Supplier Enablement

The new software deal - SaaS

2008-05-26T06:35:00.001Z

This blog is now dormant but the world of supplier enablement goes on and on.

SaaS is my new gig and if you are wrestling with how you make money (it's not a dirty word) from SaaS then take a look at http://www.saasdeal.co.uk/

See ya!!

Supplier Networks drive Supplier Enablement

2007-05-21T11:24:00.000Z

I see that the Aberdeen Group has published a new report about the importance of supplier networks. The Exec Summary of the report is free and can be located by clicking here.

It is copyright so follow the link to read more.

Click here if you need information on building a supplier network.

Supplier Enablement - black hole

2007-05-16T11:22:00.000Z

I have just reviewed a supplier adoption programme that deals with the strategy and approach that will be taken to acquire content and connectivity for an eProcurement roll-out.

Having read the documents two things struck me:

1. a team would be appointed to drive the programme – good decision

2. the programme lacked insight and detail about communication with suppliers - why?

As a general observation, a high level of competence exists to handle the data extraction and analysis that determines the selection of suppliers for inclusion in a supplier adoption programme, this part of the project being ‘internal’ to the business, but evidence shows a lack of experience when the project goes ‘external’ to the business to suppliers. It is a black hole for many.

The tough part of any supplier adoption programme is executing the activity of contacting your suppliers and then moving them to become active participants in your e-Procurement quickly and at a low cost to your business.

Quickly means the elapsed time is short between first contact with your supplier and your supplier being activated. This drives the benefits of eProcurement into the business and is vital to delivering ROI. Click here for a benchmark.

Low cost because, and you might not want to know this, most eProcurement projects woefully underestimate supplier adoption as an activity and the cost of this activity will impact ROI in Years 1 & 2.

It is apparent that supplier adoption, more often referred to now as supplier enablement, is a skill set and is increasingly in demand.

Click here if you are a buyer and want more information about how to run supplier enablement.

SaaS matures but money rules OK

2007-05-14T10:16:00.000Z

In July 2006 I mentioned Microsoft's announcement of Software as a Service. Click here for a refresh of that.

More recently I have found an interesting note on Wikipedia that talks about the SaaS maturity model.

Well, this is quite academic at the moment aside from providing developers a reference point as customers are more concerned with the 'why' and not the 'how' are you doing it.

If you search on SaaS in Wikepedia you will find the maturity model or click here to go directly there.

The real debate is about 'why' with the choices being to go with the on-premises delivery of software or use SaaS. It is a passionate debate that is riddled with the vested interests of IT departments who want to preserve control of IT resources and their vendors who want to hang on to their customary license revenues.

Does the person at the top who carries the buck care?

Who is advising him/her and what will they say about the choices?

IT say - This is a strategic resource and we know our business better than any third-party service provider. We can deliver it cheaper and, importantly, we control the resource.

Finance say - our choice is upfront capital expenditure and the cost of our resources (salaries etc.) to have the system on-premises or monthly operational expenses with SaaS that we align with use and can turn off if we don't need it in the future or for that matter change if something better comes along.

If the on-premises deployment fails to deliver then the money is lost. The financial risk with SaaS is reduced and the time to benefit is shorter because we are using an existing service.

So new projects will not only be subject to the usual rigors of the 'business case' but also the evaluation of on-premises versus SaaS.

Interesting times ahead.

Click here for insight into using SaaS to deliver connectivity in the supply chain.

Are you getting enough?

2007-05-10T10:20:00.000Z

BBC South Today featured a conference organised by SEEDA for small businesses to meet the Olympic organisers to know how they can 'cash in' on opportunities. It seems that some small businesses feel they are at a disadvantage.

The Olympic 2012 web site has an eTendering web site that shows past, current and future opportunities so that is easily accessible, check it out.

But the spend on the Olympics 2012 is small compared to what the UK public sector spends annually, so how are small businesses doing in the competition for public sector contracts? Are you getting enough?

A report has just been published by the DTI with more statistics that you could shake a stick at. Click here for the report. Can't be bothered and just need the headlines, here goes:

I bet you now want to read that report?

Click here and put the kettle on

UK Government launch Small Business Forum

2007-05-10T08:01:00.000Z

This blog regularly covers the issues facing SMEs and it will be interesting to see what issues emerge from the Small Business Forum.

There is an interesting panel representing small businesses and the first meeting on 1st May may have been little more than a get to know each other and set the agenda for the next meeting affair. Click here to see those comprising the panel.

At the same London Olympics 2012 has run a seminar to help small business understand how they can access opportunities connected with the Games. They have an eTenders site, click here to go there.

It really does appear that government is working to open up public sector contracts to SMEs.

eBusiness drives supplier enablement II

2007-05-04T11:26:00.000Z

More from the EU eBusiness Watch report 2006/7.

Is there evidence that suppliers are e-enabled as a consequence of a
growing dependancy on eBusiness? Check it out.

Does this correspond with what is actually happening in your business?

eBusiness drives supplier enablement

2007-05-04T11:00:00.000Z

Discuss. The European eBusiness Watch Report 2006/7 is a great source of free information about how eBusiness is shaping up across Europe.

Here is an interesting sample from the report.

Who's doing it - and is it important to them?

© European Communities, 2006. Reproduction is authorised provided the source is acknowledged.

Click here for the full report.

Click here for practical solutions to eBusiness whether you are a buyer or supplier

eProcurement gets political

2007-05-03T14:54:00.000Z

It is election day in Scotland today and the Scottish National Party has included eProcurement in its plans to govern if elected.

Click here to read about recent developments in Scotland.

Supplier Enablement - bring it on

2007-05-01T11:09:00.000Z

I've often referred to the Aberdeen Group as a good source for research on what's going on in the world of procurement. I see that Forrester has produced an excellent piece of work that looks at the Spend Management market opportunity.

With my remit of talking about supplier enablement I'm interested in who's doing it and who is planning to do it.

Forrester's research show that among the global businesses (>20,000 employees globally) when asked the question: Will your company purchase procurement or sourcing software in 2007?

The results were for Europe:

9% don't know?
33% are not using!!!
23% are using but will not purchase or upgrade in 2007
7% will be first time purchasers
21% will perform a minor upgrade
7% will perform a major upgrade

The significant outcome is that the don't know, not using and first time purchasers represent 49%. The will not purchase or upgrade in 2007 suggest they are in an early phase of implementation, possibly a pilot in a small area of the business, so adding in that 23%, we have 72%, the majority group. This majority group will not be driving supplier enablement in the way that a business would in an aggressive roll out of an application across the enterprise.

Conclusion: supplier enablement is not yet a mainstream activity.

Any other evidence to corroborate this?

Forrester report that there are 250,000 suppliers connected to the 5 leading supplier networks. That is a tiny number of suppliers.

That's why I say it is time to bring it on.

Click here if you are a buyer and need to know about supplier enablement.

Click here if you are a supplier and want to plan forward.

Supplier Enablement - India expects 5% savings with eProcurement

2007-04-23T13:38:00.000Z

I see reported today that the Indian government plans to save 5% with the introduction of eProcurement. Click here for source.

Now India is a hot economy with a fast growing services industry that is a popular outsource destination for many of the world's largest companies.

Government spending as a proportion of India's GDP has been growing fast in the last three years with the boom in the economy.

Late in February 2007 it was announced India unveiled large increases in proposed spending on education, health and rural infrastructure, signalling the government’s determination to widen access to essential public services and improve living conditions for more than 600m villagers. This will be funded by surging tax revenues generated by an economy set to expand by 9.2 per cent in 2007.

In April 2007 Pat McFadden the eGov minister visited for a four day trip to meet Indian government ministers and IT companies to discuss investment opportunities and online services. Purpose: "This visit is very much about sharing the experience in both the UK and India of how technology can be used to improve service delivery and make life easier for citizens," McFadden said. "Both the UK and India have significant expertise in IT and I'm sure a deeper dialogue on these issues can benefit both countries."

The UK government has a major stake in delivering savings through eProcurement with the Zanzibar Marketplace. Click here for more information.

eProcurement -it is global and for a government is needed to deliver savings that will meet the cost of spending on essential public services.

Supplier Enablement - jobs galore?

2007-04-17T14:08:00.000Z

I've just been listening to a webinar hosted by an ace Internet Marketeer and one of their many jewels of advice is "you have to get up the results list on Google." Well, 1st result on Page 1 with the only link to a related blog - it gets no better.

One other interesting observation is the increasing number of jobs showing on Google results pages for supplier enablement. It is an interesting point of maturation of an industry when jobs are notified that require specific skills connected with projects. I have said many times that the tough part of implementing eProcurement is supplier enablement and now jobs are being advertised to make it happen.

What do you make of that?

Supplier Enablement - buyers get cuddly with suppliers

2007-04-12T08:28:00.000Z

As I write and advise others about supplier enablement I find it more than comforting when I read a story about others who are getting under the covers of what supplier enablement is all about.

So if you are an oil or gas company or in their supply chain the link provided here will be of interest.

Even if you are not connected with these industries the story is still worth a read.

Click here to link to Suppliers are People Too!

Group hug anyone?

Click here for practical solutions to supplier enablement

Supplier Enablement rumbles on - shock for SAP and Oracle customers

2007-04-03T10:28:00.000Z

I have previously reported on work by the Aberdeen Group who do some fine research and reporting on Supplier Enablement.

I found a new news item reported on PROCURE IQ a web site that looks to be a broad church for supply chain types. This news item reported on a recent piece of research by Aberdeen that quotes:

"SAP and Oracle eProcurement shops are in the dark ages when it comes to supplier enablement -- perhaps the most important metric which determines the ultimate ROI of the solution".

Ouch!

They go one to remark: ERP eProcurement is largely wasted because 95-99+% of a company's suppliers usually remain unenabled following an implementation.

And their advice is: If a company chooses to go with Oracle or SAP for eProcurement, they should look to others from an enablement perspective.

Click here to read the article

Click here for more information about supplier enablement

Supplier eCommerce story – by the eCommerce fairy

2007-03-30T13:18:00.000Z

This is my first anniversary as a blogger and I’ve chosen to write a good news story with a hint of prediction of the future.

I have many written many blogs that talk about contention between buyers and suppliers about the value of eProcurement but let's take the positive view that this will work out for everyone.

If I were a supplier and the eCommerce fairy visited me what would I tell?

Surprise and delight. We tell all our customers that we promote eCommerce as our preferred way to conduct our business. Some are surprised others are delighted.

Inspire others. Our customers ask us about our experience with eCommerce as they are eager to learn and as a result our customers admire us and see us as more than just a supplier, we are visionary.

Be shrewd. We promote eCommerce as our way to drive costs out of our business so that we remain highly competitive. Where we save money we share the benefit with our customers through lower prices. This is really novel for our customers and changes how they perceive us.

Be different. We know we have great products while we also understand that every trading relationship has a cost to buyer and supplier. When we tell customers how we use eCommerce to drive cost out of our transactions they see us as more just a supplier, we are a supplier that values their business.

Distance the competition. We use our eCommerce expertise to showcase our company, we are different, we are better and we know how to sell the difference. As product differentiation becomes increasingly hard particularly with the ease that you can search for products using Google then you have to deliver on “customer experience”. We want our customers to tell others that we are easy to do business with; fast, convenient, if only all our suppliers were as good.

Bank it don’t spend it. Our commitment to eCommerce means that as our business has grown we have not had to increase our back office costs and this grows our bottom line – the reason I keep reminding myself why we are in business.

eCommerce fairy needs to go to sleep now.

Click here to continue reading

Supplier Enablement - co-prosperity

2007-02-23T09:15:00.000Z

I saw this sound-bite recently:

Understanding and agreeing on each other's expectations for the relationship usually leads to mutual gains or "co-prosperity," a term Scott Singer, director of global general procurement at United Technologies Corporation, says he's hearing more of recently in his meetings with suppliers.

So, who exactly is introducing the idea of co-prosperity? Buyer? Supplier?

Co-prosperity and eProcurement.

Do buyers consider what the mutual gains are for suppliers when building the business case to invest in eProcurement?

Should suppliers be pro-active and seek a discussion with buyers that are implementing eProcurement to discover and agree on the mutual gains?

Is it possible to put a valuation on the mutual gain and separate the specific gain to buyer and supplier?

Would a buyer be prepared to agree a 'gain share' with suppliers along the lines of: if you agree to ...... and we acknowledge there is a gain to us then we will agree to .......

Just Do It

Some buyers are making eCommerce a condition of business forcing suppliers to accept fait accompli their customers' preferred way to conduct their business with suppliers. Is this co-prosperity?

Some buyers require their suppliers to meet the cost of participating in their eProcurement programme. Is this co-prosperity?

Let's talk

With the assumption that change and progress are inevitable then any reasonable person will sit down and discuss these matters.

We (buyer) are investing £500,000 to implement eProcurement in our business; our reasons are ...... and our expectations are..... We expect our suppliers should benefit and have identified these opportunities. Is this co-prosperity?

We (buyer) are investing £x to assist our suppliers to participate in our eProcurement programme for the following reasons....... Over time we expect that your (supplier) business will benefit and in 12 months we would like to conduct a review with you to learn from you how you benefitted. Is this co-prosperity?

Of course, you are not obliged to do anything and you can exercise your choice to 'opt in' or 'opt out'. The only thing we ask is that you make your choice now. Is this co-prosperity?

