Network aims to set the standard
A very wise man once said: 'The beautiful thing about standards is there are so many to choose from.'
The business world has been forced to accept this truism, despite all the hyperbole emanating from the mouths of over-exuberant technology sales managers.
But a company that has recognised the problem, and done something about it, is Open Business Exchange. OBE specialises in the transaction of electronic invoices, and can deal with any invoice standard on the market.
It is a simple idea. Company A sends an electronic invoice destined for company B via the OBE network, known as OB10. OBE converts the invoice into whichever standard company B has implemented, and forwards on the invoice.
Alain Falys, chief executive of OBE, was senior vice president at Visa International, and it was his experience there that persuaded him and four colleagues to set up the company. The OB10 network is based on the same legacy security standard used by the major credit card companies.
Paul Parker, general manager of e-commerce at RS Components, has recently signed up to the network. The deal was approved only weeks ago, and he hopes many of his 160,000 customers will also join the network.
‘The average value of our invoices is around £80,’ he said. ‘A huge proportion of that is tied up with the actual invoicing process.’ He said the multitude of systems his customers were using presented a huge problem, and standards such as XML do nothing to solve them.
Despite this Parker did have serious concerns about signing up to the network, especially because it is so new and depends on a volume model to succeed. So far only 170 companies have joined, which is a pitiful proportion of UK businesses. By the end of the year, however, Falys expects the number to hit the 2,000 mark.
European companies issue more than 12 billion invoices a year, at a cost of between £4 and £20 each, which helps explain why OBE currently claims month-on-month growth of 25%.
One of the biggest challenges Falys faced was to strike deals with tax authorities. So far he has gained accreditation from eight European countries, including the UK, leading to recognition of OB10 as an official standard for VAT and tax purposes by both Customs and the Inland Revenue.
And the network must be doing something right, as interest is coming from all the right places. ‘We are in the final stages of negotiation with one of the Big Four firms,’ said Falys.