Archive for the ‘Public sector’ Category
How keeping it simple can help to convert 5.5 million invoices to electronic
Posted on: April 10, 2012
All government agencies in Norway, as of 1st January 2012, need to accept e-invoicing. They should demand e-invoicing and with a standard format. The public sector have now adopted the PEPPOL infrastructure in Norway. This infrastructure is open for the private sector but mandating is only for public sector. This will save the Norwegian Government around 40 million Euros. 5.5 million incoming invoices per year will be converted to 100% electronic by 2016.
I spoke with Olav Astad Kristiansen, Senior Advisor and e-Invoicing Project Manager at DIFI, the agency responsible for rolling out the Norwegian Government’s e-invoicing program. How are they going to do it? Olav says it all depends on making the infrastructure easy to set up. He wants to convince the private sector about how easy it is to set up the PEPPOL infrastructure.
This simple set up concept also applies for small and medium enterprises (SMEs). If you are going to do e-invoicing, this doesn’t necessarily need to be a big ICT project. In Norway, there are 500,000 businesses – 280,000 are SMEs. By making the ERP solutions ready to import and export the standard format, this makes a big difference. SMEs need to use simple web e-invoicing portals.
Olav will elaborate on how the private sector can learn a thing or two about this experience in using the PEPPOL infrastructure for e-invoicing in his presentation ‘What can the private sector learn from the Norwegian Government’s drive to 100% e-invoicing by 2016?’ at the e-Invoicing Europe conference, taking place on 3rd – 5th July in Brussels this year.
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During my research for developing our e-Invoicing Europe conference agenda, I thought about what has developed in this market since last year’s conference. I asked myself “How has the industry changed and what direction was it heading?” Here are a few things that sprung to mind:
A stronger link between payments and e-invoicing
Banks are now realising the potential to provide e-invoicing to their existing clients who use their payment services. They have also started to partner with e-invoicing providers to bridge the gap in functionality that make the invoice-to-pay process far more automated. In addition to this, with maturing e-invoicing practitioners, there is increased demand for additional savings from complementary functionalities to e-invoicing, such as supplier portals and dynamic discounting.
Interoperability
Around the time of our 2011 conference, a group of e-invoicing service providers formed the European e-Invoicing Service Providers’ Association (EESPA) for three main reasons:
- To promote interoperability
- To advocate and support the wide adoption of e-invoicing and its benefits
- To represent the industry, engaging in the public policy debate and recommending best practice within appropriate European forums
The fact that a Working Group for Interoperability within EESPA has recently been set up means there is now a drive to take interoperability seriously. Charles Bryant, Vice Chair of EESPA will be giving a fuller update in July at this year’s conference and also chairing a live debate with operators on interoperability for practitioners.
Public sector mandating e-invoicing
More and more national governments are mandating e-invoicing due to austerity measures, where back-office spend will be significantly reduced. Another reason is to promote growth via paying suppliers early or offering early payment or dynamic discounting, increasing liquidity into a country’s supply base. According to a 2011 Billentis report, the public sector is responsible for 15-18% of all purchases in a country. 45-65% of all companies are suppliers for the public sector and send invoices to its administration. And 100% of enterprises and households receive invoices from the public sector.
Several European governments has recently mandated e-invoicing, including Norway, Denmark, Spain and most recently Greece. The BRICs countries have slightly different motivations for e-invoicing mandates. Brazil have done so to stop tax fraud and evasion. Russia has finally made electronic invoicing legal. China’s Golden Tax Project progressed their e-invoicing journey, but the big nation likely to mandate will be India.
To gain insight into how Norway has mandated e-invoicing this year, read my next blog ‘How keeping it simple can help to convert 5.5 million invoices to electronic’.
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UK government still cool about e-invoicing and failing to capitalise on money funded by tax payers
Posted on: February 28, 2012
I attended my first UK e-Invoicing Advisory Group (UKeAG) meeting yesterday. It’s a body of experts, service providers and influencers looking to forge relationships with policy-makers within the UK government.
The intended outcome of a forged relationship is that the UK government catches up with governments like Denmark, US, Greece, Brazil and Mexico and start requesting, even mandating e-invoicing amongst their own suppliers.
The ripple out effect of this is that e-invoicing will become an ‘no-brainer’ project for multinationals and SMEs across the nation. It will become an obvious business-move for British based businesses.
The issue the UK faces as a nation is that the government is just not beating the e-invoicing drum.
We see pockets of adoption in the UK public sector with parts of the NHS and councils.
But is this ‘bottom up’ approach working?
So far the UK’s volume of electronic invoices is ‘average’.
Nigel Taylor, a spokesperson for the UKeAG, said that if the UK government embraced e-invoicing, it would be looking at savings of £3 billion per annum.
If e-invoicing was encouraged, better still mandated, by the UK government, a whole swathe of the country’s paper invoices would disappear.
What does this mean to you as businesses? It means you’ll trade with your trading partners in an environmental, economic, efficient way which results in cost savings and cleaner processes.
And should the UK government embrace e-invoicing, what does that mean to you as a UK tax payer?
