Everyone is talking about PEPPOL Are you

Author: Craig Story, Lead PEPPOL & UDI, Kodit

Depending on the market sectors you work in, PEPPOL will either already be high up on your business agenda, or may be something that’s not even on your radar yet.  However, with the UK government committed to moving all public sector procurement onto the PEPPOL platform, and its increasing usage on an EU and global basis for business to business transactions, it’s surely only a matter of time before everyone’s talking about PEPPOL.

What is PEPPOL?

The Pan-European Public Procurement Online (PEPPOL) is an interoperable European-wide trading network that enables government organisations and private companies to exchange electronic trading documents.  In simple terms, it offers a standardised network connection for electronic ordering, invoicing and shipping.

The PEPPOL project was launched in 2008 and funded jointly by the European Commission and PEPPOL consortium members, with the aim of simplifying e-procurement across Europe (both B2G and B2B).  Norway was an early adopter, with 95% of all B2G purchase orders and invoices now generated through PEPPOL, as well as a significant and growing percentage of B2B transactions.

Why is PEPPOL needed?

A PwC study on the practical application and implementation of the European e-invoicing standard found that the mass adoption of e-invoicing within the EU would lead to significant economic benefits. In fact, the study estimated that moving from paper to electronic invoicing could generate savings of around €240 billion over a six-year period.

Key benefits of adopting electronic data interchange (EDI) systems, such as PEPPOL, include:

  • Reduced costs: EDI reduces the cost of personnel, office supplies, administration and storage space
  • Improved data quality: Electronic capture of business documents enables critical business data to be fed directly into internal systems, without error-prone, manual input of information
  • Shorter business cycle: EDI transactions that used to take days or even weeks using paper can be completed in under an hour. This reduced cycle time leads to faster payments and thus improved cash flow
  • Business efficiencies: The use of EDI reduces order processing and delivery times, provides greater visibility into the supply chain, and enables faster approval and processing of invoice payments.
  • Improved data security and ease of auditing: EDI enables data to be exchanged in a highly secure environment. It also simplifies and speeds up the auditing process.
  • Strategic business benefits: EDI provides the real-time visibility needed to accelerate decision-making – improving responsiveness to changing customer and market demands.

Where is PEPPOL today?

The UK government is committed to moving public sector procurement onto the PEPPOL platform over the next 5-7 years.  Spearheaded by the NHS who are working to a 2018 adoption timeline, the change will ultimately affect procurement in all national and local government organisations and agencies, as well of course, their suppliers.

Whilst the NHS is not enforcing strict compliance at the time of writing, the fact they’re working to a 2018 timeline means that suppliers to the health sector are already finding that if they’re not registered for PEPPOL, they can’t be considered for any new contracts.

The end of September 2018 is now the timescale that most NHS trusts are working to.  After this time, there will be no more excuses for suppliers not to be registered and those not PEPPOL-ready are likely to be excluded from approved supplier lists.

Why should I care about PEPPOL?

Even if you’re not conducting business within the UK health sector, the government’s commitment to moving all procurement onto PEPPOL means that any business that wants to continue trading with the public sector will need to make the move sooner rather than later.  The increasing adoption of PEPPOL across Europe, both for B2G and B2B transactions, means it’s only a matter of time before you come across a potential customer that wants all its suppliers to be registered.  Even organisations trying to expand trade outside of the EU needs to be aware of PEPPOL requirements.  The platform’s being adopted on a global basis and its usage is expanding rapidly, so early adoption and integration makes sound business sense

How do I become a PEPPOL registered supplier?

You’ll need to register with an approved PEPPOL Access Point Provider, but be aware that as ever, not all providers are created equal. The cost of set-up will be determined by whether you gain access to PEPPOL through a web interface, through integration into your ERP, or via another e-business tool.  Most providers insist that you immediately integrate PEPPOL into your back-office systems, as this is where they make their money.  However, for SMEs that will only be processing a low volume of transactions, and for those organisations that want to become PEPPOL registered without incurring significant costs until the level of transactions justify the investment into full-integration, a simple web interface solution makes sound business sense.

Why choose Kodit for PEPPOL?

Kodit have partnered with IBM to offer PEPPOL and offer companies a choice of two options. You can  choose to either integrate PEPPOL into your existing ordering system, or if you want to avoid integration costs, you can access your own PEPPOL web portal to receive purchase orders, process them and send invoices. The cost of this is just £495 per year, which includes 100 messages with the option to buy more on an ‘as required’ basis.  You’ll be fully PEPPOL compliant and because the Kodit solution is cloud-based, we can make updates to reflect any new legislation seamlessly.

Want to explore this subject further?

Kodit has 20 years’ experience in GS1 standards and in-depth expertise in helping UK companies with UDI and EDI initiatives on a global basis.

You can find out more about Kodit on our website or contact the team directly at peppol@kodit.com

Want to explore this subject further?

If you’d like to find out more about PEPPOL and the potential impact on your business, these short videos provide a valuable overview: