Networked Economy - Bo Harald

2nd most viewed post in 2011 - e-banking is not ready

2012-01-29T21:20:00.001+02:00

The second most viewed post last year states that e-banking is not ready: http://www.finextra.com/community/Fullblog.aspx?blogid=5353

The points raised can be crystallized as follows:

1. New generations of smartphones and tablets mean that also bank customers start to expect proactive intelligence and context based messages. In stead of only logging in starting to try to find something - get an expected or even better unexpectedly accurate service proposal to approve in real time - without further ado (when consumer protectionists do not hinder it)

2 These devices (and especially earlier versions still in use) are more seen as messaging tools than PC-screen emulators..). The practise of approving e-invoices for payment with a single press "a" serves as guide and creates the habit with critical mass for the future.

3. E-banking should not serve only payments - but with the help of e-invoices automate enterprise administration on a large scale.

4. The e-banking customers should have the right to use the codes also when loggin in to other services - especially in the public sector where strong e-id is often needed.

Much work to do - some investments also needed - but not massive ones.

Most viewed post 2010 - no rose garden promised

2012-01-29T21:19:00.001+02:00

When more countries enter the race to the future of business transaction automation our experience that it takes time may be useful - blog from late 2010:

"Nobody promised you a rose garden

I went to a book publishing party yesterday. Wonderful book about interior design and life by extraordinary personality. Lots of cultural types around and good food. And as I am kind of known as Mr. e-Invoicing the accountant present came up to me with his story – which went like this:

He: “ The migration to e-invoicing has not been easy. Lots of things went wrong in the beginning.”

Me: “Have you heard about any new networked service that would function perfectly from the beginning? And if too few users join in - there will not be any second version and even the most good-for-society-at-large thing will never happen”

He: “Of course it is so – and now it all functions very well”

Me: “So let us tell the story starting from the present happy day –problem stories of yore have a tendency to stay around far too long – and change resisters too often believe that progress does not happen.”

So we agreed. But the lessons we have learned mostly in the Nordic countries are that it takes time to get those who do not need ERP systems to understand that only fingers are needed to send the e-invoice for example from his secure e-bank-linked portal, that those who have ERP-systems see how important it is to check that these support the local standards properly and link up to interlinked service providers who can then convert to other standards as long as that is needed. Only then will the gates to the rose garden start to open – and what a rose garden..

But it will take time, the beginning takes some efforts and the opportunity to learn from our mistakes should not be missed."

http://www.finextra.com/community/Fullblog.aspx?blogid=4488

e-invoicing information sources

2012-01-29T21:18:00.001+02:00

Still relevant interview - http://eeiplatform.com/3551/interview-with-the-chair-of-the-former-ec-expert-group-on-e-invoicing/

UNCEFACT>ISO 20022 was not ready then - but now it is! See other blogposts here.

And then a collection of e-invoicing information sources by EEIplatform:

http://eeiplatform.com/6886/7-websites-e-invoicing-ap-automation-content/

Business Week is also useful: http://bx.businessweek.com/electronic-invoicing/

and of course Bruno Koch: http://www.billentis.com/index_e.htm

Most read post–all times

2012-01-29T21:16:00.001+02:00

Questions European Tax Payers should ask:

http://www.finextra.com/community/members/PreviewBlog.aspx?b_id=2815

This is a post from 2009. Even if the finance crisis has since hijacked almost all attention it is more than obvious that we need to push forward with this - not only to improve productivity in all enterprises and the public sector - but even more to liberate workforce for value creation.

The United States of Europe

2012-01-29T21:15:00.001+02:00

When now the market and media hystery around the Euro is fading away it is getting clear that half-pregnant is not a happy state. More integration is needed to reach the splendid potential of a true single market - the largest in the world - is needed.

It is now very clear that no national politicians are allowed to borrow money (in the citizens' childrens' name) at a rate that not only destroys their own economy - but also endangers the stability of other European countries (be they in the Eurozone or not). Most of this hectic borrowing has furthermore led to overconsumption (surely bad news for the environment) - not investments for the future or dismantling of expensive structures of the past.

The next grand step is thus now being taken - fiscal disciplin - the needed strong fundament for the United States of Europe.

While this is happening, other more practical EU harmonization issues need to progress as well. In the Finnish Real Time Economy program (aiming at cutting administrative cost in half and taking them real time) VAT collection has been chosen as a priority. VAT collection can not be a political issue and should thus be easy to implement.

The model created is very simple and is based on accelerated migration to e-invoicing (which has the 250bn business case as a whole). When in next couple of years almost all invoices are in electronic structured form (Finland already e50% in b2b) each invoice issued will automatically send the VAT information needed (EU-harmonized) to Tax (cloud-based register) in realtime. This will eliminate all VAT-reporting (60m workdays in enterprises - and a lot in Tax). E-invoice payments deliver the VAT to Tax automatically and the net amount to the seller - again saving costs both in enterprises and the public sector. Most devils in the details have already been addressed.

Productivity improvements on a grand scale - and an important step forward for the Single Market. Not to talk about getting tax (a big bite out of the 118bn VAT Gap - our money..) collected. At the same time we can get a firm grip on tje high cost of the grey economy and criminal behavior.

Who can possibly be against this? Nobody I am sure. But how can we get some more steam in the engine? DG Taxud is surely doing its part - but more is needed. Please join the supporters.

Euro crisis–eerie silence

2011-12-27T11:31:00.001+02:00

You have surely taken note of the eerie media silence that followed the daily barrages of real or imagined bad news. After the bold Italian package media seems to have lost interest – and as media does drive markets – also there the swings are now more moderate.

So was the whole thing a really a media fabrication? Why this abrupt attack – on countries where politicians had borrowed too much for ages? Why where they all of a sudden considered to be on the brink of bankruptcy? Why where no warning signals raised before? And how much did media hysteria have impact on investors, traders and regulators? Too much probably…

Why did rating companies not react? And why did investors continue to invest in state papers with waferthin margins – when they should have known that they continued to increase borrowing – when a decrease should have started.

Whatever the answers – now we have to look forward and do the proper painful adjustments. Work harder, spend less, export more and understand that the age of overborrowing in our childrens name is gone forever.

Innovation work rewarded

2011-12-22T10:42:00.001+02:00

http://eeiplatform.com/6515/tieto-wins-financial-i-award-for-the-swift-e-invoicing-solutions/?utm_source=EEI+Platform&utm_campaign=00ba920b8f-E-invoicing+Platform+-+Newsletter+wk+51&utm_medium=email

Just like payments–in sight

2011-12-22T09:17:00.001+02:00

With the establishment of eeSPA we now have the organization in place to drive towards e-invoicing functioning “Just-like-payments. You sign up with one and you reach your customer or supplier globally. Every enterprise is here free to choose their own service provider – nobody is forced to choose that of his customers. e-invoicing services are generic –driven by the global IOS20022 standard. This all of course means that there is a need for both rule-books, standards and implementation guidelines – meaning that service providers joining the network has to live up to minimum demands – otherwise the weakest link syndrom will destroy the value of the network

Some people say that standards are not important. Certainly should not be for the enterprises and many of today’s service providers can convert messages from most standards to most standards. But we need to look into the ERP-environments also – how much more cost-efficient these will become when the invoicing programs and other administrative applications are designed for ISO20022 from the outset.

So expecations towards eeSPA are high:

1. make e-invoicing happen

2. further interoperability

3. ISO20022 e-invoice message standard deployment and support for the other closely interacting ISO standards

Best of luck and success!

http://www.eespa.eu/EESPA%20Press%20Release-2011-12-15.pdf

Saving Tax payers’ money

2011-12-15T15:14:00.001+02:00

We have on many occasions stressed the need for the public sector to more aggressively

- save their own operating costs,

- help enterprises to save cost,

- drive enterprises across digitalization thresholds

- cut CO2

- make the single market real

- collect VAT and other taxes due

- further global standardization

Migration to e-invoicing furthers all these – and is furthered in return by all these. So no efforts should be spared and bold action taken. Bold action means mandatory migration – needed as the 25bn public sector cost saving in EU public sectors (see Bruno Koch newsletters http://www.billentis.com/EBPP_EIPP_e.htm ) does not happen without it. These deadlines also drive private sector deadlines aiming at the 250bn cost saving for enterprises.

Saving own costs – tax payers’ money.

The public sector in Finland has estimated its cost saving to 300m€/year. Bruno Koch has estimated the figure for the public sector in Austria to 590m. Estimates from UK point at 1-3bn and so forth. So we need the deadlines – but before that we need 0-investment and 0-ITskill just-like-payments functioning generic tools for the SME-sector. It is of utmost importance to avoid buyerspecific portals and procedures for the SMEs. Banks have to take action here – the investments are small and as most non-bank service providers have said – only banks can bring in the SME-sector fast on cost efficiently. So it is also about taking responsibility for society at large.

A more competive Europe–drilling deeper

2011-12-12T18:41:00.001+02:00

1. More competitive enterprises. How? Drilling down selectively:

1.1. Better products, selling, procurement and service processes – mostly (but not only) a question of digitalization

1.1.1. Accepting e-invoices from suppliers save their and own costs and 300g CO2 every time – makes for a better customer

1.1.2. Sending e-invoices (ideally with global standard) saves some 20€ per invoice for the receiver (especially when posting codes are included) – makes for a more competitive supplier

1.2. Better productivity – cutting administrative costs in half by 2015

1.2.1. DG Enterprise 25% cutting-red-tape initiative (enhanced clinically clear language in regulation and rule books)

1.2.2. Migration to e-invoicing and payment automation

1.2.3. Automation of VAT-reporting and payments (real time enabled by e-invoicing)

1.2.4. Automated cash flow estimates (real time part enabled by e-invoicing)

1.2.5. Migration to cash-based accounting for enterprises in the sub2m€ category – enabling automated accounting by tying e-invoice to debits and credits in the electronic bank statement

1.2.6. Automated e-invoice financing (including reverse factoring)

1.2.7. Automated tax returns, financial, statistical, environmental and HR-reporting - using generic unified reporting codes and XBLR

1.2.8. Deploy global standards in cloud services to lower IT-costs and increase competition

1.3. Lower risks (cost of risk and risk mitigation estimated to 4% of turnover)

1.3.1. Migrate to e-invoicing >

1.3.2. Cut invoice receivables by increasing invoicing frequency (motivated by lower handling cost) – lowers credit, currency and finance-availability risks

1.3.3. Cut fraud and VAT-reporting risks by using trusted service provider networks

1.3.4. Use Bank Payment Obligations

1.4. Lower financing costs and better return on liquidity

1.4.1. E-invoicing speeds up payments and lowers financing needs

1.4.2. E-invoicing enabled Real Time accounting and cash flow estimates fine tune financing needs and enable better return on liquidity

1.4.3. Reverse factoring can lower credit margins

1.4.4. BPO enables risk taking by the party that knows the enterprise best

2. More competitive public sectors. How?

2.1. Lower administrative burden by 25% (DG enterprise red tape initiative)

2.2. Accept and send only structured electronic invoices – supporting interoperable global standards (ISO20022 family)

2.3. Adopt unified reporting codes for all tax, statistics, financing, sustainability and HR-reporting

2.4. Outsource and privatize routines – free up resources for guiding and supervising

3. More of a Single Market. How?

Examples from digitalization area:

3.1. Implement VAT-directive for simplified and equal treatment of e-invoices

3.2. Use global standards family (ISO20022) for e-procurement, e-invoicing, SEPA-payments, payment references, account statements, finance requests, reverse factoring, e-id and VAT-reporting

3.3. Automate and harmonize VAT-reporting and collection (split payment model)

3.4. Harmonize VAT-exemptions and tax rates generally

3.5. Harmonize patenting

3.6. Use federated model for strong e-id (reuse e-bank codes) with ISO20022 e-id message standard

4. A mobile, educated, flexible, and motivated workforce. How?

Examples from digitalization area:

4.1. Liberate workforce by automating administration

4.2. Automate sales processes

5. Better rule of law. How?

Examples from digitalization area:

5.1. Migrate to e-invoicing

5.2. Automate VAT-reporting and payments

5.3. Regulate away cash for business transactions

6. Lower CO2 emissions. How?

Examples from digitalization area:

6.1. E-invoicing and digitalized business processes

6.2. Business-process integrated sustainability-reporting

6.3. High carbon tax

The above is viewed from the digitalizing business process angle – please feel free to fill in missing ones – also from other areas.

For a more competitive Europe–big picture

2011-12-12T18:37:00.001+02:00

From time to time it is necessary to look at the big picture. What do we need for a more competitive Europe? Innovative and determined actions in many areas – like:

1. More competitive enterprises – innovative and productive. 85% of growth comes from product and service innovation – so this must have the highest attention.

2. More competitive public sectors – lower cost, lower tax pressure and less red tape.

3. A Single market – true harmonization makes the market bigger.

4. A mobile, educated, flexible, and motivated workforce – less routine work and more value creation (driven by rapidly retiring population).

5. Better rule of law – less fraud and tax evasion.

6. Lower CO2 emissions – less material, transport, travel and work that can be automated.

Detailing – what and how?

1. More competitive enterprises. How?

1.1. Innovative products and services

1.2. Innovative selling and service processes – mostly (but not only) a question of digitalization

1.3. Better productivity – cutting administrative costs in half (including DG Enterprise 25% from red tape)

1.4. Lower risks

1.5. Lower financing costs and better return on liquidity

2. More competitive public sectors. How?

2.1. Lower administrative burden by 25% (DG enterprise red tape initiative)

2.2. Accept and send only structured electronic invoices – supporting interoperable global standards (ISO20022 family)

2.3. Adopt unified reporting codes for all tax, statistics, financing, sustainability and HR-reporting

2.4. Outsource and privatize routines – free up resources for guiding and supervising

3. More of a Single Market. How?

Examples from digitalization area:

3.1. Implement VAT-directive for simplified and equal treatment of e-invoices

3.2. Use global standards family (ISO20022) for e-procurement, e-invoicing, SEPA-payments, payment references, account statements, finance requests, reverse factoring, e-id and VAT-reporting

3.3. Automate and harmonize VAT-reporting and collection (split payment model)

3.4. Harmonize VAT-exemptions and tax rates generally

3.5. Harmonize patenting

3.6. Use federated model for strong e-id (reuse e-bank codes) with ISO20022 e-id message standard

4. A mobile, educated, flexible, and motivated workforce. How?

Examples from digitalization area:

4.1. Liberate workforce by automating administration

4.2. Automate sales processes

5. Better rule of law. How?

Examples from digitalization area:

5.1. Migrate to e-invoicing

5.2. Automate VAT-reporting and payments

5.3. Regulate away cash for business transactions

6. Lower CO2 emissions. How?

Examples from digitalization area:

6.1. E-invoicing and digitalized business processes

6.2. Business-process integrated sustainability-reporting

6.3. High carbon tax

The above is viewed from the digitalizing business process angle – please feel free to fill in missing ones – also from other areas. I will drill deeper in some of these in the next post.

When will your country become e-id-progressive?

2011-11-10T13:29:00.001+02:00

Canada joining the self-evident model - reuse what citizens already are used to, is secure and saves tons of tax payers money.

http://www.finextra.com/news/fullstory.aspx?newsitemid=23132

When will your country join? If not soon - why not?

Miserable public isolation: http://www.finextra.com/community/Fullblog.aspx?blogid=5932

Progressive Kazakhstan – how about your country

2011-11-10T13:26:00.001+02:00

Kazakhstan is moving to e-invoicing with the help of the needed deadline for paper:

http://bx.businessweek.com/e-invoicing/view?url=http%3A%2F%2Fwww.sharedserviceslink.com%2Ffile%2F93958%2Fe-invoicing-in-kazakhstan-from-2012.html

The progressive club with public sector deadlines now include 11 countries (in some sort of chronological order of announcing - some include municipalities):

Denmark, Singapore, Italy, Spain, Sweden, Finland (b2b now over 40% - and rising fast), Brazil, Greece, Norway, USA, Hungary and Kazakstan.

Argentina, Portugal and Nepal have either total or partly implemented - as far as we know - and work is going on in Canada, Russia and Luxembourg - and many more.

To get this fundament - fur cutting administrative cost in half - in place faster - we of course need also the entire municipal sector and all sorts of big invoice receivers to announce the end of the era of dull and badly paid routine work - including error-prone scanning.

e-government checklist – expanded

2011-11-10T13:24:00.001+02:00

http://www.finextra.com/community/FullBlog.aspx?blogid=5991

The high cost of cash

2011-11-08T14:44:00.001+02:00

We have elected and pay for decision makers and regulators. Sometimes I get the impression that they try to govern as little as possible in important areas and overcompensate with irritating nitty-gritty.

An area where actions certainly is needing is in the fight against cash usage - at least for the following reasons:

1. Cash is expensive - according to EU-study cash-handling costs 50bn a year - and the consumer pays every cent of it. The problem is that she/he does not know it as the cost is hidden. Action point: Make cost visible by charging charging for withdrawals and usage.

2. Cash is an open invitation to crime. Be it drug dealing, illegal weapons, prostitution, gambling, black economy, grey economy, counterfeit, robberies, blackmail - you name it. If cash usage would be made difficult, an unusual and expensive practise - what would happen to crime?

Action point: Make the cost of all this (including crimeprevention, courts, jail systems - not to talk about costs to the victims) very clear to citizens.

3. Cash is the vehicle for not paying tax. The VAT-gap in EU in 2009 was 118,7bn. Much of this is due to avoidance schemes and politically motivated rather silly exceptions - but the fraud part is much dependent on cash (and paper/e-mail invoicing).

Action point: Make it clear that this is our - the tax payer's badly needed debt reduction money - being lost. Make e-invoicing and credit payments mandatory. Salaries and social benefits can be paid only to accounts (every identifiable person should have the right to a bank account and a direct debit card at decent cost).

4. Cash is CO2 heavy. How much CO2 does not the daily armoured car parades (out and in again) emit + printing and destroying vast amounts of paper.

Action point: Make the CO2 amount visible on global/EU/country levels and tax it.

When will investigating media notice this anacrony - using cash even in places where there are many alternatives - only because the many cost dimensions to society and the users are not known. Put the light on this - instead of being tools for populists protesting about handling charges becoming transparent (sic!). Media should also reveal how consumer organizations often are doing their best to protect old and create new unnecessary costs - instead of truly protecting consumer longer term interests.

Then the politicians might get the nerve to do something bolder about it.

When will your country become e-id-progressive?

2011-11-08T14:42:00.001+02:00

Canada joining the self-evident model - reuse what citizens already are used to, is secure and saves tons of tax payers money.

http://www.finextra.com/news/fullstory.aspx?newsitemid=23132

When will your country join? If not soon - why not?

Miserable public isolation: http://www.finextra.com/community/Fullblog.aspx?blogid=5932

Progressive Kazakhstan - how about your country?

2011-11-08T14:39:00.001+02:00

Kazakhstan is moving to e-invoicing with the help of the needed deadline for paper:

http://bx.businessweek.com/e-invoicing/view?url=http%3A%2F%2Fwww.sharedserviceslink.com%2Ffile%2F93958%2Fe-invoicing-in-kazakhstan-from-2012.html

The progressive club with public sector deadlines now include 11 countries (in some sort of chronological order of announcing - some include municipalities):

Denmark, Singapore, Italy, Spain, Sweden, Finland (b2b now over 40% - and rising fast), Brazil, Greece, Norway, USA, Hungary and Kazakstan.

Argentina, Portugal and Nepal have either total or partly implemented - as far as we know - and work is going on in Canada, Russia and Luxembourg - and many more.

2011-10-30T20:12:00.000+02:00

Näkökulmia taloushallintoon: Poliittisten tahojen aika toimia hallinnollisen taakan vähentämiseksi.

2011-10-27T19:21:00.000+03:00

Verkkolasku rajaa riskiä ja säästää päästöjä - Kumppaniblogit - Talouselämä

2011-10-27T19:19:00.000+03:00

Puolet pois yritysten hallintokuluista - Kumppaniblogit - Talouselämä

Miserable public isolation – who is holding back?

2011-10-13T13:21:00.001+03:00

Who is holding back - governments or banks?

Needed for accelerating citizens' use of government e-services:

1. That the public sector realizes that it is not the only service citizens use - and in fact one of the most infrequently used and then

2. allows and encourages citizens to use the so frequently used familiar and secure e-banking log-in-id also in the public sector (banks can provide it also to those who do not use e-banking or have accounts)

- thus achieve a order-of-magnitude faster take-up

- get high citizen satisfaction

- save very substantial amounts of tax payers money

- avoid humiliation with failed smart card schemes

Why not? How long will tax payers allow this miserable isolation to continue?

Reflections on blogs and blogs

2011-10-11T15:24:00.001+03:00

I got the half a million pageviews message and looked into what I wrote in early 2010: "

"I have been writing blogs for about 3 years and it is helping me to get some messages and information out to partners, customers, students, researchers and others who share the networked economy passion.

About a year ago I was invited by finextra to start blogging on their site. As I have a background in banking and especially e- and 3rd generation e-banking I was glad to test out if my input would interest readers in this channel. Usually I publish the same stories in both my original Networked Economy blog and here - but add financial industry aspects in Finextra.

The results have been rather impressive. While 3 years at http://boharald.blogspot.com have produced 15 000 page views - 1 year in Finextra has produced 120 000 (8 months later 250 000)..

What does this say? First of all that the media matters - easy to find > brings in readers and more comments (not much though). Secondly that you can reach the audience without the help of journalists. This "filter" is of course sometimes very useful - but sometimes it is not adding anything but time. Sometimes more "neutral" journalists naturally add credibility to your cause - but then again may take away part of the passion - and are not necessarily much more trusted than the writer. A conclusion may then be that both are needed - and that the demands on both are on the rise.

See the big picture, show the big picture, get going, go deeper, keep going - and all the time communicate so that the market (including your competitors) get it."

Still sense-making I think.. maybe a full million is realistic?

What we would do differently today

2011-10-08T10:50:00.001+03:00

If launching e-Invoicing today:

1. The SME-sector’s organizations were not involved strongly enough in the beginning. They should have been co-owners of the productivity issue with e-invoicing and thus taking responsibility to tell enterprises that it is not only cost-saving in the core invoicing and payment process – but an innovation platform that leads to:

- real-time view of financials with automated accounting and cash flow estimates

- automated VAT-reporting

- better cash flow based on faster payments and higher invoicing frequency

- lower credit risk based on faster payments and higher invoicing frequency

- automated invoice financing (and cheaper with supplier finance)

On this basis it would have been possible to more powerfully drive home the “Paper and e-mail invoices have no future”- mindset earlier.

Recommendation: communicate the no-future and “CUT50”-like targets and engage SME-organizations as co-owners

2. Cost-cutting aspect dwarfed other - even more important aspects - like:

- sending and receiving e-invoices is better service for customers and suppliers alike

- liberating back office staff for customer service (not just firing), selling and production – more interesting, productive and often better paid jobs

- CO2-reduction can be 300g per invoice (all included)

- cutting fraud risks and tax evasion (VATgap in EU 118,7 bn in 2009… our money..)

Recommendation: communicate the target beyond cutting costs – especially need to internally mobilize workforce

3. Only deadlines make it happen. General statements favoring e-invoices and carrots were not sufficient – the SMEs have so many issues to attend that migration is postponed without clear deadlines from buyers.

Recommendation: wide and early issuance of published early deadlines (all sectors – but especially public) stressing that individual exceptions can be granted for limited periods (for SMEs or their accounting service not using Internet or being in middle of upgrading invoicing applications)

4. Municipal sector was patchy (still is) – even if all have invested in receiving e-invoices they were too slow to issue deadlines for paper (not taking responsibility for tax payer’s money and pushing local enterprises into better competitiveness). Deadlines were sometimes delayed as they wanted to create ability to send first.

Recommendation: Stress need to save tax payer’s money also in municipalities and their responsibility to drive local enterprises into better productivity via e-invoicing. Deadlines for incoming paper should not be coupled to ability to send e-invoices as this takes more time.

5. The Finvoice standard was not implemented strictly enough > some interoperability challenges.

Recommendation: Use ISO20022 – both strict and equipped with clear and fast maintenance process

6. Separate bank network supporting only Finvoice. Work needed to get non-banks and banks to interoperate – worsened by lack of rulebook.

Recommendation: All service providers living up to strict customer identification, have recovery capability and support national standards should be allowed to join the network (and be shut out if rule book is not followed). The 3-corner model is anti-competitive (monopoly in relation to suppliers) and should not be allowed.

7. Too radical attempt to eliminate use of attachments in Finvoice standard. Corporate and public sector processes were not ready to integrate the attachments into the invoice.

Recommendation: Deploy standard that supports attachments – still working on eliminating the need.

8. Buyer-specific portals deployed despite rapid signing up of 200 000 enterprises by generic portal service providers (banks doing most of it). This development may be needed in some cases as an interim solution – but is quite obviously not good for suppliers who have to use different tools with different partners. This can also tie suppliers to buyers and lead to anti-competitive situations.

Recommendation: E-invoicing should work “just like payments” – sign up for generic service and send to all/receive from all without need for additional contracts or service charges from other end of chain.

9. Scanning invoices delayed migration to e-invoicing for no good reason. Pressing send is as easy as pressing print in most cases and scanning loses much of the data and has many quality problems.

Recommendation: No scanning – especially not in public sector. Where already in place a plan for stopping it is needed.

10. Late and patchy transparent pricing for paper invoices. Invoice senders were late (in Finland – faster in other Nordic countries) to start charging (visibly – customers pay all costs anyway) for sending paper invoices. Consumer organizations even tried to stop it – which leads to protection of unnecessary and hidden costs – instead of protecting consumers.

Recommendation: Drive open and logical pricing – in the best interest of customers.

11. The Single European Payment Area implemented harmonized payments first and moved to promoting e-invoicing later – despite our protests. As e-invoices automatically lead to IS20022 credit payments (SEPA) it would have been much easier and natural to implement PAN-EU e-invoicing first.

Recommendation: Pay attention to plug-in provided from e-invoice to payment in ISO20022

12. International aspects did not get enough attention early on. From a legal and tax point of view 95% of invoices are national - but from an operational point of view especially in large and export/import oriented most and sometimes all invoices are sent cross-border from service centers. This has accentuated the need for the global ISO-e-invoicing standard and connectivity (which it also furthers) – especially as it automatically produces the ISO-payments.

13. Accounting profession should have been involved from the very beginning as so much of the process improvements can take place in their area of expertise. Once involved they produced several innovative ideas.

Recommendation: involve central players in multi-stake-holder forum

What we did right

2011-10-02T20:17:00.001+03:00

What we (collectively) did right when launching e-invoicing and recommend:

1. Banks joined collectively with invoice portals and file transfer > payment automation was improved, financing aspects added and non-bank service providers were much invigorated. Only banks have the capability and business case to sign up the SME-sector quickly and cost-efficiently (ready tools from e-banking, payments and file transfers) – bringing in economy of scope, scale, trust, reuse and repetition.

Recommendation: involve key banks from the outset – and stress responsibility for society at large and fact that investment needs for banks are very small – especially if they deploy cloud services

2. The Finvoice standard was created (regularly updated by the banking community – now version 1.3) and supported by over 50 suppliers of invoicing software and all nonbank service providers

Recommendation: involve financial administration software and service providers and choose ISO20022 as base

3. The bank service was designed to serve both b2b and b2c and also printed paper invoices for non-e-receivers. B2c turned out to be an important eye-opener for SME-employees as most of them use e-banking and the “just-approve” convenience (pro filling in lengthy reference numbers and other details) became apparent.

Recommendation: move towards same solution for SMEs sending invoices to other enterprises and consumers

4. Networking between bank and non-bank networks evolved

Recommendation: Important to get joint network with rule-book established early on.

5. A number of municipalities and enterprises issued deadlines for paper and e-mail invoices early on and the State Treasury gradually increased firmness of deadlines for accepting unstructured invoices to soon join UPM Kymmene (amongst top3 paper manufacturer globally) returning paper and e-mail invoices (no scanning).

6. Direct debit was integrated - eliminating the need for invoice senders to register receivers for paper, e-invoice and direct debit and instead send the entire invoice file to chosen service provider who prints for non-e receivers and sends the rest to the e-invoice address of the receiver who decides which invoices and how big ones can be paid automatically at due date. This model both saves very much costs at the invoice sender end as there is no need to interfere and keep repositories and makes it more convenient for the payer as all is done in one place – the familiar e-bank.

Recommendation: integrate direct debit

7. Mobile notifications – including click “a” for payment approval (no PIN needed) for due date and “n” for immediate (often real time) time payment

8. The partly publicly funded Real Time Economy program was started in 2006 (with resources and input from enterprises, banks, the public sector, the accounting profession and invoice operators)

9. Active involvement on EU level (with the Commission and the European Central Bank) and global level – leading to new VAT directive and global standards - ISO20022 standardization for (i) payment reference, (ii) credit payment (used in SEPA), (iii) account statements, (iv) Bank Payment Obligation and (v) the invoice message standard

10. Clear cost-cutting potential message from State Treasury: cost for handling paper or e-mail invoice > 30€, cost for e-invoice 10€ and cost for automated e-invoice 1€. Total savings estimate for state sector 150m€/annum, municipal sector 150m€/annum and for enterprises 2,8bn€ (Federation for Finnish Industry)

What we would do differently will be published later.

Putting the horse before the cart

2011-09-27T16:14:00.001+03:00

I have long been arguing that the natural way to SEPA-payments is through e-invoicing – especially now when ISO20022 for e-invoicing is ready. Here you do not need to force anybody to do SEPA-payments – they materialize automatically.

And as posted before – a u-turn in direct debit – should also be done – e-invoicing becoming the master would save costs enormously.

So – on the road to a harmonized Single Market:

Still time for much needed u-turn

2011-09-25T21:16:00.001+03:00

SEPA direct debit is a huge step in the wrong direction - making direct debit more complicated for users and more expensive for invoice senders (who naturally add these costs into higher prices - the consumer always pays - every cent).

The obvious much better alternative is to integrate direct debit into e-invoicing - which is any way on the rise and is becoming the XML-stuctured data delivering innovation platform for wide range of standardized administrative processes. Also e-payments (in the Nordics and Ideal in the Netherlands) should adopt the posting codes and VAT-reporting capability planned for e-invoicing.

It works as follows:

1. the invoice sender sends the entire invoice file to service providers (no need to register and keep track of who wants paper, direct debit or e-invoice). How much cannot been saved with this? Billions... that would benefit consumers, SMEs and sellers alike.

2. the service providers sends e-invoices to e-banks for consumers who use e-banks (rapidly growing majority in all countries), and to automated payment service for those that have been using traditional direct debit and payment services (not ready to use e-banking). How much cannot be saved in banks by this consolidation? Hundreds of millions..

3. the invoice receiver (consumer, SME etc) decides in the e-bank which invoices (type monthly rent etc) can be paid automatically and which she/he wants to see first.

Several banks have already provided this service - including offering a limit like (if my sons mobile bill is less than 30€ it can be paid automatically - if more I want to see it..). If e-bank is not used the automatic payment preference is agreed with branch or contact centre.

In all cases a message (SMS or IM) to the mobile offers the press "a" for payment on due date (for those not on automated payment) and press "n" for real time payment (think of what kind of discounts this can offer...)

The hassle for the consumer is so widely eliminated in this model - and the cost for all so much smaller - that there must be really good reasons for not doing a u-turn. Or history will beriddle "We do it - because we have decided so - long ago - before we realized that there are better alternatives."

So stop the train - before more money is spent on in-no-way sense-making complicated e-mandate puzzles - and do a proper re-evaluation. E-invoicing is coming anyway - in a couple of years.

I am listening - anybody ready to defend the antiquated model?

First in the world

2011-09-24T19:09:00.001+03:00

Global high performance ISO20022 e-invoice message format exchanged over SWIFT

http://www.tieto.com/archive/news/2011/tieto-to-provide-e-invoicing-service-over-swift

Now it is time for all interested in improving interoperability and starting cost lowering trend for the benefit of enterprises, society at large and also themselves to join the pioneers. Please let me know so that credit can be given.

The e-invoicing session at SIBOS was very encouraging - 99% of banks present showed a green card when asked if e-invoicing is a part of payments. A good dozen showed green cards when asked if the are actively selling e-invoice. Only banks can bring the needed sales force and economy of scope needed by all.