It means the tax you pay, which is hard-earned, is being spent in an intelligent, efficient way, which fails to be the case the longer the UK government remain cool about engaging in e-invoicing.
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Greek ambition leaves me twitchy
Posted on: August 8, 2011
Did you hear what the Greek government said last week? sharedserviceslink.com reported on how the Greek government is pushing for all invoices to be received by the government electronically by 2012.
Have I missed something? I am all for the positivity, but the aim to convert ‘all’ invoices to ‘electronic’ by 2012 can only result in one thing: disappointment. Unless of course their definition of ‘electronic’ is different to mine, or indeed their definition of ‘all’ is different to mine. Or unless their starting place as-of this news is 80% already converted.
e-Invoicing takes time. Especially in the public sector which is known to move slower than the corporate world in most (not all) project scenarios. Greece has identified that €3 billion can be saved annually so there is clearly a business case. But if the inputs of that case come from predictions that all suppliers will be converted by 2012 (five months away…) then the staggering savings which will help Greece in its economic recovery are unlikely to transpire.
If best practices are followed then realistic conversion rates are 45% to 55% in the first year and 70% to 85% in the second. Based on these rates your business case won’t have a fault line running through it ready to crack.
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Shared services on primetime TV
Posted on: February 24, 2011
Shared services made it onto the 10 o’clock news on BBC1 last night. Public spending cuts are regularly discussed in the media at the moment but it’s mostly the online or the trade press that get into the nitty-gritty of how to deliver efficiencies.
This week, Prime Minister David Cameron criticised Liverpool City Council for not having a can-do attitude towards cost savings and unnecessarily cutting front-line services rather than looking in-house. To investigate the claim, the BBC asked Colm Reilly, Head of the Government Practice at professional services firm PA Consulting, to have a look at the council’s books.
In the televised interview, Colm said that the council had already saved £70m in its back office. To meet its £91m target for next year, he agreed that it had to adopt a regional approach to sharing high-cost front-line services such as the fire service and street sweeping.
I’m sure shared services have been discussed on prime-time television before now, but pieces like this help build awareness of the value the shared-services concept can bring to both the public and private sectors.
Watch the news item here http://www.bbc.co.uk/news/uk-12562334.
Find more news and resources in the Public Sector focus area on sharedserviceslink.com.
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As the effects of the UK government’s spending review wash through the public sector, it’s clear that opportunities for sharing front-line and back-office services are a popular focal point. In support of this, a report from the Confederation of British Industry (CBI), released just before the review was announced in October, gives recommendations on how central government and local authorities should be pursuing these initiatives.
Shared services is not a new concept to this sector. The Ministry of Justice, NHS and the Department for Work and Pensions are a few examples of where centres have been established for traditional functions such as finance and accounting, HR and IT.
While there are questions over whether savings have actually been realised, the CBI report includes local authority case studies where efficiencies have been realised. The CBI estimates that there are savings of up to £0.5bn available if just 150 top-tier local authorities followed best practice in these corporate services. It also suggests that it is down to central government to lead by example.
The rate of progress on shared services within local government can be described as glacial, but there has been a stream of collaboration announcements over recent months of back-office and front-line projects.
Hammersmith & Fulham, Westminster City Council and Kensington & Chelsea in London are taking bold steps by setting up working groups to investigate the possibility of merging the entire range of children’s services, environmental services, adult social care and corporate services.
Sharing chief executives should be the norm, according to the CBI. Suffolk Coastal and Waveney District Council already have a joint CEO and are taking it a stage further by agreeing to share senior management and additional services too. And speakers at the recent sharedserviceslink.com conference for local government presented more examples of savings realised and lessons learnt.
The report concludes by stating the real driver behind any shared services initiative as local authorities grapple to deliver the best from limited budgets and provide the services the public needs.
Watch a short interview with Nick Cave from Buckinghamshire County Council on some of his shared services success factors. Or buy the full set of presentations from Shared Services for Local Government here.
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We ran our ‘Finance shared services for local government’ masterclass in September 2010. I chaired the same event in January 2009 and saw a stark difference in the mood of the room last month.
What was the difference? It was clear from the organisations present that their finance-process maturity is far more advanced. In 2009, conversations were more focused on handling paper and dealing with a lack of technology support. This year organisations like Surrey County Council and The Ministry of Justice illustrated that their productivity was comparable to high-performing shared services centres in the private sector.
What has driven this change? First, the public sector has been adjusting to cuts for a while. They were hit by the Icelandic Bank crash where many councils held sizeable chunks of capital and have had council tax freezes or cuts. So the demands from the UK government for 25% cost reduction are just another step for them – albeit a challenging and disruptive one.
