We’re all part of a new, exciting digital world. The possibilities of digital technology are endless. My car tells me when it needs a service. My watch helps me stay healthy. But my supplier still prints out my invoice and mails it to me. Why are some suppliers reluctant to move to digital and what can we do to change it?
We talk about the amazing benefits of digital transformation—and they are undeniable—but there still seems to be a great deal of work to do to get the basics right. For example, research from OpenText™ and IDC found that 50% of information exchanged between business partners still travels by fax, email, or phone. Worse still, Billentus reports that more than 90% of all invoices worldwide are still processed manually.
For many years, the discussion around why smaller companies have been slow to adopt digital trading revolved around the cost and complexity of EDI systems, the argument being that the company had neither the budget nor the IT skills to embrace a new technology area.
While that may have been true 10-15 years ago, it isn’t today. Enterprises can offer small and medium companies a range of digital options—from web apps to plug-and-play EDI software—that really remove cost and complexity as issues.
I was trying to work out what else could deter small suppliers from moving to digital when I saw a very interesting piece of research from Australia that found 56% of small and medium companies see little to no value in digital tools. It turns out that almost half of small companies in the UK see digital technology as no more than ‘a necessary evil’ and over a quarter of small US companies admit to having done very little to adopt new digital technologies at all.
That got me thinking: today, your smaller suppliers need more than just the ability to trade digitally. They need access to digital tools that will fundamentally shape how their business operates and, of course, how they can be more profitable. And that got me thinking about a customer of OpenText.
Saving the energy of suppliers through process automation
As our customer expanded globally, its community of international suppliers grew and being able to work effectively with suppliers—wherever they were—became more important. The company had an EDI system with web portal for small suppliers, but it was outdated and couldn’t scale to meet business needs.
What makes this company different was its recognition that it didn’t want a straight replacement for its previous EDI and web portal solution. It wanted something that would also make life easier for its smaller suppliers. The company chose OpenText™ Active Orders.
With their small and medium-size suppliers using Active Orders, this company exchanges thousands of transactions each month, including original orders, changes, incoming goods received, deliveries, shipment notifications, invoices and acknowledgments. The company has configured its web interface so its non-digital suppliers can easily exchange documents, streamline their business processes, and comply with their trading requirements.
The company sees Active Orders as great option for suppliers that are not ready or able to implement traditional EDI. It’s more than EDI, however. Active Orders is designed as a Supply Chain process automation solution too—that’s why their suppliers love it.
Encouraging suppliers to trade digitally is no longer this company’s challenge. The company’s challenge now is how quickly it can allow its international suppliers to access the system.
Providing business functionality is key for suppliers
Some suppliers have seen digital trading as a means for buyers to impose their preferred trading practices on their supply chain. This has caused resistance. However, if you introduce suppliers to technology to enable supply chain automation that makes it easier to work with you and accelerates the payment process, then my experience is that they will be enthusiastic.
Advanced B2B solutions like Active Orders move beyond traditional EDI to deliver supply chain visibility and automation capabilities. This is great for you as you gain new levels of control and can begin to improve the performance across your global supply chains.
It’s also great for your suppliers because they have visibility across the transaction. They don’t want errors and delays in supplying products and services to you so they want to know that orders are accurate and can be quickly expedited. They want to know that the full procure-to-pay cycle is as effective as possible. Plus, it’s in their interest to engage with a system that lets them maximize their business opportunities by enabling discount schemes that both makes them an attractive partner to work with and speeds payments.
In truth, I don’t believe that small companies think digital tools are a ‘necessary evil’. If you provide a solution that brings clear, demonstrable business benefits to your trading partners, they’ll love you for it.
To find out more about how OpenText Active Orders can help connect your non-digital suppliers, please click on “Contact OpenText” in the column on the right and fill out the form.