Topics of Interest Archives: Corporate Payments

Digital Transformation and the Near-Term Futures of TEM and MMS

TEM and MMS are rapidly evolving into much broader Technology Expense Management platforms. Enterprises need to understand why this is important and critical.

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From Bottoms Up to Bottom Line: Ariba Live Returns to Vegas (Pt 2 of 2)

Ariba Live Wrap-Up Part 2: Bottom Line. Image Source: Pixabay.comLast week’s Ariba Live event at The Venetian and Palazzo in Las Vegas gave us a lot to think about — and not just from a business process perspective. Cirque du Soleil‘s live acrobatics woke us up, and Candy Chang‘s fusion of art, public space, and community-based collaboration, got us engaged. It’s not always easy–or natural–to smoothly transition from non-business to business content and messages in these type of environments, but I think it’s fair to say that the non-practitioner content did its job in getting us to think a bit differently about what’s possible when we apply equal parts creativity, skill, and preparation. And that’s where I make the tie back to the wonderful world of procure-to-pay.

Looking back over the different sessions and conversations, there are four main things that I think are important to note, for current customers, prospects, and the market in general. These have to do with (1) network expansion, (2) user experience, (3) partner ecosystem, and (4) payment options. I discussed the first two in my previous post, and will wrap things up here with the final two pieces of the puzzle.

Opening the API
The attractive storyline here is that SAP and Ariba learned from Concur’s success in nurturing a developer network for their platform and are embracing the approach post-acquisition. That said, folks like and NetSuite have been doing this very well for a while too, and their success has been quite visible in the marketplace. Regardless of whether any of those were the real genesis of Ariba’s Open API initiative, I think it has the opportunity to start something special.

Until now, Ariba has been running a pretty classic two-sided network of buyers and suppliers. An honest review has to point out that what has been missing is the two-sided benefit model that leads to true network effects. By that, I mean that the vast majority of development (and marketing) has been focused on buy-side benefits. That serves to attract buyers, and they bring suppliers with them – but there isn’t an independent value source attracting new suppliers to the system.  That’s where we get into the realm of the telephone model of value: new buyers make the system more attractive to sellers, leading to new sellers who make the system more attractive to buyers. And B-school professors everywhere go wild…

With an Open API, the model changes a bit: there’s a third community that can participate, adding value that can attract new buyers (and perhaps sellers too). The number of participants already on the network attracts developers to add functionality on a completely separate development track than Ariba’s own roadmap. The cool thing is that, as we’ve seen with the platform approach (1), this adds new features but maintains the connection to the data that runs the show. That’s the big difference between API-based platform developers and third-party solutions that communicate with, but live apart from, the main system.

Since that was all quite general, let’s get specific. I think new apps will focus, at first, on the buy-side. That’s where the focus has been, and that’s probably who will benefit first. That said, I think there’s a real opportunity to show some love to the sell-side community as well. Ariba’s started doing this on their own. One subtle point that a sell-side attendee pointed out to me is that they’ve started referring to sellers as “customers” as well, and not keeping that label just for buyers. The same sentiment was there when I chatted with folks who were entirely focused on supplier satisfaction and retention.

I think this could be a real inflection point for the network, depending on how it all shakes out. If someone—either Ariba or the developer community—builds out functionality that provides enough value to suppliers to get them signing up without needing their buyers to invite them, the equation starts to get really interesting. New suppliers and broader participation from existing suppliers are two things that could (if we trust models… and professors) catch the attention of new buyers. I thought Discovery might have had a chance to play this catalyst role, but that hasn’t been the case. Who knows, though – perhaps the Open API will lead to development of functionality that makes Discovery more attractive, and everything will come into alignment.

Building the Payment Alternative
Last but not least, something directly related to finance. As I mentioned previously, I had the chance to sit on a panel discussing B2B payment options. For Ariba, that means their continued development of AribaPay. From conversations with buy-side and sell-side folks at the show, Ariba and Discover seem to be on to something here. They’re discussing it as an ACH replacement, removing the need/ burden for you to store and manage all of your suppliers’ bank account information. When compared to ACH, the settlement time is the same (two days, generally) but the transaction cost is a bit higher. You’ll need to see if that is offset by savings in other areas (IT support, security infrastructure, supplier information management reduction). One very interesting value point they’ve highlighted is AribaPay’s ability to improve on-boarding rates for procurement programs. If you can drive greater procurement savings by using AribaPay as an incentive, the per-transaction costs may not be an issue at all.

