How to really get supplier’s on-board with e-invoicing (part 3)

Head of UK E-invoicing Centre of Excellence

Customers commonly ask Basware for assistance with supplier on-boarding. In this part of my blog on the subject, I’ll guide you towards a structured approach to e-invoice adoption and how to communicate with different types of supplier.

Now, to release e-invoicing to your suppliers you need to understand what motivates them and how and why they adopt technology. In blogs one and two I gave you some insight into this. So, depending on the type of supplier; Early Adopter, Mainstreamer, Late Majority or Laggard the message, and whether you go with a carrot or stick approach, will be different.Remember, what works for an early adopter doesn’t work for the late majority! 

You start by focusing on the suppliers who are ready for change – the Early Adopters. This allows for rapid early success whilst enabling the project to hit key milestones and adoption targets. Early success allows you to influence internal teams and drive process transformation. In essence, early success drives internal promotion, which drives changes to process and builds momentum – increasing adoption. This is called the early adoption phase. 

It’s quiet easy to find your early adopters as these are the suppliers that want to do e-invoicing. To identify them, you start with a list of suppliers that send you PDF’s via email.  Remove from this list any suppliers that are critical to your business or purely commodity. Approach this group via a series of emails with a strong benefits driven message and a call to action - such as a webinar or roundtable discussion. Do this over a period of weeks with slightly different messaging each time. Those that bite will eventually become your Evangelists.

Getting the messaging right during the early adoption phase is critical to success. You need to create benefit and a key word framework, but also understand what your competition is – PAPER or PDF emails.  

The clever supplier knows that your push towards e-invoicing is driven by your desire to cut costs, become more efficient and ultimately add value back into your organisation. That’s all very important to ‘you’ but not to your suppliers! 

What’s important to your suppliers is:
1.    Being paid on-time
2.    Getting better visibility of when they will be paid
3.    Reduce their cost of sale
4.    Capturing more of your spend
5.    Cutting out competitors

You’ll need to tell suppliers that this is what e-invoicing offers, not that it saves you money. The supplier needs to see the benefits of being a close business partner via e-invoicing. 

Early Adopters will use these messages internally to justify change or to do self-promotion, but they also need to know what they are doing is out of date. For early adopters, capturing spend and cutting out competition is the right type of message.

The early wins need to be communicated internally and within the supplier base. Communicating early success will drive further adoption. Early adopters will only drive your project towards the 20% mark, with success measured by the number of suppliers on-boarded and not transactional volumes. So start with an achievable target or segment of suppliers.

Once the early adoption has been successful, you now switch to mainstream messaging and methods. To tackle the mainstream supplier base, spilt them into manageable groups. Offer them choice of connectivity methods and let them move across at their pace. But the Mainstreamer needs to know other suppliers are doing this. So, you turn early adopters into win stories to strengthen adoption and use these to apply competitive pressure. As with the early adopters, the key to success is to park any supplier unwilling to change and move on to the next. You’ll catch these suppliers (called Laggards) again at a later stage. Also once the first group has been selected to target for adoption and successes are starting to appear, fine-tune the message for the next group, and so on.

Once you hit 50% supplier adoption, you can start to add the stick. Adjust the message to include a mandated timeline. This will prompt the late majority to move. Strengthen the competitive message and indicate that payment times could increase for non-electronic invoices. By now, your business should be working on the assumption ‘e’ is normal and your processes, contracts and terms should enforce e-invoicing. Focus your effort on the remaining high volume suppliers. 

Finally, we hit the laggards - these are the last 20%. Now you need to do a cost/value analyst. Is the supplier critical or are they low value or ad-hoc? Critical suppliers need to be managed but the rest should be forced via a mandate, dropped or just left to fade away.

In my final blog on this subject, I’ll be looking at how to run and measure the success of your on-boarding project.

Category: E-Invoicing