Is this nonsense?

Yes. In the big bad world of business only the strongest and fittest survive and they aggressively adopt change and the weak and timid who avoid change will fail even if we try and help them. Co-prosperity - nice idea - but our shareholders/stakeholders have expectations and we need to deliver results.

No. In a world that is increasingly turning to low cost country sourcing, outsourcing, offshore delivery, use of contracted-out labour, suppliers working in-house then we are already set on a course that means our performance is intrinsically bound to our suppliers' perfomance. Co-prosperity - good idea - essential to delivering results and meeting expectations of our shareholders/stakeholders.

Is it a Yes or No for you?

Supplier Enablement gives way to eInvoicing

2007-01-09T11:21:00.000Z

It has been suggested that blogs have been co-opted by business and are about as fresh as my trainers. Click here to read the article published in line56.com today.

Apparently blogs have lost their edge and are no longer fun and individualistic. I'm inclined to agree but that doesn't mean we should give up, does it?

It ain't easy to make supplier enablement fun but you can sometimes test the boundaries of humour.

I'm not deterred and have started another blog this time to discuss - ELECTRONIC INVOICING.

Scroll down for a wealth of information about supplier enablement.

Click here for more thoughts about electronic invoicing.

Supplier Enablement- off the wall

2007-01-02T17:23:00.000Z

To ease into 2007 here is an interesting couple of comments that I found recently.

Suppliers have to think: why would a customer adopt a system if it were going to create more work for them? So if you are a supplier approached by a customer to submit electronic invoices in replacement of paper invoices is your first thought; will this mean more or less work for my customer?

The businesses that have been most successful with the introduction of eInvoicing are those with captive suppliers. If you are a supplier to a business would you know if you were thought of as captive?

Finally two thoughts for 2007.

1. Surveys identify that banks are the preferred provider for electronic invoicing services. This makes sense as payment of invoices is cleared through the banks (whether that payment is by cheque or EFT) and of course they offer liquidity (cashflow) through invoice factoring and invoice discounting. What developments can we expect as banks look for revenue earning opportunities from the increasing use of electronic invoicing? Click here for how a bank helps a major retailer pay its suppliers.

2. It is well known that the problem facing the development of electronic invoicing is getting suppliers on board. This remains true but statistically we know the numbers increase year on year in the number of participants (buyers and suppliers) and number of electronic invoices. As we exit early adopter phase and move to a market that has a herd instinct then the opportunity size will grow rapidly and attract new players and new propositions.

Will this be the moment that a shift occurs from a technology led business (connectivity to enable transactions at a lower cost) to a services led business (an infrastructure for business) and will that be the trigger for banks and telcos and post and outsourcing providers to pile in?

If only we could see into the future.

Supplier Enablement - the future is coming. Or is it?

2006-12-27T14:34:00.000Z

How times have you tried to predict the future and spent some time trying to understand those things that would influence your prediction?

I picked up on an article published by gtnews.com on July 04 2005 that had a stab at the 'Future of Electronic Invoicing'. gtnews.com is read by those in finance and treasury.

The future was described like so: The electronic invoicing industry is moving towards more inter-connected B2B solutions like federated networks.

So,some 18 months has passed is there any indication that this future is coming?

The article correctly highlighted the obstacles to buyers and suppliers from 'lock-in'. To strike an analogy; if you had to choose your telephone provider (telco) based on who you could reach by telephone using that telco then that presents you a problem if one telco can not povide you a service to reach everyone that you need to or might want to speak with. Of course this is not an issue because the telco industry understands their customers want a service that provides any to any connectivity.

The article suggested that the service providers that deliver electronic invoicing will need to deliver the same any to any connectivity that your telco does. Is there progress towards any to any connectivity using federated networks?

Le me know your views and I will compile your replies in a future blog.

2007 - will it be you?

2006-12-22T13:58:00.000Z

Reflecting on my blog of yesterday I started thinking: how many suppliers have lost customers because they had NOT implemented electronic invoicing when asked by a customer?

I don't expect anyone to reply this question.

However, I have evidence that suppliers are losing customers and I wonder how many customers they have to lose before they choose to act?

Never mind with a new year in prospect we should look to the future. Will it be you in 2007 that is asked to implement electronic invoicing?

What clues do you have to know if it will be you?

1. Do you know what your customers' procurement policy is? Click here to see an example
2. When you win a new contract or renew a contract check to see if your customer has introduced a clause concerning eCommerce. Many buyers are introducing eCommerce clauses as a condition of business even though they may not implement that immediately.
3. Do you have any UK public sector customers? The likelihood is that sooner than later you are going to be required to submit electronic invoices.
4. Have your suppliers implemented electronic invoicing? That is, they want to send electronic invoices to you.
5. When your are replying to an Invitation to Tender (ITT) or Request for Quotation (RFQ) did the customer require you to send your reply on paper or reply using an online service. If it was the latter then that is a clue they are moving their procurement away from paper to electronic delivery.
6. Has your customer contacted you to have a conversation about your early payment discount terms?
7. If you have had an approach from a customer about your submitting electronic invoices how did you respond? a. I didn't respond my preferred response was no but obviously I couldn't say that. b. I said I would think about it. c. I said I would if I knew how. d. I said Yes - how do I do that?

If the clues are there and you need some help then click here

Electronic Invoicing - progress for some, problems for others

2006-12-21T11:26:00.000Z

It is fascinating when you read something and you think that is bang on if only I had the same clarity of expression. I read this statement: We would like to do away with paper invoicing completely because of the man hours and cost involved in processing this paperwork.

Done and dusted! That is the expression of why now we need to figure out the what and how details.

What? We need to STOP our suppliers sending paper invoices and have them only send electronic invoices. Do you apply that to all suppliers or just your top suppliers? If you want 'to do away with paper invoices' it has to be the former. What notice is reasonable to introduce this change? Should you consider incentives or compel your suppliers to act?

How? Do you let suppliers figure out how or do you provide a solution? If you provide a solution will you pay or make your suppliers pay?

In a recent blog that I started I received a posting from a business in South Africa that had tried for more than one year to get some smaller suppliers to commit to electronic invoicing. Despite much effort spanning one year they have now decided to abandon those suppliers that have not complied and are looking for new suppliers. Sooner or later those suppliers are going to face the same request from other customers and they will soon figure out this is something you can not ignore - PROGRESS.

Click here for more information about the why, what and how of electronic invoicing.

Supplier Enablement - No Free Ride

2006-12-15T15:05:00.000Z

There is no shortage of interest in B2B eCommerce but who is going to pay?

Will it be the buyer or the supplier?

The vendors of products and services that deliver the solutions for B2B look upon buyers and suppliers as their customers. What are they saying?

What exactly needs to be paid for?

A buyer implementing eProcurement, eInvoicing or P2P automation, e- , will need to engage suppliers. That typically results in requirements put to a supplier to create and publish electronic content and generate an electronic invoice and that comes at a cost to the supplier.

Who pays?

The general picture is:

In the private sector the buyer usually expects the supplier to meet any cost as a ‘cost of doing business’. There are exceptions.

In the public sector, at least in the UK, the buyer usually meets the cost and that is to ensure that no supplier is disadvantaged from competing for contracts. The Zanzibar Marketplace exemplifies this approach.

Among vendors there is no consensus with pricing options where the buyer pays, supplier pays and both pay.

Suppliers are wary

There are examples of buyers achieving e- compliance with all their suppliers but in the mainstream it is typical that a buyer will target their top suppliers with the 80/20 rule applying. Many of those top suppliers will be sitting on multiple requests to get involved in the e- of their customers each having their own unique requirements. The supplier is now burdened with the complexity of the business case and IT implications for each customer. This is not going to change soon and the number of requests is increasing.

Buyers wait in vain

The supplier’s dilemma is often not evident to the buyer who blissfully assumes they have a supplier’s attention and compliance which is why those that have implemented e- describe supplier enablement as challenging.

Suppliers bogged down with cost justification and IT complexity

Many suppliers have customers in the public sector and the private sector and both are negotiating down the cost of purchased goods and services and so in the eyes of a supplier they already get a good deal. If the deal included e- as a condition of business then the supplier went in eyes open. However suppliers are receiving requests for e- from pre-existing business and worry about what to do; not knowing how that might affect their business. The cost to the supplier is important as it erodes margins but it is meeting the differing requirements of various customers that injects complexity in terms of process and IT requirements that suppliers want to avoid.

Buyers get it

If you look on the buyer side they typically implement a single interface between the business and the supplier base; one to many to keep down the cost and complexity. In the supplier base a piecemeal approach is more common as result of reacting to customers’ e- and that results in cost and complexity for the supplier.

Suppliers catching on

As suppliers get wiser they recognise the need for a solution that will accommodate all of their customers’ e- requirements. They are also looking at the opportunities from having XML orders available to them rather than paper documents to reduce the clerical costs of processing orders. As a result they are now implementing a single interface between the business and the customer base; a one to many solution, and the first vendor through the door is in a strong position. However, the reality is that the majority of UK businesses are untouched by e- but that is because wherever possible they have avoided engaging with e- customers in a wait and see approach and to forestall incurring additional costs.

e- is unstoppable

Things are changing, for example, the UK public sector has an agenda for e- efficiencies and is meeting the cost for equipping suppliers for e-. This has a big impact: i) it improves the competitiveness of suppliers particularly SMEs and, ii) it will also benefit the private sector as suppliers are given a ramp to e-.

Buyers have visibility to their own costs for processing requisition to order or an invoice and know what savings they achieve in a post e- world. Now they are becoming curious about a supplier’s costs; to process an order and raise an invoice. Why the interest? Because where a buyer meets the cost of e- for a supplier then they expect the supplier will achieve savings and that provides scope for the supplier to offer concessions that help the buyer meet their objective to drive down the cost of purchased goods and services.

e- is here and the who pays options are: the supplier pays and figures out how to cut costs or recover their additional costs perhaps through tweaking prices, or, the buyer pays and agrees that a supplier’s cost savings will be taken account of when negotiating prices.

At the end of the day e- is about reducing costs and if your supplier is at the bottom of their barrel when it comes to price then buyers may have to give to get.

On a final note

In a recent blog I challenged the view that the success of e- hinged on solving a customer’s pain and vendors co-operating. No it is not. e- depends upon the collaboration of parties that have opposing agendas; buyer to pay the smallest price negotiable, supplier to achieve the highest profit negotiable. It is about: who pays and how much.

This blog was also published by Line56.com on 18th December 2006.

Honey, I shrunk the invoices

2006-11-28T17:22:00.000Z

I have a buying organisation that has asked me for information on what savings could be achieved by a supplier if they removed paper from their order to invoice process.

The buyer has data on their before (paper) and after (no paper all electronic) costs.

Why the sudden interest? Ordinarily a buyer is focussed on what their savings are and making sure they achieve that at the smallest cost to them, often that is achieved by putting costs on the supplier. When a supplier presents an electronic invoice I can process that at a fraction of the cost of a paper invoice and the supplier meets the cost to create that electronic invoice. Honey, I've shrunk the cost of our processing our invoices. But at what cost to your suppliers?

This blog has previously dealt with the debate: who pays and how much?

If, and it is a big IF, we had transaparency and an agreement between between buyers and suppliers as to what they recorded as savings from replacing paper transactions with electronic transactions then would that change things?

For example, buyer records savings of £5 and supplier records savings of £2. The savings for either could not have been achieved without the collaboration of the buyer and supplier so should they share the resulting benefit equitably? In this case buyer pays supplier £1.50. Now we have an incentive in place.

Last thought: Don't call you boss Honey, at least not without a lawyer present.

eProcurement - SMEs get it but?

2006-11-15T09:41:00.000Z

So what is the but?

According to an article published by FT.com:

For small and mid-sized companies (SME) outside the IT industry, running IT infrastructure is rarely a core competence. All too often it is an area – and a cost – that senior management feels it cannot control.

Click here to read the article and what it proposes SMEs do.

It is a fact that SMEs have some challenges if they are to participate in eProcurement; meeting the costs to set up the technical infrastructure for sure and knowing that there is going to be a benefit to the business.

But consider: if you didn't have the challenge of buying, building and maintaining IT and you had control over costs and there were no risks to the business would the decision for you to participate in eProcurement be easier?

What's changing that makes that decision easier?

Click here to find out

eProcurement boost for SMEs

2006-11-15T09:18:00.000Z

SMEs are often referred to as the lifeblood of the UK economy.

They may not be always on the leading edge when investing in IT and we have discussed this in past blogs. Click here for a refresh on why that is.

Some recent research identifies that some of the benefits of eProcurement are specific to the SME community. These include the following:

• Competition with any other supplier, regardless of their size – any supplier with access to the internet is now on a par with even the largest suppliers.

• Being strategically valuable, as it helps them to win other business elsewhere.

• Receiving payment more quickly as there is less of a paper chase at the buyer end.

• Business does not need to be limited to one geographical area.

• Removal of some of the process costs associated with supplying to government.

This is good news for SMEs but they still need the tools to equip their business to be a player.

Click here if you are a SME

Click here if you a Buyer and have SME suppliers

Supplier Enablement - B2B eCommerce and CSR

2006-10-30T12:06:00.000Z

Does Corporate Social Responsibility (CSR) extend to cover the relationship between buyers and suppliers involved in B2B eCommerce?

