Electronic invoicing in Norway, a story of success
Norway is a very active player in the area of electronic procurement, particularly in eOrdering and eInvoicing. As an integrated part of the European market in most areas, Norway has implemented the same public procurement regulations and has already ensured compliance with the upcoming EU Directive on electronic invoicing in public procurement*.
The Norwegian public sector e-invoicing project started in 2009. The infrastructure for eProcurement and eInvoicing is based on the standardisation framework and specifications developed during the PEPPOL (Pan-European Public Procurement Online) project and are now maintained by OpenPEPPOL, the international non-profit organisation set up by European governments in September 2012.
The eProcurement specifications maintained by OpenPEPPOL build on the work of the CEN Workshop on Business Interoperability Interfaces for Public Procurement in Europe (CEN BII) . PEPPOL has not developed new standards but has used the CEN BII results to develop implementation guidelines known as PEPPOL BIS (Business Interoperability Specifications) that can be embedded in any eProcurement and eInvoicing system, ensuring interoperability across Europe.
The Norwegian starting point
The main success factors of the Norwegian approach to eInvoicing are: regulatory measures, EU-wide interoperability and connectivity through PEPPOL, and a roll-out plan focused on getting the major central government entities onboard as first movers to trigger market adoption among their suppliers and eInvoicing service providers.
Government regulations have indeed played a relevant role. Since the 1st of July 2011, it became mandatory for all central government entities to receive invoices electronically in a standard format; and from the 1st of July 2012 it became mandatory for central government entities to require their suppliers to invoice them electronically using a national implementation of the PEPPOL specifications.
The role of regulations and standards
An important lesson learned is that mandating the receiving capabilities among public sector entities to process electronic invoices is not sufficient to promote market adoption. After a slow start in 2011, the transaction volumes picked up in 2012, after central governments started requiring suppliers to send eInvoices, with more than 2,7 million eInvoices sent by the end of 2013. During autumn 2013, the number of eInvoices received increased by 20‐30 % per month. The two main drivers for this growth, that is expected to continue in 2014, are that more contracting authorities mandated eInvoicing from their suppliers when entering into new contracts; and the increased market maturity among eInvoicing service providers and senders of eInvoices.
Norway ensured standardisation and interoperability by mandating the use of a standard format called EHF (Elektronisk handelsformat – electronic trade format); a national implementation of UBL (Universal Business Language) syntax and semantic interoperability model compliant with CEN BII profiles and PEPPOL BIS, and recommending use of the PEPPOL Transport Infrastructure for business document exchange. Both buyers and sellers can choose to establish their own Access Point or to enter into an agreement with any of the service providers connected to the PEPPOL Transport Infrastructure in Norway or throughout Europe.
Private sector involvement and adoption
Another decisive factor for the Norwegian success has been private sector involvement. Today, more than 30 ERP/other software providers offers EHF/PEPPOL BIS enabled products or services, and nearly 40 PEPPOL Access Point providers offers connectivity with the PEPPOL Transport Infrastructure. In January 2014, an important milestone was reached when the entity number 10.000 was registered as a recipient of EHF/PEPPOL BIS business documents. Most of these organisations have capability to receive eInvoices. From October 2013, an increasing number of Access Point providers also offer their customers the capability to receive EHF/PEPPOL BIS eCatalogues and eOrders.
Among the over 10.000 organisations, approximately 10 % are public sector recipients (including all central government entities and a majority of municipalities and counties) while approximately 90 % are private. Out of the first million transactions exchanged over the PEPPOL network, nearly 50% were Business-to-Government, and the remaining was Business-to-Business.
Difi, the Norwegian Agency for Public Management and eGovernment, is the national PEPPOL Authority. They support the private sector Access Point providers and users of EHF/PEPPOL BIS through regular meetings, web pages and other means, and operates a centralised addressing mechanism** which includes information about the EHF/PEPPOL BIS receive capabilities of Norwegian public and private sector entities. Difi also operates a test Access Point and validation services for business messages compliant with EHF/PEPPOL BIS. In order to facilitate technology adoption, Difi offers the Oxalis open source sample implementations for PEPPOL Access Points, which are widely used by service providers. Small IT companies have now the opportunity to offer Access Point services across Europe, expanding business potential beyond national borders and increasing competition.
Norway has been driving eProcurement standardisation developments in Europe. In particular, by supporting the activities on the CEN BII workshop on public procurement in Europe, by leading the PEPPOL project (2008 – 2012) and, today, the eProcurement pilots in the EU co-funded Large Scale Pilot project e-SENS. André Hoddevik, Head of the eProcurement Unit in the Public Procurement Department in Difi, is the Secretary General of the OpenPEPPOL Association.
What can be replicated?
The Norwegian approach is replicable outside national borders for two main reasons. Firstly, the business processes supported and the technology implementing them meets European-wide business requirements in a scalable way, available all over Europe through PEPPOL. Secondly, the forthcoming ‘eInvoicing in Public Procurement’ Directive will facilitate a similar regulatory framework throughout Europe, as Norway implemented it in 2011.
If Member States and affiliated countries could seize the opportunities that PEPPOL and the new Directive provide, they can re-create the Norwegian success, at a reasonable cost and with very little risk. Some of the countries already implementing the PEPPOL approach for eInvoicing are: Austria, Denmark, France, Ireland, Italy, Netherlands, Poland and Sweden, while the first PEPPOL Access Point has recently been set up in the Russian Federation.
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(*) European Commission Proposal for a Directive of the European Parliament and of the Council on electronic invoicing in public procurement. COM(2013) 449 final. Brussels, 26.6.2013
(**) ELMA – the Norwegian PEPPOL SMP (Service Metadata Publisher)