Keeping suppliers warm – “feel-good supplier adoption”

We're pleased to have another guest post from Daniel Ball of Wax Digital, a leading UK based procurement technology provider – read more about them here.

Over the last ten years we’ve helped many large organisations introduce P2P in order to control spending and reduce purchasing process costs. Whilst great technology is a vital factor, realising P2P benefits is about improving processes around the people involved – the buyers, finance teams and suppliers. We often find that supplier adoption, while sometimes recognised as critical, can be underestimated as a task due to this group’s disparity, number and variance.

Taking the decision to invest in supplier adoption and engagement as a separate and particular challenge delivers huge advantages. Conscious of the potential depersonalisation of supplier relationships through automation, effective procurement people are wise to the fact that special effort needs to be made to keep them on board. Keeping your suppliers close to you and in the picture through big P2P changes can double the positive impact of your project and reduce the chances of a hiatus.

In a recent Guide to Supplier Adoption we outlined the best practice drawn from our clients’ experiences as they have invested in supplier management as part of their P2P transition. While challenges present themselves every step of the way, benefits are also realised at the same rate when the buying organisation heeds six critical steps to supplier adoption. In summary these are:

Segmentation – dividing your suppliers into tiers based on their criticality to your organisation is an important step in segmenting your approach to communication and on-boarding so that you don’t attempt a one size fits all or risky big bang approach.

Rationalisation – expecting to rationalise your supplier list is part of the natural selection process of migrating to a new platform. It should highlight supplier weaknesses or challenges if it’s doing its job.

Communication – once your migration and adoption process has been decided, consistent and continual communication with your supplier community ensures that they stay committed and engaged throughout.

Automation – leveraging the benefits of online supplier communication and control via a web portal helps you to make engagement a natural part of your supplier relationships, whereby the supplier takes control of the management of their own information.

On-boarding – Never underestimate the power or need of an intensive on-boarding campaign to keep suppliers engaged once the P2P system and supplier portal is in use. The ease of use of the chosen system is itself a key factor in reducing on-board issues.

Exception handling – There will always be cases where suppliers don’t comply with the requirements of your new process. Treating each case individually and deciding how to manage these exceptions is more effective than a ‘blanket ban’.

While most procurement professionals know that maintaining supplier relationships during purchasing system change is a necessity, it’s still possible to underestimate the importance of suppliers as a stakeholder group – in many ways they are the most fundamental. The warmer they are to what you’re proposing, the lower your chances of causal disruption and the greater the chances of success.

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