Supplier Enablement – SME suppliers at risk?
Does the use of eProcurement by buyers put SME suppliers at risk? If you are a supplier you want the answer to be NO. The truth is probably YES.
It is not directly related to the use of eProcurement technologies rather the process that precedes the introduction of eProcurement that involves a buyer in a comprehensive review and detailed data analysis of spending.
This generally leads to a rationalization of suppliers and with that SMEs can be vulnerable. To what extent are they vulnerable? Obtaining data on this in the private sector is beyond difficult but the UK public sector is going to great lengths to understand the potential impact and minimize that for SMEs.
The London Borough of Newham has published some information on the impact to SMEs that count as their suppliers:
59% of the Council’s trade suppliers are SMEs
There has been a reduction of 9% in one year as a result of a shift to larger suppliers
The Council has a pro-active program of work to support SMEs and you can read more about that by following this link
http://www.imaginist.co.uk/documents/e-ProcurementandSMEslidesforEXPO1.ppt
Supplier Enablement – SMEs need not worry
My experience with buyers is that they are concerned about how their SME suppliers will respond to the invitation to start trading electronically with them.
As a SME there is no need to worry as all that is required of you as a supplier is three things that are really easy to achieve.
1. Create and publish an electronic catalogue. This provides your customers with all the information that they need to requisition and raise orders for your products and services.
2. To be able to receive an electronic order when transmitted as an XML document.
3. To be able to send to your customer an electronic invoice as an XML document.
These three things are the basics and all that is required for a SME to be a fully fledged electronic trading partner. How do you that?
Are you generating your own electricity or extracting the water you need from your own well? No, because service providers are set up to deliver these essential services to you.
In the same way the services that you need to be an electronic trading partner to your customers, no matter where they are in the world, can easily be provided.
Suppliers tell me they need a solution that helps them to meet their customers' requirements, a minimal start-up investment, low running costs and the ability to use the solution with multiple customers. If this sounds right then follow this link for more information
http://www.impaq.co.uk/
Supplier Enablement – a neat solution from Belmin
IMPAQ is working Belmin to deliver an innovative solution to supplier enablement.
How many orders sent by a buyer to a supplier result in the supplier having to raise a query with the buyer? The price is wrong, the product has been superseded, the product code and description vary or plain don’t exist etc. There are all manner of reasons why the supplier is unable to action the order and that results in delays for both the buyer and supplier.
The usual way to resolve such issues is for the supplier to call the buyer and agree any changes and results in several conversations and changes to documentation. Not great but it is how things get done. This is wasteful of time, an unwanted distraction for the buyer and in truth has a cost to both buyer and supplier.
Belmin has developed ARIES, that stands for Automated Reconciliation & Invoicing Efficiency Savings, and it is innovative in its approach to deliver a purchase to pay solution that ALSO deals with the real world situation I describe before. See
http://www.belmin.com/belmin/aries.htmTo learn about how IMPAQ are working with Belmin go to
http://www.belmin.com/belmin/impaq.htm
Blog - dates
I've just learned a feature of blogger.com and that is that the date that is posted with a blog, the date you see at the bottom of each blog, is the date the blog was created rather than when it was published. This is a nuisance as I want to write my blog and reflect on it before publishing or sometimes I can't finish it and need to save it as a draft and return to it later. Does anyone know a way around this?
blogger.com suffers indigestion
Sorry I was unable to post a blog yesterday 24/04/06 due to blogger.com javing a serious case of indigestion. The service is free and has become a huge success and I was warned that delays and non-availability have become a feature of this free service.
Supplier Adoption or Supplier Enablement?
A quick search on Google using the terms above reveal both terms are commonplace.
Do they mean the same thing to buyers and suppliers?
Looking at it from a supplier’s perspective what matters to them?
I’ve been invited to start up electronic trading with my customers. I have the choice to accept or decline. To help me decide I need to know:-
Why have we been selected as a potential electronic trading partner?
What’s in it for me?
What are the implications for me?
What help/assistance we will receive?
What are the consequences if we don’t or can’t proceed?
A .pdf document with information for buyers is available to download at
http://www.impaq.co.uk/images/supplier_portal_pdfs/supplier_enablement.pdfIMPAQ has created its definitions for supplier adoption and supplier enablement at
http://www.impaq.co.uk/terms/index.shtml#supplier%20enablement
Supplier Enablement - Blog IDEA
As a new blogger I am keen to learn about the essence of a blog. At a recent seminar hosted by BASDA at the Chartered Institute of Marketing it was presented that a blog incorporated:
Issues
Developments
Education
Applications
Tough call to get all those elements in every blog!
Equally there is the challenge to blog regularly, even if that is just a few lines.
Here is my Supplier Enablement IDEA blog
Issues
Depends whether you have a buyer or supplier view?
Here is a buyer quote from the Office of Government Commerce; ““Suppliers are particularly important because their participation, or lack of it, is the one of the biggest potential barriers to the entire eProcurement process”. The issue is self apparent; suppliers can make or break eProcurement.
I don’t have a supplier quote but I do have a collection of conversations that I can refer to. What’s in it for me? I hear this all the time. This tells me that buyers must understand what motivates their suppliers to collaborate for electronic trading. The issue is that buyers should invest time in thinking through how to “sell” to the supplier just as they “sold” the internal business case for eProcurement.
Developments
The age old question; who is going to pay for this?
The view was the supplier will, actually, must pay. Those that consider they have a dominant “buyer position” will mandate their suppliers to do as they say or lose their business.
