PEPPOL is an EDI protocol that enables public entities and their suppliers to exchange electronic procurement documents over its network. For those new to PEPPOL, David Eyes, Head of Business Development explains.
You may have heard a lot of discussion around the term PEPPOL lately, but do you know what it is and what it will mean to you? PEPPOL, which stands for Pan-European Public Procurement On-Line, is an EDI (electronic data interchange) protocol, co-funded by the European Commission and 18 government agencies, to simplify the purchase-to-pay process between government bodies and suppliers.
In simple terms, PEPPOL offers a standardised messaging connection for e-ordering, e-invoicing, electronic credit notes and advanced shipping notifications (ASNs). These technologies automate information exchange across the supply chain, reducing the cost and potential risk of error from manual intervention. For many public bodies, procurement remains a largely manual process and, where there is automation, it generally involves an inefficient tangled web of of different systems and protocols.
PEPPOL will unravel this tangle to deliver greater efficiency, supply chain visibility, traceability and cost effectiveness for procurement in public entities. This European initiative provides the standardisation that will ensure open, cross-border competition in the market for electronic trading exchanges, which ultimately lowers procurement sourcing costs.
Combined with the adoption of GS1 barcoding standards, PEPPOLs standardised approach to e-procurement messaging paves the way for the modernisation of material planning and material flow processes within public bodies, helping to reduce errors and cut burdensome administration by automating tasks. PEPPOL standardises messages and works together with GS1 standards to simplify inventory management and improve traceability, removing waste and cost and freeing staff from onerous stock-keeping duties, allowing them to devote more time to their primary roles. The NHS is leading the way in the public sector, having mandated GS1 and PEPPOL standards as part of its e-procurement strategy.
So how does PEPPOL work? Stripped back to its basics, PEPPOL is a set of procurement message standards and a communications infrastructure, called the PEPPOL network.
PEPPOL message standards focus on the post-award procurement processes; anything that happens after a contract for business has been awarded to a supplier, with message standards for orders, despatch advices and invoices. The PEPPOL network is simply the collection of PEPPOL-certified access point providers such as Data Interchange. Any PEPPOL access point can exchange messages with any other PEPPOL access point without having to sign and set up an interconnect agreement.
A key feature of the open PEPPOL network is the freedom for suppliers to engage with an access point provider of their choice and to send and receive electronic documents with any organisation in the network, across Europe, through one single source. Suppliers using PEPPOL will benefit from having access to every public body in the UK and across Europe without having to work through multiple systems.
Highly efficient sectors, such as automotive and retail, have proven and refined these processes for years. Public bodies and their suppliers can capitalise on this experience and adopt PEPPOL to benefit from open, efficient and low cost eProcurement. Its time to remove the constraints on your procurement and take action on PEPPOL!