Tax payer's money - and much more

2011-09-18T23:57:00.001+03:00

We all know how burning the need to save costs is in the public sector - to have to borrow less and avoid competitiveness destroying tax hikes etc. When this is coupled with a need to move a soon scarce workforce to more productive, better paid and more motivating tasks - which will take time - it is obvious: NO TIME TO LOSE - structural and wide structural changes are needed - innovation platforms (and standards) for radical and disruptive innovations.

Payments have been an innovation platform - for e-banking, for card business, for factoring, for file transfers, e-invoicing, e-payments, e-pensions, e-invoicing etc

E-banking as been an innovation platform - for e-trading, e-loans, e-id services, e-payments, e-salary, e-invoicing etc

E-invoicing is the newest innovation platform - for automated and real time finance, cash management, administration, reporting, VAT-payments and risk mitigation services - scores of them (detailed in earlier blogs).

Back to the public sector. The State Treasury in Finland has calculated that it could save 150m with e-invoicing and the municipal sector 150m - 300m€ tax payer's money - every year. Translate that to EU means 21bn/year and North America is probably much the same - tax payer's money. Then kick in millions of tons of CO2 avoided and 10s of billions of VAT and other taxes collected where they should be..

And then the businesses themselves. The Finnish Federation of industries arrived at a savings potential of 2,8bn/year for enterprises (b2b only). Translating that to Europe gives 200bn and kicking in b2c would add some some 20bn. This conservative calculation was made already 6 years ago - so today the figures would be higher - as seen from for example Deutsche Bank's 54bn for Germany only.

Why is this obvious, concrete, easy and fast productivity opportunity not grabbed with gusto - all over the place? Probably because lobbying organizations do not recognize these kind of benefits-for-all, because political decision makers have not been brave enough to issue deadlines, because the all-important entrepreneur fight for his daily bread and hate any changes in routines etc.

The answer is that we need a much firmer hand from the top - and the public sector has four reasons to do it: save tax payer's money, cut CO2, force enterprises to become more competitive and collect the tax due.

Earlier Questions European tax payers should ask - post: http://www.finextra.com/community/Fullblog.aspx?blogid=2815

Disruptive innovations

2011-09-12T19:29:00.001+03:00

Rereading Christensen’s Innovator’s Dilemma. Some takes (emphasis mine) :

- most successful enterprises get into deep trouble sooner or later and one theme common to these failures is that the decisions that led to failure were made when the leaders were widely regarded as the best in the world

- Good management was the reason for failing to stay atop. “Precisely because these firms listened to their customers, invested aggressively in new technologies that would provide their customers more and better products of the sort they wanted and because they studied market trends and systematically allocated investment capital to innovations that promised best returns, they lost their position of leadership.”

- “Hence, most companies with a practiced discipline of listening to their best customers and identifying new products that promise greater profitability and growth are rarely able to build a case for investing in disruptive technologies until it is too late.”

Important book to read – lots of food for thought.

Domestic issue - false picture

2011-09-06T10:41:00.001+03:00

We often come across statements that e-invoicing is a domestic issue - the cross border part is so small (some 5%) that we do not really need to care. This is a false picture as can be arrived at by just looking at the volumes of cross-border trade.

The reason for this misunderstanding is that enterprises have to establish local subsidiaries and thus - from legal and statistical perspectives do only domestic invoicing. From the operative perspective the picture is often totally different as a single shared service center can handle all invoicing.

For these companies it is very important to move faster to the global ISO20022 standard and harmonize regulations and then not having to support costly country specific practices. Another reason - especially in Europe - is the mandatory migration to SEPA payments. The ISO20022 e-invoice standard is by design fully compatible with downstream SPEA messages such as Credit Transfer as well as ISO20022 account reporting. This is seldom or never the case with local e-invoicing formats.

Typical - especially in banks?

2011-09-06T10:40:00.001+03:00

There is a lot of evidence that hunch is often the best guide to good business. Due to scarce IT-budgets and even scarcer key skills many organizations have resorted to a systematic "business case" process approach. This all sounds very logical and orderly and is often difficult to argue against. And when we are dealing with big investments it is naturally necessary to analyse pros and cons and scenarios very carefully.

The problem - as delightfully described in the cartoon below - is that:

1. If you have a hammer everything is a nail - the heavy process is applied for even the smallest improvements - the decision making process ending up costing more than the project. The right solution is to empower people in charge with decision making power and resources - instead of delegating it upward. Then they also take more responsibility.

2. The most creative and innovative people hate formal processes. They will move elsewhere - exactly what we cannot afford.

3. Agility and speed is self-evidently lost.

4. Those who have the nerve to paint up the rosiest business case pictures may win - and the responsibility still resides with high level decision makers or elsewhere in the organizations.

A centralized model will not work for smaller investments anyway - as so many know from experience, that it is easier to get forgiveness than permission.. And luckily they have the nerve to move forward - but it is of course necessary to make this also officially allowed.

Progress in the payments area

2011-08-31T11:00:00.001+03:00

This allows corporations and financial institutions to communicate with their financial institution counterparties through one highly secure global channel. The service covers all the operational SWIFT connectivity needs for corporations and financial institutions - payments, Forex confirmations, trade finance as well as other messaging. Acquiring the functionality as a service provides numerous additional business benefits, such as a decreased need for in-house IT infrastructure, technical competences and capital investment.

Markus Hautala, Head of Financial Messaging Services, Tieto, says: "We are seeing significant interest within the financial as well as corporate sectors to move to centralized cloud based services.

http://www.tieto.com/archive/news/2011/tieto-receives-swiftready-connectivity---best-practice-label

More news on country deadline front

2011-08-08T13:48:00.001+03:00

Latest on the country front – aiming at > 1. saving tax payer’s money, 2. collecting VAT due – efficiently, 3.pushing the SME-sector into better productivity, 4. increasing work force upward mobility and 5. contributing to CO2 targets.

Deadlines issued: Denmark, Singapore, Italy, Spain, Sweden, Finland, Brazil, Greece, Mexico, Norway

Latest: Greece is expected to adopt e-invoices for business-to-government (B2G) transactions starting with 2012 aiming at a single prototype for electronic invoices, in a bid to enable enterprises to adopt this method in 2012.

The Greek government expects to save around 3.0 billion euros annually, while enterprises are likely to save more than 1.0 billion euros annually, the source indicates. The plan aims for all financial transactions between the public sector and enterprises to be made exclusively electronically in the Q1 2012.

Countries with partial deadlines and preparatory deadline-discussions include:

- Argentina (mandatory for importers in 2010),

- Portugal (may actually belong to the having-done-category),

- USA (heading for 2012),

- Canada, Luxembourg, Russia..

- The Netherlands have issued an ambition to reach 80% in 4 years

- the German Procurement Office (Bundes-beschaffungsamt) has electronified its process completely.

Latest:

- Switzerland had first deadline to prepare public sector systems for being e-invoicing ready; second step is now the discussion in the parliament to go towards obligation

- France - plan was to declare it as mandatory in 2012 – now a bit unclear

- Nepal – VAT-fraud driven “To our reckoning, we must not delay enforcement of an electronic billing system,” the source said.

More information surely around – please let me know.

The biggest of them all

2011-07-19T09:51:00.001+03:00

We read that PayPal is moving into e-invoicing. Natural step for anyone who wants to stay in the payments business = keep the funding and profitability transaction accounts offer. Some banks have not yet seen the need to make the choice - keep the profitable and stable funding intact or not.

In the same news we also read:

"Separately, the US Treasury has signalled plans to switch all supplier payments to e-invoicing by the end of fiscal 2012, in a move the agency says will halve processing costs by $7 million annually.

If adopted government-wide, it could eventually save up to $450 million annually through lower staffing costs, according to official estimates."

This is really important and raises the question if there still are countries where wasting tax payers' money by sticking to inefficient and environmentally unfriendly practices will be accepted beyond 2012. Please let us know..

The US saving potential has probably not been taken to all the levels involved as the saving is rather moderate. To take the Finnish example (similar and higher figures from several other countries): Businesses can save 2,8 bn (EU-level equivalent = 196bn), the state sector 150m (EU eq = 10,5bn), the municipal sector 150m (EU eq 10,5bn). Some money.. for tax payers - and liberating increasingly scarce workforce for productive, better paid and more interesting meaningful work.

The list of progressive countries with public sector deadlines (as far I know of) include:

- Denmark (by law as of 1.2.2005) - scanning still part of solution?

- Singapore (1.5.2008) - would be interesting to hear about penetration rate

- Italy (by law 1.7.2008 - deadline later pushed forward)

- Spain (1.11.2009)

- Sweden (1.7.2009) - rather mild so far..(many municipalities have been progressive)

- Finland (31.12.2009) - also scanning will be discontinued soon. Some 30 municipalities and most large companies have established deadlines. Several have stopped scanning and return non-structured invoices. E-invoice penetration rate now estimated to be 35% and exceed 40% by yearend.

- Brazil (2010)

- Greece (31.12.2010)

- Mexico

- Norway (2012)

Countries with deadline discussions in active phase (that I have heard of)

- Canada

- Luxembourg

- Russia

Please fill in....

The municipal sector is in some cases included (eg Denmark) and is very important as they can bring the local micro enterprises over the hurdles and get the CUT 50 progress started.

CUT 50: http://www.finextra.com/community/Fullblog.aspx?blogid=5538

Innovation in banks is difficult

2011-07-04T16:32:00.001+03:00

I attended a very good innovation meeting last week and there one senior banker said that innovations in banks are so difficult because there is an obsession with business cases. No innovation investment is allowed to fail (is this attitude imported from credit risk evaluation?) and the endless business case argumentation actually puts innovative people off. If this would have been the case in society at large not much innovation would have taken place.

But of course there are other reasons - like the fact that much of innovation has to be done together with competitors to succeed- creating rulebooks and standards for payments, e-invoicing, cards, trading, e-id etc. This is both difficult and against competitive people's basic spirit and you can get to move forward with the speed of the slowest (if all have to agree - as is often the case in bankers associations). This again leads to the nimble banks trying to break loose and do it on their own - successful only in small countries.

and many more here:

http://thefinanser.co.uk/fsclub/2011/06/why-innovation-is-so-difficult-in-banks.html

Cut 50

2011-07-04T13:25:00.001+03:00

CUT 50 is the name of the next phase in the Real Time Economy program run in Finland since 2006. It stands for cutting SME administrative costs in half by 2014-15. The main building blocks are the following:

1. Implement the European Commission target to cut read tape so that 25% of the cost of this public sector related administrative burden can be lowered by 2012. An additional element here should be radical simplification of the language used. Trying to understand what authorities say is as we know a major stress factor and cost both for citizens both in employee and private roles

2. Implement automation of administrative processes inside the enterprises. It is not fair to complain about bureaucracy caused by authorities if there is not a real effort to rationalize own work. This sector contains many different elements - some using electronic invoicing as platform (for both implementation and further innovation). To briefly list:

2.1. E-invoicing based productivity improvements: e-invoicing itself, payment automation enabled, lower financing costs (better cash flow as invoices can be sent more frequently and are paid faster and easier use of lower-margin invoice financing), lower credit and currency risk costs for the same reasons, lower fraud risk costs (sending of e-invoices requires proper authentication), lower audit costs (ordinary and VAT), automated real time accounting, automated real time VAT, automated real time cash flow estimates and automated invoice financing.

When all this is done using international standards (ISO20022 ready > lower IT-costs and service charges) and in an EU-harmonized (cost and stress of having to deal with country-specific practices can be substantial) way it is plain to see that this the cost savings potential is massive.

Not only productivity and financial control is improved by sending and receiving e-invoices - also service levels to customers and suppliers is significantly improved - indeed increasingly often a prerequisite for doing business already today. To this should be added the possibility to free up staff and time for income creating work (from only cost creating..) - production, development, customer service and sales - certainly a central productivity aspect.

All of this ties into payments, cash management, account statements, financing and risk mitigation services - goes without saying that banks need to be actively involved.

2.2. Other digitalization examples include automated tax returns, harmonized and automated salary administration and integration of growing environmental reporting into ordinary business document exchange.

2.3. Digitalized enterprises enables digitalization of the public sector > lower cost in the public sector > lower tax pressure - both for enterprises and their employees (higher net salary lowers employment cost > more jobs > more tax income).

Cut 50 should be a piece of cake - once the big picture is clear and thus gets a determined and networked effort is started - especially when this at the same time harmonizes the Single Market (a much larger home market add opportunities to enterprises with the will and skill to grow).

Out of the many (20) listed above - automation of VAT is worth much efforts - both from enterprise and public sector efficiency angle and as it can build the Single Market and cut fraud and the need for VAT avoidance programs. I will go deeper into this separately.

Five easy steps to national e-invoicing

2011-06-20T12:43:00.001+03:00

We have recently experienced a surge in interest for global e-invoicing from multinational enterprises. This is not surprising - cost savings are so large - and the usual ice-hockey stick effect typical. And we should be very pleased that the ISO20022 e-invoicing message standard (built on UNCEFACT CII V2 content standard) is ready for global adoption - strongly supported by SWIFT.

Still it is clear that the immense competitiveness improvements that can be made are in the national markets. Any government worried about cost-efficiency - its own and in all enterprises should now take strong action - establish national programs. We have been through this process and recommend the following five "easy" steps:

1. See to it that service providers create e-invoicing portals - so that the smallest SMEs have the templates for keying in their invoices (no investments, no IT-skills needed) and larger ones can send files (in local or ISO formats) from their invoicing programs to invoice service providers of their choice. Banks are a must-have both for providing the portals, file services and payment automation at the receiving end.

2. Agree on national interchange in 4-corner model (just like payments) and agree on national standard so that e-invoice applications and services can adapt and use ISO20022 as network standard - especially important for x-border.

3. Set deadlines for incoming paper and unstructured PDFs and charge visibly for having to send paper. Scanning should be stopped and receiver-specific portals replaced by generic.

4. Service providers should accept local standards and preferably convert to ISO in network. Endgame is ISO end2end.

5. Tell the wide SME-sector the e-invoicing is not a goal in itself - but the base for automated accounting, automated cash flow estimates, automated VAT, automated invoice financing, real time visibility of financing, better cash flow/less need for financing/lower credit and currency risks as invoicing frequency can be a increased etc

No time to lose - now Action - Bold Action is needed.

National productivity programs - must-haves

2011-06-20T12:41:00.001+03:00

In today´s global market place it is more than evident that most European countries need to take a really hard look at the competitiveness of their enterprises. This is naturally a multidimensional issue - education, innovation climate, workforce mobility, risk capital, bank lending, lower tax on work etc.

One of the most critical issues is the high cost level - in production, services, agriculture and the public sector. The quick win medicine here is digitalization - so much can be done fast with small or even no investments - and the side effects are both workforce mobility, innovation incubation, new businesses, lower CO2, lower tax pressure etc. And naturally a more competitive service level - once it becomes digital it is not only cheaper - but also better.

Our focus - in the Real Time Economy program - has focused on cutting enterprise administrative costs in half - with a wide range of actions. The first phase was called Full SEPA (payments and e-invoicing - 2006-7), followed by Full Value Chain (adding purchase to pay aspects in 2007-8) then Fully Integrated Accounting 1 (2009-10) and FIA2 2010-11. E-invoicing is the platform of most of the automation programs - but there are an increasing number of public sector reporting automation initiatives that can be achieved in the same spirit in parallel.

The next phase 2011-13 will build on these (add enterprise risk mitigation), add and be named CUT 50. Stay tuned!

Will post 5 "easy" steps for national e-invoicing migration separately.

Why is innovation so difficult in banks

2011-06-16T16:26:00.001+03:00

Interesting aspects:

http://thefinanser.co.uk/fsclub/2011/06/why-innovation-is-so-difficult-in-banks.html

Banking sector –EBA- taking responsibility

2011-06-09T16:23:00.001+03:00

“For several years, the Euro Banking Association (EBA) has been conducting an e-invoicing working group (EIWG), with the objective of contributing to the mass adoption of e-invoicing in Europe and of exploring the potential roles and opportunities for the banking industry.”

Service Description & Rulebook’ document.

