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Basware vs Ariba - Open vs Closed

When embarking on an electronic invoicing strategy, how do you choose between an open network and a private network
by

Pete Loughlin

on 19 December 2010

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Transcript of Basware vs Ariba - Open vs Closed

Open vs Closed Basware vs Ariba For Ariba read OB10
For Basware read any number of open eInvoicing networks How do you choose? Basware Open Network Interoperable with other open networks Ariba Huge supplier network The case for the open network There are distinct disadvantages with either point to point or closed network models. Basware refers to these as the 2-cornered and 3-cornered models respectively. The 2-cornered model (e.g. EDI) is expensive to maintain because any changes have to be made at both”corners”. In contrast, the 3-cornered model houses the complexity of communication within a hub. This is easier for buyers and sellers to maintain but it is proprietary and subscription and transaction costs may have to be born multiple times. The open network brings the economies of scale of the mobile phone network to e-invoicing allowing buyers and suppliers to speak to any other interoperable network while incurring only a single set of costs. What’s not to like about it point to point network = 2-cornered model
closed network = 3-cornered model 2-cornered model (e.g. EDI)
expensive to maintain (because any changes have to be made at both”corners”) 3-cornered model houses the complexity of communication within a hub. (Easier for buyers and sellers to maintain) "The open network brings the economies of scale of the mobile phone network to e-invoicing allowing buyers and suppliers to speak to any other interoperable network while incurring only a single set of costs" But it is proprietary and subscription and transaction costs may have to be born multiple times. What’s not to like about it The case for the closed network Remember why you are putting e-Invoicing in place. It is to eliminate paper and manual processes by receiving electronic invoices from your suppliers. This is the critical point Getting suppliers to send electronic invoices is your biggest challenge. You already have the business case that says that a successful project will save you money – but success depends on getting the electronic invoices in and it doesn’t matter what the transaction costs are If you cannot get your suppliers on board – it’s all a waste of money. The e-Invoicing networks that have already signed up most of your suppliers and who will support your efforts to sign up the others are the networks that will will help you succeed. How do you choose between these two fundamentally different approaches? So which electronic invoice model is best? But... In the past, you could have had your fingers badly burned by buying into a long term proprietary transaction based service – and many did. Once the network owns both ends of the supply chain and all points in between, why would they not make the most out of that dominant position. The argument boils down to this – open or proprietary. So an open network is attractive. This is 2010, not 1990 We don’t need private networks to guarantee delivery and authenticity. The world is more open and it’s becoming more and more interoperable It’s easier to jump ship if your technology platform out grows your business. The case for interoperability and roaming is becoming blurred and less compelling than it was 10 – 15 years ago. As long as you go into your negotiations with your eyes open and don’t get tied into a non flexible long term arrangement, the size of your e-Invoicing network should be your dominant selection criterion. purchasinginsight.com
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