Global commerce today requires much more than scanning or faxing key documents such as purchase orders, invoices, and payment remittance. For better commerce, you must establish real-time electronic collaboration with your entire supply base on a global level, so you can dramatically compress the invoice and payment processing cycle, comply with contracts and regulations, achieve working capital breakthroughs that lower supply chain risk, and more. But few organizations can effectively target and onboard thousands of global suppliers.

 

The term e-enabled supplier, refers to a supplier who has successfully been enabled to electronically transact and collaborate.

 

Industry research* states that Best in Class organizations:

  • e-Enable 50% of their suppliers versus 23% enabled by all others
  • Realize transaction-processing costs 47% lower than all others as a result of enabling their suppliers
  • Have 71% lower processing costs with even greater hard-dollar savings over those that do not e-enable their suppliers.

 

You can cut costs, time, and risks by overcoming the barriers between you and your suppliers. Specifically, by automating and connecting your procure-to-pay (P2P) processes to their order-to-cash processes. Set value-driving objectives for your P2P program, and measure results/benchmark your organization’s performance against industry and peer groups.

  • Ensure compliance with processes, policies, and contracts
  • Leverage your payables to optimize working capital
  • Mitigate risk with greater visibility and control
  • Improve ROI

 

P2P automation is critical for improving inter-enterprise collaboration. In this Ariba Knowledge Nugget we will explore how to develop a successful Supplier Enablement program.

 

Development of your program - What should you be thinking about?

Moving your organization from a traditional paper or manual environment to an electronic process takes planning:

    • What resources will be needed to support this process?
    • How will roles within our organization change?
    • What policies and procedures need to be reviewed/changed?
    • What will the affect be on our Buyer community?
    • What will the affect be on our Supplier community?

Think about this as a Program and not a Project:

    • This should be developed to be a standard, ongoing program and not a short term project.
    • This kind of planning and preparation will ensure that you will be able to manage business processes and supplier relationship long after your work with Ariba project teams come to an end.

Having internal buy-in from key areas within your organization is key to success:

    • Solicit ideas/input from all areas within your organization where this change will have an impact:
      • Accounts Payable; Procurement; Information Technology; Sourcing; Legal; Tax
      • Ensure that you have internal compliance with key business partners up front

Build a strong supplier compliance plan:

  • The most successful organizations who implement Ariba solutions have a strong supplier compliance plan.
  • It is extremely important to document your compliance plan and enforce it from the onset.
  • It is easier to relax your policy for a few suppliers as the need arises than it is to try enforce strict changes down the line.

 

The Networked Enterprise

Companies that use collaborative technology to connect internal employee efforts to customers, suppliers, and partners are 50% more likely to:

  • Be a Market Leader1-9-2012 11-38-51 AM.png
  • Gain Market Share
  • Achieve Higher Margins
  • Increase sales

 

What resources are needed to support this process change?

Each organization functions in a unique manner and depending on what exactly is changing, you may need to define roles in the following areas:

  • Accounts Payable
  • Corporate
  • Procurement
  • Treasury
  • Information Technology
  • Legal
  • Tax

How will roles within our organization will change?

  • Roles within an organization will change as the traditional paper and manual processes in place today will no longer exist (or at least be much less of resource utilization).
  • Supporting end users to utilize new functionality as well as any change in business process.
  • Supporting suppliers will still be needed, but the day-to-day support should be much less frequent. The functionality is intended to build supplier self-sufficiency, (i.e. invoice status does not need to be a phone call as the supplier can check the invoice status on the Ariba Network).

What policies and procedures need to be reviewed/changed?

  • During this type of change, it is best to review all business process surrounding Procure-to-Pay. If changes are needed and for example, changes in technology are required to support those changes, this is the time to make those adjustments.
  • How Buyers create and submit purchase orders (and change orders) should be clearly defined and implemented globally.

What will the affect be on our Buyer community?

  • Depending on the specific business process change, these could affect all Buyers.
  • Purchase Order processes should be documented and end users need to be trained so that consistency exists not only internally, but for your suppliers.
  • Attempting to build multiple processes to accommodate all internal scenarios is difficult to implement and prone to errors.

What will the affect be on our Supplier community?

  • Suppliers will be expected to move from traditional phone calls, emails and paper mail document exchange to a consistent, electronic process through the Ariba Network.
  • Suppliers may be hesitant and convey that this change is not in their best interest.
  • Suppliers, as well as your stake-holders, need to understand and learn the true value of using the Ariba Network.
  • Cost saving value of paper versus electronic
  • Additional business growth opportunities for suppliers
  • Ariba can help with this!

 

Next: Getting your organization to fit properly with your supplier enablement program

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Beverly Dunn is a Client Engagement Executive with Ariba. All customers are invited to join the private Customer Success group on Ariba Exchange, where you can access the Customer Success Spotlights, Lunch 'n Learn Webinar calendar and replays, and the Ariba Knowledge Nuggets.