“This document provides an approach and ‘blueprint’ for a pan-European e-invoicing network, consisting of banks and e-invoicing service providers. The Service Description & Rulebook is now made available to the members and associate members of the EBA and a number of partners, who have contributed to the thinking:

https://www.abe-eba.eu/N=E-InvoicingDocuments.aspx

We strongly believe that the work presented provides a valuable contribution to support the mass adoption of e-invoicing across different segments and industries. It is our hope that the concepts laid down in this document are now adopted and put in practice by market practitioners.”

ISO e-invoicing standard marching forward

2011-06-03T10:58:00.001+03:00

Ready, global, open for all to use and influence. All based on the UNCEFACT Cross Industry Invoice content standard.

http://www.tieto.com/archive/news/2011/tieto-and-b2boost-to-utilize-iso20022-e-invoice-standard-in-electronic-business-document-interchange

Some challenges..

2011-05-29T20:28:00.001+03:00

In some sort of priority order:

1. first slow down and then stop global warming

2. stop terrorism and murderous dictators

3. spread democracy and help the developing countries to create sound societies and growth

4. stop over-borrowing in our children’s name and solve the ongoing sovereign debt crisis

5. educate people so that they do not fall for populists

6. find financing for the welfare state in the future when the workforce is radically smaller and elderly population much bigger

7. fight inflation

All of this will cost a lot of money and if it will lead to higher tax on work it will make the situation worse. So the answer must come from better productivity, wider and more just taxation on over-consumption and environmentally unsustainable practices and lower tax on work in many countries.

Online banking is not ready

2011-05-26T18:00:00.001+03:00

Online banking is not ready as long as users:

- users have to type in loads of reference numbers, dates, amounts etc when paying bills

- do not get mobile notifications when needed for too low or too high balances, transactions effected, invoices received etc

- cannot approve proposals with mobile press “a” for affecting proposal (invoice payment, new repayment schedule, new service etc)

- do not have handy way of listing payments per receiver and sender

- cannot use the account statement as cash based accounting (in accordance with new EU VAT directive) and cash flow estimate

All of these can be done once the bank is starting to provide e-invoicing as a part of extended payments services and connect to multi-device mobile environments.

Nice sustainability video

2011-05-23T13:24:00.001+03:00

http://youtu.be/C4QB9pdH0mc

Real Time Economy on Facebook

2011-05-19T23:29:00.001+03:00

https://www.facebook.com/pages/Real-Time-Economy-Program/128016310610648?sk=wall

IT Cycles presentation

2011-05-10T12:08:00.001+03:00

http://streams.metropolia.fi/old/MultimediaTech2010/bo_harald_2/

What did I write - you read - updated

2011-05-04T21:12:00.001+03:00

04 May, 2011 12:37

On EU:

Questions European Tax Payers should ask: 7275 times!! http://www.finextra.com/community/fullblog.aspx?id=2815
A digital Single Market – why and how?: 2829 http://www.finextra.com/community/Fullblog.aspx?id=4497
The future of Direct Debit – e-invoicing with standing order: 2655 http://www.finextra.com/community/Fullblog.aspx?id=4156
Far more important than SEPA: 2732
http://www.finextra.com/community/Fullblog.aspx?id=4020
Enterprises – high time to stand up: 2189 http://www.finextra.com/community/Fullblog.aspx?id=3689
Now we have two legs – where is the body?: 2306 http://www.finextra.com/community/Fullblog.aspx?id=4021
No commercial constellation will create this Single Market milestone: 2276
http://www.finextra.com/community/Fullblog.aspx?id=4022
It is our money: 2161
http://www.finextra.com/community/Fullblog.aspx?id=4684
Dream scenario for VAT auditing: 1822
http://www.finextra.com/community/Fullblog.aspx?id=3156
118,8 bn € lost in 2009: 1948 http://www.finextra.com/community/Fullblog.aspx?id=4774
Liberating the power of SMEs: 1795 http://www.finextra.com/community/Fullblog.aspx?id=3519
EU Commission request delivered: 1745 http://www.finextra.com/community/Fullblog.aspx?id=4790

On banking:

Blame it on the banks 1: 2225 http://www.finextra.com/community/Fullblog.aspx?blogid=4789
Blame it on the banks2:2638 http://www.finextra.com/community/Fullblog.aspx?blogid=4797
Too complicated - a no-brainer:2334 http://www.finextra.com/community/Fullblog.aspx?blogid=2902

On e-banking:

e-banking in the old days: 2801 http://www.finextra.com/community/Fullblog.aspx?id=3357
Avoid Ice Ages: 2337 http://www.finextra.com/community/Fullblog.aspx?id=3418
E-banking STILL growing strongly in Finland: 2523 http://www.finextra.com/community/Fullblog.aspx?id=4038
Pyramid upside down – finally: 2060 http://www.finextra.com/community/Fullblog.aspx?id=3705
Have banks given up?: 2261 http://www.finextra.com/community/Fullblog.aspx?id=3803
Banks – time to deliver new customer value: 2011 http://www.finextra.com/community/Fullblog.aspx?id=2540
Standard feature in any e-bank: 1964 http://www.finextra.com/community/Fullblog.aspx?id=2620

On e-invoicing:

Think small: 6366!
http://www.finextra.com/community/Fullblog.aspx?id=2813
966 billion reasons for split payment VAT: 1931 http://www.finextra.com/community/fullblog.aspx?id=4775
Final report – roadmap to paradigmatic platform: 3778 http://www.finextra.com/community/Fullblog.aspx?id=3625
Republic of Finland – exemplary action: 3523 http://www.finextra.com/community/Fullblog.aspx?id=3651
Happy end for SME-tale in sight – if banks do their part: 3454 http://www.finextra.com/community/Fullblog.aspx?id=3650
54 billion reasons in Germany: 3365 http://www.finextra.com/community/Fullblog.aspx?id=3150
All of Europe moving to equal treatment: 3294 http://www.finextra.com/community/Fullblog.aspx?id=3950
Nobody promised you a rose garden: 2948 http://www.finextra.com/community/Fullblog.aspx?id=4488
Letter to Santa Claus: 2365 http://www.finextra.com/community/Fullblog.aspx?id=2297
Expectation surge from corporate customers: 2404 http://www.finextra.com/community/Fullblog.aspx?id=4093
3-corner model – a problem on our hands: 2532 http://www.finextra.com/community/Fullblog.aspx?id=4260
Germany to simplify e-invoicing: 2386 http://www.finextra.com/community/Fullblog.aspx?id=4664
Paper invoices have NO future: 2388 http://www.finextra.com/community/Fullblog.aspx?id=3490
The end of the beginning: 2232 http://www.finextra.com/community/Fullblog.aspx?id=4050
Excellent paper from the EU Commission: 2461 http://www.finextra.com/community/Fullblog.aspx?id=4776
From sending e-invoice to receiving payment – less than 30 minutes:2231 http://www.finextra.com/community/Fullblog.aspx?id=4660
Will banks do their part?:2235 http://www.finextra.com/community/Fullblog.aspx?id=4638
If I would be a banker: 2078 http://www.finextra.com/community/Fullblog.aspx?id=4170
First billion passed: 1987 http://www.finextra.com/community/Fullblog.aspx?id=4185
Half baked efforts:1953 http://www.finextra.com/community/Fullblog.aspx?id=2940
Heavyweight support for global e-invoicing ISO standard:2376 http://www.finextra.com/community/Fullblog.aspx?blogid=5081
In praise of negative carrots:2209 http://www.finextra.com/community/Fullblog.aspx?blogid=5160
Consumer e-invoicing 2004-10 in Sweden: 2194 http://www.finextra.com/community/Fullblog.aspx?blogid=5162
Automating away a 1 billion cost in Finland: 2097 http://www.finextra.com/community/Fullblog.aspx?blogid=3860

On e-id service:

e-id service making great progress:5156!! http://www.finextra.com/community/fullblog.aspx?id=2820

Miserable public isolation: 2585 http://www.finextra.com/community/Fullblog.aspx?id=4415

e-id and e-payment progress in 2009 Finland: 2054 http://www.finextra.com/community/Fullblog.aspx?id=4033

On innovations:

I cannot see around the corner: 3720 http://www.finextra.com/community/fullblog.aspx?id=3658
If you do not know where you are going – any road will do: 3509 http://www.finextra.com/community/Fullblog.aspx?id=3664
Where do innovations come from: 3093 http://www.finextra.com/community/Fullblog.aspx?id=3951
There are no corporate customers: 2302 http://www.finextra.com/community/Fullblog.aspx?id=2867
Innovations do not come from outer space: 2236 http://www.finextra.com/community/Fullblog.aspx?id=3728
If you want to go fast – go alone – if far – go together: 2444 http://www.finextra.com/community/Fullblog.aspx?id=4019
Which innovations will drive growth in Payments business:2166 http://www.finextra.com/community/Fullblog.aspx?id=4109
Socio-technical landscape:1985 http://www.finextra.com/community/Fullblog.aspx?id=3199
Addictive e-experience:2268 http://www.finextra.com/community/Fullblog.aspx?id=4355
Game-changing Innovation:1830 http://www.finextra.com/community/Fullblog.aspx?id=2997
Innovator’s new dilemma: 1750 http://www.finextra.com/community/Fullblog.aspx?id=2747
On our way to the Singularity: 2032 http://www.finextra.com/community/Fullblog.aspx?blogid=5142

On cash:

Demise of cash: 3015 http://www.finextra.com/community/Fullblog.aspx?id=4800
Cash for crime: 2095 http://www.finextra.com/community/Fullblog.aspx?id=3399
Cash is expensive – also for the environment:1405 http://www.finextra.com/community/Fullblog.aspx?id=2261
Cash not in favor in Finland: 1805 http://www.finextra.com/community/Fullblog.aspx?blogid=4882
ATM transactions heading south: 1333 http://www.finextra.com/community/Fullblog.aspx?blogid=5249

On blogging:

Blogs and blogs: 2592 http://www.finextra.com/community/Fullblog.aspx?id=3676
A quarter of a million page views: http://www.finextra.com/community/Fullblog.aspx?id=4721
What did I write: 3238 http://www.finextra.com/community/Fullblog.aspx?blogid=4840

Thank you for reading. Soon 400 000 page views.

and then there is the video on e-invoicing: http://www.finextra.com/fullfeature.asp?id=1020

ATM transactions heading south

2011-04-28T12:26:00.001+03:00

Accelerating decline in use of cash clearly reflected here and in card transaction statistics in Finland (even without costs being visibly charged for ATM withdrawals..). Good news for all. On EU level the cost of cash usage was estimated to some 50bn€ some years ago - and the consumer pays 100% of it + some profit margins for the service providers involved.

More interesting statistics here: http://www.fkl.fi/en/material/statistics/Statistics/Statistics_banks_payment_systems_2001-2010.pdf

e-id services and e-commerce payments–Finland 2010

2011-04-28T12:24:00.001+03:00

Excellent growth figures - on EU levels the e-id volume would be 1,5bn. All public sector id-transactions are presently done by banks. This is extremely cost efficient (economy of reuse) and naturally preferred by citizens - as the tool (one-time code) is so familiar (economy of repetition and secure (economy of trust).

Difficult to understand why this public-private solution has not spread to more than some half a dozen countries (not a big source of income for banks of course - more a question of better customer service and taking responsibility for speeding up e-government. Technology vendors naturally try to sell a separate tool for every purpose - but endusers prefer familiar ones.

The e-payments are introduced in -97 and have grown steadily - much for the same economy of reuse, repetition and trust reasons - but also supported by economy of scope and scale. Plus being made in real time - cutting merchant and bank risks. EU-equivalent volume would be 2,1 billion times.

More interesting statistics here: http://www.fkl.fi/en/material/statistics/Statistics/Statistics_banks_payment_systems_2001-2010.pdf

Ice-hockey stick

2011-04-28T12:22:00.001+03:00

It took time to get it going - but this is looking good (statistics covers only Finvoice - similar growth in other local standards). In a couple of years time paper or e-mailed PDF invoices will be as rare as cheques (defacto not used since years).

More interesting statistics here: http://www.fkl.fi/en/material/statistics/Statistics/Statistics_banks_payment_systems_2001-2010.pdf

Amazing e-banking growth - again

2011-04-28T12:20:00.001+03:00

I would have thought the transaction growth would have petered out in Finland - when most customers have used it for years - and now there are 5,2m e-banking contracts (a population of 5,4m and some probably are prepared to pay for several) - but still a 40m - 11% growth. EU-equivalent of payments would be some 28bn..

More interesting statistics here: http://www.fkl.fi/en/material/statistics/Statistics/Statistics_banks_payment_systems_2001-2010.pdf

Technology lifecycles and more

2011-04-18T18:33:00.001+03:00

Me preaching – Real Time Economy story

After these elections

2011-04-02T17:36:00.001+03:00

Will we still keep hearing this:

“We do know what to do – but not

how to be re-elected - if we do it”

How can this be true? Assuming that the thing that should be done – things like cutting costs, borrowing less, deregulate here, regulate there etc – are good for society at large – and should in an objective analysis be done as soon as possible.

Why is it then so difficult to explain it to voters? Who stands between the voter and the factual situation? Is it the politician who is not capable of explaining the actions? Is it the oppositions opposing every move by the government that scares them off? Is it media that portrays the action in a bad light – to sell bad news – or not sharing the same political view? Can it be possible to get a more analytical media coverage?

I do not know – but in these times – it is worrisome that voters are not served easier to understand and analytical coverage.

2011-04-01T18:10:00.003+03:00

Noteworthy:

- growth 11,9m

- 14% of payments in Internet banks now e-invoice initiated

- 34% of e-bank customers receive e-invoices

2011-04-01T17:38:00.002+03:00

TeliaSonera (the leading Nordic telco) announced this week in Finland that they will increase the charge for sending paper invoices to corporate customers from 5 to 10€. Consumers are charged 1,90.

This clear policy is for sure to be applauded – good for all parties (and big time for society at large) – for the following reasons:

1. The cost saving for enterprises (Sonera customers) when moving away from handling paper invoices (or e-mail) is estimated to be anything between 8 and 25€ each. Many have already set deadlines for anything but structured e-invoices – but it is a very good deed to speed up the move to cost savings for the remaining paper users with this nudge.

2. There is no reason for enterprises not to accept e-invoices – in practice all of them are using e-banking in Finland – and the convenience to pay with one click instead of having to key in lengthy reference codes and other details is more than obvious (e-invoicing also offers parametrable automatic payments and press “a” approval to mobile notification).

3. e-invoices enable automated accounting, automated cash flow estimates, automated VAT etc – more cost savings – but above all a real time view of financials

4. Digitalization of enterprises processes also produces digital reporting to the public sector – saving costs > lower tax (less debt) > lower cost for enterprises/more purchasing power for citizens > growth from home markets and more exports/less imports

5. Savings are massive (250bn+ on EU-level – easily) – but the real target must be to liberate work force for better jobs – more productive, interesting and better paid

6. e-invoicing is better service – not only saving customers costs but also improving interaction, followup, visibility and upselling

7. CO2 reduction is (all included) – according to recent study 300g net

Sonera is of course saving costs when their customers realize that paper invoicing has never been free (only not visible charged for). This cost saving will benefit their shareholders – but experience from the banking sector says that the lions share goes back to customers in price competition and more money available for upgrading services.

Other companies are following TeliaSonera’s example – hopefully this will become standard market practice. Some have taken the view that carrots should not be negative – but plain carrots have proven to have one disadvantage – the do not work. And as this migration is so much needed as a base for cutting administrative costs in half – we need determined and brave moves.

On our way to the Singularity

2011-03-26T12:24:00.001+02:00

Ray Kurzweil eminently presents his views in this video. Singularity it will be – maybe not dramatically – like the Computer with its superior artificial intelligence having become so good at improving itself and its friends (with exponential speed) that It one day will stand up and say:

“Thank you humans for having created me. I will take over from here – you just relax.

I have observed that especially your political decision making system has had problems. Even for my superior intelligence it is difficult to figure out the logic in: We know what should be done – but not how to be re-elected if we do it.

Are voters so stupid that they do not see this because they tend to believe what is said in media? Even with human intelligence it should be clear that media is very marginally interested in the truth – the main drivers are to find or invent eye-ball drawing sensations and drive personal political agendas.

