Navigating the E-Invoicing Service Providers

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.