A lot of my clients have been asking about PEPPOL and as buyers, it’s important for them to understand the impact of this new regulation on their operations. While most of the talk in the market is focused on the buy side, let’s remember that the supplier perspective is just as important to understand.
For those who may not be familiar with PEPPOL (Pan-European Public Procurement Online), it started as an initiative by the European Union to define a common European standard for the exchange of electronic business documents: an electronic data interchange (EDI). This includes a set standard for e-catalogs, e-orders, e-invoices, product descriptions and organizational certifications. It is now run as a non-profit organization with governmental institutions and IT service providers as members.
As I’ve noticed in a number of conversations about procurement, PEPPOL is a popular topic because the UK Department of Health has made it mandatory for the National Health Service (NHS) in England and all of its suppliers. PEPPOL is quickly becoming a necessity for any organization dealing with the public sector within the European Union. The Norwegian government has done the same and other governments and major organizations are not far behind.
The requirement for trading with many organizations makes a strong business case for connecting with PEPPOL. Nevertheless, there are other benefits that should be of interest to you and your organization. The PEPPOL trading network provides access to major organizations on a secure network. The standardization of documents means improved efficiency, lowered processing costs, and a reduced chance of errors and overall business risk. In short, PEPPOL makes trading between various organizations across Europe simpler and therefore more cost efficient. You can reach more buyers and suppliers with less time and effort by using PEPPOL.
There are a lot of potential benefits that together can have a major impact on your business. By connecting to the PEPPOL network, suppliers stand to benefit from standardized e-invoices leading to improved data consistency, faster payments, and a reduction in both order disputes and delays. Suppliers can also benefit from efficiency gains through reduced administrative processes, including data entry and automation. E-catalogs can improve sales figures through better compliance to contract if you are listed as a contracted and preferred supplier. Moreover, as a supplier, you will benefit from greater customer order accuracy in the order fulfillment and invoice processes. Finally, buyers can see your products in an active buying cycle with up-to-date specs and pricing. All of this indicates a significant reduction in costs that you can pass onto buyers and a high likelihood of improved sales figures.
In my opinion, one of the biggest differentiators for PEPPOL is that it can help organizations like your own minimize the inefficiency that comes with having trading partners in other countries across Europe. A common standard across Europe reduces both the physical and digital red tape that comes with working across borders, even superficial ones like those in Europe. However, improving cross-border efficiency when dealing with trading partners across Europe is just the tip of the iceberg. Perhaps the biggest potential benefit of connecting to PEPPOL is enabling the broader trading network to mature together.
There is a need for a common standard for exchanging electronic documents in other regions outside of Europe and there is a strong chance that PEPPOL might eventually become intercontinental and even global in terms of reach. Recently, the Russian government signed up to use the network and it could be just a matter of time before PEPPOL spreads to North America and other corners of the globe. Organizations connected to and actively trading through the PEPPOL network are likely to find themselves ahead of the pack as it grows.
With the significant gains that are likely to come with access to the PEPPOL trading network, I have no doubt that any major organization can benefit from having access. The question you should ask yourself is whether or not you want to risk being left behind when you could grow alongside PEPPOL as it spreads across Europe and potentially across the globe.
I welcome your feedback and questions in the comments section below.