B2B vs E-Gov Standards: On a Collision or Peaceful Coexistence Course?

March 8, 2017

E-invoicing practitioners are well aware of the revolution that is caused by the imposition on businesses of messaging standards for purposes of tax ‘clearance’ and public procurement. Within the next decade, the business community as a whole will need to adapt to a parallel universe of standards designed for e-government transactional purposes. From what we’ve seen so far, it’s legitimate to expect that parallel universe to be just as fragmented as today’s B2B standards jungle. Viewed on a global level, it is fair to say that governments have already massively missed the opportunity to use their investments in e-government for correcting any market failures in B2B messaging standards. (The subject of market failure and how it’s used to justify regulatory activity is extremely interesting, but we’ll leave that for a future post).

However, many of these e-government standards (most of which are geographically defined: typically national, sometimes sub-national and exceptionally supranational) have the unique feature of being mandatory for all businesses in a certain territory, which means that they will likely become formidable competitors to the current body of sectorally diverse B2B messaging standards.

It might not be economically feasible for the business community at large to support two parallel sets of fragmented standards – so it’s quite likely that these compulsory e-government messaging standards will over time replace all or a large part of the B2B messaging standards we know today. If this prediction comes true, it’ll be one of those rare tectonic shifts that will rock the very foundation of business as we know it, severely affecting enterprises and e-business vendors alike. It’s hard to foresee exactly what the consequences will be, but it wouldn’t harm the B2B automation community to think more strategically about how we want this new chapter to unfold – and more importantly, what scenarios we want to avoid.

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Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe, and is owned by Hg and TA Associates.
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