Implementing e-invoicing at Walgreens
New information technologies are upcoming and revolutionizing companies in all kinds of industries. One of these new technological developments is e-invoicing. E-invoicing brings can bring a lot of advantages with the technology.
For our Digital Transformation Plan we described the feasibilities of implementing e-invoicing at Walgreens. Walgreens has publicly stated they have aspirations to revolutionize their entire IT strategy, with the goal of building a community around its suppliers. E-invoicing technology can do this by making Walgreens’ supplier network more transparent, accessible and makes its invoicing analyzable. For example, e-invoicing transforms supplier billing, compliance, procurement and supply chain management and finance operations.
Walgreens is America’s largest pharmaceutical retail chain. It owns 8,309 stores in 2014 of which 8,207 are drugstores. Walgreens current supplier network is intentionally highly diverse. They do so to be more responsive to customer demand. In this network Walgreens interacts with its suppliers using data synchronization technology, sourced from WorldSync1, that incorporates standardized trade item numbers and location information. Using a global data synchronization network (GDSN) Walgreens attempts to build information transparency among its suppliers, making restocking and data communication an ongoing process. What we proposed in our report is implementing automated invoicing using a web intermediary/operator that handles all of the incoming and outgoing invoices. As found in the prior analyses, Walgreens is active in a competitive market with high pressure on margins. The technological transformation strategy is intended to help Walgreens position itself better by creating transparency in its spending, while significantly cutting down on costs. Doing so will strengthen Walgreen’s positioning against the five forces. A major theoretical perspective used in this e-invoicing proposition is transaction costs economics as proposed by Williamson (1979).
Key-elements of the new technology
In this overview we state the key-elements of this new technology.
- Reduction in necessary FTEs for processing invoices.
- Reduction in required invoice exceptions, meaning less intervention and more automation
- Faster invoice approval cycle, which creates a larger window for supply chain financing
- 24/7 Real-time insight of every invoice leading to control of liabilities, cash flow forecasting and spend analytics. Spending can be analyzed in real time online-item-level invoices
- Accountancy accuracy enhancement
- Faster, easier and more accurate auditing and fraud prevention
- Buying partners can extend payment terms as Walgreens can offer off balance sheet, non recourse financing
- Procurement automation and compliance
- Secure and guaranteed invoice delivery
- Ability to scale F&A departments
However there are some negative aspects that has to be taken into account when implementing e-invoices. There are mainly two risks sectors that are affected by e-invoicing.
Using a third party operator by implementing the e-invoice technology, negative aspects can be found within the dependency theory and organizational learning theory. Firstly, dependency theory describes how companies attempt to increase their power relative to other organizations in its environment (Barringer & Harrison, 2000). Although Walgreens will get more insight in invoice, procure-to-pay status and process and the other benefits priory noted, it must be mentioned that the operator between Walgreens and Walgreens’s suppliers holds the critical resource; the e-invoicing technology and capabilities. The same problem can be argued from organizational learning theory (Barringer & Harrison, 2000). Arguably, there is a longer-term risk for Walgreens as interacting with the e-invoicing operator can turn into asymmetrical learning. As the operator grows in clients it becomes better and can understand Walgreens better through its analyses. Walgreens on the other hand will lose this capability to do these analytics themselves and in turn thus become dependent on the operator.
The effects on the supplier network is that Walgreens’ entire supply chain needs to adapt to the new technology. Being more efficient means handling more volume, downsizing and assigning some new tasks throughout the supply chain. Therefore the implementation should not be underestimated. A sufficient active participation is necessary for the project to become a success. Dependency on other partners in the supply chain can be a risk. If not converted appropriately the implementation will bring extra costs. Also suppliers will only adapt to the new system when they can see the benefits for their business. In some cases this can be unclear for the suppliers. (Bowsher, 2012).
Barringer, B. R., & Harrison, J. S. (2000)’ Walking a tightrope: Creating value through interorganizational relationships’, Journal of management, 26, 3, pp. 367-403.
Bowsher, A. (2012) ‘Mandatory vs. non-mandatory e-invoicing: what works best for you and your suppliers?’ Sharedserviceslink.com [Online] Available: http://www.sharedserviceslink.com/blog/mandatory-vs-non-mandatory-e- invoicing-what-works-best-for-you-and-your-suppliers [12 Oct 2015].