CSR tends to be an agenda for larger companies and governments.

Is size important or should all businesses have a CSR stake in the ground?

Generally speaking CSR statements include references to the environment and what efforts will be made to optimise use of energy and reduce harmful CO2 emissions. So B2B eCommerce and CSR: best mates?

One of the outcomes of B2B eCommerce is a REDUCTION in the consumption of paper. How is that? For each transaction between a buyer and a supplier typically 6 pages of printed documents will be produced. You have 100 transactions and you have 600 pages of paper, 1000 and you have 6000. Ok.

So what if the consumption of paper was REDUCED to NO PAPER consumed? You have just saved a bunch paper, the cost to you etc and made a contribution to the environment.

How much of a contribution?

Ask yourself, when you recycle your bottles and newspapers you don't ask yourself how much of a contribution you are making. If you stacked all your recycling for a year I bet you would be both amazed and proud of yourself that does not occupy a landfill.

So, let's say you process 6000 pages of printed documents a year that is a pile of paper that stacks to 66cm (25.98 inches). It weighs about 27.3 kgs (60lbs).

Imagine the impact when 100,000 of you convert to eCommerce and eliminate the consumption of paper and the numbers are:

600,000,000 pages of paper stacks to 66 kilometers (41 miles) high

If laid end to end that stack of paper is 4 times the circumference of earth

Its quite heavy! Weighing 2,730,000 kgs (3008 short (US) tons).

Not hard to see what difference you can make.

Need some help with your CSR credentials? Click here

Supplier Enablement - inch by inch

2006-10-27T13:43:00.000Z

I think it was Bill Clinton that remarked that when it seems you are making no real progress that it helps to think of progress happening inch by inch.

OK let's apply this thinking to how suppliers can make progress with eCommerce.

I know that many fight shy of making the decision to get involved even when under pressure to do so by a customer.

Inch by Inch way to eCommerce happiness:

1st inch: receive your customer electronic (XML) orders and print them out - absolutely NO CHANGE to how you do things today other than you give the good impression to your customer that your eCommerce savvy!

2nd inch: you reply with e-Invoices to your customer. Now your customer is sending you electronic orders and you are replying with electronic invoices. Now you really are wired for eCommerce - there is some change now as you will need to create electronic invoices and that is really easy. Follow the link below.

3rd inch: consider autohandling of received electronic orders so eliminating manual re-keying of orders - change as systems now need the capability to automatically process electronic orders and that may present a number of technical challenges. It does mean that your business is open 24x7 for handling received orders.

4th inch: consider offering ALL customers the choice of paper or electronic invoices - now that is different.

Need a quick and easy way to generate e-Invoices? Click here

Supplier Enablement - pressure point

2006-10-25T11:58:00.000Z

You are thinking about participating in an expedition to the North Pole. You have some questions like; how cold will it be? Would you prefer to believe someone who has completed an expedition to the North Pole or someone who is planning an expedition to the North Pole?

Well as you know I write about supplier enablement and eProcurement. I assert that supplier enablement is a challenge for those implementing eProcurement and often overlooked in the planning stages.

Well, what we can learn from those that have implemented eProcurement. They would likely put on their T-shirt: don't be dumb - suppliers matter

In the world of information research leaders like Aberdeen Group provide real world experience and analysis based on interviews. In a recent report: The EProcurement Benchmark Report of August 2006, they report the top two pressures faced by Procurement organisations are:

supplier enablement - the external interface of the business with suppliers

user adoption - the internal interface of the business with its users

So, those that have done it are telling us that you need a plan for supplier enablement.

Need a plan? Click here

Supplier Enablement - how do you measure up?

2006-10-24T09:44:00.000Z

Are you a best in class, average or a laggard? Do you measure your performance in these terms?

New research once again confirms that for those implementing eProcurement the top two pressures are:

1. Enabling Suppliers - external to the business
2. Driving User Adoption - internal to the business

The good news is that eProcurement is now delivering real business benefits.

What should you measure and how do you classify your performance?

The bottom line is that you are looking to reduce costs in two ways:

1. Reducing the invoice cost of purchased goods and services
2. Reducing the process costs - the cost to raise an order, to process an invoice etc.

What do you measure?

Clearly savings; a £1 saved whether on the invoice cost or through productivity is a direct contribution to profits.

The other measure is what you control. This is a measure of how much of your spend is under control, that is, spending that you have visibility to before it is committed? Those best in class work at getting more spend under control.

If you are buying essential essential goods and services and these costs represent 20% of your turnover (invoice cost + admin costs) and your competitor is achieving 17% then they have a competitive advantage.

If you do not know what your admin costs are, take the people and facility costs of your procurement and accounts payable departments as a baseline.

The amount of information and experience available now confirms that the function of procurement is now a big contributor to business performance. eProcurement has well and truly landed.

Click here for help with supplier enablement

B2B eCommerce is in error; sonny got that wrong!

2006-10-05T09:11:00.000Z

The B2B eCommerce agenda: work smarter not harder, reduce costs, increase productivity and reduce errors.

Eroors? Whet errorrs?

What is the cost of an error? If your suppliers’ invoices has errors on it then that causes work for you and your supplier to resolve. These errors demand a disproportionate allocation of resources to resolve. This is counterproductive to the Number 1 aims of B2B eCommerce: to reduce costs.

So, perhaps our implementation of eProcurement/eInvoicing should consider how we aim for the error free processing of invoices.

What is the origin of these errors?

They could be originated by your supplier in information passed to a buyer that is then used to to create a purchase order. These errors work there way out of the system over time as they are corrected. Even so, errors in purchase orders prevent suppliers from processing those orders resulting in delays to customer and lengthening the order to invoice cycle for the supplier. That is a cost to both buyer and supplier.

They could be made by the supplier during the handling of the purchase order and input into their system for processing. Errors are common during manual entry of data and they perpetuate in all related documents that rely upon that entry of data. For example, if the customer PO number was EYO990 and that was entered as EU0990 by the supplier then that error will perpetuate through to the creation of the associated invoice if it remains undetected.

The buyer receives the supplier invoice complete with incorrect PO number and then is unable to post this.

One error has created a problem that now needs to be resolved by both buyer and supplier. Actually, the supplier is more inconvenienced as their invoice could reasonably be disputed and payment withheld.

The error-free way.

Buyer creates requisition/purchase order based on supplier information either from an electronic catalogue or from punch out web site.

Buyer sends electronic purchase order to supplier

Supplier receives electronic purchase order and imports this into their system for processing. The system performs validation checks against customer and products ordered before allowing the order to be accepted for processing. No manual data entry has occurred and no errors are introduced. We now have a clean sales order for processing.

Supplier now processes the order and creates electronic documents for internal use and for despatch to customer. Internal documents would include a Pick Note. Documents for the customer would include a GRN and invoice. The supplier now creates an electronic invoice and sends this to the customer.

Customer receives electronic invoice, reception is automatic and it is automatically processed based on a two or three way match. As the customer has not intercepted the invoice nor performed any manual data entry there is no scope for the introduction of errors.

Error free processing is achievable but it does depend on eliminating manual data entry and having supplier content that can be relied upon to create requisitions/purchase orders.

It also requires the end-to-end integration of buyer and suppliers systems to eliminate the need for manual data entry. The reality is that few have achieved this and the cost and technical complexity are two good reasons.

WHAT IF: you could have end-to end integration with suppliers without making any new investment in hardware or software or changes to your or your suppliers IT systems. Would that change things for you and your suppliers?

Click here to request a demonstration of error free eCommerce.

Supplier Enablement - DIY not always best

2006-10-03T08:43:00.000Z

What can we learn from the mistakes of others?

Here is a story about B2B Consolidation published in Line56.com today. It tells the story of a major manufacturer deciding to DIY an online trading hub and fail. They then went down the route of outsourcing with a provider and succeed.

Given thousands of global suppliers, unique business systems, and more than 12 million procurement and financial transactions a year, a major commercial and military aerospace manufacturer decided that standardizing business integration would save millions of dollars annually. The company deployed an online trading hub designed to automate a wide range of financial and supply chain business procedures while reducing IT infrastructure costs.

The manufacturer decided to build support for e-business integration in-house. However, despite a massive investment in hardware, software, and dedicated IT teams, it was able to integrate only a handful of trading partners after 18 months of effort. Realizing the enormous complexity and cost of external integration, the company re-evaluated its approach and decided to outsource a solution.

IaaS (Integration as a Service) delivered the secure, seamless information exchange the manufacturer sought. A single connection links all the company's trading partners, whatever their technological sophistication, IT systems, or data models. Real-time transmission delivers the fast transaction turns the company requires.

The company deployed its trading hub in less than four months, connected with 100% of its business partners, and saved millions of dollars annually through dramatically reduced hardware and software costs as well as more efficient financial and supply chain processes.

The manufacturer is not identified but the story highlights some things that can be more difficult that you might imagine when implementing B2B eCommerce:

support for e-business integration in-house

the enormous complexity and cost of external integration

oh, and the cost in hardware and software and dedicated teams

for this manufacturer at least the wasted time and effort of a failed project

Not a pleasant lesson but perhaps a call to compare the options before setting off on your own DIY path.

Click here for help with IaaS and all things connected with B2B eCommerce

Supplier Enablement - criteria

2006-10-02T08:20:00.000Z

More lessons from EXPP 2006. btw this conference will be in London in 2007.

I'm busy reviewing all the presentations and in particular those of organisations that have put their money where their mouth is and got ahead by implementing B2B eCommerce.

I liked this quote from a company that had implemented e-orders and e-invoice with 6000+ suppliers. Their criteria for selecting a solution:

no capital expenditure
no specialist software
no lengthy training
no consultancy

This is a completly different place to start your project to let's say defining a published specification for electronic document exchange. You still need those documents but as list of criteria I think the above list is very supportive of how you would describe your project internally and to counterparties (suppliers, partners etc.).

I like it, it says; we need these things to be achieveable and if they are then we have a solid foundation to proceed. Now let's evaluate solutions against this criteria.

How many B2BeCommerce projects get bogged down in detail because there is no clarity for the project in terms of; we need to achieve xxx and criteria for that is yyy.

Good lesson.

Electronic Invoicing : How big is big?

2006-09-29T17:22:00.000Z

It is not so easy to implement as it depends on the participation of your supplier but eInvoicing is now beyond its infancy and is a fast growing industry.

Some statistice quoted at the EXPP conference in Berlin 25/26 September 2006 impressed me, and I quote them here:

340,000 businesses are now engaged in eInvoicing.

227,000,000 electronic invoices have been processed

Not all businesses have 100% of invoices served as eInvoices but many are making progress that over 2 - 5 years will have invoicing as a paper free zone.

Those that have made most progress have taken some positive action to ensure that suppliers comply, for example:

A CFO wrote to its suppliers and mandated eInvoices if suppliers wanted to retain their status as a preferred supplier. Suppliers were given 2 months to respond. Consequence, some opted in some opted out but it gave the supplier a choice.

Denmark passed a law requiring suppliers to submit electronic invoices. Consequence of non-complianace being that paper invoices were returned unpaid. Sweden will also follow this course with a law taking effect July 1 2009.

These actions suggest that there is a lot at stake for the organisation that is processing these invoices and the benefits are so great that you have to have the will to make it happen. That means being tough and it is a lesson to those that have tried and had limited success.

The private sector is generally secretive about what savings it achieves through its implementation of ideas/change whereas the public sector is very open and accountable.

Denmark claim savings of €120 - 150M. That is a big bag of savings!

Denmark public authorities process 15M invoices p.a

That is going to need around 1200 -1500 staff to process 15M invoice transactions p.a

Let's face it, processing invoices is one of those things you have to do. So by doing it at the smallest possible cost to the business it will free up resources to put behind other things that the business needs to do to stay alive and prosper. It makes sense.

Do we really need to dress it up anymore than that?

Supplier Enablement - B2B eCommerce and CSR

2006-09-29T16:49:00.001Z

There is a new head of steam building up about climate warming and that gives cause to consider our impact on the environment.

As a political agenda it is growing in importance. Will elections be won on 'green agendas'?

As a business agenda it is referenced in CSR statements. Will business valuations be affected by your CSR position and actions controlling your CO2 emissions?

We all want to save the planet.

I'm going to watch to see what unfolds over the next month and come back to this subject.

Are B2B eCommerce and CSR bedpartners?

Supplier Enablement pay day

2006-08-31T16:14:00.000Z

Continuing the debate about who pays for B2B eCommerce here is an interesting parallel with the world of B2C eCommerce (the consumer world of online shopping).

I was thinking about online shopping and the rise in the number of retailers that chargeback to the buyer (you) the cost of your using a credit card to pay for your purchase. Why is that?

I figure that if your online business is all about price competitiveness, and with the ease that the consumer can now perform price comparisons, it is essential to keep out any costs that are not under your control. So, if you choose to pay by credit card and the supplier picks up a 2% fee (average)then they will look to pass that back to you.

Does it stop you shopping online? No, because you like the experience - quick, convenient (24x7), paperless etc. You also know that the online world is keenly price competitive and you get the opportunity to verify that through price comparison web sites and browsing for yourself.

Suppliers also offer alternative ways to pay, using a debit card for example, for which the supplier has a fixed cost to process and they do not pass that back.

The B2C world is rocking and going from strength to strength so are there any lessons for the B2B world?

