Building a successful supplier network – a real-world case study
Blog: Capgemini CTO Blog
Digital purchasing and invoice networks are essential to any successful digital procurement program. They provide visibility to suppliers and customers, improve performance management and risk process efficiency, reduce source-to-pay cycle times, and improve working capital.
However, for digital purchasing and invoice networks to be successful, they need to continue to grow. While much of this growth should be organic, there needs to a continued focus on driving adoption. Organizations often approach the implementation of digital platforms and supplier portals such as Ariba, Coupa, and Tungsten with a “build it and they will come” approach – only to fail to see the value in the investments they have made after 2–3 years.
This blog tells the story of how Capgemini successfully implemented Taulia for a Consumer Products client, onboarding its people efficiently to ensure it operated effectively. It’s worth noting that the success of this story is due to the collaborative efforts of Capgemini and the clients’s accounts payables and procurement teams.
Cleaning up master data
The onboarding team comprised of people who already knew and understood the client’s and Capgemini’s processes, as well as members of the vendor’s technical team.
Capgemini managed the client’s accounts payable and part of the procurement processes, working closely with the vendors and client to ensure they had the necessary knowledge to successfully implement the supplier network. The team worked together to develop the solution – with the Capgemini team providing inputs on any relevant business processes.
One of the fundamental factors of this project was updating all vendor data. The Capgemini team conducted a clean up of the vendor’s master data processes to ensure all data was clear and active.
Change management requires careful planning
Change management implementation was divided into phases. First, the teams identified critical, non-critical, essential, and monopoly suppliers, preparing lists for each phase of the onboarding program.
Next, the Capgemini team took responsibility for communication, looping in experts to answer potential questions regarding supplier networks, and preparing standard documents and letter drafts. Providing reliable knowledge and communication was vital not only for the client, but also to convince vendors of the benefits implementation could bring. In Taulia’s case, for example, vendors are offered an early payment discount that motivates suppliers to adopt the platform.
Following the initial communication, vendors were given a transitional period to enrol and adopt Taulia. This was followed by a push to ensure vendors leveraged the platform effectively. For Taulia, one of the early challenges was reducing manual invoice uploading efforts for vendors. To resolve this, the teams worked to improve integration, while also reducing duplicate invoices caused by change or resubmission of certain invoices. While these were often caught by system controls, Capgemini implemented further improvements to identify issues at the point of submission and provide immediate feedback.
Once these challenges were addressed, the teams continued monitoring the process and adding new suppliers when appropriate. Currently, 80% of vendors leverage Taulia and 60% of transactions are processed with zero human interference – although some invoices need to be manually posted due to price or quantity discrepancy.
Five factors to build a successful supplier network
Establishing a supplier network is a long-term process. In the Taulia case above, the initial program took around two years to complete. Success was ensured through strong collaboration and partnership with the client and supplier from day one. Capgemini also leveraged a methodology that was customized to the client’s individual circumstances to successfully drive adoption.
Based on our experience of building digital invoicing and purchasing networks for multiple clients, there are five key factors that dictate program success:
- Leverage a clear network adoption strategy, including updating and communicating your supplier policies, and enforcing them consistently
- Design processes around the specific business requirements and challenges
- Clean vendor data with up-to-date contact details – categorized by supplier importance and transaction volume
- Implement a strong change management approach to address any potential resistance both internally and from your suppliers
- Adopt strong category management and finance governance that adapts to changing business requirements.
Onboarding your suppliers to digital purchasing and invoice networks alone won’t deliver the savings you expect. To be successful, supplier networks need to continue to grow, with continued focus on driving adoption and change management among your people and vendors.
Read Capgemini Invent’s Digital Procurement Research 2020–2021 , which contains some of the best practice learning’s from numerous projects and a comprehensive market overview of more than 30 procurement solution providers around the world.
Padmashri SR is responsible for driving frictionless service delivery and the establishment of industry best practices to realize benefits in terms of service excellence, better process controls, reduced cost of operations, enhanced revenues, and improved client satisfaction.