New generation of networks advance trust, buyer-supplier collaboration
With the first wave of solutions, providers charged suppliers to participate. To be fair, in a pre-Google world, supplier networks offered some value worth paying for; in today’s connected world that value has diminished.
However, these fees, along with bureaucratic registration processes, created additional hurdles on top of all the change management, communication, and training needed to bring suppliers on board. Under these circumstances, getting all suppliers on board required a mandated approach that only companies with enough muscle, and the will to use it, could pull off.
For the rest of companies, the net result was that these early efforts only enabled 20-30% of suppliers. Those may have represented 70-80% of spend, but only 20% of the real process cost of doing business with the supply base.
The good news – it doesn’t have to be so hard any more. Companies like Coupa are offering suppliers choices for how they collaborate and transact with their customers, all of which are free. This makes it much easier to enable the so-called long tail of suppliers—smaller suppliers that don’t account for a lot of spend, but contribute disproportionately to processing costs.
If these suppliers want to use a web portal – great – here it is. Don’t want to bother with a portal? OK –flip into an invoice right from the PO email. Prefer to just email your invoices right from your invoicing system? OK – send it to a central email address, where it can be read and verified.
We’re beginning to see some interesting collateral benefits to this approach. Simply put, it’s injected trust into a conversation that previously felt like buyers were cornering, or holding hostage their supply base. This trust has resulted in higher engagement and new opportunities for supplier innovation. In this video, leading procurement executives share their experience with this new breed of supplier network.