The Danish story of E-invoicing Sven Rostgaard Rasmussen OpenPEPPOL Transport Infrastructure Dir. e-SENS Lead Architect Agency for Digitisation Ministry of Finance 1

Agenda First step The savings -Regulation -Learningpoints Second step SME benefits -Enlarged focus on eprocurement Third step The european perspective 2

Danish terms 3 Denmark is a small open economy in close interaction with Europe - 5,5 mio. inhabitants Very few big companies and a lot of SMEs A level playing field is of outmost importance for our ability to compete In e-procurement, we need to secure an open market for Danish companies and public institutions But back in 2003 we needed to save money on the state budget…

The process leading to full electronic invoicing 4 October 2003 Ministry of Finance analysis stated that the public sector could save € 135 Mio. per year, by optimizing the fund transfer process. The report stated that paper based invoicing would be a prime candidate for digitisation: - 15 million invoices/year - Estimated €2 reduction in handling cost/invoice - Appx. Savings € 30 mill./year

Legislation -The Public Payment Act was passed in December Regulation was necessary: The public sector and all companies had to be committed in order to ensure critical mass -As of February 2005 paper invoices where no longer accepted by the public buyers. -Payments where withhold until the invoice was received in the correct format 5

Technical solution -Suppliers could use a scanning agency or a service provider (VANS) directly -5 VANS operators offered services to deliver the invoices to the public buyers (before they only used to transport EDIFACT messages) -When the invoice reached to public buyer it had to be in the right XML format: OIOXML – a national format covering invoice and credit note. 6

Identification Scheme A unique key was needed to identify the public sector entities at different organisational levels GLN was chosen and the Ministry of Finance acquired all numbers beginning with 5798…….from GS1 Denmark Each municipality, ministry and region where given a pile of numbers to distribute in their own way They had to display the numbers in use on their web page and when placing an order 7

Scanning agencies 2 scanning agencies in Denmark Receives and scans paper invoices and transforms them into electronic format (OIOXML) At least5 working days to process an invoice Service was free of charge for smaller companies / first 4 years Large companies and public institutions pay €1-2 per invoice 30 % of all invoices were sent through Read-In service

9 The result was impressive…

-The small companies stuck to scanning even though more than 95% of them have internet access! -The time to process was sometimes longer than with paper invoices -The e-invoicing solutions were not integrated in cheap and easy “off the shelf software,” -Using a service provider was not an attractive option – too costly and technically difficult. But the SMEs did not gain.. 10

That scanned invoices are time consuming and often need to be treated manually That GLN numbers need to be organised and displayed in a central database That to gain the real efficiency benefits like order and invoice match, you need to cover the whole procurement process - not just the invoice And on the receiver side we learned... 11

Contrary to other areas of e-government, public e-procurement has a direct effect on the private sectors way of doing business In order for both to benefit, business requirements need to be met on both sides of the table E-procurement standards must therefore be based on open and international standards to ease cross border e- commerce between our companies We also learned that it takes two to tango.. 12

What we needed An internet-based secure infrastructure There was nothing out there, so we developed it ourselves based on a stack of open international transport and security standards A central registry To look up all recipients by their GLN or VAT no. Finding their tecnical endpoint and abilities An open international XML based standard covering the whole post award procurement proces UBL 2.0 from OASIS was chosen – the only international standard meeting our business requirements

What we did In 2009, NemHandel (EasyTrade) was introduced NemHandel is an open, shared and yet secure infrastructure using the internet There is only one central component – the NemHandel registry NemHandel makes room for solutions that meet the different needs and IT skills of both small and large companies NemHandel is based on exchange of UBL 2.0 documents covering the procurement process from catalogue to invoice With NemHandel we supply the community with business rules, guidelines, code lists and open source components that makes it easy for IT vendors to implement

NemHandel - mandatory since 2011 All public authorities are now in the NemHandels registry with their unique ID ( GLNs) A wide range of e-invoicing solutions are being offered and a lot of new players have emerged: Fully integrated in ERP systems Partly integrated using a client tool to send Web-based invoice forms A lot of the solutions are free to use BtG We are seeing an increase in the use BtB among SME’s and as a supplement to EDIFACT in large companies And a decrease in the use of scanning agencies

How to drive adoption Legislation is very nice and efficient tool But equally important is making it easy to adopt and implement standards Guidelines, codelist, validation tools and stylesheets to ease implementation And components that makes it easy for it- vendors to implement Make sure standards are stable and mature - infrequent changes If you don’t have sanction, you need traction

Adapting to a moving target.. We have not waited for a common invoice standard and infrastructure in the EU, but moved on to harvest the benefits But all along we have participated in the work in the EU: NESUBL – Nordic subset E-invoicing expert group Multistakeholder forum on e-invoice (EMSF) PEPPOL Pilot CEN/BII workshop OpenPEPPOL eSense

PEPPOL is an EU co-funded project CIP-ICT PSP-2007 No EU adoption strategy We share our learnings and experiences Influence results to make sure they meet our business requirements When mature enough we start to adopt and migrate – we have started with the PEPPOL infrastructure Next step is the planned adoption of selected PEPPOL BIS (Business Interoperability Specification) Being a first mover is fun – but too costly in the long run

Questions? Contact info: Sven Rostgaard Rasmussen 19