EDI Implementation Cases
The cost savings realized by the grocery sector can also be achieved by businesses operating in other sectors such as apparel, DIY, healthcare and public administration. GS1 UK’s survey demonstrates that there is a significant opportunity for other sectors to move from a manual paper-based process to EDI – reaping the cost and efficiency benefits. There are many examples of other sectors that have achieved significant benefits from using EDI. Case study 1 is given below.
Denmark’s public sector implements electronic invoicing to optimise payment processes Since 1 February 2005, all public institutions in Denmark are required to only accept invoices from suppliers in electronic format. All public sector entities have had to convert their systems and administrative processes from physical to digital handling of invoices, credit notes and other transactions. This new EDI-based system involves 15 million invoices a year and applies to the entire public sector from government ministries and nursery schools. Before February 2005, public institutions would receive a paper invoice by mail and it would then be handled by several staff members for approval, data entry and filing. Only one person at a time had access to the invoice and for future reference it was filed in the archives.
Today, the invoice arrives directly in the electronic accounting system and is subsequently approved online by staff – a process that involves no paper and takes only a few seconds. Furthermore, the invoice can later be retrieved in a matter of seconds. This considerably reduces the processing time for Denmark’s public institutions. The electronic invoice is a bill converted into an EDI-based format that can be read by the public sector accounting system. All invoices must include a GS1 Global Location Number (GLN), order or requisition number, personal or other reference and internal accounting number.
It is estimated that each minute saved in invoice handling of the public sectors’ 15 million invoices equals 12 million Euros saved a year. A conservative estimate is that 10 minutes can be saved in the handling of each invoice when they are received electronically – resulting in total savings of 120 million Euros per year. This is equivalent to potential savings of more than 2,000 man-years of work per year.