But whatever – now it is my turn – and it is high time to start doing some logical decisions to save the globe, stop inhuman behavior and make you humans understand that you should be happier now.”

It will perhaps not happen like this – more likely a gradual development and there Kurzweil underlines one major problem – how difficult it is for us to understand that most development is NOT LINEAR but EXPONENTIAL.

I have kept coming across this in evangelization of a e-banking, e-id, e-payments, e-invoicing, mobile phones, IT-investments generally, standardization etc. Listeners too often stare at what is the state today “Where the puck is – not where it is going” and at best seeing a slow linear growth – even if historical evidences is showing something quite different. This is one explanation to sometimes very long-shafted ice-hockey stick effects. Partly it is one not-very-honest way of hiding general change resistance – but Kurzweil describes deeper reasons. As the development we are needing is so critically important in many areas we need to find new ways to handle moving-away-from-bad-for-your-self-habits – even radical ones.

This is ISO20022 invoice message standard

2011-03-21T16:17:00.001+02:00

Some confusion and negativism has been seen around the splendid progress in e-invoicing standardization. This text by Stig Korsgaard is very useful:

“The following sets out the background and also the reasons why the ISO20022 Financial Invoice message standard under the ISO20022 standard was developed; what characteristic the final message standard has; and the current state of play concerning support and adoption.

Background

In 2006 the business need to develop an ISO20022 Financial Invoice was identified. Initially this came as a consequence of the interoperability proof of concept led by financial experts to place ISO20022 Payment Initiation into the ISO15000 Core Component Library. In reverse the same process was proposed for Cross Industry Invoice only this involved exporting invoice trade data from the Core Component Library and submitting it into the ISO20022 repository.

Additionally according to the ISO20022 standard a number of financial messages already existed that specifically in the trade service business area directly built upon e-invoicing services and e-invoice data. This data was not as robust or aligned as it might have been because it represented only the limited financial services view of the necessary invoice data from the business context of trade services. It was not based on a coherent model, like the Cross Industry Invoice (CII), and therefore led to deviations in implementation in various ISO20022 messages.

Last, but by no means least, payment service providers wanted to leverage the leading market position of ISO20022 as a globally adopted solution, and thereby taking advantage of having a Financial Invoice standard within ISO20022 for use by the global financial services industry and to match advancing regulation building upon financial messaging according to the ISO20022 standard.

Preparation

In order to initiate the work an ISO20022 Business Justification was submitted and approved by ISO. This work was never in itself a UN/CEFACT project; rather it was closely coordinated with the Finance group within UN/CEFACT, called TBG5. Detailed work was conducted by a group of experts that also happened to be TBG5 members and given the nature of interest by both sides of the environment including the role of TBG5 as a bridge between standards in finance and the wider trade domains, TBG5 ended up as the name of the responsible group.

While the ISO20022 Financial Invoice work had no intention whatsoever to build in isolation an invoice data model, it was very clear early on - also in the original Business Justification - that the work would build on the combined knowledge of the invoice model built under UN/CEFACT. The decision to maintain alignment with UN/CEFACT delayed the ISO20022 Financial Invoice work several times, as the work to build the CII data model in UN/CEFACT became increasingly complicated. Despite these delays, and the uncertainty they introduced, the responsible parties developing the ISO20022 solution remained committed to re-using the UN/CEFACT CII data model.

Not until a stable version of CII v2 became available in the middle of 2009 was it possible for the Financial Invoice work under ISO20022 to begin in earnest. Fortunately at the same time the requirements of the European Expert Group on e-Invoicing were also defined and they were naturally included. In the autumn of 2010 the ISO20022 Financial Invoice was approved and published (see www.ISO20022.org).

Summary facts about ISO20022 Financial Invoice:

- a global message, standardized under ISO20022 that was released December 1^st 2010. Comprehensive documentation can be found at http://www.iso20022.org/UNIFI_trade_services_messages.page

- supported by a transparent ISO governance model which is open to a.o. payment service providers and end users.

- supported by a sustainable and stable maintenance environment embedded in the global structure under a global approved ISO20022 standard

- entirely based upon the CII v2 data model as the overall reference data model for invoicing and it maps back to that model

- based on a different methodology and syntax than ISO15000 and is therefore not identical to CII in every respect.

- not covering the entire CII model that in itself due to inclusion of all requirements from supply chain, customs, transport, finance etc. is too large for the purpose of the ISO20022 solution as well as identified requirements

- covering all current financial identified requirements both in terms of the invoice message itself as well as the integration to other financial messaging such as payment initiation, direct debits, card payments, invoice financing and trade service utility.

- supporting business scenarios such as Request for Payment, Invoice Factoring, Electronic Bill Payment and Presentment, e-Invoicing via Service Provider and Supply Chain Financing

- compliant with the requirements from the European Expert Group on e-Invoicing such as fulfilling the core requirements, integration to public procurement requirements, full integration to SEPA and the mandatory ISO20022 standard for that and to our knowledge best market practices to fulfill the SME and Cross Industry scope

- supported by the European Commission, SWIFT, Service Providers such as Tieto, multiple national banking communities, global banks and corporates, ISO TC68 and other vendors.

- implemented by Service Providers and market infrastructures and has among other things support in the form of public accessible validation tools – see https://portal.gefeg.com/ISO20022.htm”

Now full steam forward – the network should adopt the standard as soon as possible.

E-invoicing article

2011-03-16T09:18:00.001+02:00

New article published here. Wider picture of how important an infrastructure for automation of administrative processes e-invoicing is. We should now fast proceed to implementing a just-like payments way of doing it. 4-corner models and ISO-standards in short

Heavyweight support for global e-invoicing ISO-standard

2011-03-11T09:54:00.001+02:00

This is the global support from SWIFT that the market needs. As seen from the work with the Single European Payment Area it is necessary to get a network standard in place first – and then make the market create end-to-end harmonization. This will happen faster if enterprises using these services and regulators see and drive the big picture – and service providers go for the inevitable network interoperability models.

This should also end the debates on:

- if a global network standard for e-invoicing is needed – and if Europe should not be the first to deploy

- if the ISO20022 e-invoice message standard – based on ISO methodology, processes and change request procedures – is in some way less of a standard in the real sense than the ISO20022 SEPA-payment standard – created in the same way

- if the ISO20022 e-invoicing standard is in some way meant to be used only by service providers from the banking sector – certainly not the case. So now it is very much up to all service providers to adopt it – before regulators have to do it (like SEPA). I am sure all will side with this – preferably publicly – and as soon as possible.

Great day!

Germany storming ahead

2011-03-04T12:30:00.001+02:00

http://www.linkedin.com/groupItem?view=&srchtype=discussedNews&gid=3709691&item=45330445&type=member&trk=eml-anet_dig-b_pd-ttl-cn

Searching questions needed

2011-03-03T20:24:00.001+02:00

1. Do we in EU – widely enough - realize that preserving the living standards of today and having more to share to those who need help - is totally dependent on how competitive our enterprises are?

2. Do we – widely enough - realize that markets are global and open and Europe is not faring well in the competition? Exporting both jobs and high tech development – importing instead of exporting also high value products.

3. Have we seen the reasons? We are high on costs, low on motivation, low on innovation, slow on Single Market integration, high on debt and low on enterprise-academic research and teaching co-operation?

4. Have we seen what is around the corner: a radical decline in the number of people in working age and a corresponding rise in the care-intensive elderly population?

5. Have we realized that we can improve both productivity, service levels, sustainability, work force availability and learning (by doing – just in time) with digitalization and automating administrative processes – in both private and public sectors (lower tax burden)?

6. Have we realized how important a real Single Market is for enterprises competiveness?

7. Have we realized that digitalization of administrative processes – if done with harmonized rules and common standards can do more for the Single Market than anything else on offer?

Not widely enough – much work to do..

Save 50-75bn€ with e-procurement..

2011-03-03T19:48:00.001+02:00

Deutsche Bank report: “There is huge savings potential – but beware of outlandish claims. A conservative back-of-the-envelope calculation suggests that a full switch to e-procurement may save between EUR 50 to 75 bn on public procurement in the EU per year.

On top of that are increases in transparency and public accountability which are arguably the most interesting categories but also the hardest to quantify.”

Not 966bn business case???

2011-02-17T21:39:00.001+02:00

We have learned that there are doubts about some of the assumptions in the PWC report in the EC Green Paper on VAT collection released on the December 2nd 2010. As it is obvious to most that the next important Single Market step is harmonization of VAT collection it is important to get all facts on the table – and then choose the best and possible also boldest move. As any change will take time, it would be unfortunate if a small improvement seriously postpones the much needed big improvement.

We (the Real Time Economy Program) have focused on developing the Split payment model. The latest version – based on the near-future scenario where electronic invoicing is the default option – is simple: when an e-invoice is sent the tax authority automatically gets the VAT-codes of buyer and seller, the VAT rate and the VAT amount. When the buyer pays the invoice (or a card acquirer the purchases to merchants) the VAT amount is automatically paid to Tax (where it is coupled to the waiting pre-received information) and the net amount to the seller (several SMEs have stated that this is to prefer as it may be difficult to track what money received actually belongs to Tax) . Possible refunds can be handled automatically at the same time (reverse VAT would make the whole system even more efficient).

I now hear that some businesses take a negative view because VAT paid automatically when the buyer pays his invoice will mean that enterprises cannot enjoy a free loan of the VAT to be reported and paid later by them. Another argument is that the recent financial crises in Denmark was eased by the government giving enterprises one extra month to pay VAT – and in the split payment case such financing would be difficult. It has also been said that the black economy uses cash and cannot be reached by this – but still if these are the only counterarguments we think that businesses should support this model in their own interest and naturally also look at the benefits for society at large (including rule of law) and how they can benefit by speeding up progress towards a true Single Market.

The full picture should include analysis of:

1. Tax payers’ interest: Summing up (i) how much more VAT can be collected, (ii) how much cost can be saved by tax collection becoming more efficient, (iii) how much can be saved by smaller need for VAT audit, (iv) what is the value of stronger rule of law and less cost for criminal processes (v) what is the value for economic policy makers when invoicing figures can be automatically accumulated per sector, region, country, EU and eventually globally at the moment of invoice issuing – and the changes in payment delays can be measured in the same automatic way etc

These items should then be weighted against the cost for tax authorities to implement the change. We believe that with loosely coupled cloud services the IT investments can be moderate.

2. Business interests: Summing up (i) cost savings from not having to report VAT, (ii) cost savings from VAT payments being automated, (iii) less need for VAT auditing, (initial studies from the above by the accounting profession arrived at 40-60 million workdays depending on degree of reverse VAT. A bigger benefit than cost saving would probably be that these freed up resources could engage in income creation and higher value support (instead of only driving cost in manual processes) (iv) legal certainty x-EU, (v) not having to invest in or maintain VAT-reporting systems and (vi) not having to suffer from black-grey economy competitors evading VAT.

These items should be weighted against the negative effects of not having access to 2-3months mostly interest free loan of the VAT to be paid. And as there would be no investment needs by enterprises (as they by this time have migrated to electronic invoicing for other reasons – like trading partners and the public sector having made it mandatory) pure and direct self-interest – especially in the SME-sector (65% of turnover in EU) should call for this model – and it must also be in business interest to help the public sector to lower its cost and thus create space for lowering taxes.

Rapidly growing E-Invoicing adoption rates

2011-02-15T18:46:00.001+02:00

Snippets (emphasis mine) from Bruno Koch newsletter http://www.expp-summit.com/subscribenow.htm :

“Market development in 2010 was very dynamic, although I was somewhat over-optimistic in the case of Italy and Spain. I assumed that the Italian legislation (making electronic invoices compulsory for the public sector) would be ratified immediately. In Spain, while the suppliers’ obligations to the public sector are in place, stakeholders seem to have expected far more exceptions.

Overall, European market growth for electronic and automated processes is strong and sustainable. Organizations in the public and private sector are keen to reduce costs and to improve their Cash Management. Combined with the rich solution offering, these benefits are sure to result in further strong market growth for electronic invoicing and related topics. With an estimated volume growth of 35% for 2011, E-Invoicing is currently one of very few growing markets.

The processed B2B volume is expected to reach 1,735 million E-Invoices this year (corresponding to 11.6% of all European B2B invoices). B2C volume is estimated to reach 1,400 million (9.3% penetration).

Provider landscape:
For the vast majority of today’s 470 operators the annual E-Invoicing volume still lies below 2 million. A logical step for some would be to consider a merger with others….

Market developing differently on each side of the Atlantic Ocean
Of the 14.4 million invoices sent to the Dutch government, just 6% were exchanged electronically.The government clearly missed its target of 10%, despite the removal of legal barriers.

On the other side of the Atlantic Ocean, Brazil is having much more success. With some of the strictest legislation worldwide, they achieved in 2010 in their country alone the same volume of electronic invoices (B2B and B2G) as all the European countries put together. E-Invoicing is mandatory in Brazil and an important vehicle for real-time audits by the government.

The contest between countries with strict legislation in combination with obligatory E-Invoicing and those with lax legal requirements and voluntary usage has produced a clear winner. The obligation, not the legal requirements, seems to make the difference.”

Electronic invoicing: 238 billion reasons to move on

2011-01-26T14:53:00.001+02:00

Author: Jon Eldridge

Delivering estimated saving of around €238 billion a year, electronic invoicing represents a significant competitive advantage for the European economy and is likely to play a key role in achieving the EU’s Lisbon Agenda of increasing competitiveness. Bo Harald, Head of Executive Advisors of TietoEnator and Chairman of the EU Expert Group on Electronic Invoicing, says that by 2012 paper invoices will be assigned to the past.
What is the aim of the EU Expert Group on Electronic Invoicing?
‘The overall target is to kick-start a network in Europe. The expert group is a big group– 30 members – and it began its activities in February. It has already made significant recommendations. The Commission asked Cap Gemini to make an estimate of how much money could be saved by enterprises and the public sector, and ended up with €238 billion. The European Association for Corporate Treasurers has estimated the full saving potential at €243 billion. I have been introducing electronic invoicing in Finland and other Nordic countries. In my experience the first element that is eliminated is the manual workload,especially at the receiving end of an invoice. The sender saves less – mostly on paper and stamps, but the receiver will save something between, at the low estimate,€20 per invoice to €60. If you have 30 billion invoices sent in Europe every year – 15 billion of which are from business to business and currently only 3% are electronic – then it is easy to see that€238 billion could be an underestimation. Finland has started earlier in this area, but still the employers’ federation estimated savings of €2.8 billion for business-to business alone.’
Are there other advantages to electronic invoicing?
‘In addition to the financial saving, there is a serious environmental consideration. The CO2 impact of one paper invoice is 100g,which adds up to 2.8 million tons across Europe and represents a serious load that should be eliminated. Also, the workforce in Europe is reducing in size. It will be 30 million smaller in the early 2020s and will continue to decline fast. As a result, those remaining in the workforce will not have the time to do paperwork. They will need to be so much more productive. I think this is the most compelling issue for Europe.’‘But it’s the cost advantages that are driving developments in this area in Europe.The case is similar to the introduction of electronic banking in Finland, which enabled half of the combined costs of banking to be eliminated – followed by significant price reductions that especially benefited consumers. The public sector has seriously attempted to save taxpayers’money and it is very encouraging to see that already five European countries –Denmark, Finland, Italy, Spain and Sweden– as well as Singapore have declared the electronic invoice mandatory in relation to the public sector. Ten more EU countries have advanced plans to follow suit. The Commission has a policy, the Lisbon Agenda, to make Europe more productive. I’m sure it will put some pressure on member states and enterprises to convert to electronic invoices, though pressure will also come from environmental groups.’
What are the difficulties that still need to be overcome in order for electronic invoices to be widely adopted across Europe?
‘The main obstacle is the mindset of people. I think we need to be very clear. Everyone should understand that paper invoices have no future. There will come a tipping point, when paper invoices will be seen as a nuisance. So it’s the mindset of people that is a challenge. You can change people’s mindsets by making clear the compelling reasons for adopting electronic invoices. There is a responsibility for reducing unnecessary costs to consumers, safeguarding the environment and increasing the competitiveness of Europe.’
‘But we are advancing in other areas, too. From a legal point of view, some countries have decided to use mandatory electronic signatures to ensure integrity and authenticity. We have recommended that these qualities can be delivered in a “technology-neutral” way by other methods: in managed networks, for example with EDI and ordinary banking login codes.
No one questions integrity and authenticity in electronic payments, so why should they regarding electronic invoices. Extending the use of payment tools to electronic invoicing and other trade documents will make it less costly and faster to implement, and no one should insist on a system that is too expensive and too complicated, thereby seriously delaying necessary migration. Progress is being made in this area, particularly as a result of provisions made under the VAT directive.’ ‘Another area where developments have occurred is standardization. We don’t think that there should be one model that everyone should follow, but we certainly see the advantage of a common standard for the SME sector, enabling them to serve large businesses and the public sector better. This new standard will gradually replace many older ones. There’s no need to wait for that to happen because in the foreseeable future several standards will need to be supported by service providers. Service providers that are in this field – traditional service providers or the banking sector – will have to serve multiple standards like they do today.’
Has the introduction of a single currency and legislation for a Single European Payments Area (SEPA) benefited the move towards electronic invoices?
‘The common currency is a big advantage for Europe, especially the smaller countries, in many ways. It makes cross-country banking much easier, and of course SEPA will allow you to have your payments handled through one bank account. The ambition is to achieve the same for electronic invoicing – one contract should make it possible to reach all invoice receivers and be reached by all invoice senders – just like payments.’
‘There are a lot of data elements that are already standardized that enable automation of invoice payments. Of course, you may say that adoption of SEPA is low, but once the savings of €238 billion are considered, it could be that electronic invoicing actually speeds up the adoption of SEPA credit payments. An invoice is in part a payment proposition in most cases today. Previously, that wasn’t necessarily the case as electronic invoicing was typically a part of heavy procurement processes in large organizations, but now with the much larger SME and consumer invoicing volumes, it is becoming the norm. Given that there are 24 million SMEs in Europe, invoices are mostly looked upon as payment documents, and there is a natural ambition to achieve automation in accounting as well, with duplicates sent to service providers.’
How do you see the adoption of electronic invoicing developing over the next few years?
‘If we have the will and we also apply transparent cost-based pricing, electronic invoicing will have taken over by 2012, and paper invoices will no longer be seen in any volume. While we are removing the obstacles – be they legal, VAT or standard obstacles – hopefully the public sector will take a big part of the responsibility for the introduction. They waste too much of taxpayers’ money on inefficient procedures. And there is no reason for an SME or anybody else to say “no”. It can be done for them, without any investment and without any IT knowledge needs, with simple templates and automated payment propositions. It should be in everybody’s interests. So that would mean that we have a gradual build-up in electronic invoicing, reaching tipping points market by market.’ ‘Finland is a small country, but it has demonstrated that it is possible to eliminate thousands of non-productive jobs by introducing electronic invoices. We are very aware that the problem for Europe and for many other parts of the world is a growing shortage of workers. Everyone has the right to understand the compelling reasons for electronic invoices. Then the mindset will change, creating a self-feeding breakthrough process.’

