Canada government sign

Many topics have been discussed and debated during the campaigns. Among them is the topic of infrastructure. Now this is certainly of great importance since we cannot allow our country to fall into ruin and it does produce short term jobs. But infrastructure is far, far more than merely repairing things that need repairing.

In the Oct. 10 Globe and Mail, Hazel McCallian (former mayor of Mississauga) correctly observed; “Infrastructure creates a lot of jobs, and that’s not just transit and roads and bridges, etc. It’s education, it’s hospitals, it’s schools, it’s universities”.

Yes – but everyone seems to miss perhaps the most important infrastructure topic in Canada – our electronic infrastructure. We are no longer in the industrial age. From the 21st century on, we are in the information age, and Canada’s ability to innovate and be a leader in this new world is key.

We have a very long way to go. For example, in reports on which country has the fastest and least expensive internet, Canada lies at the bottom of the list. In this new age, we hear of “Unicorns” – billion dollar startups. A 2015 report by Independent Technology Research lists the number of such startups per country. Canada is not even on the list. Do we want to be an innovative nation or not? I know of previous attempts to convince the government that it was time to start providing broadband communications from coast to coast to coast apparently falling on deaf ears (remember that it was a former Canadian company, Nortel, that invented and led the digital world).

Yet there is hope. I read that by the time Perth, Ont. reaches its bi-centennial year in 2016, they will have fibre optic communication channels into homes. How come that the rest of us don’t have this?

Certainly there has to be a focus on creating jobs, jobs, jobs, and injecting much needed monies into the economy. Let me illustrate how we might do this by a single example, although there must be myriad other ways to do this.

Let’s take the case of e-invoicing. What is that? It involves moving all companies in Canada to do their invoicing – not using paper, but by exchange of electronic documents.

Why should we do this? Well, it is said that up to 10 per cent of the trees on the planet are cut down merely to produce the paper on which to print an invoice. If we moved from paper to electronic we can help repair the lungs of the planet.

The whole process of dealing with invoices is currently completely backward. Think about it! Most suppliers produce an invoice via some sort of electronic processing system – hence the data on the invoice starts out in electronic form. We then print it on paper and send it to the customer for payment. The customer then reverses this process and by some means re-enters the data from paper into electronic form for their electronic systems. This could be by a re-typing process or a scan/OCR process. European studies reveal that this process consumes from €7-15 per invoice. Let’s assume for ease of calculation that this process costs $10/invoice in Canada. Large companies and governments processing thousands of invoices have a real incentive to move to electronic form. If the Canadian government processes some 9 million invoices per year, the potential savings in a decade is close to $1 billion. Significant savings for further investment in infrastructure.

How can we do this? There are a couple of direction we might go. With our heads focused firmly to the past, we might decide that what we need is to start a process where we look for, purchase, and install the best software package available that meets all our particular needs.

A key issue discovered through experience in Europe, is getting all your suppliers on board, and getting them to use your software solution. First of all, you are the one with the problem and all the potential cost savings, whereas the supplier has to take on all the expenses to use your system. But it gets worse for the supplier. If he has thousands of customers, and they all insist he uses their chosen software solution to submit invoices, it would be prohibitively expensive to even try to pursue this direction. He also probably has already purchased and implemented his own software system for his own needs and in all probability has no resources, knowledge or permission to customize his purchased solution.

Is there any solution? Yes – and you might look no further than our current phone system to get a hint of what it might be. Today you can purchase a telephone set from any supplier. You can connect that phone wirelessly or via standard plug in, type in a phone number and reach who you are calling, also independently of what telephone set they use and what country they are in. I think you could even reach great grandmother who simply won’t give up her old rotary phone. How is this even possible? The architecture of the phone system is built upon what is called a 4 corner model and global international standards. The fact that you have one suppliers telephone set, is completely hidden from both the network and the the telephone set of who you are calling. You also need equipment along the communication path that communicates conforming to international standards so that all this remains transparent as well.

Anyone heading in this direction for e-invoicing? The answer is yes, but unfortunately Canada is already about a decade behind the rest of the world. In 2004, the Organization for the Advancement of Standards for the Information Society (OASIS) released a standard called the Universal Business Language (UBL) that supplied a standard for all business documents that might be exchanged between business entities.

In 2005, the government of Denmark recognized the importance of such a standard and actually legislated the use of UBL business documents when invoicing the government of Denmark. They also built a system (called Nemhandel – Easy Trade) to allow any business to submit these invoices.

Success in this project led to the creation of the pilot project PEPPOL for the European Union. That pilot successfully deployed open electronic invoicing in European government procurement by creating not a single piece of software, but rather, by creating an open specification of standards and interfaces that could be satisfied by multiple vendors implementing access points for their customers. The customers then use their favoured vendors for invoicing European governments. No one vendor holds sway over other vendors. No one piece of software can fail, thus bringing down the entire network. Participation is by agreeing to, conforming to and getting certified for a suite of standards and a particular level of quality of service to guarantee smooth operation of the entire network. This project mainly focused on post-award documents such as invoices.

Just think, we will have free trade agreements with the EU to facilitate trade with the European countries. Will we be ready when those countries insist that if we want to get paid for our invoices we need to present them electronically and in UBL? Will Canadian companies even know what UBL is?

Post-award procurement was so successful with PEPPOL that the new e-SENS project is adding pre-award tendering to the European network:

“e-SENS (Electronic Simple European Networked Services) is a new
large-scale project that embodies the idea of European Digital
Market development through innovative ICT solutions. The project
will consolidate, improve, and extend technical solutions to
foster electronic interaction with public administrations across
the EU.

enabling electronic procurement procedures for businesses

The project will develop the digital infrastructure for improving
the quality of public services in EU. e-SENS will support the
implementation of European policies, in particular the Digital
Agenda for Europe.”

Does Canada even have a digital agenda?

Where should Canada be headed?

I’ve heard it said that over $1 trillion are locked up in our current procurement systems. SME’s are particularly affected since their invoices are typically held up for as many as 120 days. Moving this towards immediate payment will start to move this $1 trillion into the companies that create most of the jobs in Canada. Very hard to accomplish with everything locked into paper,

Will we head down a path that is the antithesis of an open 4 corner network. Will we seek a single vendor solution of a single portal supporting a single software solution for the benefit of a single supplier.

Or will Canada be creating its own infrastructure of mandating open standards, even going so far as to consider adopting the European infrastructure so as to enable Canadian companies also to competitively be involved in European government procurement.

Joining European efforts already 10 years ahead of Canada would benefit both Canada and make the European effort a truly international project. Canada would also have a greater opportunity to ensure its own Canadian requirements could be incorporated into the entire project.

For the Canadian Government – as well as freeing up $1B in the processing of invoices, and speeding the movement of $ into the hands of small businesses, we also create a business ecosystem by specifying an open specification of standards and interfaces that could be satisfied by multiple vendors implementing access points for their customers

This direction and the subsequent benefits can be heavily influenced by our next Prime Minister. Is this you?

I would like to thank Ken Holman, CTO of Crane Softwrights for assisting on assembling the information for this letter.