Introduction - Calling Time on Half-Measures

Most large organizations we speak to have had at least one attempt at digitizing their invoicing process. If that’s you, then there’s a high chance you’ll have been left feeling slightly burned when implementation failed to deliver on its promises of a seamless process, significant efficiencies, and opportunities to automate the low-level, manual tasks that prevent you and your team from switching your attention onto the things that matter.

If this sounds familiar, then you’ll also know that getting the results you want is a different beast when compared to other enterprise software. Successful e-invoicing projects are predicated not just upon typical goals like successful application integration, deployment, and internal end-user adoption. It’s all about getting a big enough chunk of your supplier base to use your chosen solution. And this is where things generally start to unravel.

For years now, large sections of our industry have been guilty of peddling a false narrative on the opportunity to bring about genuine change. Businesses have been trying to digitize supplier relationships for nearly 30 years but benchmarks for ‘successful’ e-invoicing implementations still top out at only 15-20% supplier adoption.

Vendors are fond of explaining this failure away by referring to the Pareto principle; if you can get the top 20% of your suppliers to onboard to your e-invoicing solution, then you’ll cover 80% of your volume. The truth is it’s a half-baked solution, a minor victory at best when the only thing that will make a difference is a big win.

Here’s the thing that most vendors won’t tell you: getting your biggest suppliers to adopt your e-invoicing solution won’t solve your problem. According to Ardent Partners, AP teams spend around a quarter of their working week fixing errors in supplier invoices. Ask yourself this: how many of those issues stem from your largest suppliers? The top 20%? And how many of those errors originate from the remaining 80%?

Building walled gardens around a handful of strategic suppliers might have been just about good enough in 2019, but we all know how that story ended. Lack of connectivity beyond a small cadre of suppliers was a major factor in the upending of supply chains during the pandemic.

The supply chains of the post-pandemic era are far more likely to be made up of more diverse, more numerous supplier groupings of varying sizes and sophistication. For AP teams, that will mean more relationships to manage and more potential blind spots when those relationships aren’t digital. Papering over the cracks isn’t going to help.

The real reason vendors sell you on the 20% rule is that they know that the solutions they’re recommending simply aren’t suited to the remaining 80% of your suppliers. And since the shoe doesn’t fit, they don’t try.

100% supplier adoption isn’t a pipe dream. But it’s not a cakewalk, either. And the fact is that the majority of enterprise software designed to connect buyers and suppliers simply isn’t up to the task.

Today, Tradeshift establishes an average of 40,000 new connections onto our platform every month, from large multinational businesses to Mom-and-Pop shops. It’s been a learning curve to refine this process to the industry-leading level it’s at today.