“Error. Please contact our information technology department for assistance.”
Most businesses understand that this familiar online message will cause immediate, negative reactions from customers. However, they may not be as attuned to the potential harm a similar error message can cause when the recipient is a supplier. A negative supplier response can reduce efficiency and affect delivery and production schedules, ultimately damaging an essential relationship and the company’s bottom line.
Across a range of industries, corporate purchasing and supply chain managers are seeking new efficiencies and cost savings by implementing business process-management (BPM) software systems that enable suppliers to interact directly with the purchasers’ internal systems. As they do so, there are a number of policies and practices that can help minimize online problems and ensure success—building profitability for purchasers and suppliers.
A typical BPM software system replaces conventional purchasing processes with a paperless, interactive, online exchange of purchasing, delivery and payment information. Instead of a paper or e-mail exchange of purchase orders, order acknowledgments, delivery receipts, invoices and payment receipts, the system directly links the purchaser’s internal BPM system to the supplier’s system. It is task/workflow-based, automatically directing the purchaser and supplier through the purchasing process, ensuring that each step is followed in the proper order and providing documentation to both parties as each step is completed.
Benefits for purchasers…
At first glance, most of the benefits of an interactive BPM software system appear to accrue to the purchaser, who saves time and money by eliminating redundant data-entry work.
But in fact, such a system can create efficiencies that lead to providing better service to the purchaser’s customers by passing along cost savings and delivering the finished products or services more quickly.
In addition, an interactive BPM software system can provide transparency to the purchaser’s customers by enabling them to track purchasing progress throughout the supply chain—through multiple layers of suppliers in some cases. By eliminating re-entry of data, it also reduces or eliminates opportunities for errors and helps ensure order accuracy. And it can play a positive role in green initiatives by reducing the need for paper purchase orders, invoices and receipts.
… and for Suppliers
The benefits of an interactive BPM software system extend to suppliers as well. Because all information—purchase order, order receipt, pricing, delivery, etc.—is entered into the system only once, accuracy is enhanced substantially. These time-saving efficiencies make it easier for suppliers to meet the terms of demanding service level agreements.
Such a system automatically generates records to confirm the supplier has met all terms for delivery of products or services, minimizing or even eliminating misunderstandings that can strain a business relationship. And it can contribute to suppliers’ green initiatives, just as it does to purchasers.’
Potential stumbling blocks
However, the full benefits of an interactive BPM software system aren’t guaranteed. Successful implementation requires investments of a purchaser’s time, capital and talent. While the potential advantages are clear, this upfront and ongoing investment can be seen as a deterrent, especially in tight economic times.
There’s a danger, too, in viewing technology as a cure-all. In fact, as the all-too-common “error” message referenced earlier demonstrates, technology has its limits. Occasional glitches are inevitable and can sometimes harm business interactions and relationships.
Finally, interactive software systems, by their nature, tend to reduce opportunities for personal interactions between purchasers and suppliers. Those relationships are always important, regardless of the products or services involved, and purchasers must take care not to let automated systems inhibit these essential bonds between people and companies.