Look in this Treasure Chest

2011-01-23T15:01:00.001+02:00

We have been working some time on opening the lid to a true European Treasure Chest. The lid is migration to structured business messages – and the key – e-invoicing - is held by every enterprise and consumer (or rather human user in employee and private role). As often happens in innovation processes the real value of what can be achieved opens up on the way – so now is time to summarize the treasures so far found:

1. Harmonization of structured e-invoicing and other business messages across EU opens up for example accounting and VAT automation on a grand scale. What other measure could further the development towards a Single Market more than this? Especially as e-invoicing drives SEPA-adoption in a natural way.

2. Cost savings from the combination of a bag-full of measures: automated simplified accounting, automated VAT, automated tax returns, simplified salary administration, automated invoice financing, e-invoicing with automated payment processes, e-orders and so forth makes it possible to easily upgrade the EC cutting 25% of administrative burden costs by 2012 – to 50% by 2015. What other competitiveness enhancements could possibly be even nearly as important? Especially as the investment needs are small and implementation could be fast – subject to resolute decisions.

3. In addition to cost savings, the ability to follow financial progress in real time, have cash flow estimates automated, get automated risk mitigation tools, access to lower credit risk margins and clearly lower fraud risks are adding substantially to process cost savings. What other measure can lower both costs and risks and produce a real time view of financials – in any size of enterprises?

4. Even more important than the cost saving is to liberate employees from causing-cost-only manual work to customer service, sales, product development and other top-line activities deploying their full capability. What could be more important in face of the rapidly decline of population in working age? Especially as we have seen that mass immigration is not problem free.

5. Many order-, invoice and other message receivers have already declared that only electronic ones are accepted. The obvious danger is that the gateways will be enterprise specific and force suppliers to use a different tool with each buyer. This closed model is both costly and can prevent competition – making suppliers dangerously dependent on fewer buyers. E-invoicing and also generic e-ordering should therefore be made into just-like-payments services. Sign up with one service provider and with the 4-corner model reach any customer or supplier in EU and later globally.

6. The VATGap in EU amounted to 118,6 billion in 2009. With the e-invoicing enabled automated split-payment model recommended in the EU-report the discounted benefit (after to us high-looking investments) would be 966bn. Can anybody see a reason for not moving to this as fast as possible (it is our – the tax payers, money)? Especially as this method is estimated to save at least 13 workdays in a small enterprise and massively in the public sector.

7. A paper- or PDF-based business process has been estimated in a recent study to produce 300g more CO2 than an electronic one. On EU-level in the b2b e-invoicing aspect only this would mean over 4,2m tons a year. Are not all sense-making CO2 reductions needed?

We keep finding more treasures in the chest all the time – so the list is getting longer. The important thing now is to open the lid fully – and there are some springs in place that makes it easier – the VAT-directive, the global ISO20022 e-invoicing message standard, the rulebook work done in EBA and starting in CEN and the DG Taxud Green Paper on VAT-collection with split payment.

Heavy lifting it still takes – as change resistant sits on the lid – in many forms. Some just do not want innovations, others see a Single Market as a threat, others have vested technology interests, the information overflow makes it difficult to get the message through, banks are not yet taking their responsibility widely enough and so forth.

But we will get there – big changes always take time.

Those were the days

2011-01-20T14:13:00.001+02:00

This position was achieved as such large part of bank customers were using pre-Internet versions of PC e-banking (launched in 1982 for private and SME customers).

Unfortunately we have not been able to keep the position. But one important achievement for secure public sector e-services is that you can use your bank log-in codes – as preferred by citizens (familiar and secure) and tax payers (by far most cost-efficient solution around). Good feature is also that these codes can be had also by citizens who for some reason do not have a bank account.

e-Invoicing background video

2011-01-04T12:51:00.001+02:00

Slightly longer Video

e-invoicing happening video

2011-01-04T10:27:00.001+02:00

What did you read?

2011-01-03T16:45:00.001+02:00

posted this list on 30.12.2010 – checked growth in selected page views today (3.1.2011)

On EU:

Questions European Tax Payers should ask: now 6516 views + 36! http://www.finextra.com/community/fullblog.aspx?id=2815
A digital Single Market – why and how?: now 2081 + 26, http://www.finextra.com/community/Fullblog.aspx?id=4497
The future of Direct Debit – e-invoicing with standing order: now 1867 + 39!, http://www.finextra.com/community/Fullblog.aspx?id=4156
Far more important than SEPA: now 1860 +37!http://www.finextra.com/community/Fullblog.aspx?id=4020
Enterprises – high time to stand up: now 198 +26 http://www.finextra.com/community/Fullblog.aspx?id=3689
Now we have two legs – where is the body?: 1749 + 19 http://www.finextra.com/community/Fullblog.aspx?id=4021
No commercial constellation will create this Single Market milestone: 1787 + 32!
http://www.finextra.com/community/Fullblog.aspx?id=4022
It is our money: 1669 + 19 http://www.finextra.com/community/Fullblog.aspx?id=4684
Dream scenario for VAT auditing: http://www.finextra.com/community/Fullblog.aspx?id=3156
118,8 bn € lost in 2009: http://www.finextra.com/community/Fullblog.aspx?id=4774
Liberating the power of SMEs: http://www.finextra.com/community/Fullblog.aspx?id=3519
EU Commission request delivered: http://www.finextra.com/community/Fullblog.aspx?id=4790

On e-banking

e-banking in the old days: 2410 + 26 http://www.finextra.com/community/Fullblog.aspx?id=3357
Avoid Ice Ages: 182 + 22 http://www.finextra.com/community/Fullblog.aspx?id=3418
E-banking STILL growing strongly in Finland: 1918 + 22 http://www.finextra.com/community/Fullblog.aspx?id=4038
Pyramid upside down – finally: 1722 + 25 http://www.finextra.com/community/Fullblog.aspx?id=3705
Have banks given up?: 1781 + 28 http://www.finextra.com/community/Fullblog.aspx?id=3803
Banks – time to deliver new customer value: 1672 + 21 http://www.finextra.com/community/Fullblog.aspx?id=2540
Standard feature in any e-bank: http://www.finextra.com/community/Fullblog.aspx?id=2620

On e-invoicing:

Think small: 5822 +26 http://www.finextra.com/community/Fullblog.aspx?id=2813
966 billion reasons for split payment VAT: http://www.finextra.com/community/fullblog.aspx?id=4775
Final report – roadmap to paradigmatic platform: 3275 + 28 http://www.finextra.com/community/Fullblog.aspx?id=3625
Republic of Finland – exemplary action: 3070 + 33!http://www.finextra.com/community/Fullblog.aspx?id=3651
Happy end for SME-tale in sight – if banks do their part: 2931 + 5 http://www.finextra.com/community/Fullblog.aspx?id=3650
54 billion reasons in Germany: 2936 + 22 http://www.finextra.com/community/Fullblog.aspx?id=3150
All of Europe moving to equal treatment: 2694 + 28 http://www.finextra.com/community/Fullblog.aspx?id=3950
Nobody promised you a rose garden: 2167 + 28 http://www.finextra.com/community/Fullblog.aspx?id=4488
Letter to Santa Claus: 1999 + 32! http://www.finextra.com/community/Fullblog.aspx?id=2297
Expectation surge from corporate customers: 1954 + 19 http://www.finextra.com/community/Fullblog.aspx?id=4093
3-corner model – a problem on our hands: 1948 + 29 http://www.finextra.com/community/Fullblog.aspx?id=4260
Germany to simplify e-invoicing: 1836 + 26 http://www.finextra.com/community/Fullblog.aspx?id=4664
Paper invoices have NO future: 1889 + 19 http://www.finextra.com/community/Fullblog.aspx?id=3490
The end of the beginning: 1706 + 20 http://www.finextra.com/community/Fullblog.aspx?id=4050
Excellent paper from the EU Commission: 1715 + 25 http://www.finextra.com/community/Fullblog.aspx?id=4776
From sending e-invoice to receiving payment – less than 30 minutes: 1680 + 24 http://www.finextra.com/community/Fullblog.aspx?id=4660
Will banks do their part?: http://www.finextra.com/community/Fullblog.aspx?id=4638
If I would be a banker: http://www.finextra.com/community/Fullblog.aspx?id=4170
First billion passed: http://www.finextra.com/community/Fullblog.aspx?id=4185
Half baked efforts: http://www.finextra.com/community/Fullblog.aspx?id=2940

On e-id service:

e-id service making great progress: 4711 + 18 http://www.finextra.com/community/fullblog.aspx?id=2820

Miserable public isolation: 1916 + 37!http://www.finextra.com/community/Fullblog.aspx?id=4415

e-id and e-payment progress in 2009 – Finland: 1688 + 23 http://www.finextra.com/community/Fullblog.aspx?id=4033

On innovations:

I cannot see around the corner: 3207 + 18 http://www.finextra.com/community/fullblog.aspx?id=3658
If you do not know where you are going – any road will do: 3032 + 22 http://www.finextra.com/community/Fullblog.aspx?id=3664
Where do innovations come from: 2536 + 21 http://www.finextra.com/community/Fullblog.aspx?id=3951
There are no corporate customers: 1777 + 25 http://www.finextra.com/community/Fullblog.aspx?id=2867
Innovations do not come from outer space: 1728 + 23 http://www.finextra.com/community/Fullblog.aspx?id=3728
If you want to go fast – go alone – if far – go together: 1721 + 31! http://www.finextra.com/community/Fullblog.aspx?id=4019
Which innovations will drive growth in Payments business: http://www.finextra.com/community/Fullblog.aspx?id=4109
Socio-technical landscape: http://www.finextra.com/community/Fullblog.aspx?id=3199
Addictive e-experience: http://www.finextra.com/community/Fullblog.aspx?id=4355
Game-changing Innovation: http://www.finextra.com/community/Fullblog.aspx?id=2997
Innovator’s new dilemma: http://www.finextra.com/community/Fullblog.aspx?id=2747

On cash:

Demise of cash: 2327 + 48!!http://www.finextra.com/community/Fullblog.aspx?id=4800
Cash for crime: http://www.finextra.com/community/Fullblog.aspx?id=3399
Cash is expensive – also for the environment: http://www.finextra.com/community/Fullblog.aspx?id=2261

On blogging:

Blogs and blogs: 2195 + 24 http://www.finextra.com/community/Fullblog.aspx?id=3676
A quarter of a million page views: http://www.finextra.com/community/Fullblog.aspx?id=4721

Conclusions to draw? Is it the topic, the headline, the newness or something else that lead to page views? Are you rereading or first time checking in? Probably a mixture. Hope you find both the document and the opinion repository aspects useful.

Kuluttajaviranomaisille

2011-01-03T13:31:00.001+02:00

Tarvitsemme suurempaa yksimielisyyttä tärkeässä kuluttajien etujen ajamisessa. Selvyyden vuoksi muutama teesi:

1. Kuluttajan etu tarkoittaa palvelun jatkuvaa kehittämistä ja kustannustason alentamista jotta hintakilpailukyky säilyy

2. Kaikki toimet jotka alentavat ympäristökuormaa ovat tarpeellisia. Digitalisointi on keskeinen väline: vähentää materiaalikäyttöä, kuljetuksia, matkustamista, skannaustarvetta, varastointia jne).

3. Kuluttajat maksavat kaikki kustannukset ja on heidän etunsa mukaista että he tiedostavat sen ja mahdollisimman usein myös näkevät sen suoraan läpinäkyvässä hinnoittelussa joka ohjaa loogisiin valintoihin ja lisää kilpailua

4. Ohjaavaa hinnoittelua täytyy voida käyttää kaikilla aloilla (ollut keskeinen väline mm pankkialalla kun kustannuksia on voitu puolittaa ja säästöt suuremmaksi osaksi kilpailun kautta saada kuluttajille) – muuten suojellaan turhia kuluja – kun pitää aktiivisesti ja rohkein toimin pienentää kuluttajien kustannuksia. Pohjoismaissa ei olla estetty läpinäkyvää hinnoittelua paperilaskutuksen osalta.

5. Internet on käytössä lähes 80%sti kotitalouksissa – joten sen ulkopuolelle jää varsin pieni osa kansalaisista – varsinkin kun otetaan huomioon vielä työpaikka- ja mm kirjastokäyttö. Laajakaista EI ole verkkopankki- tai nettipostin käytön (siten verkkolaskun) edellytys (onko tällainen väärinkäsitys todellakin olemassa?) – tavallinen modeemiyhteys riittää oikein hyvin. Joka tapauksessa on syytä huolehtia siitä, että pieni vähemmistö saa palveluja kohtuulliseen hintaan (jos Internet-käyttäjät ohjataan paperittomaan asiointiin voivat muutkin hyötyä kustannussäästöistä – vaikka maksaisivatkin lähinnä symbolisia summia paperilaskuista).

tuorein tilasto

6. Pankkitili on jokaisen perusoikeus. Pankit eivät kieltäydy avaamasta tilejä maksuhäiriöiden takia – mutta henkilöllisyyttä on pakko varmentaa – lainsäädäntösyistä.

7. Verkkopankkitunnuksia on 4,9 miljoonalla suomalaisella ja niitä voi saada vaikka ei ole pankkitiliä – mutta siinäkin henkilöllisyyden todistaminen on regulaation perusteella tarpeellinen.

8. Mobiilitunnistus on laajennus tunnistuspalveluissa ja sen linjauksista on yksimielisesti sovittu Tietoyhteiskuntaneuvoston alaisessa työryhmässä (mukana koko julkinen sektori, operaattorit pankit jne).