If we look at the roadmap, I think the some significant buy-side value will come when AribaPay does something that ACH/EFT cannot (at least outside of SEPA): go cross-border. When we talk international, we’re in wire territory – with the costs that go along with that channel. True, wires are a small portion of most companies’ payment mix, but if a lower-cost (and almost as fast) option exists—and is acceptable to suppliers who may value the non-recourse/certain nature of wires—that could be a fairly easy swap.

On the sell-side, AribaPay is more attractive as a card replacement. Ariba hasn’t published the exact pricing, but different conversations at Live point to rates a few decimal places away from the 150-350 basis points suppliers currently incur on card-based payments. In addition, there’s a hard-dollar cap on that transaction fee that makes it an absolute no-brainer for suppliers when compared to currently-uncapped card fees.  The flipside, of course, is that the buyer loses the rebate income. The suppliers I spoke with say that they end up pricing those rebates into the sales anyway, so the rebate income may actually be illusory in the end.


 And that’s a wrap. If you missed the first part of the series, you can find it here. It will be interesting to see how these developments are received by the market as the solutions, partnerships, and design approaches are put through their paces in live enterprise environments.




1. Let’s not undersell what’s possible with that open platform approach. began as a CRM/SFA application, but it’s creation of a development platform for others to build from has led to the creation of — an entire ERP on-top of Salesforce1. True, they weren’t starting from scratch. It was a joint venture between Salesforce and Unit4 (FinancialForce began its life as Coda). Even still, that’s a heck of a lot more than a simple plug-in.

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From Bottoms Up to Bottom Line: Ariba Live Returns to Vegas (Pt 1 of 2)

Bottoms Up - Ariba Live Part 1. Image Source: Pixabay.comIt was an interesting few days in Vegas for this year’s edition of Ariba Live. With a new captain at the helm, there was a lot of talk of the future. For those of us outside of core procurement, this provided a view into new financial functionality as well as some foundational changes to the platform that bring Ariba in line with what started at last year’s SAPPHIRE with the UI5/Fiori and HANA announcements. There were also some main-stage acrobatics care of Cirque du Soleil, which provided a helpful jolt to attention for an early morning Day 1 start in Sin City.

Looking back over the different sessions and conversations, there are four main things that I think are important to note, for current customers, prospects, and the market in general. These have to do with (1) network expansion, (2) user experience, (3) partner ecosystem, and (4) payment options. For this blog, I want to spend a bit of time talking about this first two. The discussion of the third and fourth items continues here.

Networking the Network
There’s a push to expand the Ariba Network by connecting up with other platforms out in the market. When I heard Alex Atzberger (Ariba’s new President, and SAP CEO Bill McDermott’s former chief-of-staff) say that the “network needs to network” my first thought something along the lines of: you mean like hooking up with Tungsten/OB10? While I’ll admit to a temporary (if naïve) elation at the thought of standardized, provider-agnostic, cross-network invoicing to cut down on the number of access points buyers and sellers need to manage, the answer to that is a ‘no.’  The effort is to connect with complementary (rather than competing) networks, like eBay and Alibaba to facilitate the managed purchase of items not available through currently-enabled catalog sellers.

The eBay partnership was initially teased at last year’s SAPPHIRE, and it looks like it has come along well and can serve as a model for other network partnerships. Applying procurement rigor and review to off-network purchases seems like a win all around. It just means that we have to pin our hopes for portal rationalization on something else – perhaps the OASIS project’s ability to define some agreed-upon standards for XML business documents that can be easily integrated into ERP and financial applications large and small.  Naiveté can only go so far, of course. For the foreseeable future, there will still be a great number of connections and logins and UIs and unique flows to manage.

I’ve got two thoughts about Ariba’s new UX approach, which uses the SAP Fiori UI and has been engineered for mobile. The first is that, much like when Fiori was rolled out last year, it seems like a great way to present information – and tailor that presentation by persona. No complaints. I didn’t think Ariba’s old UI was horrible (especially relative to what most ERP UIs look like), but this is a nice, sleek revision. The team’s take on mobile is cool as well. They don’t try to fit the desktop experience into a mobile form factor. Rather, they’ve kept an eye on the types of tasks you’d look to complete on different devices and made those things the focus. When we roll in dashboarding with drill-down capabilities, it’s hard to complain.

