We’ve written before that supplier enablement is fundamental to a range of procurement initiatives, but absolutely core for eProcurement and electronic invoicing. All too often, this area was an afterthought in early P2P implementations, yet when organizations devote enough focus to it themselves — or work with a partner to do it on their behalf — successful supplier enablement and on-boarding programs can drive high levels of overall vendor adoption. As part of the on-boarding process, AP and procurement organizations are often focused on a handful of key fields to capture and maintain including supplier contact information, TIN numbers, banking details and VAT/tax requirements (especially in Europe). Increasingly, the supplier enablement step may also include additional data enrichment and risk checks (e.g., parent/child relationship, diversity status, financial stability) covering all, or a subset, of suppliers.
Organizations at the Basic or Foundational (Level 1) stage of maturity tend to target the proverbial “low-hanging” fruit for supplier adoption, if they engage in formal on-boarding programs at all. This may include targeting a subset of an overall supply base for inclusion based on overall vendor size, typical volume (dollar and absolute number of invoice) levels and related tiers or scoring mechanisms to prioritize certain vendor candidates for inclusion over others. Regardless, companies at Level 1 maturity for supplier enablement often face moderate to high supplier “fall-out” in the on-boarding process, with only a select number of suppliers actually becoming electronically enabled for invoicing as part of the process.
As companies climb to the Intermediate or Level 2 stage of maturity, we begin to see higher levels of strategic analysis going into the selection process for supplier inclusion and prioritization in such programs. At Level 2 maturity, companies also typically offer multiple engagement options for suppliers (e.g., portal, machine-to-machine, email) to synch with their electronic invoicing system. From a process-driven perspective during the on-boarding process, Level 2 organizations often take a more proactive approach in managing the enablement funnel rather than just accepting high fall-out rates.
For more on P2P, check out our latest free Compass research in the area: