Friday, April 15, 2011

A different way to handle electronic inter-company communications

Years ago, I was working at a company (not my present employer) that sold its products through a number of retail outlets, including some very large ones. One of these companies was a very large company - I won't name the Bentonville, Arkansas-based company, but you've probably heard of it. This large company was telling our much smaller company that it preferred to receive financial/billing transactions electronically, via EDI (electronic data interchange). That was a couple of decades ago, but EDI is still around today in many forms - here are the details on the United Nations' EDIFACT standards.

But what if you're not a huge conglomerate with access to standards bodies? Well, there are ways for you to electronically invoice your customers also.

Robert Scoble has posted a piece about Tradeshift, which is characterized (by Scoble and by Tradeshift itself) as adding "the viral element of a social network to the invoicing process." Because I am impatient, I watched the short three-minute interview:

If you go to Tradeshift's web site, you can read their thoughts on their contribution:

Traditionally, invoicing solutions were almost entirely disconnected from the businesses they served. The market was also fragmented, with solutions tailored either to small businesses with a focus on PDF invoices or to large businesses sending XML or EDIFACT documents. At no point did these worlds meet, and the invoicing requirements of large businesses often proved a serious impediment to their smaller suppliers and customers.

The Tradeshift revolution changes all this. With Tradeshift, every business – from small suppliers to global enterprises – can use the same network, and invite all their suppliers and customers to join.

Of course, the existence of the Tradeshift network doesn't mean that everyone will join it. If there's a market for this service, competitors will emerge, and there are still a lot of large businesses that will continue to do things the old way. The company in Bentonville isn't about to dump 20 years of investment in its solution.
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