Businesses overlook benefits digital supplier management at their own peril

Businesses Overlook The Benefits Of Effective Digital Supplier Management At Their Own Peril

07-Aug-2017 08:07:00

Einstein had it wrong. Not his theory of relativity. Apparently that is holding up quite well, but he is also the guy credited with saying that the definition of insanity is doing the same thing over and over again, but expecting different results. Too often, I think that is the definition for supplier management.

Many businesses know that they need to change the methods that they use for managing their suppliers, but seem unable to take those first few shaky steps toward positive change.

Why are businesses so reluctant to change? Is it the fear of change itself that is hindering them; concerns that they won’t have sufficient budget to truly affect change; or is it that the idea of overhauling their supplier management procedures is simply too daunting?

The honest answer probably includes a little of all those reasons, which is why in the age of business transformation and digitalisation we still find business processes that are very much paper-based and people-driven.

The old pun “Man who runs behind car, gets exhausted” is rather fitting for all those who are behind the adoption curve. Let’s take a look at how we interact with suppliers for example:

  • Buyers chase Suppliers to submit quotes and to confirm purchase orders.
  • Expeditors chase Suppliers for delivery dates.
  • Contract Administrators chase Suppliers for updated pricing schedules and to get their contracts signed.
  • Vendor Administrators chase Suppliers to provide updated information and certificates.
  • Suppliers chase Accounts Payable for payments.
  • Suppliers chase Buyers for purchase order amendments.
  • Internally, we have the Customer chasing the Expeditors to find out where their goods are.
  • The Expeditors are chasing the Buyer to deal with the unresponsive Suppliers.
  • The Logistics Team are chasing the Transporter for delivery, even though in some instances the goods have already been delivered but the change is not reflecting on the system.

Feel exhausted just reading that list? It is quite clear that people are wasting a lot of time chasing others in order to get their own jobs done.

Why the insanity? Why not place the responsibility where it belongs? Get your suppliers online. Allow them to maintain their own data and hold them accountable.

Not convinced?

Businesses that have made the switch to effective digital supplier management are seeing the following top 10 results:

  1. Significantly reduced processing costs and errors
  2. Increased operational productivity
  3. A reduction in manual effort of by at least 30%
  4. Fewer lost invoices
  5. Direct integration to ERP’s for cleaner data
  6. A reduction in late and duplicate payments
  7. Increased confidence in their compliance status and ability to pass audits
  8. Greater visibility and transparency into each step for each transaction
  9. The ability to do business 24 hours 7 days a week
  10. Increased cost and efficiency optimisation, saving time and money

If it ain’t broke don’t fix it

“But we’re comfortable with our processes.” I hear you say. “They get the job done.”

Of course you don’t want to change things that work for you at present. However, for a business to remain successful employees should always be on the lookout for opportunities to improve how things are done. This is the only way that companies will be able to survive in the future. If these organisations can’t keep up they will be left behind, along with their employees.

If the cost, complexity and management of change are what is holding your organisation back from streamlining its Supplier Lifecycle Management procedures then it is time to consider partnering with the right professionals to help you make the change.


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Topics: BPM, Guides and Resources, FlowCentric Software, Trends, Digital Business Transformation