Are your suppliers ready for your digital procurement transformation? Five steps for effective supplier enablement

Back in February, one of our Digital Procurement leaders Ajay Dhillon called out limited adoption from suppliers as a key risk for any procurement implementation, and I couldn’t agree more. While this type of transformation presents a great opportunity to deliver mutual benefits for you and your suppliers, far too many organizations fail to engage their suppliers, at the right time, and subsequently struggle with limited adoption and benefits realization.

In our experience, there are 5 key steps for effective supplier enablement:

1. Prioritize Suppliers. Supplier enablement should be aligned with in-flight category management strategies and initiatives. Focusing on enabling your key suppliers for your key categories will drive maximum return on investment, and is a powerful lever to increase your compliance and avoid value leakage. 
2. Fit-for-Purpose Purchase Channels. A common pitfall is taking a ‘one-size-fits-all’ approach to supplier enablement. For example, procuring engineering services for a complex construction project is very different from procuring routine office supplies. By understanding your spend categories’ best fit purchase channel and enabling tool, you can clearly define how each category of suppliers and their users should be onboarded.
3. Build a Business Case. Quantitative benefits of supplier enablement include cost savings from enhanced compliance and staff time savings along the end-to-end procure-to-pay process. Of course there’s also the qualitative benefit of much improved end-user experience. Investments should include the upfront efforts to onboard your suppliers (e.g. setting up supplier-hosted catalogues, back-end system integrations), as well as longer-term sustainment costs, e.g. ongoing supplier onboarding and support.
4. Develop a Supplier Enablement Wave Plan. Now that you have the who, how, and why, developing a ‘wave plan’ to outline the when is the important next step. The wave plan should be based on clear prioritization criteria. In addition to the typical criteria such as supplier spend, transaction volume, and risk, you should also consider how the plan contributes to your overall digital procurement transformation objectives. For example, for our public sector clients, this can be an opportunity to improve how they engage Small-to-Medium Enterprises and Indigenous-Owned businesses. The plan should also clearly lay out internal stakeholder and supplier engagement/communications campaigns, and compliance management and escalation processes.
5. Manage Execution and Compliance. After your strategy is in place, it’s time to engage suppliers and onboard them to your new platform. Dashboards should be set up to provide a real-time view of adoption and identify any gaps to address. Establish a primary ‘relationship owner’ for each supplier to support the escalation process with suppliers who are lagging.

Suppliers are a critical partner in the success of your digital transformation. With thoughtful planning, prioritization, and focused execution management, you can increase adoption and create mutual value across the end to end source-to-pay process.

At the heart of any digital transformation is data - this is especially true for digital procurement transformations! Tune in next month when my colleague Anthony Galonski takes a look at the importance of this topic.