There are some differences that we have to acknowledge in the B2B world:
+ the law vis a vis consumer rights versus those that govern business
+ in business we are accountability to others (shareholders, stakeholders) + businesses need to keep records (audit, tax etc.)

there are others but you get the picture.

Can we envisage that B2B eCommerce will have the supplier push back costs on the buyer based on how the buyer prefers to buy?

In B2B speak that is; will the supplier push back any costs on the buyer based on how the buyer prefers to deal with the supplier?

Turn that around. Will the buyer push back any costs on the supplier based on how the supplier prefers to deal with the buyer rather then how the buyer prefers? For example, supplier prefers paper invoices whereas the buyer prefers electronic invoices.

There is the dilemma in the B2B world; if you ask to change something the other party might calculate the cost to agree to your change and pass that cost back to you.

What if the change could be demonstrated to be mutually beneficial? Well perhaps that changes things but does require the mentality to understand and agree what matters and is important to the party affected by the change. Even so, this is a good basis to discuss change without the demarcation of who is going to pay.

Think! How can I help you to help me? I need to make some changes so my business improves and that implicates change for you. The good news is that change comes with some useful benefits to you .....

I am reminded of a saying; It is often not what you say but how you say it!

There is psychology at play just as there is around the negotiating table.

Your B2B pay day will be a product of negotiation - so its business as usual - you get what you negotiate.

Click here for more information

EU stake out electronic public procurement

2006-08-30T15:05:00.000Z

To quote the eGovernment agenda:

Government revenues account for some 45% of GDP and public authorities purchase 15 to 20% of GDP or €1500 to 2000 billion in Europe every year. Electronic procurement and invoicing could result in savings in total procurement costs of around 5% and reductions in transaction costs of 10% or more, leading to savings of tens of billions of euros annually.

Click here to access the full EU communication.

Norway getting on with eProcurement - €5Bn says so!

2006-08-22T10:01:00.000Z

No need to be a skeptic anymore about the viability of eProcurement as those nice people in Norway share their experience. 4.5M people (population of Norway) can't be wrong about these things!

Headlines are:

Results and benefits

Experiences from Norwegian public sector entities indicate a potential for 20-40 % time reductions on handling of orders, goods receipt and invoices, and between 2-10 % price reductions in operations related procurement expenditures.

At what cost to Norway?

This has been achieved with a small centralised budget; the total budget for centralised coordination, facilitation and support activities has been €2.9 millions from 1999.

Note: The ehandel.no business model is based on both public sector entities and the suppliers paying for their active use of the e-procurement system.

This is one of the pay models that can be used. Click here to read more about variations on this pay model.

Click here for the full story.

EDI and XML - parallel lessons?

2006-08-22T07:47:00.000Z

As I have written before EDI and XML are going to co-exist for a long time albeit it is recognised that EDI will remain the preserve of large business and their national supply chain. For everybody else, that is 95% of businesses, you are going to rely on XML because that is what others will implement to support their B2B eCommerce.

Quick refresh on B2B eCommerce and some differences.

If you are a major retailer with a 24x7 operation with fast moving inventory and much of it perishable you need a system that connects you whole supply chain so that your shelves remain stocked with your customers' favourite products.

Now contrast with a major financial services business that has no inventory per se and is a Monday to Friday business and you have a totally different set of requirements as you will not be totally dependant on any particular suppliers for most of things you need for your business.

In the former case EDI prevails and in the latter XML. Both do the same job in that they support the objectives of the business to manage their transactions with their suppliers in a timely fashion and at the smallest cost to buyer and suppliers.

EDI has been established for a long time and I am always looking to see what parallels exist so that we can learn from those that have been using B2B eCommerce (EDI) longest.

From an interesting article published in Line56.com I extract:

Who can do it better, cheaper and quicker?

Companies using SaaS (Software as a Service) for supply chain report they typically can get the system operational in under 3 months and achieve ROI in less than a year -- many times faster than with ordinary "license and install" software or homegrown projects.

Paper transactions prevail over use of EDI and XML

Overall, paper, fax and email still predominate. There is alot to do!

How can vendors help?

SaaS vendors that provide supplier enablement assistance and preconnections to suppliers or logistics partners are helping reduce this barrier.

How important is this?

Ask your Finance Director as it is all about cash at the end of the day. What you are spending against budgets and what cash you have to keep available to balance receiveables and payables.

Click here for the Line56.com article.

Click here for more information about SaaS, supplier enablement and how to get B2B eCommerce working for your business.

Accounts Payable - profit or cost centre?

2006-08-18T08:18:00.000Z

According to an article in Line 56.com it is potentially a profit centre that by taking advantage of early payment discounts can generate annualised risk free returns of 36%. See footnote for explanation.

Interested?

To get these returns you have to be able to capture the early payment discounts and there is the rub because if you are processing paper invoices you probably will not have the reaction time to get a hold of these discounts. Sorry for raising your hopes!

Next question then is what do you need to capture these early payment discounts?

Assuming you have suppliers that are willing to offer discounts then their terms will be negotiable according to their appetite for cash but let's say in the range 3 - 10 days are usual for discounts of 2 - 4%.

What would you have to do today to get visibility to those invoices from those suppliers that were prepared to offer discounts?

To cut to the chase; paper invoices are a problem to a process that is dependant on getting visibility to those invoices and reacting to them to take discounts. Replacing paper invoices with electronic invoices with a supporting process gives you control.

Of course then we need our suppliers to present electronic invoices and that is easy, right? Now we are at the heart of the conversation that is taking place today because we have the technology and the business case is now shaping up so what's stopping you?

Quick test of what might be available to you, not as class leader but doing a reasonable job of capturing early payment discounts:

You make supplier payments of £100M p.a
£15M p.a of supplier payments are available with discounts
Let's say that the average discount is 2%, that is £300,000
Let's say you capture 60% of those discounts, that is £180,000 in cash

Let's say your business earns a gross profit margin of 10% on sales. You've just delivered £180,000 to the bottom line risk free and that is equivalent to £1.8M in sales.

Easy to shrug this off as something you'll get round to tomorrow but can you afford to put it off?

Click here for more about how you get started with electronic invoicing.

Click here for the full article published by Line56.com

Footnote: here I show the calculation for an annualised return of 36%.

You have an invoice to pay £1000 within 30 days.

The supplier has offered a 2% discount if you pay within 10 days. 2%/10 net 30.

You decide to take the discount and pay £980 (£1000 - 2%) within 10 days.

The £20 saved on the invoice price when expressed as interest earned on £1000 calculates an annualised return of 36%.

Supplier Enablement - fair play

2006-08-16T09:37:00.000Z

In an earlier blog I spoke about how buying organisations are meeting the cost of their B2B eCommerce initiatives as they implicate their suppliers.

I also mentioned that some buying organisations take the view that the supplier must pay - period.

Is there a half-way house?

What if the buyer were to meet the costs initially because this overcomes the resistance and objections that suppliers put up about 'cost' and then agrees over time for a transferance of cost as the value/benefit materialises for the supplier?

To anticipate the next objection: what if I don't want to meet the cost at some future agreed date?

I think the answer is, OK, that is your option. However, bear in mind that we go on with the use of B2B eCommerce and that would put you on the 'outside' of our preferred way to manage transactions with our suppliers. You might want to consider what that might mean to you?

OK, so what are these benefits that materialise over time?

Let's say that we review the position after one year during that time we will implement the bi-directional exchange of electronic documents; we will send electronic XML orders to you and you will send electronic XML invoices to us. We can guide you on how you can use the electronic XML order to automate your processing of the order. We expect that the availability of an electronic XML invoice should improve our capability to process invoices providing more control over payments and increasing our options to take early payment discounts.

You should look at what improvements show up in your business and we suggest that one year is ample time to take stock of that.

So let's say that it all works out, what will be my costs when they are transferred to me?

Now we are in a big discussion with multiple choices:

1. Buyer transfers all the cost to the supplier on the basis that they have paid for the buyer to get up to speed with B2B eCommerce and there is benefit to the supplier. The supplier has the option to walk anyway.

2. Buyer transfers half the cost in recognition that their own benefits are derived from the supplier's participation in B2B eCommerce.

3. Buyer transfers none of the costs but makes it mandatory that a supplier trade with them using their preferred B2B eCommerce methods.

4. Buyer agrees a tariff with the supplier. That might be; we send you 400 orders a year and you send us 400 invoices a year, your tariff based on 400 invoices is 400 x ? where ? is the cost of the supplier to send an invoice (50p?) or the incremental cost to a buyer to process a paper invoice versus and electronic invoice (£1.50). The numbers before are made up yet broadly representative of likely costs.

All very interesting and up for debate which is the purpose of this blog to allow other people to contribute ideas.

Click here for more information

Supplier Enablement - choices choices choices...

2006-08-07T11:10:00.000Z

Here we are in a supplier's shoes looking at their choices when faced with the invitation to commence electronic trading with a customer.

In a previous blog I looked at this from a supplier's point of view in terms of what questions they would have before making a commitment. As I have remarked many times a supplier has the option to say Yes or No.

A Yes requires:

(a) a decision to buy a capability for electronic trading with (maybe) some corresponding financial commitment, and

(b) a commitment to change what they are doing today based on a strong emotional conviction that by participating in electronic trading it will help them be more successful or productive than IF they chose not to participate.

Other options that exist for a supplier include:

A maybe - I'll consider this some other time but I won't commit to when

A No - I intend to do absolutely nothing now or in the foreseeable future

Any buying organisation that has made the commitment to electronic trading will want a supplier to say Yes but for that certain conditions need to exist for the supplier. What are those conditions? Click here for a refresh.

The point of this blog is that given the choices a supplier may exercise it is imperative that a buying organisation seeking the participation of their suppliers in their electronic trading initiative need to work through a supplier's own evaluation that would lead them to a yes, maybe or no decision.

If you need more information click here.

Supplier Enablement - new dog old tricks?

2006-08-02T08:47:00.000Z

There is a ramp on supplier enablement as more and more businesses engage suppliers in electronic trading - aka B2B eCommerce.

That ramp is as a result of buyers looking at their purchase to pay process and moving from paper based transactions to electronic transactions with suppliers. This impacts suppliers and they are also looking for ways to improve their sales operations. As I have written many times this all depends on

c o l l a b o r a t i o n.

In B2B eCommerce the growth is with XML not EDI. However, EDI has been established for a long time and is there anything that we have learned from EDI that could benefit XML?

I was reading an article published by Line56.com that talked to EDI and some of the things that have been done by participants (buyers and suppliers) to ensure that:

i) the process is robust (a function of testing) and
ii) that when someone screws up or does not play by the rules then they get fined

In the case of i) someone has to bear the cost of testing and that usually falls to the supplier, that is, the customer does NOT pay even though it is their trading initiative that the supplier is complying with.

In the case of ii) again the supplier pays if their 'bad' transactions impact their customer as the customer looks to both recover their costs of dealing with a 'baddie' (I figure this is notional) and punish the supplier with a fine to say 'fix it'.

In a closed community of a customer and their suppliers the customer can be an enforcer and that is the world of EDI.

In an open commmunity where their are buyers and suppliers and each has numerous relationships then there is no role for an enforcer. I say that because in an open community you choose to participate rather than in the example above where you are compelled to participate.

Testing will always be important in closed and open communities. Who pays will be an ongoing debate.

The notion of fines is not going to work in an open community.

So, new dog old tricks? You make up your own mind.

Click here to read the Line56.com article

Click here for more on supplier enablement.

IOS – Integration of Suppliers

2006-08-01T08:48:00.000Z

When you think about your suppliers today do you think of them in terms of being “integrated” into your business?

In some industries it is true that suppliers are integrated into the supply chain otherwise Just In Time replenishment of inventory would not be possible. The integration of suppliers in this case has the impact of reducing inventory that is carried with the benefit of reducing working capital requirements of the business. Big benefit!

But for the majority they might think of integration in other terms, for example:

We have agreed preferred pricing

We have a Service Level Agreement (SLA)

We have preferred suppliers

We have been doing business with them for years and years

How would you allocate a benefit in this case? There is always someone who is prepared to deal on price or negotiate a better SLA to earn your business.

What is the cost of your doing business with a supplier? In an earlier blog we know there are costs and some of those costs are unnecessary as a result of the inefficiencies that exist in the “doing business”. We accept the world is not perfect but how many examples can you think of where you know well that the methods you use to conduct your business with suppliers is wasteful of time and resources?

With IOS you seek to take out those inefficiencies and the associated cost for you and your suppliers.

Where are these inefficiencies?

Many are looking at their purchase to pay (P2P) cycle.

In your suppliers’ business that is the order to cash (O2C) cycle.

Here you would look for IOS to optimize your P2P cycle where this also had benefits to a supplier's O2C cycle.

It has to be a win – win.

Click here for more information about IOS.

Supplier Enablement – $200Bn at stake

2006-07-31T06:37:00.000Z

The idea of creative destruction was introduced by the economist Joseph Schumpeter describing the process of industrial transformation that accompanies innovation. That innovation looks to destroy that which is outdated and inefficent and renew with that which is updated (often enabled by technology) and efficient by comparison. I like this as a statement of what supplier enablement is all about.

Yesterday in this blog I referred to a report by a top academic on the impact of electronic business initiatives in the supply chain. The full 9 yards is available in a report for the Society for Information Management (SIM) and published on their web site.

