How to really get supplier’s on-board with e-invoicing (part 2)
Friday, 15 May 2015
Customers commonly ask Basware for assistance with supplier on-boarding. In this second part of my blog, I’ll explain how suppliers (and people more genrally) adopt technology. Once there is understanding about this, it will become easier to create a successful on-boarding campaign and see why other projects fail.
Head of UK E-invoicing Centre of Excellence
Suppliers are people and not all people are the same. When it comes to using technology, typically there are four main types of people*: Early Adopters, Mainstreamers, Late Adopters and the Laggards. So, how do you identify them?
Early Adopters buy the first version of a product or just like gadgets. They like to use new technology or want to be seen with the latest thing. The early adopter will look to use innovation to elevate themselves and show their individual value. Only about 20% of people are early adopters. So in the context of our blog, these are the suppliers asking for e-invoicing or new suppliers keen for your business. Alternatively, it could be those suppliers with good procurement relationships who are open to ‘persuasion’. You start the project by finding the Early Adopters.
Most of us, about 40%, are Mainstreamers. As people, we buy products once we see a number of early adopters with one, or when there is more than one product to choose from. Therefore, mainstream suppliers will be motivated to change once others are using e-invoicing and seeing the benefits. The mainstreamer will use e-invoicing to demonstrate success internally and show management that they are a transformer. You can only start to target the mainstream supplier base with stronger messaging only once you’ve got enough early adopters on-board.
The Late Majority are people who buy products once the word ‘new’ is dropped and when the ‘next thing’ is just coming out. They want to see lots of choice but typically buy the market leader. The Late Majority supplier needs to see that everyone else is ‘doing’ e-invoicing. They are followers and typically need a stick to move. They will get around to e-invoicing once they feel safe. So, you need to wait for these suppliers and have the stick ready.
About 20% of people are Laggards. These are people who only adopt technology when they have no choice, either because it’s in a product by default or it’s the only thing they can buy! Laggards sometimes fear change but normally resist change for change’s sake. This is the group of suppliers that will be left behind or are simply unable to switch to e-invoicing due to technology barriers. Importantly, never focus on Laggards and always move onto the next supplier. They will come on-board with e-invoicing but only in their own time.
Why bother with all this, if I just mandate e-invoicing it will happen - right?
Quite simply NO, mandates never work alone. As people we hate being told what to do, especially if it costs us money and we feel we have to choice. Yes, suppliers will move but typically if it costs them time or money they will indirectly put up prices. Mandating increases friction in the relationship. So, if you really want to upset every supplier regardless of their importance to your business, increase your cost base, and never be successful with e-invoicing, then mandating is the way forward. Mandating is something you do only once you start to reach the Late Majority. Plan for it but don’t start with it. Importantly, the Early Adopter will never take on technology if they are told to, they will look for something better or reasons not to - its human nature.
* For purists, I’ve rolled up Evangelists into Early Adopters, then Early Majority into Mainstream.
In my next blog on this subject, I’ll be looking at how to structure and run a successful on-boarding project.