But not impossible. My point of contention isn’t with the design, but with the messaging that goes along with it. I’m not sure that usability as judged by millennials should be the standard for enterprise UI and UX design. If that was the case, Ariba would have announced an image-recognition feature where employees can take a selfie with the desired good and that would trigger a purchasing workflow. All vowels would be removed from UI elements and any instance of “100%” would be replaced with “totes.” In reality, what they’ve adopted isn’t about appealing to millennials – it’s about making solutions more usable and intuitive. I’ll sign on for that. As long as that is the real driving force behind design choices, we’re in a good place.

That’s a wrap for the first installment of this two-part Ariba Live wrap-up. For more, take a look at the second half right here.



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My Perspective on B2B Payments

My Perspective on B2B Payments

Next Wednesday, I’ll be part of a panel discussion at Ariba Live 2015 on the topic of B2B Payments in the Networked Age.1  Alongside T-Mobile’s Ashley Bartels and Ariba’s own Jerry Bernard, we’re going to dig into the current state of business payments, and highlight where there are opportunities to do things a bit better. I won’t speak for my fellow panelists, but there are a few key points that I plan to touch on in my piece of the presentation. This blog is a bit of a sneak preview.

It’s a bit of a “chicken and egg” question as to what came first, the analyst or the analytical framework. I’m biased towards the former, but in the end, we get to the same place: a five-element breakdown of the way that I like to look at the topic of B2B payments. At the high level, I like to divvy things up into five areas: Speed, Cost, Geography, Benefits, and Security. To maintain some balance, I try to view each of those from both the buyer’s and seller’s perspective. Let’s take a quick look at how that works out.

5-Part B2B Payments Framework

Blue Hill - Framework for B2B Payments

Speed. On the buy-side, this is mainly the time it takes to get a payment reviewed, approved, and out the door. Whether actual time required to push it through, or an artificial delay until the next check run, the real impact is on how long it takes for our supplier to receive the payment. That’s the big sell-side issue: how long it takes to transmit, receive, review, settle, and reconcile. The longer that process takes, the longer it is until the funds hit the balance sheet and are able to be redeployed elsewhere. That delay can be felt through both DSO levels and cash-flow sensitivity.

Cost. For buyers, we’re focused on the labor required to move payments through coupled with the transaction costs we accumulate along the way. That can be in the form of things like check stock, transaction fees for ACH and wire, or for security-related services like bank fees for Positive Pay. For sellers, the costs break out along the same lines: labor costs for the time it takes staff to process incoming payments, and transaction fees (e.g. card interchange fees) levied on sellers. When payments are slow to be received, there’s also the opportunity cost (what return could have been achieved in the interim) and financing cost (if cash is so tight that outside sources are needed).

Geography. This category can pose some interesting challenges. In the Eurozone, SEPA allows for EFT across national borders, but cross-border ACH is still a work in progress in North America. That mean we’re back to checks or wires, with the speed and/or cost concerns discussed previously. With checks, there can be even longer clearance delays with banks, on top of basic transit time. That’s great for the buy-side, who keep the cash in their accounts longer – to the detriment of sellers looking to bring money in the door. Depending on the length of the overall timeline, and the volatility of the currency chosen, there can be added difficulties in terms of ensuring the availability of local funds in the required currency, additional fees for conversion, or even required hedging to protect against fluctuations between local and contract currencies.

Benefits. It’s not all doom and gloom, of course. Payments offer buyers opportunities for discount capture, for card rebates, and even in the absence of those two, for greater control over their disbursements. In that last case, the benefit may be in paying later (i.e. maintaining DPO) rather than paying less. When we think of faster payment methods like wires, EFT, or cards, the sell-side can benefit too: they can get their money more quickly, and—with the big qualification of “depending on payment method chosen”—can even get more detailed information to make their cash application process easier.

Security. Although it’s comes last on this list, Security is really central to everything mentioned above. It’s the counterbalance to keep in mind when looking at the positives and negatives in the other category. Checks may be slower, but with positive pay there’s less potential for fraud. Wire is faster, but if you don’t triple-check the recipient’s information, you will likely not see your funds again if you’ve sent them in error. There’s data security concerns on both sides, most acute with sellers looking to store their buyers’ credit card information – and thus needing to ensure ongoing PCI-DSS compliance. In essence, this is the category that brings all of the others together and helps answer the question of “is it worth it?”


And that’s my starting point.


