This Spend Matters Brand Studio article was written in conjunction with Özge Gülden Güngör, Customer and Product Group Manager, Promena.
CRM systems have become the lifeblood of modern business. Internal sales and marketing automation processes and tools manage the “funnel” and orchestrate internal resources. Sophisticated self-service CRM tools are the real differentiators, however, as they engage the customer/consumer throughout the 360-degree “customer journey.” This involves understanding a customer’s granular needs, developing new offerings for them, supporting all transactional and customer-support needs and even engaging them in novel collaborative ways through smart phones, AI and so on. SRM and general supplier management processes and systems in terms of supplier experience, on the other hand, are a much sadder story.
Supplier experience should relate to both the internal experience and the external one, that is, to you as a procurement organization and to all stakeholders. There needs to be one source of truth around the supplier — a common repository with rich and current supplier information that will allow you to put yourself in the supplier’s shoes and feel the supplier experience.
What the supplier needs
Suppliers need flexible supplier portals that grant them access to multiple systems, present clear instructions for engaging during sourcing events, performance reviews, invoice submission, customer support and, most importantly, tell them when they should expect to be paid! But what we find broadly today is:
- Internally, rather than being the overall partner in a lifecycle engagement approach, many supplier management processes are treated as an afterthought to a sourcing-centric “savings factory” approach to sourcing and category management.
- Poor orchestration (and automation) exists across internal functions to provide a “single face to the supplier,” especially surrounding overlapping areas such as procurement-led SRM, IT-led “vendor [risk] management,” GRC-led supplier risk/compliance and finance-related AP procedures.
- Generic segmentation approaches that poorly differentiate the supplier engagement approach, such as a deep “customer of choice” engagement for highly innovative/differentiated suppliers versus a highly automated self-service approach for smaller suppliers.
- Suppliers are often forced to connect to poorly organized S2P tools from vendors that optimize their own approaches and business models for their buyer rather than the buyer’s supplier (e.g., many suppliers prefer sending automated invoice PDFs from their sell-side systems instead of being forced to use various buy-side portals to maintain their data, perform “PO Flips” and so on).
If you implement different best-of-breed technologies, one for supply management, one for sourcing and so on, the supplier has to log in to different solutions, which can result in portal fatigue. So, a provider that can offer a single supplier portal without the multitude of credentials maintenance will have a great advantage over those that do not.
Some CPOs have become so frustrated with the multiple solution situation (and ad hoc IT-led incremental supplier portal projects) that they’ve even tried to modify their CRM systems to become SRM systems. It can be done, but the results have been mixed. It’s also just not a great long-term strategy. A better path would have two avenues:
- To provide a single accountable executive responsible for supplier management that builds this enterprise-level competency, including the right buy-side tools that bring the CRM-like SRM capabilities to life. We also can’t stress enough how important it is to also have a senior-most leader that owns buy-side digital capabilities, such as a procurement center-of-excellence leader reporting to the CPO.
- To provide an internal and external one-stop shop which gives procurement and the buyer (internal) a single source of truth and therefore a full and accurate view of suppliers, and gives the supplier (external) one entrance door to all their needs.
Is centralization the answer?
Some solutions really only provide a one-way portal. This portal is basically a way for procurement to push information to the supplier, but there is no way for the supplier to be proactive. But it’s important to consider your suppliers as an equal business partner and give them the same opportunities to feed you inputs. These inputs could be possible innovations or feedback on how easy you are to work with. Such collaboration results in a 360-degree type of approach.
Having access to everything translates into a solution’s usability; i.e., how easy it is to use the system: no multiple logins and passwords, no variance among user experiences, no data redundancies. This centralization is a way around the proliferation of systems and portals that lags down the supplier experience, and once you have centralized, you can make it work both ways rather than being unidirectional – and that allows you to really embed your suppliers to bring “the outside in.”
The CRM/SRM experience
The customer’s experience is something that every company understands and strives to achieve. The supplier experience, though, is pretty much uncharted territory. Given that suppliers have such an impact on your business, you really have to consider them and strive to be their customer of choice.
The supplier experience revolves not just around the “technicality” of the portals but around behavior. We must cease to see our interaction with them as a necessary evil or a simple business need. If properly managed, properly understood and properly embedded, the supplier can be a source of competitive advantage. Your technology can help you achieve that advantage by providing a central point that will streamline the burden of accessing your system and maintain the information that provides answers to requests. But just as important, it should also be used to cultivate and nurture the relationship, helping you to increase intimacy with your supplier — much as we do already with customers!
This is where the question of best-of-breed versus suites comes full circle. If you really want to move the dial on supplier experience, as both a concept and a behavior, then your technology must support you. A suite needs to mirror your SxM processes and allow you to embed, communicate and collaborate with your suppliers in every activity from the early stages.
From “empty apps” to platform-enabled ecosystems
Applications, such as S2P suites, are important purchases because they don’t just automate processes, they also contain the embedded data models that are used to power analytics and app extensions (i.e. sophisticated “bolt ons”) and embedded functionality (using vendor ecosystem partners). Therefore, it’s important to evaluate S2P technology providers on their underlying platforms and business strategies for providing capabilities that can support your SRM needs, such as:
- Core functionality and frequent releases of capabilities that can support role-based use cases, but also regional/industry extensions.
- No-code, self-service capabilities for UX, workflow, content/forms (e.g., templates and “guided” capabilities for contracting and supplier qualification and onboarding).
- Flexible componentized architectures that fit well into corporate IT-driven ERP environments AND integrate to a growing ecosystem of pre-integrated ecosystem partners AND derived intelligence, including AI/ML, from a vendor’s own installed base community.
- Service partners for transformation/consulting, implementation/support and even MSP/BPO models so that digital capabilities can be accessed as a broader XaaS business service that can be contractually tied to better business outcomes and capabilities.
One great advantage of a suite for supplier experience is having everything in-house. The suite does not need to be super complex. In fact, for supplier adoption, the more easy-to-use and intuitive it is, the better. It shouldn’t be overloaded with functions that you simply do not need. From a supplier perspective, being embedded into your solution means you can collaborate better on all elements of source to pay and really leverage the supplier as a potential source of competitive advantage.
