In particular, the rapid advances with online technology have vastly improved how businesses operate and communicate both internally and externally. Cloud and mobile computing have further expanded the possibilities for businesses to operate in real-time and on a global level.
These technology changes aren’t happening in secret, yet understanding how to take advantage of them isn’t always so easy. While the advantages of digitizing business processes are promising, the wrong solution can also pose significant risks.
Eventually, the risk of falling behind the competition will outweigh the perceived or real risks of implementing digital solutions. When it comes to using technology to optimize P2P processes, CPOs have a great opportunity to forge ahead of the competition and gain a strategic advantage with suppliers.
A recent global study of 500 procurement leaders by Deloitte found:
33% of procurement leaders believe that their digital procurement strategy will enable them to deliver on their organizational objectives and value.
By forging ahead of the pack and digitizing P2P processes, businesses have the opportunity to offer their organization and supplier partnerships more value than 67% of other businesses. This sounds promising, yet CPOs may wonder if it’s really that simple.
In an effort to help, let’s examine how digitizing P2P processes makes building and improving supplier relationships simple.
Building Supplier Relationships
Traditional procurement processes have adequately facilitated B2B transactions for decades, yet are severely limited when it comes to building supplier relationships in our digital age. There are two main reasons for this:
- modern suppliers have higher technology expectations
- modern suppliers must also stay competitive in their markets
Basically, modern suppliers need B2B partnerships that help them stay competitive. In practical application, this means:
- streamlined P2P processes
- enhanced visibility with invoicing
- assurance of timely payments or early payments (dynamic discounting)
- streamlined approvals and contracting processes
- supplier portal with real-time cloud functionality
- automation with redundant P2P processes
- streamlined B2B collaboration capabilities
Building supplier relationships is simplified when businesses add value to their partnerships. For instance, businesses that offer their suppliers an optimal way to facilitate P2P processes will add value to the relationship. From streamlining the contracting and approval processes to automating invoice reconciliation, suppliers will greatly benefit from partnering with a digitized enterprise.
Improves Supplier Relationships
Implementing online technology to streamline P2P processes naturally improves supplier relationships. When suppliers have more confidence and assurance of being paid on time, they’ll naturally be more at ease with their B2B partners.
When suppliers can count on being paid on time and accurately within the clearly established terms, they’ll be able to grow their business with improved strategic clarity. They’ll also appreciate the time saved from dealing with streamlined cloud P2P processes.
Real-time digitized procurement solutions will help B2B partnerships stay on the same page; this alleviates the stress and effort associated with uncertainty. Arguably, this somewhat intangible benefit does more to improve supplier relationships than anything else.
Implementing online technology for P2P processes makes it simple to build and improve supplier relationships because it improves the fundamental connecting point between B2B partnerships. By offering value to suppliers with optimized procurement processes, modern enterprises will help their B2B partners stay competitive and alleviate common pain-points.
Modern enterprises can gain a competitive advantage by focusing on digitizing P2P processes to realize supplier relationship improvement (SPI). Optimizing this crucial process will make it simple to build and improve supplier relationships now and in the future. If interested in learning how ISS Group can help please contact us today.