Walking through those five categories is how I make sense of the different payment-related technologies and services available in the market. I’m fairly confident that next week’s panel will probably include a discussion of AribaPay.  Stranger things have happened. If that’s the case, this is the framework I’ll use to structure my views. For example, since AribaPay executes transactions over the Discover Network,2 it’s got speed on its side. Since it uses tokenization, sellers don’t handle buyers’ account information – so security gets a check-mark.  That’s the beginnings of the discussion, at least. I’d take the same approach when evaluating other options, like ACH, virtual cards, and other alternative payment methods. And as we get farther into the year, I will be doing just that. But there’s no need to give everything away just yet.

So, if you’ll be in Vegas next week, drop on by the session. If not, I’ll look to post a follow-up blog after the show with some key points from this panel and other sessions over the course of the event. There’s no lack of content on the agenda, so it should provide some good highlights.




1. The agenda has us planned for 1:30 – 2:45pm 10:45 am – 12:00 pm on Wednesday the 8th. If you’ll be at the show, we’re included in both the Sell and Manage Cash tracks (visible here). Drop on by for what should be a great conversation!

2. Even though the transactions go over the Discover Network, Ariba is pretty emphatic in pointing out that there are not card-based transactions. It’s all about the infrastructure.

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FinOps 2014: Looking Back and Forging Ahead

Astronaut_640It’s been quite an eventful year. I’ve seen a lot of activity in the market, with acquisitions, partnerships, and new products. I’ve had more interesting and engaging conversations with practitioners and providers than I can count. Taking a step back and looking at a year’s worth of those discussions (and publications), I’ve put together a quick summary of what I see as the high points, broken out across four big categories: Procure-to-Pay, Discounting and Supply Chain Finance, Order-to-Cash, and Subscription Billing.

For each, there is far more to say than can be captured in a single paragraph. My hope is that these quick bites highlight some key themes, and provide a jumping off point for deeper dives into past research and further conversations about future projects. As always, I welcome your feedback and participation in this collaborative research process. And now, on with the show!


Early on, it looked like 2014 might be a repeat of what we’ve heard in years past when it comes to P2P: folks still looking to reduce paper, lower costs, and explore some degree of automation. I was prepared to keep advocating for a different mindset, but hadn’t seen much reason to expect change. I’m happy to report that I’ve been pleasantly surprised. I’ve seen pieces like The Rockstar Controller and Financial vs. Operational Savings strike a chord with their discussions of how AP’s potential to provide strategic working capital benefits can catch the eye of peers who traditionally viewed it as a tactical function. I won’t say that we’re quite “there” yet, but I’m more optimistic today than I have been in years that AP’s true potential will be more broadly recognized than just among its champions in the analyst world.

What’s Next?

Even though I sing AP’s praises, I recognize that the biggest threat to progress is an inability to provide a realistic business case for automation. Building on my earlier framework for analyzing AP costs, I’ll be taking an honest look at the ROI of P2P solutions. This means being mindful of different stages of maturity, identifying the different choices available, and getting a handle on how those choices impact both benefits gained and costs incurred.

Discounting and Supply Chain Finance

One of the biggest boons for P2P this year was the publicity (and the message, of course) of the White House’s SupplierPay initiative. To me, it served three very important purposes: (1) it brought wider attention to the P2P world; (2) it underscored the strategic importance P2P can have both for the companies themselves and the wider economy; and (3) it sought to bolster small businesses, a group that is not normally given priority in discussions of payments and invoicing. With the goal of accelerating payments to SMB suppliers, SupplierPay also put the focus on efficient invoice processing, programs that provide incentives for earlier payment, and the provision of access to alternative financing solutions when companies do not want to fund accelerated payments from their own working capital. In other words, it put a big spotlight on AP automation, discounting programs, and supply chain finance. Awesome.

What’s Next?

The biggest thing on the horizon here is sharedserviceslink’s upcoming Dynamic Discounting and Supply Chain Finance Summit in Scottsdale, AZ at the end of February.  For my part, I’ll be presenting on “SupplierPay Decoded,” continuing the discussion of what it is, what it means, and what opportunities it holds for buyers and suppliers alike. Blue Hill and sharedserviceslink are partnering on a pre-event survey, which will both inform the summit’s sessions and fuel additional research publishing in the New Year.

See Related Research


I’ve said it many times, but it bears repeating: I think the AR side of financial operations is a sadly underserved area. It’s in a bit of a different position than AP, however. AR has to work harder to demonstrate the benefits of automation, as it doesn’t have the same discount/rebate-based savings card up its sleeve that AP boasts. Perhaps ironically, it’s AP that I think is giving AR a bit more exposure. As buyers look to push out payment terms to improve their own working capital positions, discussions of how to accelerate those payments and mitigate those terms extensions get more attention. This goes beyond offering discount-based incentives. It means a focus on collaboration and data sharing to ensure bills are accurate and disputes are resolved efficiently. This also means looking outside of DSO when gauging “success,” by including factors like customer satisfaction and renewal rates in the evaluation of AR’s impact.

