eInvoicing in the Danish public sector

Riga 15th April 2010

Doug Hill ,GS1 Denmark

Denmark

©2006 GS1 Denmark2

Denmark

Content

Background to eInvoicing

Challenges and solutions

The GLN usage

Lessons learned

©2006 GS1 Denmark3

Denmark

The information revolution – “just do IT”

“The information revolution is sweeping through

our economy.

No company can escape its effects.

Dramatic reductions in obtaining, processing and

transmitting information are changing the way we

do business”

Prof. M. E. Porter .

Harvard University 2001.

©2006 GS1 Denmark4

Denmark

eInvoicing market penetration

1,000,000,000

B2B Invoices in 2009.

The tip of the iceberg.

Only 5% eInvoice!

©2006 GS1 Denmark5

Denmark

5

Background to e-invoicing in Denmark

1. KPMG analyse the fund transfer

process in Denmark

2. KPMG analysis finds that € 135

Million per year could be saved

3. Based on the recommendation -

the work commenced.

4. The „Danish‟ model, a successful

blueprint

©2006 GS1 Denmark6

Denmark

6

A very aggressive timeline…

December2003

Act is passed

1. feb.2005

eInvoice

Go Live !

Nov. – dec.2004

Dep. orders passed

Dep. orders in hearing

April – Sept.2004

Project startup

April2004

©2006 GS1 Denmark7

Denmark

7

Status after five years: 2005 - 2010

1. All public institutions are able to receive electronic invoices.

2. All suppliers send invoices either fully digitalized or through

Read In-bureaus (70/30 ratio).

3. All public sector institutions have GS1 GLNs assigned.

4. Significant savings are being made.

©2006 GS1 Denmark8

Denmark

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How were the savings calculated?

Total efficiency potential savings of approx. € 100 mill./year*:

Elimination of float-days Approx. € 25 mill./year

Closing of cash tills Approx. € 15 mill./year

Easy Account Approx. € 30 mill./year

E-Invoicing Approx. € 30 mill./year

• ~ 15 million invoices/year

• Estimated €2 reduction in handling cost/invoice

*Source:

Danish Ministry of Finance presentation

©2006 GS1 Denmark9

Denmark

Key figures 2010

5 yrs post implementation of eInvoice

Savings to date thru eProcurement #………. ~ € 0.5 Billion*

Invoices digitised to date .………...................~ 60,000,000*

Total SME savings potential………………… ~ € 0.63 Billion**

Private sector companies……….…………….….440,000

Danish Municipal regions………...……………......98

Danish State regions…………. …………………….5

Danish State agencies and ministries…………….19

*Rough estimate to date

** Based on a KPMG report#

Only savings on the receiver side, i.e. government. Private sector benefits not in calculation

©2006 GS1 Denmark10

Denmark

Saving potential for issuers (2009 report)

©2006 GS1 Denmark11

Denmark

Savings potential for recipients (2009 report)

©2006 GS1 Denmark12

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E-invoices February 2005 – December 2009