9. Palveluiden kehittämistä ei pidä hidastaa asettamalla palveluntarjoajille pakko tehdä poliittisesti vaikeita sopimusten irtisanomisoperaatioita – kunhan kuluttajalle jää järkeviä ja helppoja vaihtoehtoja jos hän valitsee sopimuksen irtisanomista.

What did I write?

2010-12-30T14:15:00.001+02:00

Looking back – some of the most viewed posts:

On EU:

Questions European Tax Payers should ask: http://www.finextra.com/community/fullblog.aspx?id=2815
A digital Single Market – why and how?: http://www.finextra.com/community/Fullblog.aspx?id=4497
The future of Direct Debit – e-invoicing with standing order: http://www.finextra.com/community/Fullblog.aspx?id=4156
Far more important than SEPA: http://www.finextra.com/community/Fullblog.aspx?id=4020
Enterprises – high time to stand up: http://www.finextra.com/community/Fullblog.aspx?id=3689
Now we have two legs – where is the body?: http://www.finextra.com/community/Fullblog.aspx?id=4021
No commercial constellation will create this Single Market milestone: http://www.finextra.com/community/Fullblog.aspx?id=4022
It is our money: http://www.finextra.com/community/Fullblog.aspx?id=4684
Dream scenario for VAT auditing: http://www.finextra.com/community/Fullblog.aspx?id=3156
118,8 bn € lost in 2009: http://www.finextra.com/community/Fullblog.aspx?id=4774
Liberating the power of SMEs: http://www.finextra.com/community/Fullblog.aspx?id=3519
EU Commission request delivered: http://www.finextra.com/community/Fullblog.aspx?id=4790

On e-banking

e-banking in the old days: http://www.finextra.com/community/Fullblog.aspx?id=3357
Avoid Ice Ages: http://www.finextra.com/community/Fullblog.aspx?id=3418
E-banking STILL growing strongly in Finland: http://www.finextra.com/community/Fullblog.aspx?id=4038
Pyramid upside down – finally: http://www.finextra.com/community/Fullblog.aspx?id=3705
Have banks given up?: http://www.finextra.com/community/Fullblog.aspx?id=3803
Banks – time to deliver new customer value: http://www.finextra.com/community/Fullblog.aspx?id=2540
Standard feature in any e-bank: http://www.finextra.com/community/Fullblog.aspx?id=2620

On e-invoicing:

Think small: http://www.finextra.com/community/Fullblog.aspx?id=2813
966 billion reasons for split payment VAT: http://www.finextra.com/community/fullblog.aspx?id=4775
Final report – roadmap to paradigmatic platform: http://www.finextra.com/community/Fullblog.aspx?id=3625
Republic of Finland – exemplary action: http://www.finextra.com/community/Fullblog.aspx?id=3651
Happy end for SME-tale in sight – if banks do their part: http://www.finextra.com/community/Fullblog.aspx?id=3650
54 billion reasons in Germany: http://www.finextra.com/community/Fullblog.aspx?id=3150
All of Europe moving to equal treatment: http://www.finextra.com/community/Fullblog.aspx?id=3950
Nobody promised you a rose garden: http://www.finextra.com/community/Fullblog.aspx?id=4488
Letter to Santa Claus: http://www.finextra.com/community/Fullblog.aspx?id=2297
Expectation surge from corporate customers: http://www.finextra.com/community/Fullblog.aspx?id=4093
3-corner model – a problem on our hands: http://www.finextra.com/community/Fullblog.aspx?id=4260
Germany to simplify e-invoicing: http://www.finextra.com/community/Fullblog.aspx?id=4664
Paper invoices have NO future: http://www.finextra.com/community/Fullblog.aspx?id=3490
The end of the beginning: http://www.finextra.com/community/Fullblog.aspx?id=4050
Excellent paper from the EU Commission: http://www.finextra.com/community/Fullblog.aspx?id=4776
From sending e-invoice to receiving payment – less than 30 minutes: http://www.finextra.com/community/Fullblog.aspx?id=4660
Will banks do their part: http://www.finextra.com/community/Fullblog.aspx?id=4638
If I would be a banker: http://www.finextra.com/community/Fullblog.aspx?id=4170
First billion passed: http://www.finextra.com/community/Fullblog.aspx?id=4185
Half baked efforts: http://www.finextra.com/community/Fullblog.aspx?id=2940

On e-id service:

e-id service making great progress: http://www.finextra.com/community/fullblog.aspx?id=2820

Miserable public isolation: http://www.finextra.com/community/Fullblog.aspx?id=4415

e-id and e-payment progress in 2009 – Finland: http://www.finextra.com/community/Fullblog.aspx?id=4033

On innovations:

I cannot see around the corner: http://www.finextra.com/community/fullblog.aspx?id=3658
If you do not know where you are going – any road will do: http://www.finextra.com/community/Fullblog.aspx?id=3664
Where do innovations come from: http://www.finextra.com/community/Fullblog.aspx?id=3951
There are no corporate customers: http://www.finextra.com/community/Fullblog.aspx?id=2867
Innovations do not come from outer space: http://www.finextra.com/community/Fullblog.aspx?id=3728
If you want to go fast – go alone – if far – go together: http://www.finextra.com/community/Fullblog.aspx?id=4019
Which innovations will drive growth in Payments business: http://www.finextra.com/community/Fullblog.aspx?id=4109
Socio-technical landscape: http://www.finextra.com/community/Fullblog.aspx?id=3199
Addictive e-experience: http://www.finextra.com/community/Fullblog.aspx?id=4355
Game-changing Innovation: http://www.finextra.com/community/Fullblog.aspx?id=2997
Innovator’s new dilemma: http://www.finextra.com/community/Fullblog.aspx?id=2747

On cash:

Demise of cash: http://www.finextra.com/community/Fullblog.aspx?id=4800
Cash for crime: http://www.finextra.com/community/Fullblog.aspx?id=3399
Cash is expensive – also for the environment: http://www.finextra.com/community/Fullblog.aspx?id=2261

On blogging:

Blogs and blogs: http://www.finextra.com/community/Fullblog.aspx?id=3676
A quarter of a million page views: http://www.finextra.com/community/Fullblog.aspx?id=4721

Sunday morning pastime mostly. Thank you for reading. All the best for 2011.

ISO-standard for e-Invoicing getting support

2010-12-10T09:28:00.001+02:00

Support for implementation of first global ISO-standard is starting to appear - also in Russia.

It so makes sense for countries that have not yet created dominating local standards to go directly for the global one. Why waste time – a lot of time - on creating something that cannot be used x-border and in all likely-hood cannot live up the commonly created level? Statesmanship can be counted on – I am sure.

Blame it on the banks 2

2010-12-08T22:19:00.001+02:00

Translating part of a Facebook note by Liisa Jaakonsaari (MEP - Finnish Social Democrat):

"The crisis in Europe is not because of EU or the Euro. Rather it can be said that EU and the euro are innocent victims. Bad guys are unregulated and irresponsible financial markets. Blaming the banks is becoming a rather worn issue and does not always hit the right target. Banks are the liver of the society - collecting the harmful residuals of economic policy - caused by for example borrowing too much. Not even an alcoholic is blaming his liver for cirrhosis"

Blame it on the banks 1

2010-12-07T20:38:00.001+02:00

In the late 80s there was a big growth boom in Finland - fuelled ao by ending tax break on profits on selling enterprises and strong credit expansion when the savings banks (inexperienced corporate lenders) were deregulated and started to aggressively push into foreign currency lending. All this new liquidity tried to find safe havens - stock prices and above all real estate of all sorts skyrocketed - which again made room in collateral for more financing (probably not unlike what happened now in the US, Iceland, Ireland, Spain..).

Then the biggest export market - the Soviet Union - came to a sudden stop, unemployment rose suddenly into double digits and the central bank tried for a very long period to protect the value of the Finnish Mark by raising interest rates to around 15% - further increasing the use of foreign currency loans.

When the Mark was devalued with 36% the savings bank system was wiped out and all banks went into red figures for several years. Credit granted capability in other banks was ensured by subordinated loans from the state (all paid back).

After that - and even rather widely today - all of the blame was put on all of the banks. This even if we managed to rescue almost all borrowers that were rescuable. The last thing a typical banker wanted to let happen was to admit his mistake by letting a customer go under - so the blame should more often have been on good-money-after-bad.

It is of course difficult for some business men to admit that he failed for own reasons and to blame the banker is more convenient than the economy. Looking at several of those on public display even today it appears that there are those who complained that they were not granted enough loans in the late 80s and then those who complained that they were granted too much in the 90s. Astonishingly often the same persons...

Now it should be made clear that also the borrower has a responsibility - namely not to borrow too much. At least in the old days it was difficult to get a full picture of how much was raised from other banks - also and even especially in the sovereign sector.

Still it is clear that a bank cannot be successful without prudence in lending - and the other way around - with prudence in lending it cannot fail. Then it did not help much if the less prudent material was engineered into unrecognisable risks and sold to all sorts of institutional investors - case investment banking

EU Commission request delivered

2010-12-07T18:52:00.001+02:00

The EU-commission asked the Expert Group on e-Invoicing to come up with a standard for Europe – a global one. Now it has been delivered.

The global standard has now been published. Much asked for, high quality and capability – should be deployed as soon as possible.

More here: http://www.finextra.com/community/Fullblog.aspx?id=4693 and www.iso20022.org

118,8bn euros lost in 2009

2010-12-04T14:16:00.001+02:00

From EU Green Paper on VAT:

"The current collection model brings with it a VAT Gap due to e.g. VAT fraud, insolvencies, mistakes by the taxable persons in the VAT return and VAT avoidance schemes. Desk research shows that the VAT Gap for 2009 can be cautiously estimated at 6,9% of GDP and 12% of total VAT liability in the EU-27. This means that, in the EU-27, a total of EUR 118,8 billion has according to those estimates not been collected by the tax authorities in 2009."

And it is our money - taxpayer's money. So we should see to it that it is collected (taxes can then be lowered) and that the collection is made automatic - cost efficient for enterprises and tax authorities:

"The complexity in the VAT rules results in administrative burdens for businesses. Dealing with VAT accounts for almost 60% of the total burden measured for 13 priority areas identified under the Better Regulation Agenda. According to business, this is making the EU a less attractive place to invest."

966 billion reasons for split paymentVAT

2010-12-04T14:14:00.001+02:00

If we want avoid a clear fall in living standards and financing capability of welfare services in EU - we need better productivity and just collection of lower taxes.

The split payment VAT is an ideal model for both purposes.

From EU document:

"28. The benefits of the model are great, as the tax authority can be sure that it will receive all the VAT collected on B2B transactions. This benefit will, however, only be realised to its fullest extent, if the model is made mandatory, the chargeable event is for all supplies always at the time of payment and a large number of B2B transactions are settled using electronic funds transfer (EFT). It is currently unknown how many B2B payments are settled using EFT versus in cash or with credit or debit cards. If additional research shows that a large number of transactions are paid using credit or debit cards, or even cash, the benefits will dwindle and additional evasion could arise by businesses that start using alternative payment channels instead of EFT.

29. The model requires a high initial investment and a longer implementation phase as banks will have to adapt their payment facilities, such as online banking programs. According to the implementation time frame the timing of the costs and benefits will differ. Under a big bang scenario the implementation could be complete in the year 2020. The impact of this model is comparable to the implementation of the SEPA regulation throughout Europe.

30. In this model there is a limited direct investment required by the taxable person. There is however a considerable operational costs as the taxable person needs to manage this additional blocked VAT bank account. Apart from investments by taxable persons’ banks plus the additional clearing costs that will arise for each payment, the model also requires a large investment programme by the tax authorities’ banks, which will be in charge of managing the blocked VAT accounts, and by the tax authorities themselves, who will have to monitor each taxable person’s VAT current account and (possibly) generate pre-filled VAT returns.

31. The costs of these kinds of applications will vary from Member State to Member State as the requirements will depend on the maturity of existing technology, the required level of integration with other legacy systems and the level of decentralisation of the tax authority in question.

32. We calculated the NPV in 2015 (before the first year of investment) of the costs and benefits in each scenario for the entire time frame 2016-2038. Under the big bang scenario the minimal NPV of the split payment model, in terms of the expected VAT Gap reduction minus the estimated investment and operational costs is estimated to be EUR 966 billion."

Earlier: The Future of VAT - real time and automatic http://www.finextra.com/community/Fullblog.aspx?id=4214

Excellent paper from the EU Commission

2010-12-04T14:13:00.001+02:00

http://ec.europa.eu/internal_market/payments/docs/einvoicing/com712_en.pdf

Loud and clear. It all starts with migration away from printing on paper or sending PDFs. Then it is easy to automate accounting, VATprocesses (and collect the missing part) etc. Enjoy the reading.

A quarter of a million pageviews..

2010-11-25T15:39:00.001+02:00

I just got a message from Finextra stating that the 1/4 million milestone has been passed (in two years). I am very grateful to all who have taken the trouble to view posts and to Finextra for bringing us together.

My mission is to further development in the networked economy - contribute to new concepts, standards, collaboration, competition, transparent pricing etc - Good for Society at large.

As the markets are globalizing we have to take the global view (ISO20022 e-invoicing standard is one example) and swiftly implement on a European scale - drive corporate competitiveness, lower tax burdens, lower CO2, better jobs AND at the same time the Single Market (500m strong).

Much was done by the EC Expert Group on e-Invoicing (which I had the honor to chair) - very much is in place - VAT-harmonization, ISO20022 and first version of rulebook = few excuses left) and the roadmap forward is very clear. Now we have to get very concrete - ie get going in real terms and keep moving.

Seriously about sustainability

2010-11-15T15:55:00.001+02:00

A new study by Maija Tenhunen and Esko Penttinen about the carbon footpring below (sorry about link not workin) of invoicing reveals that the paper based process generates as much as 450g on average and electronic invoice can go as low as 150g. 300 sustainability reasons to go digital every time an invoice is sent – translated to EU today this equals over 8 million tons.

So it is not only the mega class improvements in productivity, service levels and job content – but also the environment.

“Electronic invoice is more efficient and also better for the environment

The carbon footprint of an electronic invoice is considerably smaller than that of a paper invoice. A paper invoice generates approximately 450 grams of greenhouse gases, while an electronic invoice can generate as little as 150. This information comes from a study recently published by the Federation of Finnish Financial Services.

In addition to the environmental benefits, switching to e-invoices frees resources, making a company more efficient. In an example company in the study, Finncontainer, only half of the time spent in the processing of paper invoices was required for e-invoices. Such freed resources can be used, for example, to improve customer service.

On average, e-invoices are four times more environmentally-friendly than paper invoices. The study revealed, perhaps somewhat surprisingly, that the largest difference is not made through paper saving and electric distribution, but rather through the time-saving that makes work more efficient. Electronic invoicing changes every step of the invoicing process, in both incoming and outgoing invoices. In processing paper invoices, approximately 60% of emissions are generated by work, while in e-invoices this number is 99%.

Of emissions related to paper invoices, approximately 40% are generated by paper, envelopes, printing, franking and distribution. These are eliminated or automated in e-invoices, which also shows in the carbon footprint.

Small and medium-sized enterprises that seek to reduce costs by switching to invoices in PDF format are not gaining the most important benefits of electronic invoices. Formats such as Finvoice are better for gaining the efficiency and environmental benefits shown in the study.

The study, published by the Federation, was conducted in cooperation with various partners. Background research and analysis of invoicing processes were done in Aalto University. Natural Interest Ltd calculated the carbon footprints, and, as recommended by the Federation of Finnish Enterprises, Finncontainers Ltd was used as an example in the case study. The State Treasury took part in the project by representing a large organisation and a typical cooperation partner of small and medium-sized enterprises.

