What is Supplier Onboarding?
Supplier onboarding represents the foundation of any effective supply base management program. Instead of constantly finding themselves reacting to unpredictable circumstances, companies can use supplier onboarding to take a proactive approach towards capitalizing on actionable supplier data.
By establishing a best-in-class supplier onboarding process, companies can increase their efficiency, reduce costs, have access to better discounts, and achieve a higher, overall, ROI. They are also in a better position to minimize disruptions that can occur downstream or are a result of poor supplier governance.
The supplier onboarding process is defined by a number of specific steps undertaken by an organization to collect the information needed to certify and approve a vendor as a company supplier, allowing that vendor to sell, issue invoices, and accept credit card payments from your company.
As an essential first step before the vendor management process can take place, supplier onboarding needs to pay extra close attention to whether the potential supplier complies with the laws, regulations, and standards required by your organization.
What is Supplier Onboarding software?
As part of a more comprehensive vendor management system, the supplier onboarding software is used to enhance the overall process of vendor management. It facilitates the collection of information used for the onboarding of new vendors.
The automated software increases the efficiency of the entire sourcing cycle by empowering you to instantly resolve issues such as quality and compliance. It does so by tracking various activities of the supplier throughout the onboarding process.
Essentially, with cloud-based platforms, businesses can quickly assess their supplier’s strengths, weaknesses, and potential for growth. These types of analytical data can then be used to better plan the sourcing strategy of the organization.
Main benefits of Supplier Onboarding solutions
Vendor onboarding solutions are quickly becoming a vital part of the procurement function. These systems have the potential to increase the efficiency and effectiveness of their vendor management process.
Vendors onboarding software solutions, which are integrated into Vendor Management Software, are helpful in many ways including but not limited to the following:
1. Enhanced Supplier Relationships
Almost every organization works with a wide variety of suppliers, each with its own capabilities and services provided. While some are better suited for certain products, others have more specialized capabilities.
When using a proprietary solution, it should be a top priority for all organizations to ensure they make sure the supplier is held accountable for the solution's performance.
On one hand, companies will want to send vendors information to gain their trust, while on the other, make sure that the products and services they offer conform to all of the regulatory requirements.
Vendors will also want to make sure they have an efficient and easy-to-use onboarding process, which leads to higher trust, loyalty, and satisfaction.
2. Increased Efficiency
When an organization implements vendor onboarding strategies, it can expect increased efficiency and lower costs associated with procurement. Companies that have implemented good onboarding processes have also the potential to increase their productivity and boost their customers' satisfaction, reducing the number of complaints in the process.
3. Improved Risk Management
As an organization implements a comprehensive vendor onboarding process, it will be better positioned to deal with any challenges that may occur with a new vendor. It will be able to engage and retain new suppliers, as they are a great way to strengthen the company's risk management.
With an established process for onboarding the suppliers, if there is ever anything wrong or issues come up with these new vendors then they can quickly and easily learn about it before more damage occurs.
Other benefits of Supplier Onboarding solutions
Among the other benefits of supplier onboarding, we can include the following:
1. Overall Increased Supplier Confidence
Ensuring compliance and monitoring potential interactions with potential suppliers increases overall supplier confidence and allows your organization to better control its business.
2. Better Visibility Over Suppliers’ Capabilities
Supplier Onboarding Software also provides crucial visibility over suppliers’ capabilities. Building a strong and lasting partnership is all about getting to know your suppliers, as well as determining and comparing vendors based on different criteria. At the same time, the software provides visibility over how they work with you as your partner.
3. Streamline Collection of Supplier Data
When businesses have dozens of suppliers, contracts, and locations to keep track of, Vendor Onboarding Software helps by streamlining the supplier data collecting process, putting all relevant data at your fingertips. Cloud-based onboarding solutions keep this information organized, saving you time and resources.
By streamlining the collection and safekeeping all the supplier information in one convenient location, the platform gives you an instant overview where you can see everything - from terms & conditions to expiration dates - at a glance!
