Initiative from the Danish Agency for Digitisation

The Danish Agency for Digitisation operates a national open e-business framework NemHandel” to facilitate the exchange via the internet of e-business documents (e.g. electronic invoices) b2g as well as b2b.

The case

The purpose of NemHandel is to replace less cost-effective solutions, such as the scanning-based digitisation of paper invoices, to reduce the administrative burdens and exploit the powers of ICT in businesses, particularly SMEs.

NemHandel allows business to send standardised electronic invoices directly from their PC via the internet in a secure and reliable fashion. As NemHandel is based on open standards, any IT vendor or IT service provider may freely incorporate the technology into their commercial products and connect to the open infrastructure, which ensures dissemmination and uptake and rapidly builds critical mass.

NemHandel solutions fall into three main categories:

• Fully integrated NemHandel-enabled ERP solutions (software or web-based)
• ERP solutions in combination with a NemHandel message handler client
• NemHandel-enabled web-based invoicing portals (web forms)

Impacts

The official communication and dissemination campaign was initiated as recently as April 2009 and within two years more than 30,000 businesses adopted the NemHandel technology. The Danish Agency for Digitisation has established a NemHandel helpdesk to assist end-users and IT-providers who develop and offer e-invoicing solutions based on the NemHandel components and standards. The savings potential for businesses was estimated to be EUR 590,895,000 per year.

Benefits for businesses

NemHandel effectively relieve businesses administrative burdens by replacing less cost-effective solutions, such as the scanning-based digitisation of paper invoices. A key feature of very high importance to businesses is the document receipt functionality, which provides the sender of a document with a receipt, when the document has reached the intended receiver.

Benefits for public sector

For public authorities and institutions the implementation of NemHandel also reduces administrative burdens as fully digital business documents can be processes automatically and significantly reduce the risk of errors occurring.

Benefits for IT vendors and service providers

As a result of the launch of the NemHandel framework, a number of providers of IT solutions providers (software or online services), who previously did not have the capacity to compete in the electronic invoicing solutions market, have developed electronic invoicing solutions and have successfully entered the market.

Policy Context

The NemHandel project operates within the context of European and national policy as well as within a strategic framework for a comprehensive digitisation of Danish society through the establishing of state-of-the-art shared infrastructure.

National policy

Since 2005 Danish suppliers to the public sector have been required by law to send invoices electronically. This affects approximately 70% of all Danish businesses. Thus, existing legislation allows electronic invoicing in the public sector to act as a key driver for the NemHandel initiative, which is targeted more widely to help businesses digitise their business processes.

Using legislation as a driver positively affects both the end-users, i.e. businesses, the ICT market, i.e. IT vendors and services providers, and the public sector institutions:

IT vendors benefit from a clear message from government as to the direction digitisation is meant to take. Legislation on mandatory use of specific standards within the public sector has already had a very positive impact on smaller IT solutions providers (software or online services), who previously did not have the capacity to compete in a electronic invoicing solutions market characterised by disparate and competing standards.

In terms of business policy the NemHandel initiative aims to relieve businesses administrative burdens by replacing less cost-effective solutions, such as the scanning-based digitisation of paper invoices, as well as paving the way for more comprehensive digitisation of a range of e-business processes. NemHandel achieves this by allowing the businesses to send standardised electronic invoices directly from their PCs via the internet in a secure and reliable fashion which frees up ressources to focus on their core business and on evolving their business. Furthermore, the use of the internet very significantly lowers barriers for SMEs as NemHandel is an exceptionally cheap, well-known and readily available solution to businesses of all sizes.

For public authorities and institutions the implementation of NemHandel also reduces administrative burdens as fully digital business documents can be processes automatically and significantly reduce the risk of errors occurring.

Strategic framework

Public provision of open infrastructure lays the foundation for a fully digitised society and stimulates a healthy eco system of IT vendors and service providers who deliver high-value solutions to businesses.

The private sector has not managed, or indeed taken the initiative, to achieve interoperability or the establishing of shared infrastructure services (e.g. addressing mechanisms, federated identity and access management services) and, that being the case, the Danish public sector has shown leadership and established the necessary shared infrastructure services. The NemHandel initiative enables nationwide interoperability and supports the formation of an ecosystem of commercial vendors and service providers offering NemHandel compliant solutions and services.