Here are my top-15 take aways from the event:
- The public sector has come quite far in terms of savings in finance and procurement over the past couple of years. The most obvious next step for process efficient organisations is collaboration. As a concept collaboration is a no-brainer, but it’s the detail that can often be the show stopper
- To get collaboration between councils off the ground, get the sponsors and leadership teams from councils concerned in a room around round tables (avoid tables with corners as this will encourage a ‘them and us’ mind set, and a committee-type approach)
- If you can have senior management conceptually agree that collaboration is the way forward you can then hammer out the detail about how it will work. This may prove the best approach but have them buy-in to the concept first
- Shared services is a model (collaborative or independent) that impacts the organisation… not just finance, so the organisation needs to be aware of the change and how it affects different stakeholder groups
- A ‘big bang’ approach may result in chaos, according to Gerry Smith from the Ministry of Justice. So create a phased plan with achievable deadlines to maintain your credibility
- Are the people in you shared services leadership team mainly civil servants? If they are, is this the best team make-up to meet your targets? Again, Gerry Smith explained that there were no civil servants in his team, which he believed was a good thing
- Shared services means that finance now has ‘customers’. These customers used to be your colleagues, so the shift in attitude can be hard to manage. But remember to treat customers as if they have a choice regarding their service provider, because one day they might
- Find a powerful sponsor and stand behind them. Use their voice and their influence
- Is outsourcing the best deal for you? Buckinghamshire Council found that the business case only showed a 15% savings and they would have been locked in for ten years. Instead Buckinghamshire decided to manage this without an outsourcer and collaborate with local councils. The result: 20%-40% savings
- Look at your procurement activities for quick wins. If you don’t collaborate with another council on finance, at the very least do so for procurement, as the savings here once volumes of spend increase, are significant.
- We are dealing with politics, so be quick to identify private agendas and deal with them quickly before individuals spread a toxic message. Be paranoid – shared services is not a model welcomed by many
- Find out about the organisation by hanging out in the ‘smoking room’. Find out what people throughout the organisation are saying about your initiatives
- Challenge the need for your long KPI suite. Surrey County Council is a high-performing shared service and has customer satisfaction as its sole KPI
- Cambridgeshire and Northamptonshire County Councils have collaborated with excellent effect. It can now invest in technologies it wouldn’t have been able to had it remained independent
- Use technology in its vanilla form rather than bending it around a process. Review your process instead and see how this can be massaged to suit the technology
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Professionals in both the public and private sectors should learn from the expanding remit of shared services at the Prison Service.
Gerry Smith joined the organisation from Barclays, and before that Royal Mail, to scope and execute its shared-services strategy.
The Prison Service had 53,000 staff members, 130 public prisons, 83,000 prisoners, 27,000 suppliers and 800,000 invoices. It had limited IT, disparate systems and groups managing functions in their own way. Not a small challenge by any stretch. With a focus on rationalisation, modernisation and delivering tangible benefits, Gerry centralised finance, procure to pay, IT, HR and training within a shared services centre in Newport, Wales.
As the keynote speaker at Establishing Shared Services in Local Government, Gerry outlined how he achieved business transformation across these functions to deliver tangible benefits, achieve 80% customer satisfaction and extend the remit to other government bodies.
His top tip: automate expenses payment first as staff will be delighted with a two-day turnaround.
The Home Office was also considering shared services. As implementation of a new shared service is expensive and carries risk, and almost a third of the costs are fixed, the Home Office began using the Prison Service’s model in 2008 even though it had a different IT platform and client-supplier relationships. Success continued to spread and the Ministry of Justice is also getting on board.
Key lessons from Gerry’s experience in shared services included:
- Customer satisfaction is the number-one priority.
- You must act like a commercial service provider
- Measure performance: you need to know how much work you’re doing so don’t forget to count your widgets
- Judge innovation by its impact on performance
- Find the biggest supporter you can – you’ll need him/her.
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I can’t remember when I last went a day without reading about the need for budget cuts or efficiency increases in the UK’s public sector. Shared services always features heavily in these reports, often as a proposed solution or success story but sometimes as a tale of woe.
So it seems incredibly timely that we’re getting ready to run our London masterclass on shared services in local government on Thursday.
As usual, we’re focusing on the detail behind how our speakers are collaborating in both the front and back office, and how they’re delivering additional value while slashing costs.
You can see who’s going to be sharing lessons learnt on our events page. If you’re unable to join us fret not, we’ll be posting some of the event’s juciest nuggets here and on twitter (if you don’t follow us already, please do). And as usual, I’ll collate my top-ten take aways here after the event.
If you are coming to London to find out what’s happening with shared services in local government, then I look forward to seeing you on Thursday!
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This week has been all about the radical shake up in the structure of the UK’s National Health Service. Opinions on the reforms pushed by Secretary of State for Health Andrew Lansley have been divided.
Essentially, the move will put more power in the hands of frontline staff, with GPs handling the majority of the commissioning budget. For GPs, this means more freedom and responsibility for commissioning care for their local communities.
All NHS trusts will become foundation trusts, giving them the ability to set pay locally as foundation trusts do now. The new structure will see the end of primary care trusts and strategic health authorities, and aims to create a more streamlined health service with greater competition and co-operation.
What does this mean for shared services? A strong push for establishing partnerships without the need for several stages of approval. This should pave the way for greater efficiency savings that are vital to sustaining a good level of service and keeping people in employment.
To hear examples of how the public sector is collaborating across back-office functions while also partnering to deliver frontline services, join us at Establishing Shared Services in Local Government in London on 23 September.
By Suril Vara
sharedserviceslink.com's Weblog 