Tuesday, April 18, 2006

EIPP Market - Segmentation

EIPP market can be split into four segments, these being: supplier-centric (sending invoices electronically from A/R systems), buyer-centric (receiving invoices electronically into A/P systems), enterprise-centric (sending and receiving invoices electronically from/into A/R and A/P systems - a customised solution usually based on ERP solution) and exchanges.

The first three types generally cater for one party, usually the dominant player to the cost of its trading partners. They also provide partial solutions, which limits benefits that could be gained by parties involved in a transaction. The enterprise (and DIY) solutions are costly due to underlying ERP solutions and high consultancy fees usually charged by system integrators (including VARs, management consultancies, etc).

Exchanges have emerged over the last six years. Some of early exchanges have become supplier networks catering predominantly for larger purchasers, e.g. Ariba. Some are industry specific and caters for large buyers and tier 1 suppliers (e.g. Exostar for A&D industry and Covisint for Automotive industry). Some have become e-procurement platforms used by large retailers, e.g. Marrakech.

However, a number of true non sector based exchanges have emerged that cater for both end of a transaction (i.e. buyer and purchaser) equally irrespective of their size or geographically, i.e. they offer the same functionality to both parties. ebdex Document Exchange is such an EIPP solution. I truly believe that success of such a solutions lie when they can be offered to both large and small companies, where both parties gain substantial benefits, be they reducing of debtor days, early payment discounts, corporate governance, upto date information for sound decision making or improving trading partner relationships.

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