Supplier Enablement - the best and the worst
In my previous blog I discussed what the ‘best’ achieve for supplier enablement, follow
http://supplierenablement.blogspot.com/2006/05/supplier-enablement-takes-how-long.htmlSo, what do the ‘worst’ achieve?
The evidence suggested that the ‘best’ achieve supplier enablement of a new supplier within 15 – 60 days.
I know of worst cases where supplier enablement has taken 200+ days. That is quite a disparity between the best and worst.
Why is there such a disparity?
Let’s look at two scenarios for supplier enablement:
Scenario 1. Supplier has to create an electronic catalogue and receive XML Purchase Orders. What does a supplier have to do?
Compile a product catalogue listing all products and prices. This should exist and an allocation of 1 working day is given to this task.
Classify the products using UNSPSC. This is optional and your buyer will normally indicate if they require you to use UNSPSC. Well, this could be a major task. I have experience of coding to item level 15,000 product line items and that took 8 working days. Allocation of time is either 0 or in the case I refer to 8 working days.
Publish the catalogue in the required format and send to the buyer. With the right tools this is a negligible allocation of time.
Wait for buyer to approve catalogue for use. Say, 2 working days.
Supplier has to prepare to receive XML Purchase Orders. Let’s assume they have no experience with XML so decide to use the IMPAQ Supplier Portal. This can be set up in a matter of minutes but we allocate 1 working day.
That is everything as far as meeting the meeting the requirement although it does not look at how the supplier use the XML Purchase Order to streamline how they process the order. Some activities can happen in parallel so the whole activity could be completed inside 4 working days ( 8 – 12 days elapsed) or where UNSPSC was required 12 working days ( 24 – 36 days elapsed). This is right up with the best case.
Scenario 2. Supplier has to create an electronic catalogue and receive XML Purchase Orders. In this case the supplier has eCommerce web site that supports punch-out. Let’s assume that is cXML punch-out. What does a supplier have to do?
Let’s assume the web site supports ring fencing so that the buyer sees only those products and prices that are applicable to them. That being the case let’s allocate 1 working day to confirm that.
Now the buyer needs to be able to reach the web site and go ‘shopping’ and retrieve the contents of the shopping basket so they can construct their requisitions/orders. We have assumed the use of cXML punch out to minimize compatibility issues but even so we have to test the process end to end so an allocation of 2 working days is proposed.
Supplier has to prepare to receive XML Purchase Orders. Let’s assume they have no experience with XML so decide to use the IMPAQ Supplier Portal. This can be set up in a matter of minutes but we allocate 1 working day.
On the face of it there are less steps for the supplier of an eCommerce web site to take to meet the requirement but there is a higher level of technical competence required. Even so, 4 working days is achievable, say 8 – 12 elapsed.
Why then has it taken some 200+ days?
In my earlier blog the best case was achieved by buyers that were well organized and I add to that motivated.
It is my experience that suppliers take a lead from buyers. Buyers that are strong and take charge of supplier enablement get results. Those that are disorganized and/or lack commitment do not succeed. Get help from an organization that understands supplier enablement and be prepared to take advice that will help you succeed.
More at
http://www.impaq.co.uk/
Supplier Enablement - takes how long?
Should you have an expectation as to how long you will be engaged in supplier enablement?
A major new system installed as a replacement for a system going into retirement can take 12 - 18 months to bed in for a big business. Some of that time is ICT time, say 20% is connected with "technology" but the majority of time, 80%, is concerned with "changes" affecting people, organisation and processes.
It is likely, I suggest, that the resulting savings that are achieved are of similar proportions, technology contributing say 20% and "changes" 80%.
Supplier enablement is no different; the job is to work through the changes as they implicate your suppliers. If you have 400 suppliers that is a task that needs a program of work that will extend over many months as suppliers will have differing appetites for involvement. On the other hand if you have 10 suppliers (and you have significant (to them) value as a customer) you might expect to achieve that in a few weeks.
So my thought is that if people, organisation and process are the drivers of the change that deliver the big benefits then that has to be core to any supplier enablement planning.
To answer my earlier question; how long? Well, out of a conversation I heard, those that had been involved in supplier enablement for more than 1 year and who were well organised might take 15 days to on-board a supplier (on-board is a term used to describe the activation of a supplier).
For most that will be a real challenge to take a supplier from "hallo, we need you to trade electronically with us" to "and now you are" in 15 days is going some. If we were a little more relaxed and doubled that and doubled it again you would be at 60 days. So, how long is piece of string? It is between 15 and 60 days - or approximately two new moons for most.
More good stuff to help at
www.impaq.co.uk
Supplier Enablement – to blog, or not to blog: that is the question
As a blogger I am mindful that not everyone is connected with what’s happening in BLOG land.
I met a marketer in a hi-tech company last week that hadn’t even heard of blogging! So, is anyone bothered about my blogs? In keeping with many other blogs I have no comments but I’m not bothered. When I visit blogs I’m there to ‘gather’ information and have little interest to leave comments. So I was interested to read a comment by the renowned Butler Group suggesting I might be wasting my time blogging and that it is a drain on my productivity.
