Having up-to-date information on your suppliers has become more and more critical over the years. Complex supply strategies coupled with increased regulatory requirements have made organizations more dependent on suppliers.
This is no big secret and there is no shortage of solution providers trying to address this issue. There are both specialists, like Kodiak Hub, Graphite Connect, or HICX, and suite providers, like Coupa, Ivalua, GEP, or SAP, available to support the collection and maintenance of supplier data. In fact, the problem is not that there aren’t any supplier information management solutions. The problem is there are too many solutions. Suppliers are asked to enter and maintain their information in dozens of different solutions, all dictated by their customers (i.e., the buyers). This causes “portal fatigue” amongst suppliers that struggle with keeping track of login details and maintaining correct information in all solutions required.
No One Has Unlocked the Network Effect Yet
The theoretical approach is to take a many-to-many network approach where suppliers maintain their information in one place and share it as appropriate with their customers. While there are solutions that take this approach, the problem here is scale. After all, if you only have one customer using a solution, the many-to-many architecture and data sharing approach doesn’t matter, it might just as well be a portal.
A true supplier network with critical mass would unlock the network effect (like Facebook, Snapchat, or TikTok has done on the social network side) that could create a dominant player in this space. If all, or at least most, suppliers are using one network, it makes sense for a new buying organization to use that as well. This buyer will add suppliers that are not already part of the network, creating a snowball effect. But no one is even close to that yet.
How About a Supplier Focused Solution?
One of the issues is that procurement solution providers, for obvious reasons, are taking a buyer perspective on the problem. There seems to be an opportunity in the market for a “supplier information orchestration” solution that would integrate with the various SIM solutions and allow suppliers to maintain their information in one place. Where complexity exists is with information that is specific and proprietary to a single buyer-supplier relationship. But maybe this is more of a CRM extension than a procurement solution?
Gen AI to the Rescue?
A different approach could be to leverage GenAI to find and prepopulate supplier profiles. By combining GenAI with pulling data from existing third-party data providers, much of the work could be automated. It would largely minimize suppliers reviewing and correcting data, reducing the burden on them.
Easier on the P2P Side
There is a similar issue on the P2P side. However, the P2P data exchanged is more standardized (excluding management of catalogs). This is especially true on the e-invoicing side where a certain amount of network-to-network interoperability and integration exists. This means that a supplier using a single e-invoicing provider can continue using that solution because it integrates with the buyer’s e-invoicing solution. Also, accounts payable and ePayables solutions have become increasingly good at extracting data from PDFs, meaning all that is required by the supplier is to assure that the invoice is sent to the correct email address. However, more and more countries are requiring true e-invoices to be used as part of clearance models to ensure proper taxes are paid. But that’s a different topic.
In any case, I hope we start to see some more innovation that supports suppliers as they are an obvious, but somewhat overlooked, key factor in successful procurement technology deployments.
As always, Ardent Partners is here to answer any questions on the various solutions and approaches to supplier management.
RELATED RESEARCH
More Isn’t Necessarily Better When It Comes To Supplier Portals
Magnus Mondays — Graphite Connect: Supplier Management, Network Style
Tagged in: Accounts Payable, Chief Procurement Officer, CPO, ePayables, Magnus Bergfors, Magnus Mondays, P2P, Procurement, Supplier Information Management, Technology
