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Only supplier portals ensure efficient supplier management
Purchasing experts are faced with the challenge of a heavy administrative workload every day. Supplier portals offer a solution here: by simplifying workflows and processes and saving time. Communication and collaboration are also much easier for the company’s purchasing team and external suppliers through this type of portal.
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But for successful digital supplier management, we need to take a number of important success factors into consideration before introducing a supplier portal – from effective supplier onboarding and management to the integration of AI tools for data analysis.
What are supplier portals?
A supplier portal is a web application: a website that enables the mutual exchange of information between suppliers and purchasing departments in companies. The exchange of information between both parties takes place directly via the portal, remaining traceable and thus transparent.
What do supplier portals like this do?
Such portals and their self-service functions offer a promising approach for both in-house purchasing and external suppliers. Supplier portals support defined processes in purchasing, as well as the management of supplier and service requests and supplier master data. Just searching for current supplier data across different sources – such as ERP and CRM – takes a lot of time. This slows down reaction times and distracts from other, often more urgent tasks. The sheer volume of order confirmations, delivery bills and invoices can also quickly lead to a problem – especially if they still arrive on paper and by post. Purchasing departments often find themselves in a dense jungle of documents.
For strategic purchasing
In today’s business world, corporate purchasing is becoming increasingly strategic. While the focus used to mainly be on reducing costs, digital transformation is now becoming more and more important. According to the 2024 State of Procurement Report by Amazon Business, more than half of the respondents expect budgets to increase in the coming year. This is to be invested specifically in new technologies in order to further optimize procurement and purchasing processes, such as in supplier portals. Above all, however, greater use is to be made of the tools available in procurement for data analysis, automation and artificial intelligence (AI). But how can this smart digitalization be implemented in the purchase-to-pay (P2P) process in a concrete and holistic manner?
5 functions for supplier portals
The implementation of supplier portals is revolutionizing cooperation between purchasing and suppliers. The main objectives are as follows:
- Flexible and location-independent access by purchasing staff and suppliers to data from orders and supplier processes
- Supplier portals provide a complete overview of the status of invoices at all times
- Shorter processing times and fast responses to queries and interventions via the supplier portal in the purchase-to-pay process
- Accelerated cash flows for suppliers
In addition, supplier portals lead to significant cost savings in external communication with suppliers – by up to 90% in some cases. All communication functions smoothly and is always context-bound. However, when introducing such portals, there are a few crucial points to keep in mind to ensure that the subsequent collaboration really works out.
1. First contact: Supplier onboarding
Even the first contact with potential suppliers is made directly via the supplier portal with its impressively simple onboarding process. The plausibility and consistency of the supplier master data is checked as soon as it is entered in self-service. This prevents errors on the part of the supplier right from the start, resulting in high quality master data. It also eliminates tedious additional follow-up work for the purchasing department. Of course, appropriate form fields and questionnaires must be available in the portal for this type of supplier self-service. After all, suppliers not only have to store their own contact details, but also data on services, conditions and prices. An automatic plausibility check during input ensures that the data is seamlessly transferred from the supplier portal to the leading ERP system. It should also be possible to customize the profiles with minimal effort, such as to add suppliers as accounts payable or make general updates.
2. Automated requests for information (RFI)
As soon as suppliers have successfully registered in the supplier portal, a wide range of options for automating and optimizing downstream workflows opens up. Supplier portals not only enable actions like accepting deliveries and settling invoices in operational purchase-to-pay workflows, they also provide efficient features for finding and selecting suppliers. Over time, you will acquire a pool of suppliers who manage themselves in self-service. This supplier pool provides the purchasing team with the ideal basis for categorization, such as for designating A, B or C goods. Suppliers can then be specifically selected later and approached with requests for information (RFI). Suppliers also respond to these RFIs in self-service: Offers can be placed in a targeted manner and including all necessary information. In short: This allows you to compare and evaluate all supplier offers for a service request, greatly simplifying supplier management and improving efficiency.
3. Evaluate suppliers
In addition to the RFIs mentioned above, supplier evaluations also play a major role in strategic purchasing. The required data has already been collected via the supplier portal. Supplier performance can now be assessed quickly. This goes beyond quality management, reliable delivery of orders and the price-performance ratio of products. Aspects such as the capacity of suppliers to innovate, their ability to cope with volatile supply chains, their financial stability and their environmental footprint are also included. This gives strategic purchasing a holistic perspective when it comes to supplier evaluations. Companies can better understand their supplier relationships and select the partners that best fit the their long-term goals and values. Integrating the supplier portal with external evaluation platforms or benchmarking databases can also provide valuable insights and improve supplier evaluation even further.
Ratings are not a one-way street
The smooth exchange of data and documents with the purchasing company plays an important role for suppliers, too. Having a suitable portal solution has a positive impact on purchasing negotiations. This much is clear: suppliers will be more inclined to supply companies that provide a supplier portal. This gives them planning security and a complete overview of invoices issued and payments received.
4. The supplier portal as a knowledge center for purchasing
Supplier portals play a central role in the purchasing process in modern corporate landscapes. They are a central hub of knowledge that efficiently links supplier data and makes business processes for procurement faster and more effective. Ideally, the supplier portal should be combined with an archive. This ensures that employees from purchasing and other departments in the company have quick access. They can get answers to pressing questions about invoices or delivery bills and easily view e-mail correspondence. The workflows become much simpler. But it is only in combination with an archive that the supplier portal forms a bridge between the past, present and future. This creates a data hub for insights into company-wide relationships and structures. The context of this data in conjunction with the supplier data provides a basis for rational analysis. It is possible to detect future trends and potential problems, such as supply chain issues.
Supplier portals are the knowledge hub
At first glance, it is clear how purchasing employees and suppliers benefit from a supplier portal. However, it is important not to forget that there are numerous other upstream, downstream and related processes and departments in addition to purchasing. They too sometimes need to access data and information from purchasing processes. Consider:
- Who in the company needs access to contracts on weekends?
- Or on the supplier side: Who do employees need to contact if the production line comes to a standstill over the weekend?
- Or for IT services: Who needs access to service level agreements in case something doesn’t work as desired?
A supplier portal can provide all of this information. Modern portals have finely graded role and rights management for information. By planning ahead, all information-dependent internal and external groups can be included so that everything keeps flowing and the work gets done.
5. Optimal integration: Pay attention to interfaces
Having a suitable system environment with appropriate interfaces is simply a must for supplier portals to run smoothly. This is absolutely crucial. These interfaces synchronize data from the supplier portal with CRM (Customer Relationship Management) or ERP (Enterprise Resource Planning), for example. However, before a supplier portal is implemented, the people in charge of purchasing must draw up a precise roadmap and clarify the key questions as to which systems the supplier portal should be connected to.
A supplier portal is the link that unites purchasing with external suppliers
For an efficient long-term partnership, one might add. As such, supplier portals offer a smart solution in purchasing to reduce administrative effort in the purchasing process for both sides. A pool of suppliers gradually forms, from which the company’s purchasing department simply selects the right offer. This makes for a more stable supply chain in volatile times. The portal also improves communication between companies and suppliers. The possibility of flexible and location-independent access to order and supplier processes as well as a complete overview of invoice statuses offer numerous advantages for both sides. The implementation of supplier portals transforms the collaboration between both parties.