No matter what product you produce or service you sell, you rely heavily on your suppliers to provide the raw or indirect materials and services so you can go to market on time and on budget.
But when you look at your working relationships and collaboration with your suppliers, is there room for improvement? Is the process of working together more work than it needs to be?
Manual processes are slowing you (and your supply) down
The goods and services you need are getting ordered, delivered, and paid for. Although on paper it may look relatively easy and orderly, the paper is actually the problem. The purchase orders, invoices, notes, emails, spreadsheets, and phone calls required to find, onboard, communicate, and collaborate with suppliers are all adding delays and potential errors to the process. Similarly, distributing an RFI, RFP, or RFQ to every appropriate supplier means a series of one-off communications that have to be managed individually. Shuffling all these documents and communications eats into your day, and it can result in late payments, overpayments, and other costly oversights. These inefficient processes are distracting your top talent and bogging down your team.
Lack of spend oversight can limit your growth potential
Financial implications can also result from these manual processes. Without more competition among your suppliers, you may be over-spending across the organization. The lack of visibility into your spend or whether employees are purchasing against established supplier contracts can result in cash flow, forecasting, and other budget challenges.
In addition, when you receive a response to an RFP, how can you be sure that the supplier has been fully vetted? Poor supplier business practices can negatively affect your reputation and your bottom line.
All of these challenges can result in real money wasted – capital that could be funding more innovation and growth for the business.
Automation is only half the answer
While setting up an electronic data interchange (EDI) portal could enable basic information sharing between your organization and individual suppliers, it is another one-off solution that doesn’t solve for the larger problem. As you grow and add additional suppliers, you are creating greater complexity without the benefit of added spend control.
Increasing collaboration without complexity
By digitizing the collaboration process with your suppliers, you can solve these manual issues. You can eliminate inefficient emails, calls, and documents throughout the entire process – from initial onboarding through ongoing collaboration. You can reduce delays and errors and easily share information back and forth with suppliers. This makes them (and you) happier and easier to work with.
But what really improves the supplier relationship is the ability to share and centralize POs, invoices, documents, and other data – all in one, easy-to-access place. You can collaborate with all your suppliers in the same efficient way, and your suppliers can see the status of their invoices and know when they’re going to get paid. And because those invoices are automated and more accurate – with information based on the PO – you can catch exceptions before they cause delays, and your AP team can focus on more strategic work.
As the buyer, you can implement rules-based workflows to match purchase orders and invoices to reduce exceptions, according to tolerances that you set. Compliance policies can be applied digitally to every transaction to keep both buyers and suppliers in check.
You can also realize financial benefits almost immediately. You can do business globally and in multiple languages, cutting down on translation costs and miscommunication. By orchestrating payments strategically, you can capture more supplier discounts, as well as better manage cashflow and working capital. These are real savings that can help fund other initiatives across the organization.
It’s time to embrace a business network
Regardless of the current status of your supplier relationships, you can continue to enhance them in a way that is beneficial to both you and your suppliers. By connecting to a proven network, you can improve the process exponentially – instantly accessing millions of suppliers across all your spend categories. This gives buyers across your business one place to get everything they need. It ensures your policies are applied consistently to each and every transaction, protecting your business from excess cost or unexpected incidents.
In addition, your suppliers will be empowered to reach new customers and expand partnerships with existing customers because they can more easily access new markets, integrate their catalogs directly with customers, and close more deals faster.
Your suppliers are critical to your business, just as better margins and cost efficiencies are critical to your business growth. How much more could your business be doing if doing business with suppliers wasn’t so much work?
Learn more about rethinking your supplier relationships through Ariba Network.