I recently took part in a webcast to unveil the results of a groundbreaking IDC research study about how businesses are achieving next-level collaboration with their suppliers. Judging from the enthusiastic reaction of the audience, improving supply chain collaboration is top of mind for many organizations.
Maybe that’s the result of the supply chain challenges we’ve all experienced in the last few years. But even more, I think it’s because businesses are struggling with outdated collaboration methods and a lack of visibility into their supply chains. Making matters worse, they don’t have the agility to react quickly to changing business conditions.
These organizations are feeling the need to take supplier collaboration to the next level.
If you’re feeling that way, check out the webcast, Reaching digital maturity with next-level supplier collaboration through business networks. I joined Mickey North Rizza, IDC group vice president, Enterprise Software, to examine how companies are collaborating with their suppliers today and how they can uplevel these interactions.
Additionally, we shared insights from an impressive research study of over 1,500 businesses globally, conducted by IDC and sponsored by SAP. The IDC InfoBrief, sponsored by SAP, Driving Best-in-Class Supply Chain Collaboration with a Business Network (doc #US50854723, July 2023) examines today’s supplier collaboration and examines the benefits of business networks.
Collaboration, One E-Mail at a Time
Would it surprise you to know that most organizations are still using “old-school” methods to collaborate with suppliers?
In the IDC study, 68% of respondents said they use e-mail to transmit and receive documents and data relevant to procurement and supply chain collaboration. Other methods include telephone (44%), supplier/customer portals (38%), and EDI (26%). If there is a silver lining, half of those surveyed (50%) reported they are also using enterprise collaboration tools, such as Slack and Microsoft Teams, to help accelerate collaboration with suppliers.
What this means for most businesses – or parts of those businesses – is that collaborating with suppliers remains one-directional and inefficient. Just think how many e-mails and follow-ups it takes to find and purchase from suppliers – and the hours of time that takes.
Unlike the significant progress businesses have made by digitalizing their internal processes with enterprise resource planning (ERP) systems, their external processes and collaboration methods remain largely manual. In the Americas, 58% of IDC study respondents said they share documents like purchase orders and forecasts manually. The numbers are even higher in EMEA (66%) and APAC (64%). One survey respondent told IDC, “We have digitized our internal processes but then rely on ‘stone tablets’ to collaborate with our suppliers.” Suffice it to say, now is the time for businesses to focus their efforts on digitalizing how they collaborate externally.
We’re in a New Digital World
In the webcast, IDC’s North Rizza reminded us we’re in a new digital world that demands speed, agility, and resilience. Businesses need to move quickly, not only internally but also externally in their interactions with suppliers.
Which brings us to the old-school and manual methods like fax, phone, and e-mail. They’ve worked for years. But let’s face it, they can’t keep up with the requirements to collaborate in a digital world and their ability to provide supply chain visibility only goes so far. This is a problem because, as the IDC study finds, visibility and collaboration are challenges for most organizations. According to the study:
- 75% of organizations view collaboration as a work in progress
- 59% said a lack of visibility in their supply chain makes it difficult to see changes in time and react to them effectively
- 56% believe a lack of effective collaboration with external suppliers is a significant impediment to better business performance
- 26% view better collaboration as key to managing risk
Importantly, the IDC study also found that many organizations believe they are missing business opportunities because of poor collaboration. Among larger businesses (US$1 billion in revenue), 53% reported missed opportunities. The impact is even greater for businesses with $750 million to $1 billion in revenue, where more than 70% observed missed business opportunities.
Where is your organization in terms of lost opportunities? How can you get the data you need to make better decisions? How do you make sure you’re collaborating effectively with your suppliers, so you can acquire materials to support your business and stay competitive?
I believe old-school collaboration needs to give way to next-level business networks.
Next-Level Supplier Collaboration via Business Networks
“Business network” is a term we toss around a lot these days, almost to the point of confusion. Let’s get something straight: the old-school collaboration methods discussed here – telephone, fax, e-mail, even EDI – are one-directional channels, not business networks. To stay competitive, organizations need to extend the digital transformation they started internally with ERP systems beyond their four walls with a true, many-to-many business network.
SAP Business Network makes this possible. It is a comprehensive business-to-business collaboration platform that can connect people, processes, and systems across multiple enterprises. It can enable you to digitize your transactions and create transparent, resilient, and sustainable supply chains.
SAP Business Network is a many-to-many network that can help uplevel collaboration with trading partners across procurement, supply chain, logistics, finance, people, and asset management. Organizations can exchange data, manage workflows, and apply network-wide intelligence to help improve decision-making. For suppliers, SAP Business Network helps create opportunities to make their offerings available to more buyers and thus expand their supply base.
Ready to Go to the Next-Level with Your Suppliers?
I’ve only touched on a subset of the data and best practices in IDC’s important research. To start moving collaboration with your suppliers to the next level, check out IDC’s complete InfoBrief and don’t miss our webcast.
Eamon Ida is head of Solution Marketing for SAP Business Network.