The Dirty Little Secret about Supplier Networks

Tuesday, October 3, 2017

5 minute read

The Dirty Little Secret about Supplier Networks

Let me tell you a dirty little secret about supplier networks: solution providers aren't telling you everything about their ability to connect your suppliers to their network. 

You've got a supplier efficiency problem: POs are sent manually; invoices are received manually; cycle times are slow; suppliers are always calling about payment status; your AP staff is drowning in paper. So, you're going to put in a procure-to-pay system with a fancy supplier network, and all your problems will be solved, right? Wrong.
In most cases, there's a big difference between the theory of what you can achieve with a supplier network and reality. The dirty little secret of supplier networks is they can't actually connect to all of your suppliers. Sure, they connect the big guys… Grainger, Staples, Dell. But look at your supplier base. If your company is like most, you have a long tail of midsize and small suppliers. Do you think they can send an XML invoice? Doubt it. Maybe you can get a PDF invoice from them, but a lot of times it's old-fashioned paper. And no, they probably aren't going to log in to a portal each time they want to send you an invoice. That's a good theory, but it's just not reality.  So, you end up with automating the big guys, but the long tail of suppliers leaves you with the same problems you had before you started.
If you really want to get rid of supplier inefficiency, you need to dissect your procure-to-pay provider's true supplier network capabilities. If the network isn't built to handle all levels of supplier sophistication, you have a nasty surprise coming when you try to onboard your vendor base. 

Watch the recording of our webinar with Amy Fong from The Hackett Group, as she discusses how to digitize long tail suppliers.