What’s Next?

Since I think the business case for O2C technologies is there, but has yet to be properly set out, that’s first up on my AR agenda. There are some very interesting use cases for billing and payments technologies, eInvoicing from the supplier perspective, and the application of analytics to sell-side data. I’ll be working through a maturity framework to detail what those options are, what impact they can have, and for which companies/environments they might be good fits.

Subscription Billing

Last, but certainly not least, subscription billing really has had a banner year. I say that for two reasons: (1) “as a service” offerings are expanding today in both the B2C and B2B worlds, and (2) this flavor of billing is at the heart of the monetization of future technologies. In the more traditional context, service-based offerings are helping to hammer home the importance of customer satisfaction on future revenues. I think everyone can learn from that. When we look out to the future, we see very interesting developments with the Internet of (Billable) Things, and we’ve already seen some market activity hinting that the preparations are well underway. In contrast to the AP and AR topics discussed above, this is about as cutting-edge as topics in financial operations get. When we move beyond some of the hype, there is still some work to be done in providing a complete and frank assessment of what this model means, what choices businesses have in tackling it, and what outcomes they can realistically expect.

What’s Next?

I’m doing some work now on a model for analyzing the different flavors of subscription billing solutions, seeing how they impact operations, and working through their potential benefits. The goal is to embrace what is different in an as-a-service model, while being mindful of the lessons learned from the more traditional, individual purchase approach. As this market continues to gain exposure and attract new entrants with new solutions, it will be important to have a solid foundation to evaluate which option might be a good fit for a particular billing environment. Not every solution is right for every business, and we’ll kick off 2015 looking to provide a bit of guidance to help folks navigate their way through.

Were there other developments that caught your attention this past year? Anything you’re keeping your eye on in the months ahead? Let’s talk.


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AP and Treasury: A Growing Friendship (AFP Wrap-Up Part 2)

FriendsIf this year’s AFP conference was any indication, I think we’re coming to a bit of a crossroads in financial operations. For years, we’ve been talking about how to deal with paper. Our focus has been on getting payments out on-time, and we’ve largely viewed “improvement” in terms of efficiency and headcount reduction. The space is evolving, however, and we’re finally seeing some light at the end of the AP automation tunnel. From my own research, and from the topics discussed and conversations I had while in D.C., the strategic importance of AP for folks in treasury and the CFO’s office is rising.

This is the second of a two-part series on this year’s AFP conference. You can find the first part, discussing payments and fraud, here.

Traditionally, AFP’s main draw has been in areas like treasury and financial planning and analysis. The exhibitor hall was mainly banks, software companies, and service providers focused on payments execution, investments, workstations and the like. This year was a bit different. While the perennial players were certainly in attendance, so too were folks like C2FO, Direct Commerce, Direct Insite, NVoicePay, Scan One, and Taulia. These are providers focused on AP efficiency, discounting, and supply chain finance. They’re providers who we’d expect to see at more operationally-focused conferences run by IFO or IOFM. That’s not by mistake: these providers made a smart move, recognizing the increasingly close tie between AP efficiency and strategic working capital decisions. Treasurers and CFOs may not have paid much attention in the past, but they’re increasingly doing so now.


When you’re focused on paying invoices on-time, and doing so more efficiently, you’re dealing with a mostly tactical issue. You might avoid late payment penalties, which is great. From time to time, you might also pick up a discount from a supplier with pre-existing discount terms. Again, that’s wonderful. Because it is accomplished more by chance than by a programmatic approach, the overall impact on cash flow is fairly small. In that scenario, you’re also likely handling these decisions on a one-by-one basis, prioritizing a specific invoice for payment when a discount is available – and when there’s adequate funding to make the payment in the short term. That leads to a few ad hoc conversations with folks outside of AP operations, but not to a strategic, ongoing relationship.