Williamson, O. E. (1979) ‘Transaction-cost economics: the governance of contractual relations’, Journal of law and economics, pp. 233-261.
When we look at the evolution and growth of industries in the past 2000 years we see an almost 90 degrees line rising straight upwards. What could cause this improved productivity, this increase in industrialism? Well some say its due to the technology. Technology has accumulated through human history, and right now it advances extremely rapidly.
A lot of things we have achieved have been the result of the human mind. Everything that we have right now is a cause of the human mind; it is based on relatively minor changes through time. Currently we are working on machine super intelligence.
Artificial intelligence (AI)
AI is defined as intelligence or the ability of a computer to act like a human being. With machine super intelligence we go a little bit deeper. Earlier we wrote algorithms that functions in the following way, we get out of the algorithm what we inserted in the algorithm. However a big shift is happening now, we are currently more focused on machine learning, rather than just the traditional way of machine work. Now we are producing algorithms that learn from raw data, and improve through time.
What will happen?
The improvements can be endless and therefore we should ask ourselves, what happens when a computer will become smarter than humans? What will be the consequences? And when will this happen?
The imitation game (Enigma)
One of the first machines or computers that sort of outsmart a human brain was the enigma machine. A machine that had to be developed by humans and that could crack such a complicated code that could not be cracked by a human brain. The recently published movie ‘The Imitation Game’ tells us the story about the development of the machine.
https://www.youtube.com/watch?v=_C25CwNlVjA (movie clip, breaking Enigma code: ‘The Imitation Game’)
Another consequence is that by time we are able to create a super intelligence machine, from that point on the machine will invent for us.
Humans versus Computers
There are of course several differences between humans and computers that need to be taken into account before we can start thinking about when computers will become smarter than humans.
The speed of information that is processed in a human mind goes by the speed of a neuron to the brain. For computers the speed of information can travel as quickly as the speed of light. Another difference is the matter of size of the processor. Where a human processor (or the brain) is limited in its size (the size of the skull, computers can be the size of a warehouse or even larger.
On the other hand, humans do not have an off switch (besides killing a human being) and with developing a super machine we can implement an off switch. Also humans can’t be digitally bugged and a computer can incur a virus.
So when will we reach human level of machines?
I do belief that there will be a time in the future where computers will outperform a human, but when is still a big question for me. Looking at another movie (iRobot) we should be careful not to haste ourselves. Of course this is still one of the crazy robot or machine fiction stories, some day this can be our future.
The Imitation Game
We are currently living in the Information age, which according to Hutter (2003) “is a shorthand term for a state of society in which communication is ubiquitous and knowledge is instantly available”. We experience this in our personal lives through the constant flow and availability of information through web-based applications on our e-devices.
Nowadays, it is also unimaginable that business could be conducted without the constant IT-enabled flow of information. Yes, our lives have become very dependent of information and we are constantly searching for new and innovative information goods.
The distribution of information or news has changed through time. Where old villages had a central place to shout the news to all the villagers, we developed the news by introducing newspapers, news channels on the television, and the availability of news online. The latter is the current trend in news and this development is still going through some rapid changes.
Important players in the modern news
Taken the new era of news, we looked at two pioneer news firms who have responded well to the new industry.
The first company we looked at was Blendle. Blendle is a Dutch online kiosk that offers customers the possibility to buy articles from newspapers and magazines per piece. Blendle offers customers an online kiosk with a wide range of magazines and newspapers. Customers can scroll through a list of articles, when a customer decides to read an article; he or she pays for it with an online wallet. Blendle uses a pay-per-view revenue model in which Blendle is an intermediating party that receives 30% of the price that is paid by the customer for viewing an article. The remaining amount goes to the publisher of the article Blendle gets its main competitive advantage from offering the customer a large variety of both newspapers and magazines combined with the pay-per-view option. This combination is not offered by the competition in the Dutch market.
Flipboard’s original goal was to build a simplistic, magazine like, application wherein users can easily find readings of their interest. These readings are directly sorted to the users’ interests and are directly readable on demand. By clustering content by topic or interest areas, Flipboard is then able to present the reader with only content he or she is actually interested in. In this way the interface presents itself as a personalized magazine.
