Dean R. Hoffman could not have been happier at the news that American Express Co. had purchased Harbor Payments, an Atlanta-based electronic invoice presentment and payment (EIPP) provider. His company, the $2.3 billion engineered component maker Kennametal Inc., is using Harbor to service 12,000 invoices a month, about 95% of Kennametal's U.S. volume. Hoffman, Kennametal's manager of customer/vendor support systems, is hoping that the takeover by a behemoth like American Express could make it possible for his company to consider expanding the Harbor accounts payable program to Kennametal's overseas suppliers.
"This acquisition is good news for us," says Hoffman. "If we can expand that program outside the U.S., we could see big savings in A/P overhead. American Express is a global organization with the resources to make Harbor Payments a global service, and that's just what we're looking for."
That's music to American Express' ears, no doubt. With its purchase of Harbor Payments, AmEx is launching a new trademarked S2S (source to settle) solution–a strategy that is raising expectations that new technology and marketing dollars are about to be pumped into the supply chain automation space. "Interest has never been higher," insists Lionel Le Meur, vice president of the American Express global commercial cards unit, with special responsibility for electronic invoice and payments services. "Companies have invested in supply chain automation, but the result has been piecemeal solutions that leave gaps in the process. Our customers have been asking for a solution that ties everything together in a fully automated way, and S2S will be our response to those requests." Since the Harbor Payments acquisition was still pending at press time, Le Meur declined to give many details about S2S, including whether it will be used aggressively to cross-sell the American Express corporate card products or whether there will be a tilt toward buyers since the buy side operations of American Express is slated to actually be responsible for the S2S tool. "We're building a platform solution that will benefit both buyers and sellers," he says simply. Currently, Harbor Payments also offers business-to-business EIPP services to both billers and payers.
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Le Meur is also silent about how S2S could avoid the problems that have long plagued EIPP initiatives–primarily the lack of broadly accepted standards for order, billing and remittance documents that would allow them to be processed automatically, as well as the unwillingness of large numbers of customers or vendors to accept a solution imposed upon them. He does suggest, however, that S2S will be built to work with legacy systems.
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