Measuring SupplierPay

The goal of the initial SupplierPay kickoff meeting was really to find a way to collect and report on the success of the program. The White House hired an outside facilitator group to help brainstorm ideas here. We broke out into four working groups to address four questions:

  • What data might be collected?
  • How might it be collected?
  • How frequently?
  • What might be reported?

Sure there will be great anecdotal stories to tell how Mom & Pop got their money faster, but ultimately, show me the money. I think the group recognized this was not going to be easy. A few in my session commented on how different their supply chains are and their direct to service spend. Essentially what they were saying is some of you have a longer spend tail than I have.

We also know its important to move beyond how many participate in a program to actual usage data. So this gets at the heart of the matter, there are many early pay techniques firms can use to honor the pledge – Supply Chain Finance, pcards, dynamic discounting, reduction in payment terms for small business, reverse auctions, factoring partnerships, etc.

Taking your spend totals and measuring the impact of the above programs is not an easy task. You could choose to go the Intuit or Lockheed route – Lockheed uses a portal to flag small business invoices to accelerate payment to 15 days. Intuit now offers 10-day payment terms to 320 small businesses. That is taking a direct route.

Whatever is decided, the group certainly would like to keep their data anonymous in a sanitized report. I mean no one wants to sign up as a pledge and be #98 out of 100 companies in terms of how the feds define success.

Perhaps they need to start a pilot with a select few corporations to see how easy it will be for firms to internally collect data. One can only imagine trying to collate information from various initiatives offered to suppliers - Supply Chain Finance, dynamic discounting, pcard, reverse auction and others. It could prove to be an IT nightmare.

To make it even more challenging, my colleague Pierre Mitchell has suggested this data could also tie in with supplier diversity reporting.  Then there is the issue of Governance around the role of using third parties.

It will be interesting to see how the Government ultimately structures the data. Jason Miller, Deputy Director of the National Economic Council, promised to get back to the group soon.

As I say, keep the Mojo going, we don’t want to lose momentum when it comes to paying the little guys faster.

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