If you want to read the article follow this link
Supplier Enablement – just catalogues?
Er, from some, YES, but in reality, NO.
Supplier Enablement as a list of ‘things to do’ comprises:
Content
Make available to the buyer as a catalogue or from a supplier’s web site.
Actually this is not hard ‘to do’ but it does require a commitment by buyers and suppliers to maintain that content so that it is up to-date. That, I’m told, is where there is pain for users of catalogues although it is not so much of an issue for suppliers that direct buyers to a web site.
Communication
Buyers and suppliers need to communicate. Right now the majority of communication is via phone, fax and e-mail. This is fine as everyone has these. While it may be the case that these are retained for supplier enablement they don’t really belong as part of the transformation to electronic trading.
What is required with the transformation? The requirement is for buyers and suppliers to exchange XML documents. Is that easy? For the majority the answer is NO. That is why fax and e-mail are used.
Is there an easy way? Yes, follow
www.impaq.co.uk to learn more.
Anything else?
Yes. Just as the buyer has implemented systems to assist their internal customers to requisition and order goods and services so they can get a benefit so too are suppliers looking for similar benefits. To achieve this suppliers need to be able to use XML documents as a ‘feed’ to systems that they use to process customer orders and deliver customer service.
Is that all?
No. This is not just about how we use technology there is a need to execute a communications program, usually driven by the buyer, to inform suppliers about why these should participate in electronic trading.
For more information look at
Supplier Enablement: Supplier Enablement - collaborate for profit
Supplier Enablement - the dreaded business case
There are many variables that can included or excluded in the calculation of what cost savings are achievable from automation of a Purchase to Pay process where those savings are computed on the cost of processing an invoice. There is agreement that savings are achievable but is focus on unit (per invoice) cost savings the full picture?
Where are the potential cost savings to recover the investment?
An invoice clerk processes 9,000 invoices per year. Not my figure but a number I have quoted to me several times by those that know their AP departments. There is a cost for each clerk how will a move to automation change the workload of clerks?
Not all supplier invoices will be correct and that involves others in the query and resolution process. This time is unrecorded but has a cost to a business. How many invoices per year are put in 'query'?
Are discounted payment terms being taken full advantage of?
When things get messy with a supplier payment how much management time is consumed in intervention to mediate?
How much time is spent on handling supplier enquiries; 'when can I expect to be paid?'
When you receive invoices for which there is no Purchase Order or other reference, how long does that take to resolve?
If your suppliers were paid on time according to agreed settlement terms for clean invoices, what could you ask for in return from your supplier?
Just some ideas to build on.
Supplier Enablement - you're gonna pay!
Following on the theme of my BLOG of yesterday where I highligted the dilemma of who pays for supplier enablement, I had some thoughts following a conversation with buyer who said; " the supplier will always pay to do business with us whether we choose to use paper or use electronic".
If you can compel your suppliers to meet the costs of their participation in your use of technology for a Purchase to Pay process that changes the process you use to communicate with suppliers and send messages and documents then it becomes a supplier's decision to do business or walk away.
Of course one of the objectives of replacing paper with electronic communication is that you can improve both the speed and accessibility of information between buyer and suppliers.
Now, if in doing that you can expose e-invoicing then you start to co-operate on a new level. You eliminate paper but the real benefit is from exploitation of settlement discounts that reflect the appetite for capital of the buyer and seller. And you get this with fewer resources as productivity of AP departments increases with eInvoicing.
So who is gonna pay is where you start out but it is just the beginning of something more beautiful.
More information at
www.impaq.co.uk
Supplier Enablement – Requisoft partner with IMPAQ
IMPAQ presented at the Requisoft 2006 User Meeting in Birmingham on 12th May.
Buying goods and services is an indispensable activity so it ain’t going away!!!
This was an opportunity for IMPAQ to present some themes that are important to buyers and suppliers as they move to electronic trading.
What are the results of supplier enablement?
Collaboration –
you won’t get the full benefits of electronic trading UNLESS your suppliers participate
Beginning of the end for paper -
paper may not always be eliminated but it is always substantially reduced
Cost Reduction –
the "prize" for buyers and suppliersThe meeting were presented the dilemma of who pays for supplier enablement; buyer
or supplier, buyer
and supplier?
Output from the meeting included a discussion about how supplier enablement can include small suppliers (single employee businesses) and the largest national suppliers.
For a copy of the presentation or to discuss click on
View my complete profile under About Me and use the e-mail link.
For more information about
supplier enablement follow
www.impaq.co.ukThanks to Requisoft
www.requisoft.com
Supplier Enablement – SME in Wales?
If you are a SME, and it doesn’t have to be the case your place of business is Wales, then this report might help you benchmark how well you are doing against other SMEs in taking advantage of eCommerce.
You can read the report by following this link
http://www.opportunitywales.co.uk/stateofthenationreport2005.pdfFollow
www.impaq.co.uk if you need more information about how to connect to your customers and suppliers.
Supplier Enablement – are all SME the same?
SME represent 99.9% of all UK enterprises and not all of these are UK owned businesses, many are subsidiaries of foreign owned businesses. This distinction is made as some UK management teams may not have the final word on matters such as eCommerce that are decided by their Corporate HQ.
Thinking about the group that do have the final word on matters relating to eCommerce, is there any way to perform segmentation among this group as to their propensity to engage in eCommerce?
How do we normally perform segmentation? We group (e.g. all those in retail) then use size for comparison; number of employees, number of outlets, geographical presence, turnover, profit etc.
Are these useful? You might have a very successful business but with a management team that is unconvinced about the value of eCommerce to the business. So, minimal investment is made just to tick the box.
Is there any other way to perform segmentation? What if we understood some of the “soft” factors that influence how the business is run, attitudes toward customer service, innovation and so on?
What matters now is understanding what makes the business tick, such as:
- management style; we like to experiment vs. we don’t do that
- industry dynamics (regulated, unregulated, expanding, shrinking)?
- high volume – low margin, high margin – low volume business?
- is the business transaction simple or complex?
- are their intermediaries between you and the customer?
- is your customer’s supply chain highly automated?
I have experience of small companies with little understanding of eCommerce commit to trade electronically with their customers because it was important to their customer. Then again, large companies with very high competency in IT and eCommerce dilly dally over both the decision to commit and wrestle with the customer over eCommerce policy.
So it comes down to either a power struggle between buyer and supplier or simple economics (e.g. Supplier: I can’t afford to lose the business!).
For more information follow
http://www.impaq.co.uk/
Supplier Enablement – why it matters to buyers
Here is tale of a buying organization delivering on major changes as a result of implementing eProcurement. In an earlier blog I noted that there was an upheaval associated with eProcurement that resulted in many things that had gone unchanged coming under review for the first time in a long time.
In a review of eProcurement at eProcurement Scotl@nd, Tom Wilson states a reduction in the number of purchase to pay processes from 45 to 4.
Can you imagine, whereas before 45 processes were required there are now 4. This has contributed to a major reduction in administrative costs. More information at
http://www.egovmonitor.com/node/5755If you are a supplier to the UK public sector follow
http://www.impaq.co.uk/suppliers/suppliers_public.shtml
Supplier Enablement – whose challenge?
Two companies dominant ERP – SAP and Oracle. So is size any advantage in terms of managing supplier adoption? At the end of the day it is the end-customer that has the experience to tell.
Here is a quote found on the SAP web site at
http://www.sap.com/uk/company/success/casestudies/anglianwater.epxSupplier adoption, in its sort of generic sense has probably proved to be the most challenging aspect of our e-Procurement strategy.That was a quote from a FTSE 250 company.
For more information with perspectives for both buyers and suppliers follow
http://www.impaq.co.uk/
Supplier Enablement – don’t lose business!
There is a debate and often dilemma among suppliers, particularly SME suppliers, about whether to start electronic trading with customers. Usually the electronic trading initiative comes from the customer and a supplier may not always understand the motives of the customer.
Here is great quote from a supplier; “If we hadn't made the move to electronic trading we would have lost business with the public sector."
The report from which this quote was extracted can be viewed at
http://www.localegovnp.org/webfiles/EXPO%2006%20press%20releases/Newham.pdfTo have more insight on electronic trading with your customers follow
http://www.impaq.co.uk/suppliers/index.shtml
Supplier Enablement – eInvoices – that didn’t hurt!
It can be a shock for a supplier to be told by their customer that they need to stop sending paper invoices and start sending electronic invoices as XML documents.
What if you don’t have the systems to generate XML documents?
No problem, can your systems generate CSV (comma-separated value) files? Even if you don’t know the answer it will usually be YES.
CSV files can be converted to XML and there you have it – electronic invoices in the format required by your customers.
For more information see
http://www.impaq.co.uk/products/products_supplier_portal.shtmlDon’t break the law. HMRC Information Notice 700/63 is essential reading if you intend to commence eInvoicing. In particular you should know that the following rule has the force of law: If you intend to begin invoicing electronically after 1 January 2004 then you must let HMRC know so within 30 days of beginning to do so.
Supplier Enablement – e-buying – come on!
From a conversation the other day I was asked to comment about suppliers’ readiness for electronic trading to participate in a buyer’s paperless purchase to pay (P2P) process.
Many are ready but in the capacity of being a seller. It is obvious that the first thing any business is going to do to exploit the Internet is to focus on how they reach customers that deliver sales - e-selling.
When their customers want to trade electronically they need a supplier that is equipped for e-selling but also understands the needs of those that are e-buying.
For example, the buyer needs an electronic invoice from the seller. Few sellers can provide an electronic invoice or process a received electronic invoice. Those buyers that want a paperless P2P process need electronic invoices from their suppliers.
How many suppliers that are e-selling are also e-buying? Some but they are rare among SMEs. The first place for a SME is e-selling as that has a direct impact on sales and the success of a business. That does not necessarily equip them to be a supplier to those buyers that are introducing a paperless P2P process.
If you are a supplier and are interested in a buyer’s perspective follow
http://www.impaq.co.uk/buyers/index.shtml