Description of target users and groups

The target users are all Danish businesses, with particular attention to the needs of SMEs and micro-sized businesses.

The total Danish population of businesses is approximately 500.000 of which almost 300.000 are SMEs or micro-sized businesses (<10 employees). More than 90% of Danish businesses have broadband internet access, and almost 70% (2006) of Danish businesses are regular or occasional suppliers to the Danish public sector.

Target user needs revolve around cost-effectiveness, easy of use, common standards, interoperability, and variety of solutions to suit different needs:

Businesses need access to technology to replace less cost-effective solutions, such as the scanning-based digitisation of paper invoices, and introduce comprehensive digitisation of a range of business processes to reduce the administrative burdens.

Otherwise faced with a range of competing proprietary standards put forward by individual industries and large IT vendors businesses, and in particular SMEs, also need a definitive set of common standards that ensure interoperability.

Finally businesses need effective solutions that can be acquired at a relative low price and that reuse existing and well-known technology such as the internet.

Description of the way to implement the initiative

The target users are all Danish businesses, with particular attention to the needs of SMEs and micro-sized businesses.

The total Danish population of businesses is approximately 500.000 of which almost 300.000 are SMEs or micro-sized businesses (<10 employees). More than 90% of Danish businesses have broadband internet access, and almost 70% (2006) of Danish businesses are regular or occasional suppliers to the Danish public sector.

Target user needs revolve around cost-effectiveness, easy of use, common standards, interoperability, and variety of solutions to suit different needs:

Businesses need access to technology to replace less cost-effective solutions, such as the scanning-based digitisation of paper invoices, and introduce comprehensive digitisation of a range of business processes to reduce the administrative burdens.

Otherwise faced with a range of competing proprietary standards put forward by individual industries and large IT vendors businesses, and in particular SMEs, also need a definitive set of common standards that ensure interoperability.

Finally businesses need effective solutions that can be acquired at a relative low price and that reuse existing and well-known technology such as the internet.

Technology solution

Interoperability at all levels

Lack of interoperability is a major barrier to growth in e-government services. However, the private sector has been unable to establish common and open infrastructure services and this is why the public sector must show leadership and establish the necessary shared infrastructure that ensure interoperability. NemHandel addresses interoperability at all levels; organisational, technical and semantic.

Delivers value across sectors and industries

As an open and shared e-business framework, NemHandel delivers value across sectors allowing the exchange of business documents business-to-government as well as business-to-business. Providing one definitive set of common standards NemHandel also ensures interoperability between industries that previously maintained their own individual, often proprietary standards, and left businesses faced with a range of competing standards to support.

Strategic use of open source

As part of the NemHandel initiative, the Agency for Digitisation has utilised the open source model strategically to promote adoption of the technology. The Agency has developed a basic open source message handling reference client and made it freely available to public sector institutions, private businesses, and to IT vendors who may easily incorporate the technology in their own commercial products. (Infrastructure components are also open source and thus interested parties, e.g. other nations, may essentially download their very own NemHandel infrastructure and put it into operation.)

Range of NemHandel-enabled solutions

A range of commercial IT vendors have integrated the 'NemHandel' technology into their products so that documents may be exchanged directly between existing IT solutions. Other IT vendors and service providers have developed a range of new NemHandel-enabled solutions to serve the needs of businesses of all sizes (e.g. simple web-based software as a service solutions that cater to the needs of small and micro-sized businesses). Likewise a range of existing commercial service providers, e.g. banks and operators of value added networks (VAN) and other proprietary solutions, have incorporated the technology into their services and connect their individual networks to the NemHandel infrastructure.

Document standardisation

Last but not least the use of document standards ensures interoperability at the content level. Having IT business systems provides no guarantee that even very central business processes, such as invoicing, may be handled seamlessly because of lack of interoperability at the content level. Instead valuable time is wasted on time consuming manual processes that are even prone to generating errors. NemHandel addresses this by providing document standards that ensure interoperability.

