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Expert Knowledge on Digitalization & Automation of Business Processes

Three Ways to Use a Supplier Portal

18 .11 .2021

Topics:  Digitalization

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A supplier portal, often also referred to as vendor portal, is an online platform that allows companies to communicate and interact with their suppliers. It is a shared space where both the customer and the supplier can enter information, submit documents, track orders, and manage their business relationship. On the most basic level, a supplier portal simply eliminates paper. And to take it a step further, it is an interface which significantly enhances and integrates communication between businesses.

When you look at all the repercussions of paper or no paper, integration or non-integration, you’ll see just how many aspects of doing business a supplier portal can change. We’re already familiar with a lot of the general advantages of digitalizationtake the following:

    • Elimination of transport and idle time significantly speeds up document turnaround. The digital medium provides information immediately.

    • Access across devices and locations allows more flexibility in work, ensuring constant availability of information from any point of access.

    • When searching and evaluating information, digital trumps paper.

    • Standardization supports reliability in processes and provides mandatory fields and predefined workflows.

We’ve all come to know and love these benefits when it comes to digital transformation in general. But what kind of enhancement might they bring to the niche of supplier relations? And what might specific applications actually look like? In this article, we'll share the top three use cases that come up among xSuite customers using our cloud-based Business Partner Portal Sphere

Supplier onboarding

When you enter into a business relationship with a new supplier, there are some formalities to be completed. This includes setting up the master data for the supplier in your ERP system. Since it’s your system, you would normally be expected to collect this information yourself. However, with a supplier portal, you can simply outsource the task to the supplier.

A self-service option in a portal is an essential functionality which allows suppliers to enter their data on their own. Moving from the portal interface, a workflow for creating a new supplier is triggered in your ERP system, and as soon as you have approved a change, the master data will be updated.

With this arrangement, suppliers can update their data any time. And the flip side to this—one which is of great benefit to supplier companies—is that the responsibility for keeping their data complete and up-to-date is no longer in your court, but in the supplier’s.

Document exchange

In practice, business processes often follow a procedure something like the following: In your ERP system, you generate a purchase order. You send the purchase order, printed or as a PDF, to the vendor. The vendor digitalizes the document again and extracts the data to transfer it to their own ERP system. You receive an order confirmation from the vendor system, sent either by e-mail or by regular post. Then you, in turn, digitalize the order confirmation, as this information needs to be brought into your ERP system.

These kinds of processes tend to grow wild over time, and just visualizing them makes it clear how nonsensical and inefficient they are: Information that is available in digital form is printed out, only to be digitized again. And this happens not only with the order and the order confirmation, but with the delivery bill or goods receipt, and the invoice as well. These breaks in a sequence of necessary actions are a result of incompatibility and a lack of interfaces.

A supplier portal can dramatically improve processes in environments that are only partially transformed. Documents and information can be transmitted digitally throughout the lifecycle of a process, eliminating the discontinuities that result from switching media. This case scenario illustrates the importance of document exchange in the procurement process, and how a supplier portal can truly be a quick fix to common inefficiencies in this area.

Flexible discounts

There’s no denying the appeal of discounts. Wouldn’t anyone go for another five percent off of invoice totals?

More likely than not, a lot of your suppliers have already set up business with you based on general conditions specifying payment and discount terms. What doesn’t necessarily come to mind immediately, though, is that there are probably a number of regular suppliers with whom you haven't negotiated any fixed terms per se.

And that's where your potential lies. If you work under the premise of "There's no harm in asking," you might just garner discounts for a few more suppliers. How might a supplier be approached with this idea? As an example, you could offer early payment in exchange for a small additional discount.

A supplier portal offers you the flexibility necessary for these kinds of ad hoc agreements. You are the one who chooses the supplier, the period, the type of invoice or the specific invoice, and you are the one who proposes the terms.

If you prefer to handle multiple suppliers en masse, however, then you are just as well served by a supplier portal. It provides all the advantages of standardization and automation, which are instrumental in ensuring that effort does not exceed savings. Setting payment terms for discounts or price reductions in exchange for accelerated payment is referred to as dynamic discounting. Through a supplier portal, it is a realistic way to reap savings you wouldn't otherwise have.

At first glance, a supplier portal might seem to be an add-on requiring more work. However, considering the three applications above, it clearly emerges as a high performer in minimization of staff workload, improvement and acceleration of processes, and enablement of opportunities for receiving more discounts. If you want more information on how a portal can bring more profitability to your operations, check out our Business Partner Portal here.