How to really get supplier’s on-board with e-invoicing (part 4)
vrijdag, 22 mei 2015
Customers commonly ask Basware for assistance with supplier on-boarding. In this final part of my blog on the subject, I’ll guide you towards a sustainable and long term approach to e-invoice adoption and how you should measure success.
Head of UK E-invoicing Centre of Excellence
It is important to note that even in progressive countries with high e-invoicing rates, only 75-90% of transactions are electronic. Therefore, any strategy needs to include paper & PDF ingestion for the tail-end suppliers. Likewise, you need to consider the different electronic methods as separate streams. However you cut it, there are two measurements; transactions and adopters.
At the beginning of the project, split the suppliers into the following transactional groups:
- Ad-hoc with up to 3 invoices a month
- Weekly at around 35 per month or 7 invoices per week
- Core with up to 100 invoices a month
- Volume sending over 100 invoices a month
- Essentials, Banks, Utilities, Councils etc.
Remove from your adoption targets the Essentials & Ad-hoc suppliers as these will be either laggards or late adopters. Getting ad-hoc suppliers on-board will be via the supplier portal and ideally should be agreed as the way they do business. Essentials etc. will come over time, as they will either do it in their own time or are not worth the risk of upsetting. However, some essential suppliers may be worth contacting via your relationship or procurement teams – you never know.
Weekly: these suppliers are perfect for a supplier portal or intelligent PDF e-invoicing, therefore you should be able to get 20% early adoption within this segment in 3 to 6 months. The mainstream will then follow-on over the next 6 to 9 months to reach 50% adoption of this group in year one. Based on the transaction volumes in this group, you’ll be able to estimate success based on adoption and transactions. Leave the rest, as extra effort here will be wasted. Remaining suppliers will come on board via business as usual.
Core: as a fairly important part of your supply chain, these suppliers need more options. They are more likely to be mainstream buyers and send too many invoices for a supplier portal to be viable. Therefore, they will need to be offered PDF e-Invoicing or some type of direct connection. These suppliers will be harder to on-board and take longer. They will also have more complex internal processes to change.
To gain momentum, focus on those core suppliers that already send PDF’s, are brand new or have contracts coming up for renewal. To get early adopters in this group, focus on competitive advantage and better access to your business. They could also be pushed over the line if other customers are also asking for e-invoicing. Depending on the number of suppliers in this group, getting to 20% within 6 months will be hard. However, once the weekly group get to that mark, switch these suppliers into the mainstream phase. On-boarding 10% of this base in 6 months will be a good campaign but the next 40% will follow in the next 6-9 months as other suppliers on-board. Based on the transaction volumes in this group, you’ll be successful based on 10% adoption and those transactions after 6 months.
Volume: these suppliers are typically late adopters due to their billing processes but they will also be critical, if the average spend with them is high. Therefore, focus on your relationship and work with them via procurement. This group may need to be offered connection methods and will need special focus. Success in this group will take time and effort. Risk of failure is high but just getting a couple of high volume suppliers will give pay-back. Never make these suppliers a measure of success in the early adoption phase. So, plan for 3 or 4 suppliers in the first year and set expectations accordingly.
Whatever you do or say, never commit to 100% adoption – this is impossible – regardless of what others say. As our Helsinki City Council case study demonstrates, even in the most advanced countries, adoption is still at 80% ever after 5 years of mandate. You will only ever get to 100%, if you continue to support paper via in-house or outsourced hardware. Make this part of your strategy but avoid investing in this technology with declining returns.
So to conclude, the UK market and economy is ready for e-invoicing but for this to happen suppliers must be treated as partners within a supply chain, not cash-cows. The guidelines for successful deployment and adoption of new processes or products (e-invoicing is both) need to followed. It will be a partnership between you and your e-invoice provider. They are your suppliers so never simply hand-over responsibility to the provider. Here are some handy tips:
- Set SMART objectives for the project
- Focus on the benefits to the supplier not your business
- Group the suppliers and tailor messages to suite
- Use early success to build momentum
- Communicate internally and externally with successes
- Never spend time on a laggard, just move on
Finally, be agile in the ways you achieve success, if it works follow that path, if it doesn’t try something else.
Ultimately, Basware has a Supplier Activation Team to help and guide you through the project, set milestones and build the messages. Likewise, our e-invoicing solutions offer your suppliers choice, flexibility and freedom. To be successful, e-invoicing must be a win for you and your suppliers.
For more information on how to help your suppliers adopt and activate e-invoicing, see our top 5 tips for supplier powered e-invoicing whitepaper.