Effective digital transformation in your supply chain

Today, corporates across industries consider the implementation of e-invoicing systems as part of their broader e-procurement strategy. Corporates take the lead in guiding their supply chain partners towards more efficient and dematerialized supply chain processes. While these digital transformation trajectories yield substantial benefits when executed properly, corporates face challenges in capitalizing on this opportunity in their supply chain. These challenges differ according to a corporates’ adoption phase of digital transformation, as depicted in attached picture.

The key to maximizing the Return on Investment (ROI) and minimizing break-even time of digital transformation projects (ie. realization and implementation of e-invoicing) is to ensure high supplier adoption rates in phase 4. While this sounds logical, less than 20% of corporates are successful in achieving adoption rates higher than 40% (of total invoice volume, source: Glenbrook, 2010). 

There are many factors determining the potential success of your adoption strategy, including how ‘closed’ your industry is and the level of standardization in your domain. Many other factors are within the corporate’s span of influence. A number of important practices are: 

1. Involve all suppliers from the start, not only the top 20%. Pursue a different adoption strategy for distinct categories of suppliers. 
2. Empower your suppliers: what mechanism(s) has your service provider in place to persuade your suppliers onto your platform? Some offer Supply Chain Finance or Dynamic Discounting capabilities, other offer liquidity management capabilities or other value added services to convince suppliers of the benefits. 
3. Embrace interoperability: allow your supplier to use his own service provider to deliver invoices to your service provider, rather than requiring your supplier to be on-boarded on your own platform. 
4. Consider the cost of onboarding per supplier: what are the cost of onboarding your suppliers? Are different onboarding models supported? Does your supplier need to adapt processes, or can operations continue without disruptions? 

There are many more ways for corporates to stimulate supplier adoption and to successfully execute digital transformation projects (ie. e-invoicing). However, supplier adoption is a key objective that should be the core theme in any digital transformation program of a corporate.