In recent years the construction and installation sector have been working closely together to define uniform standards for the building industry. The industry associations are well aware of the benefits and savings that can be achieved by the electronic exchange and provision of data.
In the past, the communication with customers and suppliers could easily be done manually – by email, post or via fax. Today we see in other sectors that electronic business is increasingly being adopted. Companies in the building industry more often receive requests from customers and suppliers to exchange data electronically and to provide product data in a standard format.
Industry associations have delivered an important contribution to this change of mentality by developing standards and providing facilities for sharing product data.
In 2012 ETIM and S@les in de Bouw under guidance of GS1 defined a common XML standard for the construction and installation sector. On June 1, 2015 the ETIM Building classification was officially published as an extension to the international ETIM standard for classification of product information in the installation sector. A development that sets the construction and installation sector closer together and offers benefits to all companies in the building industry.
It is important that continuous efforts are made to reduce the thresholds for participation. This requires commitment of all those involved in the building industry, from manufacturers to construction companies and calls for a director who encourages and monitors the use of standards.
What can we learn from electronic invoicing?
When I make a trip to the world of electronic invoicing, we see there that despite all standardization efforts the adoption in the past 10 years has been limited. That has, in my view, four major causes.
First of all, the perpetual debate over the preferred global standard, UBL or UN/CEFACT, and the emergence of various variants on these standards. That must/may not happen in the construction and installation sector.
In addition, the large growth of providers of B2B solutions with their own standards and networks. These providers solved the spaghetti-problem of EDI but managed to create a new problem that slowed down (still does) the adoption of electronic invoicing. The explosive growth of B2B providers brought the interoperability problem between providers – the lack of interoperability between the systems of information providers – one spaghetti problem went away and another one came in its place. Luckily (one would say) the providers invented the interoperability agreements (roaming). But these rather have a commercial purpose than that they really live up to what is promised due to the absence of uniform standards between providers and the improper interest in the own network.
Third, there is the one-sided attention for the electronic invoice leaving only the receiver of an invoice to fully enjoy the benefits of automated processing. In other words the lack of the supply chain thinking.
Last but not least – the starting point: what do we mean by electronic in other words is digital the same as electronic. A discussion that takes place quite often. Let me formulate my position as follows: I'm happy with the standard electronic messages of the construction and installation sector and I believe that integration of systems in the future can not be done without these standards.
Do companies in the building industry suffer from similar problems?
Indeed there are companies that experience such problems and we must prevent this.
Installation companies are urged by several parties to retrieve and exchange data electronically. These companies have to do with suppliers, customers and centralized product data pools that each have their own way of data exchange.
For these companies it becomes impractical over time to facilitate the technical and functional requirements of all these parties.
Let's look at what an average installation company has to deal with. An installation company in the building industry retrieves materials from wholesalers and from suppliers that deliver their products to the building and installation sector or to both. In turn they receive purchase orders from customers and must supply data to participate in major construction projects.
First of all, the company gets to do with the product-data pool from the installation sector (2BA or through artikelbeheer.nl) and from the construction sector (EZ-base). Further, the company has a number of vendors, each with its own EDI/XML Message Broker or B2B provider which should be connected.
How can we make life a lot easier for this company and others!
(How can we help companies to start exchanging electronic data and/or retrieve product data)
There are two routes that could be followed here:
Route 1: the construction and installation sector picks up the role of director and provides a platform/infrastructure – an information highway for companies to exchange messages and information with each other.
Compare it with the PEPPOL project (= Pan-European Public Procurement Online) of the European Commission. This project is aimed at simplifying Procurement between Government and businesses both national and cross-border.
Only (in my opinion) individual companies should be able to connect their information systems easier and faster. With PEPPOL this now is mainly done through service providers that act as Access Point providers. An authorized Access Point has to comply with all kinds of technical and functional requirements for which certification must be gained.
A Business Process Management system consisting of a process, a data, integration and service layer can greatly simplify the process of connecting and exchanging data. When participants through search-and invite can link with one another it would significantly reduce the threshold for participation. The challenge is then with the providers of information systems (ERP, PLM, and others) to open up their systems.
If we look at BPM systems (Pegasystems, E2E Bridge, ...) we see that they already have links to many existing information systems. When information systems offer their functionality as services then connecting on the information highway is pretty simple to accomplish.
Route 2: the company itself implements a BPM system and connects with the different providers of their customers and vendors. Here it is important that the BPM system can be implemented without high cost, is flexible and can quickly respond to new and changed requirements of customers or suppliers. But also that the existing B2B/EDI Providers offer these companies the possibility of free of charge data exchange with partners on their network.
By the way: I shouted years ago (2009) that Google, Yahoo or Microsoft should set up such a highway. In the meantime there are plenty of other players like Facebook and Linkedin who could do this.
My focus areas are business processes, business information systems (ERP, CRM, BPM, ...) and integration of business processes and systems over the boundaries of companies AND not to forget Open Source business applications.
If you have an opinion about the implementation of e-invoicing then do not hesitate to react. If you agree with the fundamentals then share it with others.