There is a change afoot that has the buying organization meet the costs that would before fall to the supplier. Enlightened thinking or expediency?
This gets interesting where a supplier may have to meet the cost to trade with one customer because it has been mandated and yet have no costs for trading with another customer. Will this affect a supplier’s decision to commence electronic trading with a customer?
Education
One of the few mainstream analysts covering Supplier Enablement is Aberdeen Group who have just published there 2006 Supplier Enablement Survey, see
http://www.aberdeen.com/summary/report/benchmark/RA_SupplierEnablement_RS_2869.aspApplications
Any buyer or supplier that wants to participate in electronic trading has to think in terms of how that is going to work and want level of collaboration is required of trading partners. Applications that require collaboration include:
Buying and selling of goods and services categorized as; eProcurement, Purchase to Pay (P2P) and electronic Invoicing (eInvoicing). This is applicable to both in-house and outsourced procurement.
Supply Chain/Logistics; in my language getting goods from supplier to buyer (customer) in the most cost-efficient way and on-time. This can be both in-house and outsourced to 3PL” (3rd Party Logistic) and “4PL” providers.
For an explanation of 4PL go to
http://www.paconsulting.com/insights/supply_chain/4pl/Job done!
Supplier Enablement and D-U-N-S®
D&B® D-U-N-S® Number, a Data Universal Numbering System that simplifies the identification of buyer and supplier organizations conducting eCommerce.
IMPAQ is seeing an increasing use of D-U-N-S® Number by customers implementing P2P/eProcurement as there is a clear need for a common identifier for suppliers.
For example, suppliers invited to join the Zanzibar Marketplace are required to have a D-U-N-S®, see
http://www.zanzibaronline.gov.uk/faq.htm#22As a D-U-N-S® Number is free of charge to a supplier there is no reason for a supplier not to comply, indeed many will already have a D-U-N-S®.
From a supplier’s perspective the D-U-N-S® provides them a unique way to identify themselves to customers and suppliers and make it easy to conduct business.
IMPAQ support DUNS Numbers for supplier identification and suppliers can obtain these free at
https://eupdate.dnb.com/IMPAQ’s D-U-N-S® Number is 238078872.
Supplier Enablement - big company view
One of my many sources of information that keep me tuned in to what is happeneing on the big world stage of commerce and business is Line56.com The E-Business Executive Daily at
www.line56.comI saw this story today about Wal Mart and how a big business responds to the economic reality of what's in their customers' pockets to spend in their stores. The story is at
http://www.line56.com/articles/default.asp?articleID=7538&TopicID=1And guess what, they will be looking to their suppliers to help Wal Mart manage their business more profitably as a consequence of the squeeze on their customers' pockets.
There is no moral rather it is just a fact of life that Supplier Enablement is at the top of the business agenda.
Supplier Enablement on the increase
A recent report by the Aberdeen Group confirms that for Supplier Enablement it is a case of more rather than less……………………………..
Some headlines and my comments
(in italics) from that report below.
Most enterprises have established supplier enablement programs –
some big companies and the UK public sector do but most certainly do not have any established program and that is an obstacle to them and their suppliers.
More suppliers are enabled –
it is true more are but SMEs in particular need solutions. In the UK SME’s represent 99.9% of all enterprises according to the Small Business Service, and executive agency of the DTI. There is a way to go yet!
Getting everyone with the program –
standardizing a program for supplier enablement is highly desirable but needs to align with a corresponding commitment for execution by the buying organization.Portals are on the rise –
because it simplifies the connectivity for both buyers and suppliers – IMPAQ refer to this as having “one place” follow http://www.oneplace4business.com for further information.
But phone, fax and e-mail still dominate –
re-use of existing business tools keep it cheap and minimizes disruption. These tools change nothing and as a result do nothing to address the agenda to REDUCE COSTS - it is the “stand still” option. Click here for a B2B eCommerce business briefing for buyers and suppliers.
Click this link
http://www.aberdeen.com/summary/report/benchmark/RA_SupplierEnablement_RS_2869.aspto review Aberdeen Group's 2006 Supplier Enablement Survey
Supplier Enablement - collaborate for profit
Why do we need paper?
We don’t, it is just that we are accustomed to the use of paper and the idea that it is “on file” although we can’t always find that piece of paper when it is urgently needed.
Consider this, in our personal lives we are accustomed to buying online, often major purchases such as vacations, where there is no paper as all transactions are electronically recorded and notified by e-mail or SMS. It seems we like the convenience of paperless transactions and this is no impediment to either you or your supplier; in fact, you choose to shop online because you get a better deal. Why is that? Your supplier is stripping cost out of their business by streamlining the transaction and, importantly, it is instant, which is the way we like it.
As we move from our personal into our working lives we see how cumbersome it is make purchases when we have to negotiate the system. It is not actually a system it is a reference to the people, the form filling and the protocol of getting through the required paperwork. Many stories have been told about how you go around the system because the delays are unacceptable and results in maverick buying.
So, if we don’t use paper what will we use? In business we will increasingly use electronic documents. The reasons are many and include saving time and money.
Now, the reality is that in business a buyer and supplier will need to agree they will use electronic documents. Buyers will send electronic purchase orders to suppliers who will reply with electronic shipping notices and invoices. No more need for paper.
As a supplier have your buyers requested that you provide electronic documents such as catalogues and invoices? They may have spoken about XML documents. How did you respond? Was your answer; I would if I could, if I knew how to.
This blog is for suppliers to exchange their stories and ask for help.
The postings on this site are my own and don’t necessarily represent IMPAQ’s positions, strategies or opinions.
