1. Electronic invoicing paving the way for Real-Time Economy Esko Penttinen, Aalto University School of Business Assistant Professor, Information Systems Science Director of Real-Time Economy Competence Center Chairman of XBRL Finland

2. PART I: E-invoicing a cornerstone in process automation Recent developments in Real-Time Economy PART II: Research results in Real-Time Economy Consumer adoption of e-invoicing (PhD thesis by Miira Juntumaa) Service provider selection (MSc thesis by Niko Myllynen) Cloud-based information systems disrupting work routines (PhD thesis by Aleksandre Asatiani) CONCLUSIONS Agenda 3. XML PDF XYZ Ltd. 4. Full SEPA 2006 2008 2009 2010 2012 FVC FIA1 FIA2 SME50 Full SEPA (Full Single Euro Payments Area) -SEPA payments -E-invoicing FVC (Full Value Chain) - Harmonizing value chain development FIA 1 (Fully Integrated Accounting 1) 1.1.2009-30.6.2010 - E-accounting reference - Standard for Electronic Financial Reporting -Global e-invoicing standard ISO20022 -European e- invoicing work FIA 2 (Fully Integrated Accounting 2) 1.8.2010-30.12.2011 - Electronic Financial Statement and XBRL - Fully Integrated Payroll (FIP): Payroll reporting codes and practices - Real-Time VAT - European e-invoicing work SME 50 (Administrative costs in half) 2012-2013 1. AFA Automated Financial Administration 2. FAR Fully Automated Reporting 3. ERM Enterprise Risk Mitigation 4. SIM Sustainability Intelligence Management Real-Time Economy program 5. Real Time Economy: National Co-innovation Program CONSUMERS Kuluttaja- tutkimuskeskus, TeliaSonera, FK, SMES AgentIT,Dicole, Fi nansia,Hawcon,H ammerkit, Maven ta, ProCountor, ... BANKS Aktia, OP-Pohjola, Nordea , Sampo, Suomen Pankki, ... COMPANIES ALD-Automotive, Finnair,Lindstrm Pretax, UPM- Kymmene, Wrtsil, Asiakastieto, ... ACADEMICS Aalto, Hanken, A, TY, Politecnico di Milano, University of Nevada, ... OPERATORS & SERVICE PROVIDERS Aditro,Basware, OpusCapita,Telia- Sonera,Tieto, Itell a, PUBLIC ORG. Hansel, Kuntaliitt o, PRH,Tieke, Valt iokonttori, vero, VM, TEM, STM, K ela, ... INTEREST GROUPS FK, Taloushallinto- liitto, Keskuskauppak., Suomen Yrittjt, EK, Sitra, ... 6. Financial administration processes from mandatory reporting to value-added services Data driven decision making 4 corner model critical in e-invoice diffusion Finland forerunner Mandatoryship Sticks work way better than carrots B2B (mandatory paper invoices) & B2C (paper invoice fees) XBRL (eXtensible Business Reporting Language) Enriching data on documents in early stages of financial value chain enables process automation at later stages Automated purchase invoice handling (three way matching): UPM- Kymmene example (XML) & Ford example (EDI) & ALD Automotive Automated sales invoice generation: Koho software E-Invoices integrated to electronic bank account statements leading to fully automated accounting for SMEs Key takeaways lessons learned 7. Perceived Usefulness Perceived Ease of Use Attitude Toward Use Behavioral Intention to Use System Usage Original model: Technology Acceptance Model by Davis (1989) See Juntumaa (2011) and Rinta-Kahila (2013) for further info Study 1: Consumer adoption of e- invoicing and self-service checkouts External Variables Weak link Triggers needed! 8. Vendor selection literature Fifty-five papers reviewed, focus on 15 most relevant papers Initial list of 255 individual dimensions Expert interviews Refining (combining, erasing, adding) dimensions Applying them to the context of e-invoicing Number of dimensions from 255 to 35 Pilot case studies Validating and further refining the constructs Defining scales: developed 3 levels for each dimension (low, average, high) Number of dimensions from 35 to 9 Final research instrument consisting of 9 choice dimensions with 3 levels for each dimension Using Sawtooth software to collect the data Study 2: How to select e-invoice service provider? 9. Results criteria for selection 10. Large vs. small companies 11. Study 3: Cloud-based accounting systems disrupting work routines Customer Company Accounting Firm Processes Client register maintenance Product register maintenance Sending sales invoices Handling of sales invoices Sending note of complaint Sales ledger maintenance Supplier register maintenance Receiving purchase invoices Handling purchase invoices Handling purchase, travel & other costs Purchases ledger maintenance Personnel register maintenance Basic payroll data maintenance Payroll calculations Preparation of balance sheet and income statement Preparation and sending of VAT Preparation and sending of annual salary reports Preparation and sending of annual pension insurance reports Periodic VAT payments Salary payments Payments for purchases, travel and other expenses Monthly payroll tax payments Sales 6% Purchases 8% Payroll 35% Reporting 61% Payments 22% Level of outsourcing X% 12. Clusters 1 and 2 Cluster #1: In-house Cluster #2: Selective outsourcing 13. Clusters 3 and 4 Cluster #3: Selective outsourcing Cluster #4: Total outsourcing 14. Clusters profiling Characteristic Cluster #1 Cluster #2 Cluster #3 Cluster #4 Outsourcing pattern In-house Selective outsourcing Selective outsourcing Total outsourcing Industries Industry Construction Other services Industry Construction Other services Motor vehicles & motorcycles Industry Other services Motor vehicles & motorcycles Healthcare & social services Industry Other services Construction Motor vehicles & motorcycles Healthcare & social services Cloud based IS 4 3 1 2 Improvements 2 4 3 1 Software satisfaction 2 4 1 3 Average size 1 4 3 2 Invoices sent 2 4 3 1 Invoices received 2 4 3 1 Average turnover 1 4 2 3 Top 3 most important sources of improvements Usability Accuracy Relevance Usability Accuracy Understandability Accessibility Accuracy Understandability Accessibility Accuracy Usability 15. Cloud makes outsourcing easier for the client Facilitates the disaggregation and outsourcing of information intensive services Lower the barriers for outsourcing for companies for the complex tasks Opens possibilities for outsourcing services that were not considered before (due to lower barriers of outsourcing) Outsourcing and cloud 16. Esko Penttinen Contact info: esko.penttinen@aalto.fi +358-40-5754520 Websites: http://biz.aalto.fi/en/research/projects/rte/ www.xbrl.fi Thank you!