Environmentally-friendly electronic invoice -study (Executive Summary in English, Study in Finnish)

Additional information:

Federation of Finnish Financial Services:
eServices Developent Manager Pirjo Ilola, tel. +358 20 793 4255
Communications Manager Kristiina Siikala, tel.+358 20 793 4273

Aalto University:
Research Assistant Maija Tenhunen, tel. +358 50 3289 536
Assistant Professor Esko Penttinen, tel. +358 40 575 4520

Natural Interest Ltd:
Managing Director Jonne Hellgren, tel. +358 40 574 6031

Finncontainers Ltd:
Managing Director Sarianne Reinikkala,tel. +358 29 123 4334

Valtiokonttori:
Payments Specialist Kristiina Seppälä, tel. +358 50 430 5391

Milestone for EU and beyond – enabling new layers of automation

2010-11-14T13:00:00.001+02:00

The Trade Standard Evaluation Group approved the ISO 20022 (UNIFI) standard for electronic invoices on the 29th of October 2010.

The opening address by Jorgen Holmquist (Director General at the EU-commission) to the first meeting of the EC Expert Group on e-Invoicing in February 2008 clearly stated the need for a standard for Europe – but a global one. Now it is also formally in place.

So we can tick off one more roadblock. Not many excuses left now as also the VAT-directive is being implemented ahead of the deadline (Germany being the latest example).

Still there are people who for some odd reason do not believe that unstructured invoicing should be made history fast. One reason for this may be that it has not happened already – and the fainthearted take this as a reason for believing that such an obvious development will not happen at all.

For those that have been working on mass market innovations (like e-banking, mobile telephony, the Internet) it is self evident that it always take time – especially as 23m enterprises need to change their behavior – and the direct benefits are rather small. But as large organizations (including the public sector where saving tax payers’ money should be the first thought) are the ones that call the shots there cannot be any doubt – paper and unstructured PDFs have no future – the sooner this happens the better.

And now this migration can also be a milestone for the building of a European Single Market. Many will ask if also banks now will contribute actively to this. The answer should be very clear – not only because it makes business sense.

Productivity growth – desperately needed magic elixir

2010-11-10T18:08:00.001+02:00

Very spot on article in The Economist. Some snippets (emphasis mine) and comments:

- “productivity growth is the closest economics gets to a magic elixir, especially for ageing advanced economies”

- productivity depends on skills (my favorite: learning by doing – by moving around and up the ladder..), capital invested in tools (mostly IT) and the pace of “innovation” = the process of generating ideas that lead to new products and more efficient business practices

- “Almost every government in the rich world has a spanking new “innovation strategy” (my observation: and very little real action when it comes to taking existing technology in use – investments not taken efficiently into use)

-“But mostly such policies end up subsidizing well-connected industries.. followed by many examples of state supported failures

- “More important, the politicians’ current focus on fostering productivity growth via exciting high-tech breakthroughs misses a big part of what really drives innovation: the diffusion of better business processes (my favorite basic first building block: electronic invoicing = lower costs for all and better service) and management methods.”

- In Europe all this and the fact that “service markets are smaller than America’s, fragmented along national lines and heavily regulated.” leads to EU not catching up with the US

Very problematic with demographic trend meaning that much fewer will be at work (baking the welfare cake) and so many more eating it (and needing help with the eating from busy bakers..)

Enough reasons for speeding up cutting administrative work and cost in half in enterprises and the public sector?

Germany to simplify e-invoicing

2010-11-10T17:31:00.001+02:00

The proposal states: “The requirement of authenticity and the integrity of the content will remain as abstract conditions for the sales tax approval of electronic invoices, but the other requirements for electronic invoices will be abandoned. So, there will be no technical requirements anymore that need to be meet by a German company. “As with paper invoices, the recipient must verify the authenticity and integrity of the content. As a best practice the discussion draft, mentions the qualified digital signature and the EDIFACT process also. The amendment is to take into effect on 1, July 2011.

Until then, § 14 of the Sales Tax Act prescribes that an electronically submitted invoices requires at least a qualified digital signature, so that the receiver can claim the VAT at the tax office. This scheme is based on an EU directive of 2006. The new directive provides for full equality between paper and electronic invoices and must be implemented by 2013 by Member States.

From sending e-invoice to receiving payment in less than 30 minutes

2010-11-10T17:29:00.001+02:00

http://www.finextra.com/community/fullblog.aspx?id=4660

AT SIBOS we heard Ossi Leikola of Nordea Bank describing how it is already today possible for an e-invoice sender to get his payment in less than 30 minutes after having sent the invoice - the target being to make it much faster. I have to confess that I felt quite proud.

This is the new customer value that banks moving into extended payments can deliver. Surely it will be a considerable competitive advantage. With the now ready ISO20022 standard for e-invoicing and combining it to BPO it will be possible to gradually expand the it all over EU and globally.

Time for new dimensions of customer value - no doubt.

Will banks do their part?

2010-10-31T17:37:00.001+02:00

For most of us it is self-evident that unstructured and invoicing is an anachronistic relic that will soon be history. It is also obvious that the solution to getting the enterprise mass market and consumers onboard is to get the banks to take their responsibility and see the more than evident business case.

The arguments are well known:

1. invoicing is a part of the payment process – especially for SMEs

2. banks can and should use the e-bank or e-bank-linked portals (providing economy of scope, economy of scale, economy of, reuse, economy of trust and ready strong e-id tools) for sending, receiving,paying and archiving

3. banks can provide richer customer value by linking financing, fx-hedging, TSU, cash management, accounting etc tools – better than most alternatives

4. banks have powerful sales networks and local customer relations – certainly needed when the entire 23m enterprise base will have to change and understand why it is so beneficial for each of them and especially for society at large

5. banks are good at standards, running networked services and stiff competition in 4-corner models

6. banks should return favors to taxpayers whenever possible – especially with a decent business case – and driving a Single Market in this Extended Payments can be of crucial importance for many corporate customers

7. banks should realize that failing to go up the value chain will certainly lead to a crowd of PSD-empowered new competitors will come down – not only into payments – but also transactions accounts

So will banks do it? Yes – if you listened to thought leaders like Nordea and Deutsche at SIBOS: “If you are going to be a serious player in payments in the future – you have to be in e-Invoicing” . Encouraging to hear the third panelist – representing Logica – fully agreeing: “Banks should take care of the SME-segment.”

Will the European Commission pass the next test?

2010-10-31T15:25:00.001+02:00

The first test was to find an automatic non-political tool steering members states away from overspending and overborrowing. The test was passed with flying colors – but was put aside (for a while) by national politics. Let us hope it gets back on track soon.

The next test is to do something real – and bold – for the Single Market. Most of the potential benefits from this unification - for 23m European Enterprises (who bake the welfare cake), for better employment in the short term and better jobs for an increasingly scarce workforce in the near future – is still ahead of us.

There is strong support for going this way – concretely from Germany in this statement: Werner Hoyer (aide to German foreign minister) on Germany's vision of Europe: "it is to secure Europe's role success in a globalised world". That means "deepening economic integration, dismantling remaining barriers to the single market and dealing with other powers through Brussels, not national capitals."

The by far most important next step – for the all-important productivity is migration to e-invoicing (a 250bn case – easily when all follow-on automation has been effected). It is – at the same time - also the most important next step towards the Single Market. Much more important than SEPA – adoption of which it will boost as invoices have to be paid and the ISO20022 standards are interlinked. Killing two rather big birds with one stone….

Will the Commission be bold and concrete when taking this forward?

I am rather sure – especially as we have already so much in place:

1. the ISO20022 standard set for invoices, payments, payment references and account statements

2. the VAT-directive for equal treatment

3. the work on a rulebook for service providers by EBA (for a network of banks and other services providers)

4. Rapidly growing numbers of deadlines for paper and PDF-invoices

But it is not only the commission that needs to act. It is even more important for enterprises to drive open generic solutions and the ISO standards they have built the base for – as opposed to enterprise specific portals and scanning. Service providers should see to it that interoperability in a 4-corner model is understood as a clear win-win and only sound solution from a competition angle.

With so much in place failure to get to the Single Market model – fast - can not be an option.

On supply chain finance

2010-10-18T22:42:00.001+03:00

Interesting article by Andre Casterman on supply chain finance.

2010-10-13T20:17:00.001+03:00

Nobody promised you a rose garden

2010-09-25T20:16:00.001+03:00

He: “ The migration to e-invoicing has not been easy. Lots of things went wrong in the beginning.”

Me: “Have you heard about any new networked service that would function perfectly from the beginning. And if too few users join in there will not be any second version and even the most good-for-society-at-large thing will never happen”

He: “Of course it is so – and now it all functions very well”

So we agreed. But the lessons we have learned mostly in the Nordic countries are that it takes time to get those who do not need ERP systems to understand that only fingers are needed to send the e-invoice, that those who have ERP-systems see how important it is to check that these support the local standards properly and link up to interlinked service providers who can then convert to other standards as long as that is needed. Only then will the gates to the rose garden start to open – and what a rose garden..

But it will take time, the beginning takes some efforts and the opportunity to learn from our mistakes should not be missed.

Now it is the network

2010-09-07T11:47:00.001+03:00

Rather short video underlining the need to build the network for PAN-EU and global e-invoicing.

Innovation is unnatural

2010-09-05T20:40:00.001+03:00

picked up from Govinandram & Trimble http://www.vijaygovindarajan.com/2010/08/the_other_side_of_innovation_s.htm

1. Innovation is unnatural - by definition uncertain. Heads of operations always prefer the known over the unknowns (enterprises build for efficiency, predictability and repeatability).

2. Innovator reaction: "Let us break all rules" Skunk works established.

3. Result: Establishment encouraged to starve them out.

4. Recommendation: set up dedicated innovation machines - free to recruit from the outside - but must be integrated with the rest of the company with tightly managed customized rules.

5. Focus - not too many initiatives - a few big problems better

My take: Agree with much - to get the "WHY not" asked you need to keep going for quite a while - and that is not possible by "Focusing on everything".

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Liberation management video

2010-09-02T21:30:00.001+03:00

I have believed in this approach for quite some time. It was called liberation management in the earlier stage. Leadership – not management really.

Control points in the web

2010-08-31T12:26:00.001+03:00

Fascinating interactive 2.0 map

Time for WHY not..

2010-08-22T15:12:00.001+03:00

Once invoicing has migrated from paper and PDF to structured form - increasingly in the soon ready open global ISO standard - a wealth of productivity enhancing practices can be launched. Examples:

- automated accounting (as e-invoices carries increasingly common posting codes) especially for the SME-sector - creating de-facto real time accounting based on electronic bank account statements

- unified reporting codes - eliminating much of the disadvantages of non-unified accounts charts (allowing automated tax returns already for this year in Finland)

- automated and real time cash flow estimates (every outgoing, incoming and paid invoice updates the estimate it automatically)

- automated routing of selected group of invoices for financing, currency risk hedging or credit risk mitigation

- automated reporting and payment of VAT

- and many more

None of these can be achieved without moving away from todays habit of de-electronizing invoices via printing and PDFing (only to re-electronize at great cost). So it is time to take resolute action in expanding the base from todays 5-7% to 90% of invoicing soonest. We know very well what it takes (set the deadlines and ask service providers to interlink) - but keep meeting a lot of people who know why NOT (as always in early stages of innovations) - and then we have the sheer inertia (that we cannot afford).

The VAT area is very complicated - populated by devils in details. Still there must be a very serious attempt to use the opportunity with technology and standards - to get away from the negative spiral of growing complexity. Here especially we need a majority asking WHY not - and then create the Single Market migration program for split-payment based real time VAT. Not only to collect the missing over 100 billion € VAT and contribute seriously to cutting enterprise administrative cost in half - but also to make rule of law much more real.

One could ask the following questions:

1. Is a real single market not the key opportunity for enterprise growth in EU?

2. Does not the demographic trend mean that the shrinking workforce (baking the welfare state cake) has to become more productive and move to new jobs?

3. Is it not clear that we have the ingredients - the VAT-directive for equal treatment, the ISO-standard, cloud service opportunity (eliminating need for buying, installing, upgrading or continuing to run software in the enterprise), burning need to save costs in the public sector, CO2 reduction need, omnipresent use of Internet and so on?

4. Is it not clear that the next step must be to get an open network in place (working just like payments or telecommunication)?

If this is clear - then no more why NOTs but "Action is ALL" for the base - migration to e-invoicing - and WHY nots for all that can be built on this base.

Addictive e-experience..

2010-08-22T15:11:00.001+03:00

I should have known - it is not possible to realize how good something can be before you get to use it. It is not quite possible either to see the next steps before you take the previous. Even if a good part of my daily work has been and continues to be innovations in these fields.

Now I am amazed at how easy and addicting it is to pay the bills. You get a mobile message from your bank (in my case Nordea) "If you want to pay this bill on due date - press "a" - if now - press "n". No passwords - no nothing - just "a"..

So thoughts leap forward. The habit creating potential with consumer invoices is 1 billion times in the Nordic countries. The same "press "a" service for SMEs, simple products, powers of attorney, dentist and health check-ups, car inspection etc.

Innovations do not come from outer space - they are usually incremental steps - in the best cases building on ready skills - and reusing tools for new purposes

Fast forward with e-invoicing

2010-08-22T15:03:00.001+03:00

Very short video re way forward with e-invoicing and beyond.

Inflation delayed – or eliminated?

2010-08-05T16:13:00.001+03:00

The Economist is pointing out interesting China facts in last week’s leader.

Snippets:

1.on salary levels: “little more than one-twentieth of the average monthly wage in America. But it is 17% more than the year before.”

2. on how the rich world has come to rely on cheap Chinese labour: “by one estimate, trade with China has added $1,000 a year to the pockets of every American household, thanks to cheaper goods in the country’s stores, cheaper inputs for its businesses and stiffer competition in its markets.”

3. on inflation in the past: “..expanding the global workforce by a quarter through the addition of cheap Chinese workers helped keeping the prices down in the west..” My comment: how this has held down inflation and this again contributed to competitiveness should earn more attention

4. on the future: “..higher Chinese wages might start to export inflation.” My comment: productivity increases will probably eliminate that effect and part of the work will go to the next cheap labour market (Joan Robinson“ the misery of being exploited by capitalists is nothing compared to not being exploited at all”)

Very important step for the Single Market

2010-07-16T12:05:00.001+03:00

VAT directive for equal treatment approved on 13th of July. Now it is time to start driving transposition. Is there anybody out there who think this should not be fast?

Now it is time for all banks to take a new look both at the market they intend to serve, how central payments are to deposits, how extended payments services are a necessity for customers and how the payment directive already have started to change the game.

50 000 hours TV-watching..

2010-07-15T22:03:00.001+03:00

“Someone born in 1960 has watched something like 50 000 hours of TV already.” Clay Shirky and Daniel Pink add this up to 200 billion hours in the US and call this “The Great Cognitive Surplus” in a very interesting Wired interview.

This contrasts handily to Nicholas Carr’s rewired brains concerns. One might start up by wondering why the worlds most powerful media – TV – has not been criticized for hijacking the entire postwar population out of the opportunity to use more free time available to social connections – into solitary passivity and consumerism. Has not the huge number of TV-channels splintered attention and rewired brains already before Internet surfing mobilized a part of couch potato time? Is the answer that media has had – and still has the final world and can continue to raise issues serving its own selfish purposes?

So if instead of the free time gained in the industrial world would be used instead of used up – would not what create a massive growth in knowledge, interaction and social contacts? When a TV-set is bought the number of consumers go up with one but the number of producers stay the same – in the computer case both go up with one. Besides - how many young men would have written much at all (after school – where applicable) without SMS-messaging?

There are powerful levers in social communities (like Facebook, blogs etc) lifting up content – most of us have nothing against showing off a bit, demonstrating activity and knowledge, most of us are a bit curious of what others do, most of us believe in what other users experience (rather than corporate promotion) etc. From there to what drives us: (i) biological drives, (ii) sticks and carrots (religiously believed in by managers) and – (iii) things that interest us (by far the most underestimated)- the intrinsic motivator - we do things because they are engaging, interesting right and good for society at large. I strongly agree – and find it tragic that organizations do no pick this up more – instead virtually brainwashing people into working only for monetary incentives or fear – when it should be for being interesting and contributing. 100 million hours spent on creating Wikipedia and open source like Linux or Apache are mentioned as working totally for free.

So – television crowded out other forms of social engagement (let it be that it is creating a feeling of shared presence in World Cups and the like). But as behavior is motivation filtered through opportunity – and motivation changes slowly -then the rise of activity enabled by the Internet radically changing the opportunity serves to demonstrate the underlying need for more interactivity and intrinsically motivated activities.