The central infrastructure components

The NemHandel infrastructure consists of the following technical elements:

• Addressing Mechanism

A master registry contains information about the technical endpoints of all public institutions and private companies that are able to receive documents via NemHandel. It also contains information about their public encryption key and the documents they are able to receive (e.g. invoice, creditnote, order, catalogue etc.)

• Infrastructure standards

The standards used in the infrastructure are all open standards belonging to the WS* stack of standards. The standards are described in detail in an interoperability profile called RASP (Reliable Asynchronous Secure Profile). The profile narrows down the implementation choices and describes in detail various policies and how standards are used in combination.

• UBL documents

NemHandel uses UBL 2.0 (Universal Business Language) as the common standard for definition of business documents format.

Technology choice: Mainly (or only) open standards, Open source software

Main results, benefits and impacts

User impact and satisfaction

The official communications and dissemination campaign was initiated as recently as April 2009 and within two years more than 30,000 businesses have adopted the NemHandel technology. The Danish Agency for Digitisation has established a NemHandel helpdesk to assist end-users and it-vendors in their implementation of NemHandel.

Businesses are particularly satisfied with the ease of use, with document receipts, with the reduction of technical document errors to practically 0%, and with the wide range of available solutions. Many businesses even add ideas and requests for additional business services that could be delivered through the NemHandel infrastructure.

Providing more services on the basis of the infrastructure, and thereby adding more value to an existing technology, is an integral part of the strategic framework within which NemHandel has been established  and it is a strong indication that businesses understand and value the power of NemHandel.

ICT market impact

An increasing number of IT vendors and service providers have already integrated, or are in the process of integrating, NemHandel into their existing and new solutions, and the IT market has expressed satisfaction with legislation on public procurement standards as it sends a clear message from government as to the direction digitisation is meant to take and levels the playing field for IT vendors. This clearly demonstrates the key role NemHandel is playing in Denmark proactive policy approach to stimulate ICT market growth.

Technical impact

From a technical point of view, the NemHandel technology has already proven its capacity to reduce technical document errors to practically 0%. This is achieved through automatic document validation prior to sending, ensuring that only valid and uncorrupted UBL documents are exchanged.

Return on investment

Return on investment: Larger than €10,000,000

Track record of sharing

The NemHandel infrastructure is based on open standards and open source and all components are freely available through the Danish public software exchange Digitaliser.dk. The Danish Agency for Digitisation actively promotes and encourages reuse of the components and participate in various knowledge sharing activities.

Denmark has been  a very active participant in the EU project PEPPOL (Pan-European Public Procurement Online), which has succeed in establishing an  open infrastructure very similar to NemHandel to cover the European Union. Denmark has based on experiences with NemHandel, contributed with hands-on expertise to the design, development and implementation processes of the PEPPOL project.

Denmark is now an active member of OpenPEPPOL (www.peppol.eu) and The Agency for Digitisation is working on establishing a gateway between NemHandel and PEPPOL, in order for foreign suppliers on the PEPPOL network to reach Danish Public institutions on the NemHandel network.

In the long term the plan is to make a full migration from the NemHandel infrastructure to the OpenPEPPOL infrastructure.

Lessons learnt

1. Public sector development and provision of an open national IT-infrastructure has mimicked and tapped into the powerful democratic principles of the internet where no one entity or controls the net.

This provides excellent conditions for the growth of a healthy eco system of IT vendors and service providers of all sizes, who can all on an equal basis build NemHandel-enabled solutions and services upon the infrastructure and rely on the common standards to be supported and maintained.

As the simple transport of data becomes greatly simplified and virtually cost-less in the open IT-infrastructure, enterprises and in particular SMEs can focus on their core business and on evolving their business. Additionally the provision of a definitive set of common standards in NemHandel ensures that businesses are no longer faced with a range of competing proprietary standards.

2. Developing the NemHandel framework on the basis of actual business requirements gathered through an open and ongoing dialoque with businesses, public authories, trade associations and IT vendores and service providers has made the NemHandel framework a powerful and effective technology.

3. The use of the internet has very significant lowered barriers for SMEs as NemHandel is an exceptionally cheap, well-known and readily available solution to businesses of all sizes. This demonstrates the power of helping businesses use existing and very low-cost technology to carry out vital business processes.

Scope: National