Your Supplier Engagement Plan -
Set yourself up for Success

“If you build it, they will come.” This may have worked for Kevin Costner in the movie Field of Dreams (more info on that reference here for those of you not born in the 1980s), but for all that, the network supplier engagement model provides the best possible foundation for digitization, it’s going to take more than a click of your fingers to get from 0-100% engagement across your supply chain.

Regardless of the value proposition you believe your project can offer to suppliers, your audience is diverse. And for all those that instantly see the light, others will remain cautious or skeptical. Converting this group is going to require a mix of clear communication, a clear value proposition, cross-organizational collaboration, a healthy dose of staying power, and some basic human psychology.

It’s important to remember, too, that when it comes to networks, definitions may vary. Some will promise you 100% e-invoicing from day one – and then just divert all your paper invoices to a scan & capture service. Mostly though, they will promise a global e-invoicing / AP Automation solution, but the project will stall after only a few countries (if it gets that far).

All of the most successful e-invoicing programs we’ve been involved in share some common characteristics: clear vision, effective communication across stakeholder groups (internal and external), and explicit backing from senior management.

Securing an executive sponsor for your project has a galvanizing effect in bringing together different stakeholders who will have a role to play in the success of the project. And from a supplier perspective, receiving a communication that includes a visible endorsement from your CFO or CEO shows just how seriously you’re taking this project.

Lean on internal stakeholders within your organization who have a particular influence over your suppliers. Anyone who has direct contact with suppliers should be able to reinforce the fact that e-invoicing is coming. And all your key stakeholders should also be well-versed in the benefits of enrolling in e-invoicing.

Procurement is typically a trusted point of communication for your suppliers. Given the closeness of this relationship, ensure your procurement team is engaged early and that they are involved in the evaluation of the project.

“Best practices for us have been built around leadership, particularly in the procurement team, for them to encourage, enable, and even enforce suppliers to use electronic means to contract with you.” Stephen Sutcliffe, Director of Finance and Accounting, NHS Shared Business Services.

Watch Stephen’s interview here:

Make your suppliers feel like they have skin in the game. Invite them to a virtual Town Hall to communicate the way forward, provide visibility, and answer questions. Understand any resistance they may have to change, as well as any technical challenges you’ll need to help them address.

Encourage feedback and be creative about how you make suppliers feel heard. Run polls across your supplier base (response rates will also help you get a sense of which suppliers will be most receptive to outreach later on). You may even consider giving certain suppliers a more active role in the vendor selection process.

It is not uncommon for a business to hold 20 or more different records that point to a particular company. Many more will be inaccurate, out of date, or spread across multiple disparate systems.

Quality supplier data is an essential component for success in digital transformation. Ensuring you have an accurate, single source of truth for all suppliers is also an essential first step when you’re looking to inform trading partners about a change to your processes.

Depending on the current state of your data it may well be necessary to conduct a level of manual cleanup. Focus on suppliers that you’ve done business with over the past year. If you haven’t already, then establish standardized data formats, naming conventions, and categorization rules. You’ll also want to assign some responsibility for keeping that information up to date over time.

The reality is that as long as your master data management remains manual and entirely your responsibility, problems are going to keep resurfacing. New suppliers will need to be onboarded, and existing ones will change their details. If your source of truth is spread across different systems with different formats and ownership, issues will amplify over time.

When you’re selecting your technology partner, ask them about their approach to cleansing and maintaining the master data for your supplier information.

We use a combination of automation and machine learning (AKA “artificial intelligence”) to help organizations clean existing datasets so that when that first communication goes out, it’s going to the right people.

And because the connection we establish between buyers and suppliers is 100% digital, onboarded suppliers can more easily take on the responsibility of managing their own information and ensuring their details remain up to date.

Financial institutions have saved billions by getting consumers to go paperless. They did this by presenting a clear value proposition to the audience they were trying to influence. Going digital would give customers a real-time view of their finances, help them address issues quicker, and open up a range of additional services to them at the touch of a button.

There’s an important lesson here: if you want to influence behaviors, then carrots are far more effective than sticks.

Understand what your suppliers really care about and frame any communication with them through that lens.

According to Ernie Martin, founder of Receivables Savvy, three things that matter most to suppliers are the ease with which they can send a document, the ability to understand where that document is in the process, and, most importantly, swifter payments. Before you send any communication out to suppliers, make sure those points are front and center.

If you’ve chosen a solution that’s free of supplier charges, then emphasize this fact to your suppliers: it’s a great incentive for onboarding.

Be open about any potential costs suppliers might incur if they need to reconfigure their systems. Likewise, if you choose a solution that charges a user fee for suppliers, ensure this is communicated. Be prepared for some pushback and be ready to provide a concrete business case that presents a straightforward cost-benefit analysis from the supplier’s perspective.

Ask your technology partner to provide detail of marketing and training initiatives they plan to run in order to engage your suppliers.