138 7

43

301 5

36

349 2

42

387 0

91

443 7

26

359 7

42

285 1

26

430 1

19

425 9

27

375 0

40

467 6

53

436 3

40

420 0

02

472 1

38

368 9

25

456 5

77

396 3

56

382 1

97

338 1

20

437 0

76

468 8

83

482 9

36

449 9

72

493 3

80

409 6

71

452 6

55

404 5

32

404 3

42

448 5

61

417 0

48

327 4

97

410 2

56

480 2

37

513 1

80

396 0

28

541 8

54

407 8

22

378 8

93

461 1

15

418 1

94

403 5

66

432 4

37

321 9

53

469 2

87

443 6

55

412 2

64

448 7

80

451 5

49

396 5

91

453 0

90

361 7

30

355 5

06

399 0

86

282 1

38

243 5

98

318 5

05

293 6

17

293 8

79

270 2

61

466 8

51

534 5

14

545 8

74

579 6

35

513 9

07

671 3

96

724 4

89

791 7

19

824 1

24

799 0

86

877 3

41

742 8

03

901 2

69

714 5

31

841 3

00

891 8

54

884 7

40

861 5

59

921 0

16

1 0

27 2

80

1 0

49 2

41

973 1

69

978 1

25

902 8

93

1 0

01 0

00

889 8

36

998 6

99

1 0

61 8

27

903 8

07

992 5

03

1 1

02 3

53

1 2

16 4

68

1 2

29 1

10

1 0

51 6

97 1

300 8

45

1 1

39 8

28

1 0

22 4

84

1 1

76 0

93

1 1

44 4

79

732 5

49

1 0

17 2

46

916 4

75

1 2

43 8

90

1 1

07 5

10

1 1

09 1

17

1 1

09 6

85

1 1

73 8

33

762 4

22

1 2

69 3

74

1 0

69 2

54

1 0

86 6

98

1 2

22 2

47

1 0

34 0

66

1 1

38 2

70

1 4

12 8

90

1 3

50 4

05

1 3

71 0

26

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2 000 000

Read-in and full electronic invoices per month

Read-in invoices Full electronic invoices

©2006 GS1 Denmark13

Denmark

eInvoicing in the Danish public sector

1. Legislation (Mandatory compliance)

• Sign interchange agreement

• Compulsory eInvoice

• Float days reduced

2. GS1 Global Location Number, GLN

3. eInvoice, an XML message

4. Scan-in centres

5. Web EDI tool/Internet client tool

6. Online instance testing facility

7. Help desk operation

Other

Tools

©2006 GS1 Denmark14

Denmark

The global location number.

Routing solution

A globally unique key:

EDI routing key

EDI Location/role ID

Legal entities

Departments

Companies

Various Roles

The GLN in Denmark for the public sector construction

Check

Digit

N65 7 9 8 N7 N9N8 N10 N11 N12N5

Danish government prefix Location reference

“ a small but integral part of the whole eInvoicing solution”

5798000416604

©2006 GS1 Denmark15

Denmark

Why the GLN?

Characteristic Benefit

The GLN is a major global routing key Maximum adoption

Guaranteed Capacity Scalable solution

Unambiguous identification scheme Recognised coding scheme

Numbering integrity Strong GS1 governance

Cost effective Minimal investment

©2006 GS1 Denmark16

Denmark

Lessons learned

1. Need for legal regulation & strong political support.

2. Need for standardisation. Need to apply market solutions.

3. Stay in control of public sector location allocation.

4. Think big, but start small.

5. Leave no one behind, however, avoid read in bureaus

6. Use your local GS1 org…they can help!

©2006 GS1 Denmark17

Denmark

The spread of the “Danish model”

The GLN is becoming increasing the de facto key for public sector

eProcurement, below is a sample of countries and supranational orgs

that have applied /use the GLN :

EC – adopts GS1 GLN in their own supply

chain

Sweden uses the GLN in Public invoicing

Norway has applied the GLN in two

Municipalities

PEPPOL: Pan European Public

Procurement Online

An example „best practice‟ key in the CEN

workshop agreement documentation on

public sector data model profiles

(NB. See EC e-PRIOR)

©2006 GS1 Denmark18

Denmark

Next steps and Final word

Next steps:

More message types

o Full pre – post contract

RASP – A full architecture

Final word:

Apply standards that

have „traction‟.

Apply standards on

„ patterns of application‟

that are proven.

Any questions?

©2006 GS1 Denmark19

Denmark

Contact details

Hammershusgade 17

DK -2100 Copenhagen, Denmark

T +45 39 27 85 27

F +45 39 27 85 10

E info@gs1.dk

W www.gs1.dk

Douglas Hill

Senior consultant

Email: dsh@gs1.dk

Denmark

©2006 GS1 Denmark20

Denmark

Enjoy the day!

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