Originally posted on on the e-Sourcing Forum [WayBackMachine] on Thursday, 7 June 2007

A recent Research Brief from Aberdeen, “Enabling Suppliers, Enabling Savings”, notes that supplier enablement is one of the top three challenges for procurement professionals looking to increase spend under management and drive tangible cost savings to the bottom line.

According to the brief, effective supplier enablement includes:

• Supplier recruitment and information management
• Technical integration and support
• Electronic document transmissions (PO, invoice, etc.)
• Supplier catalog management
• Enhancement for other business processes

In addition, they hypothesize the following actions, capabilities, and enablers are required:

• adopt incremental BPO methodology and related services
• cover entire business processes across multiple spend categories
• achieve visibility into enterprise spending
• collaboration across internal and external teams
• supplier self-service tools

This was followed up by another Research Brief, “Supplier Networks Drive Supplier Enablement”, which noted that supplier networks can increase performance metrics such as spend under management significantly and that enterprises leveraging their supplier networks are enabling their suppliers in a faster, better and more efficient way.

The brief notes that “an enterprise must realize the value if they are interested in fully enabling their supplier base. Having one central network to handle POs, invoices, and catalog management allows an enterprise to quickly enable suppliers in their base, communicate in a helpful manner, and manage key business transactions with ease”.

What’s interesting to note is that although the focus on supplier enablement is well-founded and their recommendations close to what I’d recommend, the core capabilities they note for supplier networks do not dictate the need for a supplier network, merely the need for a fully functional supplier portal. A well-defined portal will allow a supplier to access cached copies of purchase orders, upload invoices, check payment status, manage their catalogs, and communicate with the buyer. A network may simplify and automate some of these tasks, but a network is not necessarily needed if an organization is merely beginning their journey on the road to supplier enablement.

Also interesting is that there is no mention of the enhanced benefits a supplier network can bring to a buyer beyond those benefits that would be found in an enhanced portal such as supplier search, interactive RFX’s, and enhanced collaboration. But that’s a topic for another post.