessment of profitability 63 The meta-model 63 Theanalysis of benefits 66 The analysis of profitability 70 Brief conclusions 82 5. Evolution of the legislative framework 83 A summary of the legislative framework 83 The open issues 86 The electronic invoicing to public sector authorities 90 Note on methodology 93 Workgroup 99 School of Management 101 The School of Management of Politecnico di Milano 101 ICT & Management Observatories 101 Supporters of Research 103 www.osservatori.net ELECTRONIC INVOICING AS A ‘KEYSTONE’ IN THE COLLABORATION BETWEEN COMPANIES, BANKS AND PA 1 Index of Figures pages Figure 1.1 The electronic invoicing as a ‘keystone’ in trade process integration 14 Figure 1.2 The value tree in electronic invoicing projects 15 Figure 1.3 The benefits of total integration and dematerialisation of the trade process 16 in different sectors (measured in €/cycle) Figure 1.4 The benefits of electronic invoicing in function of the adoption model 17 (measured in €/cycle) – Consumer goods sector Figure 1.5 Some data on the level of adoption in Italy 18 Figure 1.6 The barriers to adoption and the priorities for action 21 Figure 1.7 The payback time (years) of electronic invoicing projects 22 Figure 2.1 The main adoption paradigms 23 Figure 2.2 The adoption paradigms: coverage of the trade process 25 Figure 2.3 The adoption paradigms: the coverage of the trade process - integration 26 with partners matrix Figure 2.4 The service fruition mode 28 Figure 2.5 The service fruition modes: electronic invoicing paradigms 30 Figure 2.6 The service fruition modes: integration and dematerialisation of the trade 31 process paradigms Figure 2.7 The service fruition modes: total integration and dematerialisation of the 31 trade process paradigms Figure 2.8 The various supply worlds 32 Figure 2.9 The services offered by the main classes of player 33 Figure 3.1 The characteristics of the user company panel 35 Figure 3.2 The diffusion of the adoption paradigms 36 Figure 3.3 The diffusion of the service fruition modes 37 Figure 3.4 The “service fruition modes - paradigms” matrix (parameter: project progress) 38 Figure 3.5 The “service fruition modes - paradigms” matrix (parameter: company size) 38 Figure 3.6 The amount of the investment 39 Figure 3.7 The “paradigms - amount of the investment” matrix 40 Figure 3.8 The project promoter function 41 Figure 3.9 The “paradigms - project sponsorship” matrix 41 Figure 3.10 The operational management of projects 42 Figure 3.11 The benefits obtained 43 Figure 3.12 Some critical issues reported by user companies 44 Figure 3.13 The adoption barriers 45 Figure 4.1 The limits of the analysis 66 Figure 4.2 The main investment categories and current costs 67 Figure 4.3 The structure of the profitability assessment model 68 Figure 4.4 The benefits of total integration and dematerialisation. Percentage 69 reduction of the cycle cost Figure 4.5 The benefits of total integration and dematerialisation. Absolute reduction 69 of the cycle cost Figure 4.6 The determinants of the absolute cycle cost and the positioning of the sectors 69 Figure 4.7 The benefits in function of the level of integration in the consumer goods sector 70 Figure 4.8 The benefits of total integration and dematerialisation. Break-down 70 between ideal cycle cost and non-conformity cost www.osservatori.net ELECTRONIC INVOICING AS A ‘KEYSTONE’ IN THE COLLABORATION BETWEEN COMPANIES, BANKS AND PA 3 Figure 4.9 The benefits in function of the level of integration in the consumer goods 71 sector. Break-down between ideal cycle cost and non-conformity cost Figure 4.10 The benefits of total integration and dematerialisation. Break-down 71 between customer and supplier Figure 4.11 The profitability analysis: the main variables 73 Figure 4.12 The company parameters used for the profitability analysis 73 Figure 4.13 The sensitivity scenarios 73 Figure 4.14 An example application of the models: medium size company and in house 74 management Figure 4.15 The analysis of payback time: medium sensitivity scenario 75 Figure 4.16 The analysis of payback time: pessimistic sensitivity scenario 76 Figure 4.17 The payback time in function of the level of integration 76 Figure 4.18 The payback time in function of the