In today’s fast-paced business environment, organisations are keen to streamline their operations as well as cut down on costs without compromising on efficiency. A good place for improvement is the supplier onboarding process. A linked automated procurement management system along with robust supplier onboarding capabilities enables an entirely automated process for what has been a long, laborious and error-prone activity.
Manual Onboarding: The Hidden Costs
Traditional supplier onboarding is a multi-departmental, multi-paper form, labor-intensive process. This antiquated approach has many challenges, most of which affect an organization’s bottom line. However, procurement teams invest a great deal of time collecting and validating supplier information, managing the documentation, and verifying compliance with company policies and regulatory rules. This is not to mention the obvious fact that the manual nature of these tasks means it not only costs more to manually perform them than it would to automate (a cost that will inevitably find its way into the final prices), but these tasks are inherently error-prone and prone to delays that can slow the entire supply chain.
Additionally, there is no standardization of manual processes which results in inconsistencies in provided supplier data forcing your vendor records to be inaccurate and your supplier relationship management difficult. Typically, this inefficiency means duplicate vendor accounts, missing information and compliance gaps that put the organization at unnecessary risks and costs.
Transformation Through Automation
An automated procurement management system promises to revolutionize the process of supplier onboarding. By digitizing and automating key steps organizations can save enormously in the amount of time and resources spent to onboard new suppliers into their ecosystem. Modern procurement platforms also offer self-service platforms where suppliers can upload information, upload required documentation, as well as maintain their profiles independently.
It not only removes the burden from procurement teams, but it also means the supplier information is correct and up to date. It also can validate, in an automatic fashion, data entries, perform completeness tests and flag discrepancies so that attention is drawn to them. It reduces errors and guarantees uniformity of all supplier records through this automated validation process.
Automated Supplier Onboarding: Key benefits
Time saved through automating the supplier onboarding process is only one of the advantages of automating it. If organizations have implemented the automation of procurement management systems, they can reduce the processing cost significantly, some by up to 60% more than through manual processes. This cost reduction comes by way of eliminating paper-based workflows, decreasing manual data entry and minimizing the number of times there needs to be a corrective action for an error.
Accelerating the time to onboard is another pretty big win. All this can now be done in days or even hours. It allows organizations to attain increased speed to market to capitalize quickly on new supplier relationships, and to respond more effectively to changing market conditions. The more time it takes to onboard, the less time vendors will want to spend putting their business in front of this organization, which also improves the satisfaction of your suppliers, more so they can start doing business with your organization faster and with less administrative work.
Compliance and Risk Management
In addition, automated supplier onboarding systems also come with powerful risk management and compliance capabilities. They can be set up to auto-verify the tax information of these suppliers against a sanctions list and to verify that all required certifications and insurance documents are up to date. By preventing organizations from working with non-compliant suppliers, and avoiding the costly penalties and damage to their reputation that can be caused by it, this automated compliance checking offers value.
As well, the system can include a complete audit trail for all supplier interactions and supporting documentation, so audits and regulatory reviews can be easily demonstrated. In highly regulated industries where record keeping of supplier documents is mandatory for extended periods, this capability is extremely valuable.
Data-Driven Decision Making
The wealth of data generated by one often overlooked benefit of automated supplier onboarding is one. Modern procurement management systems can have specific metrics that can be tracked and even analyzed for the onboarding process, including completion times, rejection rates, and common points of delay. This data can be used to select suppliers based on criteria that optimize performance and relationships with said suppliers.
It also allows organizations to analyze supplier data across multiple dimensions and their corresponding trends, supplier performance, and strategic sourcing decisions. Using this data-driven management of suppliers, companies have the potential to cut costs and increase supply chain resilience.
Implementation Considerations
Automated supplier onboarding offers clear benefits but requires careful planning and thought to get right. First, organizations should start by mapping their current onboarding processes and identify where there is the most value out of automation. All aspects of this analysis – immediate efficiency gains and long-term strategic benefit – should be considered.
Conclusion
Automating supplier onboarding is a big opportunity for organizations to save costs, drive efficiency and enhance supplier relationships. Organizations can transform what has long been a painful process into a powerful advantage by using a modern procurement management system with powerful onboarding features. Reduced costs, improved compliance, faster processing times, and added bits of data insight make automated onboarding an investment organization simply can’t afford to miss in today’s business environment where time is of the essence.