4. Reduce Error Rates
Vendor Onboarding Software prevents mistakes by simplifying vendor onboarding, so you spend less time completing paperwork, entering data, and waiting for responses from vendors.
Using automated software simplifies the vendor onboarding process, reducing mistakes that can occur if staff members are not following standardized procedures.
When to use Supplier Onboarding software
Most organizations typically need to embark on an extensive process to certify their vendors' compliance in terms of all the legal requirements, which can often be a tedious and time-consuming procedure. To increase the efficiency of the supplier onboarding process and minimize the incidence of human error, companies should automate manual data entry and other such manual operations.
By using a robust supplier onboarding software, businesses can free up much of their team's time and allow them to focus more of their time and efforts on business-critical tasks and responsibilities.
The telltale signs that companies need a supplier onboarding software include:
If you constantly need team members for additional assistance.
If qualified managers skilled at brainstorming new ideas and insights into problem-solving even when lacking complete information are prevented from doing so because of the constant busywork.
If your creative talent is needed offsite because the task doesn't require a physical presence.
Vendor onboarding software is excellent when trying to find the right supplier for your organization. It will help evaluate the different vendor options available as well as assist in choosing the one that provides the best fit.
The software is a go-to for organizations looking to improve their efficiency and reduce their procurement costs. Aside from helping with managing and keeping track of vendors' performance, this type of system also makes it easier for businesses looking to cut on the amount of time spent on administrative work.
When organizations need to oversee dozens of suppliers, contracts, and locations, vendor onboarding software will greatly streamline these processes. By keeping everything organized and in a centralized location, businesses can make their job easier than ever before.
How to implement the Supplier Onboarding process
The first step towards implementing this process is to analyze your current situation. The purpose of this initial phase is to accurately determine where you stand, how your current supplier base is performing, and what necessary steps need to be taken in order to improve efficiency, build stronger vendor relationships, and streamline processes.
The next viable phase is to decide on a pilot project that will be able to satisfy all of your goals established in the previous step.
Lastly, you will have to choose a procurement manager and/or team capable of seeing the project to fruition.
A robust supplier onboarding process will actually consist of several separate processes to move the supplier relationship through each stage of the onboarding program. These stages include:
1. Creating an evaluation process with clear supplier expectations. This stage is about establishing approval policies and standards that will make it easier for the procurement team to understand what is and isn't required when onboarding a new supplier.
2. Establishing clear requirements as well as a transparent policy framework outlining responsibilities and duties owed by all parties involved in the vetting process. This phase will lay the groundwork for a good collaboration and working relationship with the supplier from the moment they are onboarded and all throughout their lifecycle.
3. Implementing data collection and registration forms through the use of vendor onboarding software. In addition, a dedicated supplier portal will also be extremely beneficial by making it easier for suppliers to have access to all the required documentation.
4. Developing a process for strategic supplier partnerships. This phase will help in gaining a better understanding of your strategic suppliers. These are those that have the greatest amount of spending attributed to them, as well as the ones that generate the most value to your organization.
5. Establishing an effective communication system between you and your suppliers. This will help eliminate delays of human mistakes, improve efficiency, and strengthen relationships.
How Prokuria can help and why is it different?
One of the fastest, simplest, and most intuitive ways to onboard suppliers is to use supplier onboarding software such as Prokuria. As a cloud-based supplier onboarding solution, Prokuria provides companies with all the necessary resources needed to create and manage onboarding forms and documents for all suppliers.
The platform's easy-to-use interface is designed to minimize and eliminate as many manual processes, giving businesses the necessary time and resources to focus on other key areas of the organization.
Among its many features, we can include:
supplier segmentation and configurable workflows for approval and changes.
ensure compliance with flexible onboarding forms and periodic checks and surveys.
brand your portal, customize your requirements, and structure your process according to your procedures and workflow.
you can edit in real-time as well as upload multiple files simultaneously.
approval workflow processes for partners in one screen.
review past information about a partners' progress.
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