See Related Research

Things change a bit when we look at discounting and supply chain finance programmatically. When discounting programs cover a large majority of suppliers and you’re efficient enough to capture all of them, decisions here can lead to huge cash flow impacts. If you traditionally pay in 30 or 45 days, do you have the cash on hand today to fund an accelerated payment? If not already in a disbursement account, can it be transferred? Whether done to reduce fraud risk or to take advantage of short-term investment opportunities, treasury likely has funds stored somewhere else. Now that the ability to capture discounts is firmly established and accelerated payments are predictable, they’ll need to revise their cash management strategies to ensure adequate funds are available to take advantage of discounting’s great returns. This requires partnership; AP cannot do this on its own.

I think that this is an important step in raising AP’s profile. When discounts are predictable, they can be accurately modeled for budgeting and planning purposes. The effective return that discounting provides (the oft-cited 36% annualized rate for 2/10 Net 30 terms, for example) is difficult to beat. It necessitates efficient AP operations to support, and requires supplier on-boarding to scale up.  The good news is that this too can be modeled, making business case development that much easier. As the space continues to evolve, and more stories of successful programs circulate in the market, I think we’ll see this now-emerging trend become more commonplace. With that, we should see more and more familiar faces at AFP in years to come.





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Apple Pay, BYOD, and B2B Payments (Part 2 of 2)

Cat with multiple mobile devices. Source: pixabay.comThis is the second of two blogs, both of which ask a fairly simple question: what, if anything, does the introduction of Apple Pay mean for the B2B payments space? The first time around, I argued that it doesn’t mean all too much – at least, not yet. As a functional replacement for traditional corporate cards in the enterprise T&E space, the additional security is certainly welcome, but the overall impact is minimal. Perhaps with additional partnerships, it could form the foundation for something truly revolutionary. But that was then – now we’re on to something else: more obstacles.

If we assume that there is (or will be) a true differentiator that brings with it enterprise value beyond what existing mobile wallets provide, then we’ll still have a problem: standardization. Put another way, even if there is a compelling value to Apple Pay, it’s only available on a certain device (i.e. the iPhone 6), and that device isn’t the only game in town. Really, the challenge here is the diversity of available devices and the difficulty of implementing a standardized enterprise technology in a non-standardized environment.

Looking simply at market share, the problem is pretty clear: even in the more developed U.S. market, Apple’s iOS claims just north of 40% overall, running neck-and-neck with Google’s Android. Looking more broadly to the global market, that figure drops to right around 12%. One important point to make is that these figures bundle business and consumer users together, so there could be a different distribution if we were to look at company-owned devices. At very least, the distribution within a single company should look much different for the devices they purchase and manage.1 But in today’s BYOD environment, 100% company-owned device allocations are few and far between.

Cochran v. Schwan’s, BYOD, and Standardization

If my Blue Hill colleagues are right, then the BYOD sky isn’t falling. From most peoples’ perspectives, that’s a good thing. For me, however, looking at the potential for a technology that requires a degree of standardization to be realized, it’s a bit depressing. The California ruling really just said that employers have to compensate their employees some amount for their business usage of personal devices. If this ruling, even if it was followed by 49 others, wouldn’t be BYOD’s death knell, then something else will have to give: either technology licensure, cross-platform applications (which accept that some devices will be less secure that what Apple has designed), or separately-managed company-owned devices for those folks that have company cards now.

See Related Research

Wildcard: The Apple-IBM Partnership

BHR’s Tony Rizzo (of footnote 1 fame) wrote a great piece on the Apple-IBM partnership and how it bolsters IBM’s MobileFirst portfolio. It certainly seems like a great collaborative step forward for enterprise mobility – but that’s his domain of expertise. For me, it’s a potential avenue for fulfilling the two major requirements that I see as standing in the way of a real advancement in corporate payments: application development and platform standardization. Following Tony’s lead, if the Worklight portion of the MobileFirst portfolio benefits from deeper integration with (and access to) the security and tokenization technology underpinning the Apple Pay offering, then we’ve got a solid basis for building a front-end expense management application for mobile devices – iOS first, and others later. With IBM’s influence on the technology decisions of the Global 2000, there is good reason for continued (and perhaps increased) standardization around iOS devices, at least for that upper-end section of the overall market.

Wrapping It Up

In the past two posts, there have been a lot of ifs and maybes, so let’s end with something more concrete: without more, Apple’s recent announcement of Apple Pay doesn’t mean much for the B2B space. Its improved security is welcome but not groundbreaking. What will provide real value is a related application that helps businesses better control their spend before purchases are made. That requires building an application that can do the job and getting that application (and the device it runs on) in the hands of everyone who might make a purchase on the business’s behalf. For that, Apple’s partnership with IBM could help with both the development and standardization pieces. And what do we get at the end of that particular rainbow? Well-managed spend all the way through the organization, with lower incidence of both noncompliant spend and fraudulent (see the Apple Pay security tech does help somewhere) use of corporate cards.