In the SIM report it puts a value on the inadequacies of current supply chain methods of the automotive and electronics industries. Now, these are two industries that are acknowledged as being very progressive in terms of supply chain automation so they represent the best examples.

It is claimed that these inadequacies represent about 1.2% of the value of shipments in each industry. These are mega industries and that is a lot of money, the estimate is $5Bn for automotive and $3.9Bn for electronics.

In some industries the inadequacies will represent much more than 1.2%, perhaps 5% or even more. Someone is paying for that – the consumer.

When I write about supplier enablement I note that the business driver (profit driver) is the reduction of costs incurred by buyers and suppliers in the course of their trading.

The two industries above have an estimated $8.9Bn in added and unnecessary costs as a result of supply chain inadequacies. Let’s speculate what that value might be for the global economy. $100Bn? Perhaps $200Bn? It is a really big number anyway.

You want to pay a smaller price for your electronics and automobiles? Don’t we all.

It certainly appears there is scope for that and for these companies to achieve a handsome profit from improving the supply chain so let creative destruction do its work on that supply chain.

Now global business has already spotted the opportunity and is doing its job so this is work in progress and is starting to permeate the whole supply chain from top to bottom.

Make sure you don’t get left behind!

Need some help? Click here

Supplier Enablement – Top Academic gives verdict

2006-07-28T12:18:00.000Z

I’ve mentioned in other blogs that getting suppliers involved in your electronic business initiatives is not always as straightforward as you might hope.

Well, now a top academic has piled in with some help.

They report: “Despite the amazing technical advances of recent years, and all the talk about agility and real-time information, the information systems that link customer to supplier remain woefully limited.”

Ouch! - I hear you say, I didn’t want to hear that cos’ that spells trouble.

Is there any good news from this academic?

Well, they go on to say: “Successful partner integration largely depends on understanding both industry trends and your company's business relationships.”

That’s a comfort?

And does this academic have the answer?

They sure do.

Here it is: “How can I help you to help me?'"

Did I hear you shout eureka?

Click here for the full article

Click here if YOU NEED HELP with: “How can I help you to help me?'"

Big company want e-Invoicing - little company say ooh!

2006-07-28T08:20:00.000Z

I have written in the past about the dilemma for the SME who is challenged by big companies (their customers) to respond to initiatives like e-Invoicing.

There is an interesting article published by Channel Insider that talks about this, here is an excerpt: "The problem is that none of this works very well in the SMB (American speak for SME) space. IT investment activity among smaller companies is almost completely driven by the "need/solution" mindset - i.e. the customer is generally looking for safe, hassle-free and cost-effective offerings that address immediate problems and opportunities. There are exceptions, but typically smaller businesses don't have the time, resources, breadth of skills or inclination to get involved in the same speculative or exploratory activities as their larger cousins". Click here for the full article.

As I have commented before in a recent blog, SMEs are not all the same, they have differing attitudes and appetites for innovation, progress and risk.

The article I have referred to contrasts the reality of big versus small business attitudes to exploring the use of new technologies. Big "can and do", small "might like to but don't".

The UK public sector has taken a different approach and for example the Zanzibar marketplace that serves the UK public sector provides for suppliers' participation in their purchase to pay initiative at NO COST TO THE SUPPLIER and meets the requirements of "safe and hassle free and totally cost-effective". That is progressive thinking on the part of the public sector! Click here for more about Zanzibar.

Click here if you are a SME

Click here if you are a buyer looking to implement e-Invoicing

XML 101 - Help for Business Managers

2006-07-27T11:36:00.000Z

Interestingly searching XML on google turned up a number of results that talked about SOA and Web Services 2.

Me thinks – that’s not very interesting to the majority of business managers?

This blog originated from a conversation with a supplier that rejected EDI yet knew something about XML. The trouble was, something, as in not very much.

XML 101 – something worth knowing if you are not a computer whizz but need to stay on top of your game.

XML is for all sizes of business.

XML allows you to exchange documents with others; your customers, your suppliers. These are electronic documents.

What is an electronic document? It is not paper although electronic documents can always be printed in a human readable form. Electronic means that it has been constructed in such a way that it can be sent from one computer to another and the receiving computer can interpret the information in the received document and process that. The construction of the document uses XML.

How does that help? It saves having to intercept the inbound document, route it to a department or person so the information in the received document can be translated into instructions that people can act upon or input to a computer.

Many question why the received document that is nearly always computer generated has to be received as a paper document and the information re-entered into a computer? It doesn’t and that is the whole point of using electronic documents that can be used to pass information from one computer to another even if those computer systems are different.

That is the power of XML to resolve the differences between IT systems that are used around the world yet still allow them to pass information for processing.

What are these documents? Mostly Purchase Orders and Invoices although other documents types such as Advanced Shipping Notices, Credit Notes, and Debit Notes are supported. This is a fast developing area and the UK Government has specified 14 different document types that will be supported as XML documents.

Why all the interest in XML? There are costs associated with purchasing goods and services as you request quotations from suppliers, process orders and invoices for payment.

Since the activity of buying the things you need for your business is indispensable, many organizations are now looking at their costs to raise a purchase order, to process an invoice, and, alarmed at the scale of these costs are determined to find a better and lower cost alternative.

Solutions include increased use of automation and the use of the Internet to send and receive documents in preference to postal mail.

So XML is mainly to do with buying and selling? No, type XML in your Microsoft WORD help bar. There are many potential uses for XML but I am writing about how it used business to business between buyers and suppliers.

Do I need to do anything about XML? No, it is a technology and this blog is about debunking the techno speak for business managers.

Think about the transactions that you have with customers and suppliers and the business process and documents that support those transactions. Do you know the cost to process an order, process an invoice, to develop, publish and distribute a printed catalogue?

This is where others start out when looking at the business case “to change how things get done around here for the better”. That can be sparked by an increase in business, competitive pressures, a squeeze on margins, a new CFO, there all sorts of reasons.

I'm a business manager, what are the benefits? Let’s suppose you save £1.00 on the processing of an order and invoice and that you processed 10,000 orders/invoices per annum. That is a saving of £10,000. How much do you have to sell to achieve £10,000 in gross profit? If you have a gross margin of 10% you have to sell £100,000. So, if you were looking at the profitability of your business would £10,000 incremental profit be attractive?

Basic stuff but in a low inflation economy with little scope to increase prices (unless you sell energy!) then you have to look at how you can take cost out of the business without doing harm to customer service or supplier relations. Just some thoughts so you can develop this further for yourself.

When I searched in google.com for XML the 1st result shown linked me to this web site http://www.w3.org/XML/

Have a look and send me a comment if my blog has helped you.

Click here if you are a buyer

Click here if you are a supplier

Suppliers do say NO!

2006-07-26T10:31:00.000Z

I am always looking for anecdotal proof to support things that I write about in this BLOG.

Recently I wrote about EDI and mentioned that few suppliers commit to use EDI even when the option is put to them by a supply chain partner.

Today I was at our web design agency and I engaged in a discussion about EDI and the person that I was talking to who was asked by their distributor to use EDI said; "it was just too expensive". That was reason number 1,2,3,4,5 etc.

It is not that suppliers aren't interested to improve supply chain logistics and actively participate in how that it is achieved BUT it has to be at an affordable price to include cost of acquistion and usage. For this supplier EDI failed that test.

This same supplier knew about XML but did not know how this is being used in the supply chain. Pause for thought. So here we have a supplier that has eliminated EDI, recognises the 3 letter acronym that is XML, but is not infomed as to how this could benefit the business.

So, a decision has been made to write a blog that is the 101 beginners guide to XML - business points of view only.

Can't wait for that ? click here

Need a refresh on the EDI - XML debate? click here

BLOG AD - IMPAQ

2006-07-25T12:44:00.000Z

Apologies for a bit of blatant commercial activity to test the utility of the search engines that trawl BLOGS.

I have noticed how old (by date) some of the postings are that show up in results lists from BLOG searches.

Why is that?

BLOG wisdom is that you must make regular positings otherwise you drift off the results pages of the major search engines.

Testing, testing, testing. IMPAQ, IMPAQ, IMPAQ.

Testing over.

Don't do as I do, do as I say! STOP IT!

2006-07-25T10:37:00.000Z

There is on old saying that is drilled into presenters; say it, say it again, and then say it one more time in case they didn't hear you.

So, here goes:

If you don't want paper documents from your suppliers STOP sending paper documents to them, I repeat

If you don't want paper documents from your suppliers STOP sending paper documents to them, I repeat once more

If you don't want paper documents from your suppliers STOP sending paper documents to them

Sending paper documents as an attachment to e-mail is PAPER SENT BY E-MAIL.

Sending paper documents as a fax is PAPER.

Sending paper by post is PAPER in an envelope.

Let your supplier have the choice to print your electronic documents if they need to but don't burden them with paper when you are trying to eliminate paper yourself.

Click here for more information on getting those electronic documents on the move.

What a Carry On

2006-07-21T13:00:00.000Z

It is getting bigger and bigger and I’m not kidding. This could be a line be out of a Carry On film but I’m referring to the growing number of suppliers that are being lured into electronic trading with their customers. It is as if 2006 is the year of supplier enablement.

If you are a supplier does this make you laugh like a Carry On film might or cry in your beer as you do when your horse falls at the first fence?

Is this a right ol’ caper or something that you simply must pay attention to?

My blog has been running for 3 months and I’ve looked for interesting news to comment on and highlighted research that helps to inform you about what others are thinking and doing.

You will find news about China, comments about EDI, real stories (OK I’ve had to protect the names) about buyers and suppliers that have implemented electronic trading and lots of research and surveys so that you can form your own opinion about ‘what’s going on’ out there in the market.

I also work in a business that is at the coal face working with suppliers to equip and support them to participate in electronic trading.

It is happening; last year’s trickle is during into a deluge.

In business, and this is particularly true of business leaders, it is their job to anticipate the future. Get it right and you are a hero with a fat bonus. Get it wrong and you are looking for a job.

I hope this blog is useful to you and please comment if I’m right or wrong to say that electronic trading is hot – my job might depend on it!

Click on Comments below now and let me know your thoughts.

Feel better - benchmark your performance

2006-07-20T08:52:00.000Z

Are you under the cosh to find a way to improve the visibility into your costs and supplier performance?

Don't worry. You are not alone according to a recent survey by Aberdeen Group. Feel better?

To read the abridged edition of Aberdeen Group's report; The Invoice Reconciliation and Payment Benchmark Report click here

Need some practical assistance with delivering cost savings? Click here for help.

China get on board

2006-07-20T08:20:00.000Z

China is in the news as a booming economy that is supporting growth in other economies due its demand for raw materials and need for logistics and for infrastructure to support its growth.

There is an interesting news item just published by Line 56.com about what China is doing to develop and improve it B2B capabilities.

For example, the news item quotes that the electronic exchange of business information is not as popular as using manual methods. In fact that is no different to western economies that continue to rely upon manual processes and enhance those by using tools such as fax and e-mail to speed up delivery.

It also quotes a very interesting statistic that supply chain and logistic costs represent 18.9% of China's GDP whereas in western countries that is 8 - 10%. Good to know the West in beating China in one area.

I see many reports in the business pages of newspapers about how we remain competitive against the low cost country producers like China.

Perhaps our investment to drive down costs in our supply chain and logisitics is one are where we are ahead and can keep ahead.

A good read, click here for the full report.

Are you looking to drive down costs in your supply chain and logisitics? Click here for more information on how to.

Supplier Enablement - get ahead of the game

2006-07-19T12:15:00.000Z

Are you a buying organization moving in the direction of eProcurement and in discussion with vendor(s) for your eProcurement solution?

Is supplier enablement on your agenda or that of your
vendor(s)?

It should be on yours as your suppliers are going to be impacted by your introduction of eProcurement.

Perhaps you will require your suppliers to publish electronic catalogues and for them to classify their products using UNSPSC, click here for help with UNSPSC.

You may want your suppliers to submit electronic invoices to reduce your invoice processing costs.

None of this is going to be possible unless you are thinking about the implications for your suppliers and how they will meet your particular requirements.

For this reason you should consider what your supplier enablement strategy is as a core component of your eProcurement planning.

For more information click here

EDI or XML? Take the test

2006-07-18T08:02:00.000Z

If you have experience with supplier enablement then you will know it is a bumpy road.

Why is that? Money, People, Technology, Relationships are all in the mix and there is 'change' and it is not that we don't accept change it is just that change forces decisions.

One of those decisions would be about technology.

Consider that your customer wants to commence electronic trading with you and all paper documents that are currently sent to and fro are to replaced by electronic documents. That spells change and has big implications on how you support this change and in particular impacts technology (IT systems) that you use.

One of the things that we know about supplier enablement is that you should consider every way to minimise change for your suppliers at the outset and provide options to grow as they absorb the change and become confident and proficient with electronic trading. The reason is the more change and disruption that is imposed on your suppliers at the outset will result in delays and a lack of progress that is highly frustrating.

Minimise change

If your objective is to minimise change would you look to XML or EDI?

I say XML as this can be implemented without the neccesity for end to end testing of IT systems.

Click here to read an article published in Line 56 about EDI Transaction Testing and ask yourself - am I ready for this?

If the answer is NO then consider the alternative - XML.

Your customer wants to send you an electronic (XML) order and request you return an electronic (XML) invoice. You have no experience of XML. Your IT systems work just fine and you have no desire to make any changes at this time.

If you could meet this request without making any new investment in hardware or software or any changes whatsoever to your IT systems would you consider that?

If the answer is YES click here

XML and EDI; or is that XML bye bye EDI?

2006-07-17T07:57:00.000Z

EDI came first of that there is no dispute.

With the availability and increasing use of XML, is EDI threatened with obsolescence? NO.

Are businesses that use EDI also using XML. YES.

Are there businesses using EDI that plan to extend the use of EDI to all suppliers? Maybe (because we don't know), but doubtful. Let's assume NO.

So, we can be pretty certain the EDI and XML will co-exist. YES.

Also that XML will become dominant, as while EDI is well established it is not widespread in its use? This will provoke debate but XML is going to win out as the preferred way for most business (large and small) to exchange messages and documents electronically.

Consider that 99.3% of UK businesses employ less than 50 persons; how many do you suppose use EDI? We don't actually know the answer to that question because there is no data but it is fair to assume that it is a tiny tiny percentage and they will be mainly suppliers to major companies that have mandated the use of EDI such as major retailers and automotive industry.

The real growth will be XML as these businesses are introduced to electronic trading and the need to exchange electronic documents with their customers and suppliers.

Why XML not EDI?

The cost to implement XML is much smaller than the cost to implement EDI and this matters, particularly to the SME.

There are more businesses that can or will support XML than there are those that will support EDI and that we know from current projects that promote only the use of XML.

There is a telephone argument; if I buy this telephone how many people can I talk to? Only those people that have the same telephone as you - EDI. Everyone who has a telephone - XML. The choice is yours. This is a simplistic argument but also true.

In summary:

EDI is here to stay where it is already established.

Use of XML is growing rapidly.

The post, fax and use of e-mail to communicate messages and documents goes on but in many businesses is coming under review for eProcurement, eInvoicing and for the automation of Purchase to Pay.

The business issues that drive the debate:

COST, as businesses look for ways to reduce both the invoice price for bought goods and services and the cost to the business for 'procurement'.

COMPLIANCE, the new word casting a shadow over business and in our context it means tighter controls over what we spend and whom we spend it with.

CONTROLS, as a quick look at the non-pay expenditure of an organisation or the cost of goods in a P&L will reveal the extent of money spent with suppliers. All that has to be accounted for and in pursuit of saving money (reducing costs) so more controls are being implemented.

For more information on these issues click here

SaaS - Microsoft announcement

2006-07-14T14:48:00.000Z

There is a flush of news about Software as a Service (SaaS) with Microsoft most recently announcing the availability of hosted CRM, click here for that story.

What characteristics does a hosted service need to have to be SaaS?

It is hosted. There is no specific hardware and software that need to be installed 'on premises'. The service is accessed from a PC with browser and connection to the Internet - that's all!

It is multi-tenanted. If it weren't then each customer would require their own system, that does not scale well and negatively impacts the economics of the service.

It has low start up costs. If you don't have to acquire hardware and software and you can use PCs that are already connected to the Internet then you can get going fast and at a low cost. This is particularly interesting to SMEs who do not have the capital budgets to invest in IT or the resources to build and support numerous applications 'on premises'.

While Microsoft will deliver CRM as SaaS during 2007, IMPAQ have a working SaaS built with Microsoft.NET and SQL Server 2005.

The IMPAQ Supplier Portal serves organisations of all sizes both in the public and private sector that need to exchange electronic business documents, such as Supplier Catalogs, Purchase Orders, Invoices and others.

The Supplier Portal makes collaboration easy between buyers and suppliers irrespective of whether they are high or low tech IT users as all they require is a PC connected to the Internet.

Like the idea? Click here for more information.

Paper Invoices returned unpaid

2006-07-13T15:05:00.000Z

According to an article in eGov Monitor 10th July 2006, in Denmark the public sector no longer accept paper invoices from suppliers - there are returned unpaid to the supplier.

Why is that?

The savings available to the Danish public sector are €120 - 150m per year - an impressive sum.

To read the article click here

Need a solution to your own eInvoicing needs? Click here

Electronic Invoicing made easy

2006-07-12T10:01:00.000Z

Help your suppliers to deliver electronic invoices to you.

If your supplier could create an electronic invoice in 5 seconds with NO new investment in technology and minimal training would that be an assistance to you and them?

If the answer is NO, sorry to have wasted your time.

If the answer is YES, here are the steps to follow:

1. Send and electronic order to your supplier. This order will be an XML document and it does not matter what XML standard you use.
2. Your supplier receives your electronic order as a document they can action just as if it had been received by e-mail, fax or post. So, no change for your suppliers.
3. The electronic order is stored in a secure area only accessible by your supplier so they can refer to it when they need to create an electronic invoice.
4. Supplier fulfills the order and now needs to create an invoice. They refer back to the stored electronic order and with "one click" create an electronic invoice and press SEND.

Job done!

This routine task is made easy where the buyer provides their suppliers and electronic order and this document is used to create the electronic invoice.

You get what you give!

Click here to learn more about how easy it is to start electronic invoicing.

Electronic Invoices - suppliers' point of view

2006-07-12T09:48:00.000Z

We have lots of conversations with businesses that want their suppliers to send electronic invoices to them and we understand why this is a valid request. But what is their suppliers’ point of view?

Let’s examine the issues that arise for suppliers:

1. They are set up to process paper documents inbound to and outbound from their business using post, fax and e-mail. The associated costs have no particular visibility because of the reliance on these methods to serve all customers.
2. Less than 5% are equipped to process electronic documents, specifically XML.
3. SMEs in particular find it a challenge to know how to respond to a customer’s request for eInvoicing particularly so as each customer has their own unique requirements. These costs have high visibility in the business as they are attributed to serving individual customers.

How do you eliminate paper invoices and replace with electronic invoices?

First, consider that if you want electronic documents (invoices) FROM your suppliers shouldn’t you provide electronic documents (orders) TO your suppliers? This can help your suppliers prepare the electronic invoices that you require - click here to find out why that is.

Second, consider what capability your suppliers need to receive and send your electronic documents? Do they have the capability, if not, who can provide it?

Click here for more information on "make it easy" for buyers and suppliers to move to electronic invoices.

Portals offer rapid ROI

2006-06-29T12:37:00.000Z

Pulled from a recent feature on Line56.com it revealed positive feedback for Portals as a tool for collaboration to solve business problems. It quotes:

Return on investment: Portal-based composite applications that are designed to solve specific business problems can deliver rapid return on investment (ROI)--54 percent of customers surveyed report that initial deployments took fewer than six months. Customers cite benefits such as revenue growth, call center productivity improvements, stronger supplier partnerships, and increased customer retention and loyalty.

Click here to read the feature on Line56.com in full

Need a Supplier Portal to deliver stronger supplier partnerships? Click here to get started.

Supplier Enablement – OPT IN or OPT OUT?

2006-06-27T13:11:00.000Z

I was explaining to a customer some of the things that matter to a supplier when confronted with the decision to commit to trading electronically with a customer.

Usually the request (sometimes demand) comes from the customer and the expectation is that the supplier is gonna say; “Yes, I’ll do it”.

I was explaining that you need to have the view that some suppliers will OPT IN and some will OPT OUT. It is perfectly alright if the supplier chooses to Opt Out. Gulp!

Surprise, the suggestion that a supplier would Opt Out just hadn’t occurred to the customer. Accept it!

You have got to accept a supplier has a choice.

Here is a really useful piece of help if you have the task of taking a P2P, eProcurement or eInvoicing initiative to your supplier base:

The lesson that IMPAQ has learned is; supplier enablement results in suppliers electing to either to ‘opt in’ or ‘opt out’, getting to that point as quickly as possible is your primary objective.

Qualify your supplier early

Your purpose is to know if a supplier is going to work with you. By offering a choice – Opt In or Opt Out - you have a call to action on the supplier.
I need you by dd/mm to confirm your ‘opt in’ or ‘opt out’.

Focus resources on Opt In

Then you can focus time and attention on those that want to participate rather than wasting time with those that can’t or won’t give you a decision.
Click here if you need some help?

English Local Authorities – eProcurement and their suppliers

2006-06-27T12:54:00.000Z

The UK Public sector is making great strides in the use of eProcurement and here is an interesting report (April 2006) based on a survey commissioned by NePP.

NePP is the National eProcurement Project.

Local Authority expenditure has an estimated outturn for expenditure on goods and service of £29,412,000,000 in 2005/6. Click here for source of this information.

If you are a supplier to local authorities it will inform you how, at a regional geographical level, local authorities are performing against the National Procurement Strategy.

Click here to access the report

The other reason you may, if you are a supplier, need to read this report (it is only 10 pages) is to understand how buyers are conducting their supplier analysis.

For example, one of the questions they ask is; Have you put in place any strategies to limit over-dependency among your SME suppliers?

Need some help to make sense of all this? Click here

BASDA Members receive briefing on Zanzibar

2006-06-19T09:26:00.000Z

IMPAQ hosted a meeting of BASDA members on Friday 16th June to present information about the Zanzibar Marketplace for the UK Public Sector.

The audience was primarily interested in the commercial opportunities for their businesses resulting from the availability of Zanzibar.

IMPAQ explained how BASDA members could generate license fee, services and maintenance revenues. For more information follow this link to contact IMPAQ.

There was also a lively debate about the choice of XML standards for Zanzibar that has resulted in the implementation of cXML and the future implications of an on-going review for an Internationally Recognised Standard to include consideration of the Oasis UBL initiative.

For information about BASDA click here

For information about Zanzibar click here

What are you looking for?

2006-06-13T14:24:00.000Z

I have just been alerted to a really useful web site that helps you to know those phrases and keywords that your prospective customers use in search engines that drive traffic to your web site.

I used it and searched on the phrases "supplier adoption" and "supplier enablement".

It appears that there are more than 16 x more pages listed in google with the phrase supplier adoption than supplier enablement.

However, more people are searching on "supplier enablement".

So my claim that supplier enablement is in its ascendancy is now proven.

Follow this link NicheBOT and test your own phrases and keywords.

IMPAQ all you need to know about supplier enablement in one place.

Supplier Enablement - tipping point

2006-06-12T09:12:00.000Z

There is growing evidence, some of it is available in previous posts in this supplier enablement blog, that we have reached a tipping point where we are all done talking about this and are now getting on with it!

I guess the dynamic now is; who is gonna pay as supplier enablement becomes a must do?

There are two camps:

Those that maintain the supplier must pay - because their business model dictates that. That business model usually being the dictate of a provider to a buyer that is offering to deliver supplier connectivity. This is a valid business model particularly for those buyers that have purchasing power and are prepared to mandate suppliers to comply with their trading initiatives.
Those that maintain the buyer will pay because it reduces the commitment the buyer would otherwise have to make to secure the participation of their suppliers. The approach being; without our suppliers' participation we don't get the full benefits and ROI on our investment. The incremental cost to us is not so high and we can always negotiate a cost recovery later when we have suppliers connected and they see the benefits in their business. We just get to where we need to be alot quicker than if we put the onus on our suppliers.

The economics for those that pay are:

The supplier pays a per transaction fee or a fixed fee per annum. In an ideal world the supplier would get to choose and that may be particularly important where there are a small number of low value transactions between a supplier and a customer.

The buyer accepts a cost to the business to support all their suppliers irrespective of the number of suppliers, the volume or value of transactions.

How is ROI computed?

Where a supplier pays they simply look at the impact on their gross margin for their costs and make an assessment as to whether that is affordable. That has to be tempered with a commercial assessment of the impact of not 'participating', as in; will I jeopardise my existing and future business with my customer?

For a buyer that is involved in a major investment and change program to roll-out electronic trading with suppliers there are a number of factors that need to be considered and perhaps the biggest of those is a risk assessement of the impact of suppliers choosing not to participate?

How many buyers do this?

The assumption is that suppliers will comply and if not we will bully them. That may work for some but not for all.

Does it matter any more as I have suggested we are at a tipping point?

It will be interesting to see which of the two 'pay' models becomes prevalant.

www.impaq.co.uk for more insight on how to deliver the participation of your suppliers.

Supplier Enablement – Software as a Service (SaaS)

2006-06-05T12:45:00.000Z

One of the things that bother SMEs is the cost and complexity of investing in IT and there is good reason to believe the SaaS may provide a solution.

Read more at FT.com

Our view at IMPAQ is that SaaS provides the way to deliver supplier enablement.

More at IMPAQ - delivering supplier enablement with SaaS.

Supplier Enablement - what have we learnt?

2006-06-01T07:57:00.000Z

It is no longer about eProcurement, it is now all about supplier enablement. Source: eProcurement vendor.

Reminds me of a sign in a female office manager’s office that read; Don’t tell me I’m efficient, tell me I’m beautiful.

The benefits of eProcurement are well understood for the buyer but there is now acceptance that the full benefits are only accessible with suppliers’ participation.

So, would it be the case that; eProcurement is efficient and supplier enablement is beautiful?

More wisdom at www.impaq.co.uk

Supplier Enablement - the best and the worst

2006-05-31T10:18:00.000Z

In my previous blog I discussed what the ‘best’ achieve for supplier enablement, follow http://supplierenablement.blogspot.com/2006/05/supplier-enablement-takes-how-long.html

So, what do the ‘worst’ achieve?

The evidence suggested that the ‘best’ achieve supplier enablement of a new supplier within 15 – 60 days.

I know of worst cases where supplier enablement has taken 200+ days. That is quite a disparity between the best and worst.

Why is there such a disparity?

Let’s look at two scenarios for supplier enablement:

Scenario 1. Supplier has to create an electronic catalogue and receive XML Purchase Orders. What does a supplier have to do?

Compile a product catalogue listing all products and prices. This should exist and an allocation of 1 working day is given to this task.

Classify the products using UNSPSC. This is optional and your buyer will normally indicate if they require you to use UNSPSC. Well, this could be a major task. I have experience of coding to item level 15,000 product line items and that took 8 working days. Allocation of time is either 0 or in the case I refer to 8 working days.

Publish the catalogue in the required format and send to the buyer. With the right tools this is a negligible allocation of time.

Wait for buyer to approve catalogue for use. Say, 2 working days.

Supplier has to prepare to receive XML Purchase Orders. Let’s assume they have no experience with XML so decide to use the IMPAQ Supplier Portal. This can be set up in a matter of minutes but we allocate 1 working day.

That is everything as far as meeting the meeting the requirement although it does not look at how the supplier use the XML Purchase Order to streamline how they process the order. Some activities can happen in parallel so the whole activity could be completed inside 4 working days ( 8 – 12 days elapsed) or where UNSPSC was required 12 working days ( 24 – 36 days elapsed). This is right up with the best case.

Scenario 2. Supplier has to create an electronic catalogue and receive XML Purchase Orders. In this case the supplier has eCommerce web site that supports punch-out. Let’s assume that is cXML punch-out. What does a supplier have to do?

Let’s assume the web site supports ring fencing so that the buyer sees only those products and prices that are applicable to them. That being the case let’s allocate 1 working day to confirm that.

Now the buyer needs to be able to reach the web site and go ‘shopping’ and retrieve the contents of the shopping basket so they can construct their requisitions/orders. We have assumed the use of cXML punch out to minimize compatibility issues but even so we have to test the process end to end so an allocation of 2 working days is proposed.

Supplier has to prepare to receive XML Purchase Orders. Let’s assume they have no experience with XML so decide to use the IMPAQ Supplier Portal. This can be set up in a matter of minutes but we allocate 1 working day.

On the face of it there are less steps for the supplier of an eCommerce web site to take to meet the requirement but there is a higher level of technical competence required. Even so, 4 working days is achievable, say 8 – 12 elapsed.

Why then has it taken some 200+ days?

In my earlier blog the best case was achieved by buyers that were well organized and I add to that motivated.

It is my experience that suppliers take a lead from buyers.

Buyers that are strong and take charge of supplier enablement get results.

Those that are disorganized and/or lack commitment do not succeed.

Get help from an organization that understands supplier enablement and be prepared to take advice that will help you succeed.

More at http://www.impaq.co.uk/

Supplier Enablement - takes how long?

2006-05-24T15:27:00.000Z

Should you have an expectation as to how long you will be engaged in supplier enablement?

A major new system installed as a replacement for a system going into retirement can take 12 - 18 months to bed in for a big business. Some of that time is ICT time, say 20% is connected with "technology" but the majority of time, 80%, is concerned with "changes" affecting people, organisation and processes.

It is likely, I suggest, that the resulting savings that are achieved are of similar proportions, technology contributing say 20% and "changes" 80%.

Supplier enablement is no different; the job is to work through the changes as they implicate your suppliers. If you have 400 suppliers that is a task that needs a program of work that will extend over many months as suppliers will have differing appetites for involvement. On the other hand if you have 10 suppliers (and you have significant (to them) value as a customer) you might expect to achieve that in a few weeks.

So my thought is that if people, organisation and process are the drivers of the change that deliver the big benefits then that has to be core to any supplier enablement planning.

To answer my earlier question; how long? Well, out of a conversation I heard, those that had been involved in supplier enablement for more than 1 year and who were well organised might take 15 days to on-board a supplier (on-board is a term used to describe the activation of a supplier).

For most that will be a real challenge to take a supplier from "hallo, we need you to trade electronically with us" to "and now you are" in 15 days is going some. If we were a little more relaxed and doubled that and doubled it again you would be at 60 days. So, how long is piece of string? It is between 15 and 60 days - or approximately two new moons for most.

More good stuff to help at www.impaq.co.uk

Supplier Enablement – to blog, or not to blog: that is the question

2006-05-23T07:23:00.000Z

As a blogger I am mindful that not everyone is connected with what’s happening in BLOG land.

I met a marketer in a hi-tech company last week that hadn’t even heard of blogging! So, is anyone bothered about my blogs? In keeping with many other blogs I have no comments but I’m not bothered. When I visit blogs I’m there to ‘gather’ information and have little interest to leave comments. So I was interested to read a comment by the renowned Butler Group suggesting I might be wasting my time blogging and that it is a drain on my productivity.

If you want to read the article follow this link

Supplier Enablement – just catalogues?

2006-05-18T09:39:00.000Z

Er, from some, YES, but in reality, NO.

Supplier Enablement as a list of ‘things to do’ comprises:

Content

Make available to the buyer as a catalogue or from a supplier’s web site.

Actually this is not hard ‘to do’ but it does require a commitment by buyers and suppliers to maintain that content so that it is up to-date. That, I’m told, is where there is pain for users of catalogues although it is not so much of an issue for suppliers that direct buyers to a web site.

Communication

Buyers and suppliers need to communicate. Right now the majority of communication is via phone, fax and e-mail. This is fine as everyone has these. While it may be the case that these are retained for supplier enablement they don’t really belong as part of the transformation to electronic trading.

What is required with the transformation? The requirement is for buyers and suppliers to exchange XML documents. Is that easy? For the majority the answer is NO. That is why fax and e-mail are used.

Is there an easy way? Yes, follow www.impaq.co.uk to learn more.

Anything else?

Yes. Just as the buyer has implemented systems to assist their internal customers to requisition and order goods and services so they can get a benefit so too are suppliers looking for similar benefits. To achieve this suppliers need to be able to use XML documents as a ‘feed’ to systems that they use to process customer orders and deliver customer service.

Is that all?

No. This is not just about how we use technology there is a need to execute a communications program, usually driven by the buyer, to inform suppliers about why these should participate in electronic trading.

For more information look at Supplier Enablement: Supplier Enablement - collaborate for profit

Supplier Enablement - the dreaded business case

2006-05-17T11:19:00.000Z

There are many variables that can included or excluded in the calculation of what cost savings are achievable from automation of a Purchase to Pay process where those savings are computed on the cost of processing an invoice. There is agreement that savings are achievable but is focus on unit (per invoice) cost savings the full picture?

Where are the potential cost savings to recover the investment?

An invoice clerk processes 9,000 invoices per year. Not my figure but a number I have quoted to me several times by those that know their AP departments. There is a cost for each clerk how will a move to automation change the workload of clerks?
Not all supplier invoices will be correct and that involves others in the query and resolution process. This time is unrecorded but has a cost to a business. How many invoices per year are put in 'query'?
Are discounted payment terms being taken full advantage of?
When things get messy with a supplier payment how much management time is consumed in intervention to mediate?
How much time is spent on handling supplier enquiries; 'when can I expect to be paid?'
When you receive invoices for which there is no Purchase Order or other reference, how long does that take to resolve?
If your suppliers were paid on time according to agreed settlement terms for clean invoices, what could you ask for in return from your supplier?

Just some ideas to build on.

More at www.impaq.co.uk

Supplier Enablement - you're gonna pay!

2006-05-16T13:56:00.000Z

Following on the theme of my BLOG of yesterday where I highligted the dilemma of who pays for supplier enablement, I had some thoughts following a conversation with buyer who said; " the supplier will always pay to do business with us whether we choose to use paper or use electronic".

If you can compel your suppliers to meet the costs of their participation in your use of technology for a Purchase to Pay process that changes the process you use to communicate with suppliers and send messages and documents then it becomes a supplier's decision to do business or walk away.

Of course one of the objectives of replacing paper with electronic communication is that you can improve both the speed and accessibility of information between buyer and suppliers.

Now, if in doing that you can expose e-invoicing then you start to co-operate on a new level. You eliminate paper but the real benefit is from exploitation of settlement discounts that reflect the appetite for capital of the buyer and seller. And you get this with fewer resources as productivity of AP departments increases with eInvoicing.

So who is gonna pay is where you start out but it is just the beginning of something more beautiful.

More information at www.impaq.co.uk

Supplier Enablement – Requisoft partner with IMPAQ

2006-05-15T08:39:00.000Z

IMPAQ presented at the Requisoft 2006 User Meeting in Birmingham on 12th May.

Buying goods and services is an indispensable activity so it ain’t going away!!!

This was an opportunity for IMPAQ to present some themes that are important to buyers and suppliers as they move to electronic trading.

What are the results of supplier enablement?

Collaboration – you won’t get the full benefits of electronic trading UNLESS your suppliers participate

Beginning of the end for paper - paper may not always be eliminated but it is always substantially reduced

Cost Reduction – the "prize" for buyers and suppliers

The meeting were presented the dilemma of who pays for supplier enablement; buyer or supplier, buyer and supplier?

Output from the meeting included a discussion about how supplier enablement can include small suppliers (single employee businesses) and the largest national suppliers.

For a copy of the presentation or to discuss click on View my complete profile under About Me and use the e-mail link.

For more information about supplier enablement follow www.impaq.co.uk

Thanks to Requisoft www.requisoft.com

Supplier Enablement – SME in Wales?

2006-05-11T08:13:00.000Z

If you are a SME, and it doesn’t have to be the case your place of business is Wales, then this report might help you benchmark how well you are doing against other SMEs in taking advantage of eCommerce.

You can read the report by following this link http://www.opportunitywales.co.uk/stateofthenationreport2005.pdf

Follow www.impaq.co.uk if you need more information about how to connect to your customers and suppliers.

Supplier Enablement – are all SME the same?

2006-05-10T11:48:00.000Z

SME represent 99.9% of all UK enterprises and not all of these are UK owned businesses, many are subsidiaries of foreign owned businesses. This distinction is made as some UK management teams may not have the final word on matters such as eCommerce that are decided by their Corporate HQ.

Thinking about the group that do have the final word on matters relating to eCommerce, is there any way to perform segmentation among this group as to their propensity to engage in eCommerce?

How do we normally perform segmentation? We group (e.g. all those in retail) then use size for comparison; number of employees, number of outlets, geographical presence, turnover, profit etc.

Are these useful? You might have a very successful business but with a management team that is unconvinced about the value of eCommerce to the business. So, minimal investment is made just to tick the box.

Is there any other way to perform segmentation? What if we understood some of the “soft” factors that influence how the business is run, attitudes toward customer service, innovation and so on?

What matters now is understanding what makes the business tick, such as:

- management style; we like to experiment vs. we don’t do that
- industry dynamics (regulated, unregulated, expanding, shrinking)?
- high volume – low margin, high margin – low volume business?
- is the business transaction simple or complex?
- are their intermediaries between you and the customer?
- is your customer’s supply chain highly automated?

I have experience of small companies with little understanding of eCommerce commit to trade electronically with their customers because it was important to their customer. Then again, large companies with very high competency in IT and eCommerce dilly dally over both the decision to commit and wrestle with the customer over eCommerce policy.

So it comes down to either a power struggle between buyer and supplier or simple economics (e.g. Supplier: I can’t afford to lose the business!).

For more information follow http://www.impaq.co.uk/

Supplier Enablement – why it matters to buyers

2006-05-09T08:22:00.000Z

Here is tale of a buying organization delivering on major changes as a result of implementing eProcurement. In an earlier blog I noted that there was an upheaval associated with eProcurement that resulted in many things that had gone unchanged coming under review for the first time in a long time.

In a review of eProcurement at eProcurement Scotl@nd, Tom Wilson states a reduction in the number of purchase to pay processes from 45 to 4.

Can you imagine, whereas before 45 processes were required there are now 4. This has contributed to a major reduction in administrative costs. More information at http://www.egovmonitor.com/node/5755

If you are a supplier to the UK public sector follow http://www.impaq.co.uk/suppliers/suppliers_public.shtml

Supplier Enablement – whose challenge?

2006-05-08T08:47:00.000Z

Two companies dominant ERP – SAP and Oracle. So is size any advantage in terms of managing supplier adoption? At the end of the day it is the end-customer that has the experience to tell.

Here is a quote found on the SAP web site at http://www.sap.com/uk/company/success/casestudies/anglianwater.epx

Supplier adoption, in its sort of generic sense has probably proved to be the most challenging aspect of our e-Procurement strategy.

That was a quote from a FTSE 250 company.

For more information with perspectives for both buyers and suppliers follow http://www.impaq.co.uk/

Supplier Enablement – don’t lose business!

2006-05-04T08:19:00.000Z

There is a debate and often dilemma among suppliers, particularly SME suppliers, about whether to start electronic trading with customers. Usually the electronic trading initiative comes from the customer and a supplier may not always understand the motives of the customer.

Here is great quote from a supplier; “If we hadn't made the move to electronic trading we would have lost business with the public sector."

The report from which this quote was extracted can be viewed at http://www.localegovnp.org/webfiles/EXPO%2006%20press%20releases/Newham.pdf

To have more insight on electronic trading with your customers follow http://www.impaq.co.uk/suppliers/index.shtml

Supplier Enablement – eInvoices – that didn’t hurt!

2006-05-03T08:48:00.000Z

It can be a shock for a supplier to be told by their customer that they need to stop sending paper invoices and start sending electronic invoices as XML documents.

What if you don’t have the systems to generate XML documents?

No problem, can your systems generate CSV (comma-separated value) files? Even if you don’t know the answer it will usually be YES.

CSV files can be converted to XML and there you have it – electronic invoices in the format required by your customers.

For more information see http://www.impaq.co.uk/products/products_supplier_portal.shtml

Don’t break the law. HMRC Information Notice 700/63 is essential reading if you intend to commence eInvoicing. In particular you should know that the following rule has the force of law: If you intend to begin invoicing electronically after 1 January 2004 then you must let HMRC know so within 30 days of beginning to do so.

Supplier Enablement – e-buying – come on!

2006-05-02T09:29:00.000Z

From a conversation the other day I was asked to comment about suppliers’ readiness for electronic trading to participate in a buyer’s paperless purchase to pay (P2P) process.

Many are ready but in the capacity of being a seller. It is obvious that the first thing any business is going to do to exploit the Internet is to focus on how they reach customers that deliver sales - e-selling.

When their customers want to trade electronically they need a supplier that is equipped for e-selling but also understands the needs of those that are e-buying.

For example, the buyer needs an electronic invoice from the seller. Few sellers can provide an electronic invoice or process a received electronic invoice. Those buyers that want a paperless P2P process need electronic invoices from their suppliers.

How many suppliers that are e-selling are also e-buying? Some but they are rare among SMEs. The first place for a SME is e-selling as that has a direct impact on sales and the success of a business. That does not necessarily equip them to be a supplier to those buyers that are introducing a paperless P2P process.

If you are a supplier and are interested in a buyer’s perspective follow http://www.impaq.co.uk/buyers/index.shtml

Supplier Enablement – SME suppliers at risk?

2006-04-28T10:02:00.000Z

Does the use of eProcurement by buyers put SME suppliers at risk? If you are a supplier you want the answer to be NO. The truth is probably YES.

It is not directly related to the use of eProcurement technologies rather the process that precedes the introduction of eProcurement that involves a buyer in a comprehensive review and detailed data analysis of spending.

This generally leads to a rationalization of suppliers and with that SMEs can be vulnerable. To what extent are they vulnerable? Obtaining data on this in the private sector is beyond difficult but the UK public sector is going to great lengths to understand the potential impact and minimize that for SMEs.

The London Borough of Newham has published some information on the impact to SMEs that count as their suppliers:

59% of the Council’s trade suppliers are SMEs

There has been a reduction of 9% in one year as a result of a shift to larger suppliers

The Council has a pro-active program of work to support SMEs and you can read more about that by following this link http://www.imaginist.co.uk/documents/e-ProcurementandSMEslidesforEXPO1.ppt

Supplier Enablement – SMEs need not worry

2006-04-27T08:03:00.000Z

My experience with buyers is that they are concerned about how their SME suppliers will respond to the invitation to start trading electronically with them.

As a SME there is no need to worry as all that is required of you as a supplier is three things that are really easy to achieve.

1. Create and publish an electronic catalogue. This provides your customers with all the information that they need to requisition and raise orders for your products and services.

2. To be able to receive an electronic order when transmitted as an XML document.

3. To be able to send to your customer an electronic invoice as an XML document.

These three things are the basics and all that is required for a SME to be a fully fledged electronic trading partner. How do you that?

Are you generating your own electricity or extracting the water you need from your own well? No, because service providers are set up to deliver these essential services to you.

In the same way the services that you need to be an electronic trading partner to your customers, no matter where they are in the world, can easily be provided.

Suppliers tell me they need a solution that helps them to meet their customers' requirements, a minimal start-up investment, low running costs and the ability to use the solution with multiple customers. If this sounds right then follow this link for more information http://www.impaq.co.uk/

Supplier Enablement – a neat solution from Belmin

2006-04-26T13:04:00.000Z

IMPAQ is working Belmin to deliver an innovative solution to supplier enablement.

How many orders sent by a buyer to a supplier result in the supplier having to raise a query with the buyer? The price is wrong, the product has been superseded, the product code and description vary or plain don’t exist etc. There are all manner of reasons why the supplier is unable to action the order and that results in delays for both the buyer and supplier.

The usual way to resolve such issues is for the supplier to call the buyer and agree any changes and results in several conversations and changes to documentation. Not great but it is how things get done. This is wasteful of time, an unwanted distraction for the buyer and in truth has a cost to both buyer and supplier.

Belmin has developed ARIES, that stands for Automated Reconciliation & Invoicing Efficiency Savings, and it is innovative in its approach to deliver a purchase to pay solution that ALSO deals with the real world situation I describe before. See http://www.belmin.com/belmin/aries.htm

To learn about how IMPAQ are working with Belmin go to http://www.belmin.com/belmin/impaq.htm

Blog - dates

2006-04-26T11:08:00.000Z

I've just learned a feature of blogger.com and that is that the date that is posted with a blog, the date you see at the bottom of each blog, is the date the blog was created rather than when it was published. This is a nuisance as I want to write my blog and reflect on it before publishing or sometimes I can't finish it and need to save it as a draft and return to it later. Does anyone know a way around this?

blogger.com suffers indigestion

2006-04-25T07:59:00.000Z

Sorry I was unable to post a blog yesterday 24/04/06 due to blogger.com javing a serious case of indigestion. The service is free and has become a huge success and I was warned that delays and non-availability have become a feature of this free service.

Supplier Adoption or Supplier Enablement?

2006-04-24T15:12:00.000Z

A quick search on Google using the terms above reveal both terms are commonplace.

Do they mean the same thing to buyers and suppliers?

Looking at it from a supplier’s perspective what matters to them?

I’ve been invited to start up electronic trading with my customers. I have the choice to accept or decline. To help me decide I need to know:-

Why have we been selected as a potential electronic trading partner?
What’s in it for me?
What are the implications for me?
What help/assistance we will receive?
What are the consequences if we don’t or can’t proceed?

A .pdf document with information for buyers is available to download at http://www.impaq.co.uk/images/supplier_portal_pdfs/supplier_enablement.pdf

IMPAQ has created its definitions for supplier adoption and supplier enablement at
http://www.impaq.co.uk/terms/index.shtml#supplier%20enablement

Supplier Enablement - Blog IDEA

2006-04-24T14:58:00.000Z

As a new blogger I am keen to learn about the essence of a blog. At a recent seminar hosted by BASDA at the Chartered Institute of Marketing it was presented that a blog incorporated:

Issues
Developments
Education
Applications

Tough call to get all those elements in every blog!

Equally there is the challenge to blog regularly, even if that is just a few lines.

Here is my Supplier Enablement IDEA blog

Issues

Depends whether you have a buyer or supplier view?

Here is a buyer quote from the Office of Government Commerce; ““Suppliers are particularly important because their participation, or lack of it, is the one of the biggest potential barriers to the entire eProcurement process”. The issue is self apparent; suppliers can make or break eProcurement.

I don’t have a supplier quote but I do have a collection of conversations that I can refer to. What’s in it for me? I hear this all the time. This tells me that buyers must understand what motivates their suppliers to collaborate for electronic trading. The issue is that buyers should invest time in thinking through how to “sell” to the supplier just as they “sold” the internal business case for eProcurement.

Developments

The age old question; who is going to pay for this?

The view was the supplier will, actually, must pay. Those that consider they have a dominant “buyer position” will mandate their suppliers to do as they say or lose their business.

There is a change afoot that has the buying organization meet the costs that would before fall to the supplier. Enlightened thinking or expediency?

This gets interesting where a supplier may have to meet the cost to trade with one customer because it has been mandated and yet have no costs for trading with another customer. Will this affect a supplier’s decision to commence electronic trading with a customer?

Education

One of the few mainstream analysts covering Supplier Enablement is Aberdeen Group who have just published there 2006 Supplier Enablement Survey, see
http://www.aberdeen.com/summary/report/benchmark/RA_SupplierEnablement_RS_2869.asp

Applications

Any buyer or supplier that wants to participate in electronic trading has to think in terms of how that is going to work and want level of collaboration is required of trading partners. Applications that require collaboration include:

Buying and selling of goods and services categorized as; eProcurement, Purchase to Pay (P2P) and electronic Invoicing (eInvoicing). This is applicable to both in-house and outsourced procurement.

Supply Chain/Logistics; in my language getting goods from supplier to buyer (customer) in the most cost-efficient way and on-time. This can be both in-house and outsourced to 3PL” (3rd Party Logistic) and “4PL” providers.

For an explanation of 4PL go to http://www.paconsulting.com/insights/supply_chain/4pl/

Job done!

Supplier Enablement and D-U-N-S®

2006-04-21T11:35:00.001Z

D&B® D-U-N-S® Number, a Data Universal Numbering System that simplifies the identification of buyer and supplier organizations conducting eCommerce.

IMPAQ is seeing an increasing use of D-U-N-S® Number by customers implementing P2P/eProcurement as there is a clear need for a common identifier for suppliers.

For example, suppliers invited to join the Zanzibar Marketplace are required to have a D-U-N-S®, see http://www.zanzibaronline.gov.uk/faq.htm#22

As a D-U-N-S® Number is free of charge to a supplier there is no reason for a supplier not to comply, indeed many will already have a D-U-N-S®.

From a supplier’s perspective the D-U-N-S® provides them a unique way to identify themselves to customers and suppliers and make it easy to conduct business.

IMPAQ support DUNS Numbers for supplier identification and suppliers can obtain these free at https://eupdate.dnb.com/

IMPAQ’s D-U-N-S® Number is 238078872.

Supplier Enablement - big company view

2006-04-20T08:43:00.000Z

One of my many sources of information that keep me tuned in to what is happeneing on the big world stage of commerce and business is Line56.com The E-Business Executive Daily at www.line56.com

I saw this story today about Wal Mart and how a big business responds to the economic reality of what's in their customers' pockets to spend in their stores. The story is at http://www.line56.com/articles/default.asp?articleID=7538&TopicID=1

And guess what, they will be looking to their suppliers to help Wal Mart manage their business more profitably as a consequence of the squeeze on their customers' pockets.

There is no moral rather it is just a fact of life that Supplier Enablement is at the top of the business agenda.

Supplier Enablement on the increase

2006-04-19T09:03:00.000Z

A recent report by the Aberdeen Group confirms that for Supplier Enablement it is a case of more rather than less……………………………..

Some headlines and my comments (in italics) from that report below.

Most enterprises have established supplier enablement programs – some big companies and the UK public sector do but most certainly do not have any established program and that is an obstacle to them and their suppliers.

More suppliers are enabled – it is true more are but SMEs in particular need solutions. In the UK SME’s represent 99.9% of all enterprises according to the Small Business Service, and executive agency of the DTI. There is a way to go yet!

Getting everyone with the program – standardizing a program for supplier enablement is highly desirable but needs to align with a corresponding commitment for execution by the buying organization.

Portals are on the rise – because it simplifies the connectivity for both buyers and suppliers – IMPAQ refer to this as having “one place” follow http://www.oneplace4business.com for further information.

But phone, fax and e-mail still dominate – re-use of existing business tools keep it cheap and minimizes disruption. These tools change nothing and as a result do nothing to address the agenda to REDUCE COSTS - it is the “stand still” option.

Click here for a B2B eCommerce business briefing for buyers and suppliers.

Click this link http://www.aberdeen.com/summary/report/benchmark/RA_SupplierEnablement_RS_2869.asp
to review Aberdeen Group's 2006 Supplier Enablement Survey

Supplier Enablement - collaborate for profit

2006-04-06T13:08:00.000Z

Why do we need paper?

We don’t, it is just that we are accustomed to the use of paper and the idea that it is “on file” although we can’t always find that piece of paper when it is urgently needed.

Consider this, in our personal lives we are accustomed to buying online, often major purchases such as vacations, where there is no paper as all transactions are electronically recorded and notified by e-mail or SMS. It seems we like the convenience of paperless transactions and this is no impediment to either you or your supplier; in fact, you choose to shop online because you get a better deal. Why is that? Your supplier is stripping cost out of their business by streamlining the transaction and, importantly, it is instant, which is the way we like it.

As we move from our personal into our working lives we see how cumbersome it is make purchases when we have to negotiate the system. It is not actually a system it is a reference to the people, the form filling and the protocol of getting through the required paperwork. Many stories have been told about how you go around the system because the delays are unacceptable and results in maverick buying.

So, if we don’t use paper what will we use? In business we will increasingly use electronic documents. The reasons are many and include saving time and money.

Now, the reality is that in business a buyer and supplier will need to agree they will use electronic documents. Buyers will send electronic purchase orders to suppliers who will reply with electronic shipping notices and invoices. No more need for paper.

As a supplier have your buyers requested that you provide electronic documents such as catalogues and invoices? They may have spoken about XML documents. How did you respond? Was your answer; I would if I could, if I knew how to.

This blog is for suppliers to exchange their stories and ask for help.

The postings on this site are my own and don’t necessarily represent IMPAQ’s positions, strategies or opinions.