Even executives that knew of the potential benefits of adopting technology still don’t do so -something Epner said was reflected in his survey. Researchers in a study on that topic said that perceived strategic value, external pressure and perceived ease of use were significant factors in the adoption of e-commerce technologies. Another study showed that the type, age and size of a business may have an impact on decisions to adopt technology.
As Epner notes, however, businesses sometimes just delay the implementation of technology while gathering data to validate the move. Still these businesses may be hit by an opportunity cost of waiting too long.
This is a summary of a recent research project on technology use conducted by Steve Epner, principal at Brown Smith Wallace consulting group.
The research project looked specifically at whether distributors in the survey sent or received electronic invoices. Less than a fifth said they did either, and even fewer sent or received a significant percentage of their invoices electronically; 150 responses were analyzed in a survey of MDM readers.
Epner also examined whether the age of the company’s top management, the age of the company, its size and the markets served affected the decision to adopt this technology. In this survey, he found no significant connection between these factors and the use of electronic invoicing.
Most of the distributors in Epner’s recent survey who accepted electronic invoices said they did so because a trading partner had asked them to. Oftentimes this seems to be the case, with a trading partner providing incentives or penalties to induce adoption.
In the same vein, those distributors that send (as opposed to just accept) electronic invoices do so in response to a customer request.
Since the use of technology to save money or improve operations was not the motivation, there is a large area of potential improvement for reducing administrative costs in operating a business,” Epner writes. Other reasons cited, though not as often, were the improvement of operations and cost reduction.
About 25 percent of respondents received electronic invoices -17.3 percent reported receiving electronic invoices comprising more than 10 percent of all invoices. Epner estimated about one-third of all companies receiving electronic invoices were doing it for a single vendor.
About 18 percent of respondents sent electronic invoices. Just 8 percent of respondents’electronic invoicing comprised more than 10 percent of company invoices. Epner suggests that more than 50 percent of companies sending electronic invoices do so for a single customer.
“Companies that have learned the value of receiving invoices electronically should logically consider the use of the same technology to improve operations with their customers.”
Only three distributors received and sent more than half their invoices electronically.
Just one company in the survey sent and received 100 percent electronically. The sales at this company were between $5 million and $10 million a year; the company was less than 10 years old. The distributor, selling primarily to MRO customers, reported a small volume of invoices and that it was using electronic invoicing to improve its operations.
Barriers to Use
In his report, Epner discusses the barriers to technology use. Complexity and lack of trust are cited as two of the barriers to widespread use of certain technologies, especially those that require interaction with supply chain partners. Participants in some studies believed it would be difficult for them to realize benefits due to uneven levels of sophistication within their trading community.
Technology adoption is growing in distribution, but the effort to collaborate is slow in catching on. Epner comments on an effort by a group of 32 distribution trade associations to form a coalition to educate members on the benefits and usage of EDI. He quotes a founder of that group: “The results were unimpressive. Following extensive development work, publication and endorsement, adoption was minimal.”
Other potential reasons for not implementing a technology solution focus more on qualities of business’leaders, including their age. Two researchers of this side of the equation said: “… it is reasonable to assume that older workers may be much more accustomed to seeking and applying traditional (ie non-technological) solutions to job-related tasks whereas younger workers are much more reliant on the use of technology for