If we get there, that’ll make for a press release I’d be excited to read.  


1. As my Blue Hill colleague Tony Rizzo has mentioned, in the enterprise space, iOS does actually pull pretty far ahead. He’s pretty bullish on the future, as well. In reviewing a draft version of this blog, he provided this snippet that he published two years ago: “mobile payments via NFC will go nowhere until Apple gets in the game and then it will explode.” Pretty prescient, and potentially spot-on – at least when it comes to consumer use. That’s an important point to keep in mind, as much of the struggle I’m talking about could be alleviated by company-provided devices.

2. I’ve limited this to company cards, as that’s what Apple Pay replaces directly. That said, if the real business value (as I argued last time) comes in controlling the front-end of business purchases, then you’d want to cover both the folks who currently use company cards and those that use their own personal cards/funds and submit expense reports. There are a heck of a lot more of that second category then there are of the first, which just exacerbates the BYOD lack-of-standardization problem further.

Posted in Executive Management, Finance & Accounting, General Management, General Industry, General Function, Financial Operations, Blog, Research, Mobility, Procurement | Tagged , | 1 Comment

Apple Pay, Mobile Wallets, and B2B Payments (Part 1 of 2)

Mobile Wallet. Image Source: pixabay.comJust over a week ago, Apple made its much-hyped announcement of the iPhone 6, and a few other items. Admittedly, as someone who has never crushed a piece of candy or farmed a ville, the new hardware wasn’t much of a draw for me. What was a bit more interesting was Apple’s foray into mobile payments with Apple Pay. For consumers, it seems like a good development, though not earth-shattering in light of the other players in the market (Google Wallet, PayPal Here, Softcard, etc.). While there may not seem to be much to be excited about for business folks and the businesses they work for, I think there are some bright spots to highlight.

For me, the biggest benefit to come out of the announcement was the attention that tokenization is getting. The improved security of facilitating payments without the need to exchange account information is something everyone should applaud. Of course, that’s nothing new in the B2B space. Virtual cards have done this for purchasing card (p-card) programs. AribaPay (with Discover) and Basware Pay (with MasterCard) both have recent introductions that do this as well. Bottomline Technologies’s Paymode-X platform uses its own ID and facilitates payments over multiple channels. AOC Solutions and Paymetric offer tokenization as well. For those interested in the “net-net,” it’s safe to say that the B2B space is pretty well-covered when it comes to this approach to security.

The Immobile Wallet
When we think of B2B payments, we can break that into two categories: point of sale purchases (expenses) and post-invoice payments (traditional purchases). Most of the work, thus far, has been focused on the latter: finding secure ways to transmit payment for purchases that have been invoiced. The wallet that stores your payment information for that type of transaction is your ERP system. I, and many others, have written quite a bit about the importance of moving to electronic payments and the great potential afforded by alternative approaches to payments. Of course, none of that helps you when you’re standing in line at Staples with a box full of printer paper.

So what is there for you? To answer that question, I think it will be good to sketch out a few attributes of what we’d call a helpful program, and then see where we stand in today’s B2B mobile payment world. When making point-of-sale purchases, we want a method that: 1) is accepted, 2) is easy, and 3) provides some degree of control. With a traditional purchasing card, points 1 and 2 are par for the course: they’re hooked up to popular payment networks and transactions can be completed with a simple swipe. Number 3 is a normal part of purchasing card programs as well: the ability to set transaction-based and/or monthly dollar limits and the option to restrict purchases to specific types of retailers based on Merchant Category Codes (MCC). While we do see reporting of detailed Level 3 data, we don’t see preemptive transaction restrictions based on the identity of the items, rather than the retailer.

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Ground AP Control to Major Tom Non-compliant Purchaser
At this point, I don’t have an exact answer to that last issue – but here’s what I’m thinking: there has been a lot of work done on making post-purchase receipt capture, expense reporting, and approvals much easier for businesses to handle. They’ve made great strides in identifying non-compliant purchases during the review stage. There’s a bit of difficulty in automating everything, however, because of the technical requirements on the retailer side of providing Level 3 data for these purchases. They’re not insurmountable, of course, but they’re enough added work/expense that they’re not ubiquitous. And that’s a key point: when the value of any program or application is based on things outside of your control (i.e. you rely on retailers to provide the info), it is difficult to standardize. But there may be another way.