level of integration: the customer/ 77 supplier view Figure 4.19 The analysis of the NPV/cycle: medium sensitivity scenario 78 Figure 4.20 The NPV in function of the level of integration 79 Figure 4.21 Some examples of progressive adoption 80 Figure 4.22 The effect of the level of financial activity on payback time: in house 80 management Figure 4.23 The effect of the level of financial activity on payback time: outsourced 81 management Figure 4.24 The effect of company size on NPV in the various service fruition modes 82 Figure 4.25 The convenience domain of the service fruition modes 82 Figure 4.26 The four contexts examined 83 Figure 4.27 The profitability of total integration and dematerialisation projects in the 83 four contexts examined Figure 5.1 The legislative framework regarding electronic invoicing in the EU 91 Figure 5.2 The legislative framework regarding electronic invoicing outside the EU 91 www.osservatori.net 4 ELECTRONIC INVOICING AS A ‘KEYSTONE’ IN THE COLLABORATION BETWEEN COMPANIES, BANKS AND PA Index of Boxes pages Box 2.1 Electronic invoicing technologies 29 Box 3.1 Abbott 45 Box 3.2 Amadori 46 Box 3.3 Amga Azienda Multiservizi 46 Box 3.4 Bennet 46 Box 3.5 Brembo 47 Box 3.6 Candy 47 Box 3.7 Compagnia Generale Trattori 48 Box 3.8 Consorzio Autotrasportatori Marchigiani 48 Box 3.9 De Vecchi Editore 49 Box 3.10 Diesel 49 Box 3.11 Disano Illuminazione 49 Box 3.12 Doimo City Line 50 Box 3.13 Dott. A. Giuffrè Editore 50 Box 3.14 ERG Petroli 51 Box 3.15 Europ Assistance 51 Box 3.16 Fashion Box 52 Box 3.17 GORI 52 Box 3.18 Granarolo 53 Box 3.19 Gruppo Effe 2 53 Box 3.20 Gruppo SCM 54 Box 3.21 HP Italia 54 Box 3.22 Indesit Company 55 Box 3.23 KOH-I-NOOR 55 Box 3.24 Marzotto 56 Box 3.25 Mes 56 Box 3.26 Oviesse 56 Box 3.27 Poste Italiane 57 Box 3.28 Scame Parre 57 Box 3.29 So.Ge.Gross. 58 Box 3.30 Sony Italia 58 Box 3.31 Telecom Italia 59 Box 3.32 Teva Italia 59 Box 3.33 TNT Global Express 60 Box 3.34 Valsoia 60 Box 3.35 VS Dental 60 Box 3.36 Warner Music Italia 61 Box 3.37 Whirlpool 61 Box 4.1 The indicators to assess the profitability 70 Box 5.1 The legislative framework regarding electronic invoicing and substitute archiving 84 Box 5.2 The electronic invoicing models “according to the norms” 85 Box 5.3 Letter to the Tax Office (extract) 87 Box 5.4 Management of electronic invoicing with countries outside the EU 90 Box 5.5 The Danish model 91 Box 5.6 The Swedish model 91 www.osservatori.net ELECTRONIC INVOICING AS A ‘KEYSTONE’ IN THE COLLABORATION BETWEEN COMPANIES, BANKS AND PA 5 Introduction This is the second report from the Politecnico di Milano School of Management’s Observatory on Electronic Invoicing and Dematerialisation. A particular feature of this edition is the large number of partners and sponsors (31) of different backgrounds: from associations in the banking sector and technology provid- ers to system integrators and IT consultants. Their presence together with an active, and not merely formal, contribution to the research are evidence of a broad community with a strong motivation to contribute to an important cultural project. With regards the empirical study, there are two new elements in this edition: the presentation of a complete classification of the main models of electronic invoic- ing and, in general, of the integration and dematerialisation of the trade process; an analysis of the profitability of electronic invoicing projects for each of the models identified and for the various levels of financial activity. We are convinced that these two original contributions, which are unique in European research in the field, can contribute to the spread of these solutions in Italy and Europe (and for this reason the Report has been translated into English). The empirical foundation of the study is considerable: a survey involving over 200 com- panies, 90 case studies in user companies, 50 studies among electronic invoicing solu- tion and service providers, and validation of the models to assess profitability in vari- ous business sectors undertaken with the support of the principal partner associations (ACBI, ANIE-AIRES, Consorzio DAFNE, Indicod-ECR, METEL). A final consideration concerns the particular moment in time in which the Report is published.