Partner intimacy issues? The interdependency and risk conundrum

Director, Center of Excellence, Global Sales

You might have seen on our Twitter feed today that we’ve launched the second instalment of The Cost of Control – Disrupted Networks, following on from the success of chapter one – Fuzzy Finance, back in January.

What this round of research tells us is that there is increasing concern amongst global finance executives that the interdependency between suppliers, partners and customers (as a consequence of increasingly complex supply networks), is creating commercial risks for buyer organizations.

While it’s positive that buyers are starting to (rightly) view suppliers as equals, there continues to be concern about the impact of tight credit lines and payments which impact suppliers, and subsequently buyers.

These are essentially the core findings of the Disrupted Networks report, which found that finance executives estimate that 15% of invoices remain unpaid past their payment terms, despite two thirds acknowledging that late payments cause problems for their suppliers. Indeed, 38% are aware that their late or erroneous payment to suppliers impacts the supplier’s finances to the same level as it would their own business.

Interestingly, there continues to be concern about the visibility of activity within the supply chain, as 59% of respondents believe that the visibility of supply chain activity and supplier payment is becoming more difficult due to the increasing complexity of supply networks.

What’s more, transparency is believed to be key for buyers looking to take advantage of this networked world, with 64% of global finance executives believing that the transparency of an open and collaborative supplier network helps to overcome many of the issues that buyers face today, while providing a more effective basis for sustainable cost savings than closed network environments.

What the research tells us is that, ultimately, the key for commerce networks to be successful is for them to be flexible enough to accommodate the changing needs of buyers and suppliers, and being able to connect disparate parts of the purchase and payments processes within their business.

Please do take a look at the report, and look out for more updates on Twitter!

Thanks for reading.

Category: E-Invoicing