It’s hard to come up with a good definition for supplier enablement. Depending on who you ask, it is either supplier networks, catalog management and / or ((c)XML-based) punchouts, e-Document Management, a Supplier Portal that enables e-Procurement and / or e-Sourcing, or some (often proprietary) combination thereof. The common thread between most of the definitions that one encounters is a greater utilization of technology solutions to streamline procurement and / or sourcing processes by seamlessly connecting the buyer to its suppliers through a common application or platform.
However, none of these definitions really get to what supplier enablement should be. Supplier enablement should be about providing a buyer’s supplier with the solutions that the supplier needs to more efficiently and productively do business with the buyer in such a way that the buyer is also able to conduct business with the supplier more efficiently and productively. It is true that such a solution will need to be based on one or more technology solutions, but the focus needs to be on the business processes required and the capabilities of the supplier, not on the capabilities of the technology supplier. The best technology in the world is useless if the supplier doesn’t have the technical capabilities in-house to make use of it.
Supplier Enablement is relevant as it can significantly increase performance metrics such as spend under management and enterprises that leverage supplier enablement solutions enable their suppliers faster, better, and more efficiently than those that do not. Well executed supplier enablement reduces administrative errors, increases inventory turns, eliminates parallel processes, reduces cycle times, maximizes value, and improves compliance.
To this end, it’s important to understand the four core capabilities that will be required in any end-to-end supplier enablement solution.
- Catalog Management
If the goods and services the intended users of the e-Procurement system need to order on a regular basis are not in the system, this will just result in the system being by-passed and proliferation of the maverick spending that the organization hoped to avoid through the acquisition of the e-Procurement system. Thus, catalog management is quite important.
- Supplier Network
A supplier network, which is becoming a staple offering of many of the larger e-Procurement providers, is a single point of integration that provides a many-to-many connection between buyers and suppliers, allowing them to transact in real time. The major selling points of these networks is pre-enabled suppliers and the ability to find new suppliers almost instantaneously if you are a buyer and the ability to support multiple buyers through the same technology platform and win new opportunities for business if you are a supplier.
- e-Document Management
The most critical, and most often overlooked, component of enablement, regardless if the trading entity is acting in a buyer or a supplier capacity, is that of information and document management. These days, each trading party needs to maintain a host of information on each party it trades with, including incorporation information and status, owners, home country, operating countries, financials, products, services, contacts, CSR status, regulatory compliance, and current contracts as well as a slew of documents including RFx’s, purchase orders, shipping receipts, goods receipts, invoices, payment receipts, product information sheets, and trade documents.
- Supplier Portal
A supplier portal is a web-based interface designed to allow a supplier to easily conduct business with a buyer by providing them with a one-stop-shop access point for receiving and replying to RFX requests, participating in auctions, receiving and returning contracts, providing catalogs, receiving purchasing orders, replying with shipment receipts and invoices, and receiving goods receipts and payments. It also allows the supplier to maintain and update all of their information as required by the buyer and to check order and payment status at any time.
For more insights on #, check out the Supplier Enablement: The Secret to Sourcing Success wiki-paper over on the e-Sourcing Wiki which includes more detail on the core capabilities, an overview of buyer-side and supplier-side challenges that will need to be addressed, and some best practices to help ensure a successful project.