First, let’s take a company like Scandit, who boasts a database of information on 25 million products, searchable by UPC (or other standard industry product identifiers). Next, let’s connect that type of solution with an expense management stalwart like Concur, who is always pushing the boundaries of T&E. The third piece of the puzzle—which brings us back to the discussion of mobile payments—is a mobile wallet. Both Apple Pay and Google Wallet have developer APIs, allowing apps to make the connection and facilitate in-person transactions. If some industrious developer were to tie those three things together, we could have a flow where a businessperson on the road scans an item they intend to purchase, it is recognized by the item database, its product type (and perhaps even manufacturer) is recognized, and we can make the go/no-go decision on that purchase not based on the name on the sign outside, but on the actual item the employee intends to purchase. If he or she gets the green light, payment can be completed via the mobile wallet, with the product-based gate-keeping function taken care of by something within the company’s control. That approach makes for a more reliable solution, as all of the steps are managed by one party. Yes, the gate-keeper is only as good as its product database, but no one has ever accused enterprises of an inability to collect data.

That’s it for this installment. Next up, I’ll continue the discussion by taking a look at BYOD policies, OS market share, and how they both impact the standardization necessary for reliable B2B payment solutions.




Posted in Executive Management, Finance & Accounting, General Management, General Industry, Financial Operations, Blog, Research, Procurement | Tagged , , | Leave a comment

Taking the Pulse of Receivables and Payments Pros

Taking the Pulse of Receivables and Payments Pros. Image source: pixabay.comIn my publications here at Blue Hill, I’ve shared the experiences and insights of financial operations professionals on both the AP and AR sides of the fence. At times, I’ve added some of my own (hopefully informed) opinions on market developments and trends that I think will have an impact on how folks handle invoicing and payments. Now, however, it’s time for some data. With that in mind, I’ve put together a brief Pulse Survey to take the pulse1 of receivables and payments professionals – to understand their goals and challenges, and to help ensure that the solutions intended to help them are focusing on the areas of greatest need.

I’m not the only one interested in the topic, of course. For this effort, we’ve partnered with Direct Insite to create and promote the survey to the market. The scope of the project is fairly straight-forward: to gather information to better understand how businesses feel about the AR side of their operations – and to see how banks think their customers feel. We all have our own hypotheses of how things might shake out, of course, but I’m looking forward to being surprised. It’s quite fun when the main question is “what’s happening?” rather than “is this particular thing happening?” Well, fun for an analyst, in any event.2

If you’re interested in how your peers are dealing with their AR and payments processes, then stay tuned for the study results. We’ll be collecting data throughout September, and plan to complete the analysis and publish the study in late October or early November. That’s right about the time that we’ll be co-presenting the results during AFP’s 2014 Annual Conference. If this is a topic that you care about, I’d encourage you to participate in the research, and you’ll be one of the first to get a copy of the report when it’s ready to share.


Take the Survey!


As a final note, we’ll be supplementing the survey-based data collection with some one-on-one interviews as well. If you’d prefer to offer your feedback through that channel (or both, really!) please get in touch and we’ll schedule a time to chat. I hope that you’re as invested3 in the topic as I am, and I look forward to sharing the study results with you all as soon as they’re ready.




1. Clever, right?

2. I’m sure there are some folks who hope things turn out a certain way. I’d be a bit foolish to think otherwise. For me, however, it’s wide open and I’m embarrassingly excited to see what the community has to say.

3. Financial pun? Check. Feel free to float on by, and return at will, to see how we’re progressing. If you are able to participate, I’ll be forever in your debit.

Posted in Executive Management, Finance & Accounting, General Management, General Industry, Financial Operations, Blog, Research | Tagged , | Leave a comment

Tungsten Network and DocuSphere: A Worthy Acquisition

On September 2nd, Tungsten Network announced its planned acquisition of AP automation and document management solution provider DocuSphere. While there is work to be done, it appears to be quite a good fit, and a development that could bode well for those interested in leveraging AP as a strategic working capital driver. After exploring the possibilities this acquisitions offers—and examining some challenges it will need to overcome—it seems likely that this will be a positive development both for the companies involved and for the market in general. This report takes a closer look at the acquisition and provides some thoughts on how things might play out.


Please use the form on the right to download this report.
BHR - Tungsten DocuSphere - Preview

Posted in Executive Management, Finance & Accounting, General Management, General Industry, Financial Operations, Research, Procurement | Tagged , , | Leave a comment

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