To maximize engagement, you should provide comprehensive training programs and resources to suppliers, highlighting the benefits of the new e-invoicing technology and addressing their concerns. Case studies, webinars, and training materials can help suppliers understand the value proposition and ease their apprehensions.

Some vendors take on more of this responsibility than others, and some will have specific guidance on the number of attempts they will make to engage a supplier before the responsibility falls back to you.

Integration challenges are frequently listed as the single biggest barrier to e-invoicing adoption by suppliers.

Conducting assessments or surveys to evaluate suppliers’ technological capabilities and readiness can help identify potential integration challenges early on. You’ll be much better placed to deliver targeted support and tailored solutions to suit the requirements.

Not every supplier will be at the same phase in their maturity. And despite the clear benefits of onboarding to a fully digital platform, some suppliers just won’t be ready to make a change. Rather than ignoring them from the process, why not meet them halfway?

Tradeshift’s EasyPDF solution allows suppliers to send a structured PDF out of their ERP system and use a connector to convert the data contained in the document into a digital format.

Is it cheating? A little, perhaps. But think of it this way. You’ll achieve your digitization objectives faster. At the same time, your supplier will start to get a feel of the benefits of using your chosen platform at a pace that suits them. We’ve found that most businesses that start off submitting documents to our platform in this way eventually make a full transition.

For suppliers that send invoices less frequently, the priority is to ensure that onboarding is quick, painless, and delivers an immediate result.

Networks like Tradeshift are designed to make set-up and connectivity as easy as any social media network. Tradeshift offers self-service portals where suppliers can easily register, provide their information, and manage their invoicing processes.

A tailored pre-onboarding page gives suppliers a range of rich, personalized insights and clear instructions on how to activate their accounts . Suppliers can get themselves set up to send fully digital invoices to any customer in just a few clicks.

Segmenting suppliers helps shape how to onboard suppliers from a technical perspective. For larger suppliers with a high volume of transactions, onboarding sometimes requires a more bespoke, white-glove approach.

Integration challenges can arise due to differences in data formats, protocols, or APIs between the buyer’s e-invoicing platform and the supplier’s systems. At the bare minimum, it’s critical to have plug-and-play integration for common ERPs and standardization of formats.

We also have a well-resourced team in place to provide dedicated engineering support, or help-desk services that can address any integration challenges and provide timely assistance.

Helping your suppliers answer the question of ‘what’s in it for me,’ showing them early value, and making it easy for them to transition is going to give you a great chance of success. But as with any project that involves change, some individuals need a bit more of a push.

To create a sense of urgency, you’ll need to set out clear deadlines for compliance, and potential consequences for failure to adhere to timelines, such as extended payment terms, or in extreme cases, refusal to pay invoices that are not submitted electronically.

Your initial messaging to suppliers should skew heavily towards the benefits of switching, but the tone of any subsequent communications should become more assertive over time.

Every communication that goes out to suppliers should be signed by your executive sponsor. For certain tier-one suppliers, you may want to get your executive sponsor to reach out to them directly.

If you’re not getting a response from the Accounts Receivable team at a supplier, then escalate the issue with the commercial team. If an Account Executive thinks he will lose business because of failed integration/onboarding with his customer, you tend to find ownership.

Regardless of how simple your supplier onboarding process is, there will always be multiple steps, requirements, and documentation that needs to be completed. Identifying a single point person to manage the tasks and progress of the onboarding experience can help to create accountability and streamline your process.

Cross-functional alignment with IT, Treasury, Procurement, and even with Business Requesters helps ensure everybody knows what message to communicate at what stage and how to handle objections and resistance at any given time.

Your technology partner should take on a lot of the responsibility for engaging and training suppliers but don’t be surprised if suppliers end up defaulting to you when they have a question. If your internal teams aren’t informed and ready, it’s far more likely that your engagement efforts will go to waste.

We like to think big at Tradeshift. So when our founders got together, they did so with a vision to connect every company in the world, creating economic opportunity for all.

Today, Tradeshift is home to over 2.5 million digitally connected businesses. Our rapid growth and success can be attributed to one straightforward promise: every business that joins our network shares in the value that arises from embracing a fully digital relationship with its partners.

For suppliers, connecting to Tradeshift means gaining free and instant access to powerful business tools, from analytics to financing.

For enterprises that want end-to-end connectivity between their people, their processes, and their partners, the Tradeshift network helps them achieve this by giving suppliers tools they actually want to use.

If you’ve got this far then you share our belief in the importance of creating a shared sense of value between you and your suppliers. That’s the first step on a journey that will transform your business and the relationships you hold across your entire supply chain.

Organizations like the NHS and DHL choose to digitize with Tradeshift because they know that suppliers see the value in what our platform offers.

Keep this top of mind as you follow the remaining steps we have outlined in our guide. Recognize that success will not happen overnight, so set milestones and celebrate each one you achieve. Above all, don’t be tempted to settle for half-measures.