If you listened to the constant stream of hype that Ariba has put into the market about smaller suppliers (really SMB suppliers overall) liking P2P, it would be easy to become brainwashed into thinking that small and mid-tier vendors like transacting online through eProcurement systems and sending invoices electronically. Granted, Ariba is not the problem here – smaller suppliers on the Ariba network, in fact, pay disproportionately less to transact, especially when invoice values are lower (and Ariba does a much better job than most P2P providers when it comes to holding supplier’s hands in the on-boarding process).
In fact, in the paper, Ariba Network Price Hike: Plan for Increased Supplier Fees in September 2010, Spend Matters outlines the cost/benefits for smaller suppliers of network participation compared with larger vendors. Yet generally speaking, especially when it comes to providers besides those that have dedicated teams assigned to manually assist suppliers with the on-boarding process – not just limited to registering to send e-invoices – the entire process of getting online to transact for SMB suppliers, including uploading and managing catalog content and responding to RFPs, is typically more cumbersome and less rewarding than advertised.
What stumbling blocks do suppliers typically encounter? Here are just a few:
- Registration processes which require information from multiple stakeholders but which are not designed to support branching workflow that can be assigned by the supplier
- The hassle of integrating financial systems (invoice creation / receivables) and mapping these into a customer’s P2P environment or indirectly through a network
- Being made to think they will get more business from moving to online support for customers, but then realizing the move just means supporting existing customers in new ways
- Paying transaction fees (either fixed or volume based) that cost more than offline processes
- “Kludged” integration from supplier view, such as having to upload an invoice to a portal and re-enter data from an existing invoice that was created in the supplier’s accounting software
- Supplier portal access for checking on invoice status (and related) with latent information that their customers do not necessarily update with accuracy and frequency
- Having to go through the same process (or much of the same process) for different customers
Of course this list could go on – this is just a start. In the next installment in this series, we’ll consider specific supplier complaints from a recent Procurement Leaders blog post on the subject.