Procurement systems must speak a universal language

Gert Slyvest
21 July 2015

As I discussed in my last blog post, the business-to-business sphere is often perceived as being built on inflexible and siloed processes and software when compared to business-to-consumer.

There’s no smoke without fire, but while structured processes make interaction in the B2B sphere difficult when compared to the social, consumer or B2C sphere, it is not an insurmountable challenge. But it requires shared semantics and support for process automation through machine-readable data and rich integration options.

At the heart of this is 'Universal Business Language' (UBL). UBL is a library of standard electronic business documents such as purchase orders and invoices, created for the purpose of making accounting systems interoperable. So, as long as a business and its supplier uses accounting software that is founded on UBL, then no matter the vendor, they can seamlessly transfer data and documents between them.

UBL has been adopted by a large number of commercial players; including the pan-European procurement network PEPPOL, the European Commission for referencing in EU public tenders, and the NHS as the basis for all of its e-procurement.

Although the ‘U’ in UBL stands for universal, we don’t currently have universal adoption of a standard trade language - in Europe alone there are more than 10,000 accounting systems. UBL brings the interoperability needed to make business processes fluid because it is a shared language. It is unlikely that we’ll ever reach a point where we all use the same accounting software, so instead we need to allow fluid movement of data between formats so that, say, order documents that have been created in one application can be flipped to invoices in another. UBL helps to facilitate this.

So, for organisations looking to speak the language of global trade, they need to seek out platforms that support UBL as a basis, but also those that operate with other industry standards. If every piece of data that is exchanged is based on a standards-based semantics, such as UBL, this ensures data is machine-readable across processes such as workflow support, accounting, reporting, and so on. Bringing such fluidity to business processes is a key step for building an efficient digital supply chain.

In my next blog, I will explore the next step towards fixing the sorry state of the digital supply chain: How to use machine learning to further advance accounts payable and procure-to-pay processes.

Gert Slyvest is chief technology officer and co-founder of Tradeshift

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