Why Don’t Companies Utilize Supplier Portals
According to Ardent Partners, only 25.7% of invoices from suppliers are submitted electronically. What is the root cause? One major area is the lack of supplier portal adoption. Just 50% of organizations that are deemed “best-in-class” are using a supplier portal. And of the rest of the organizations, only 20% utilize supplier portals.
It’s completely understandable. Supplier portals are almost always custom-built. So then IT resources are required to develop an internal product that is arguably not critical to a business. It’s a “nice to have,” but organizations often have competing priorities. For example, that IT developer you’ve asked to build the portal could easily be pulled into a major report engine project instead. And he or she may not be an expert at supplier onboarding, so then they have to invest time in taking what used to be a manual process and codifying it into a software process.
Even more important, the design, logic, and upkeep of a supplier portal become issues that the organization needs to resolve. Supplier portals are basically software products that someone must spend the time to code and maintain. And anytime there are changes to the basic process flow, someone also needs to update it. And supplier portals are publically facing (directly interacting with the supply chain), so their interactions must also be considered. The portal acts as a communication vehicle with the supplier, but one that is available anytime and has the most up to date information. Someone then has to support issues that almost certainly arise with any user base that’s not 100% familiar.
Yet, these portals are often thrown together or poorly conceived. This leads to a predicament. A bad software product invariably requires a human being to step in and make up for shortfalls in what was developed, thus negating any benefit that supplier portals are supposed to provide, namely:
- putting the onus on the suppliers themselves to enter their own data or submit invoices
- providing an efficient, scalable process for proper supplier onboarding (e.g. collecting payment details and tax identification)
- reducing accounts payable cycles spent on supplier inquiries by enabling suppliers to view payment status 24×7
Maybe the best approach over reinventing the wheel is to buy a wheel that works and is meant to last.