Flipboard attempts to take the entire user-search process out of this equation by using the information provided by both the news publisher and reader. Flipboard is able to provide a unique value proposition to the reader by building a user- tailored magazine-like interface that immediately shows content the reader is interested in. This strategy is highly customer-solution oriented and enables online publisher to get in contact with their intended reader.
difference between the two is their revenue model. Blendle earns money per article they sell. They share the earnings with the publisher. Therefore only paid content is offered. This revenue model empowers them to offer their services without any advertisements. Flipboard does not profit from selling paid articles, they don’t share earnings with publishers. Their revenue model is based upon advertisement. Their position between readers and publishers is where they get their earnings from: they can offer advertisers the possibilities for targeted marketing, seeing the fact that they have good knowledge about the interests of the readers.
Conclusion & Opinion
We believe both companies reacted well to the changing market and therefore will have a fortunate future. Still they need to adapt to new trends in the news industry and be careful for new entrants that could threaten their current business. Considering the fact that both companies have a first mover advantage, the new entrants will have a hard time in taking over the position of Blendle and Flipboard.
Max van Hilten (417357mh)
Thijs Sicking (350118ms)
Marco Stoppini (44015ms)
Victor Vink (345936vv)
Rutger Vogelsang (435718rv)
The Dark Net rises!
Most of us might have heard about the ‘Dark Net’. Seeing it in movies, on the news or from other sources it intrigued me, and therefore I started a research on the ‘Dark Net’.
What is the Dark Net?
We are all familiar with stories that the Dark Net is a place for people to gather child pornography or dealers who buy and sell their drugs anonymously. Well, journalists who entered the Dark Net for journalism purposes confirmed those prejudices. Using a TOR browser will give you access to the Dark Net, and allows you in the world where the possibilities go beyond the standard web browsers.
Internet through time
The internet has changed over the last decades and so it will, maybe even more rapidly, change in the future. We can say that internet is becoming more innovative, more interesting and widens the possibilities of our (digital) life. But on the other hand, it could be considered as a dangerous place. In short we could say that the Dark Net is one of the most interesting an exciting places in the world, because of its mysterious and untraceable or anonymous features.
An upcoming trend on the internet is privacy. The revelations of Edward Snowden opened up our eyes and we are now more concerned who is watching/listening along with us while we are on the internet, we are concerned what happens to our personal information that is posted on the internet and we want to know what happens to our data. That is where the Dark Net comes in.
Possibilities of the Dark Net
The Dark Net with all its negative aspects opens up some possibilities as well. A practical recent example is uploading a new released album on the net and gives permission to download the album for free (legal in the Netherlands, illegal in other parts of the world), because the download is untraceable.
Another political advantage is the ‘freedom’ of speech. In most Arabic countries censorship is a big issue. In Turkey for instance, Youtube was blocked and therefore not Turkish citizens were not able to access Youtube on a standard browser. Blocking Youtube (or other individual sharing websites) may have many reasons, but mostly it is to prevent criticism of a ruler, government or laws, to be spread across the country, this could cause political unrest. Social media played a big role in the Arabic revolution, and so did the Dark Net. Critics could anonymously write down their thought and could not be prosecuted, because of the intractability the critics are free to post what they want.
Finally to give one more example why the Dark Net might become more important, Facebook started a page there as well.
Dangerous facets of the Dark Net
At the opposite site of all the possibilities and advantages are the dangerous aspects of the Dark Net. As I said in the introduction, the Dark Net is a place where the pedophiles could find what they want, where drug deals are as normal as buying something on eBay. Also something against the freedom of writing anything you want, there are some rumors that the IS is planning attacks on the Dark Net.
So dangerous or will it bring possibilities?
To conclude we can say that the biggest advantage is that there are no more authorities checking your internet traffic, there are no more companies saving and storing your browser history or data. These components will bring the most relieve among the current internet users. Also the fact that there will be no more advertisements or disturbing pop-ups is a advantage and decrease the level of irritation among the internet users.
I believe the Dark Net is going mainstream and more people will start using it. The Dark Net is already used in different levels of the civilization, from students to outcasts to army people. So will we all be on the Dark Net soon?
“The Dark Net” (Jamie Bartlett, 2015)