What an ERP cannot do is address the break points between your processes and those of your suppliers.

According to a recent study by analyst firm IDC, email remains the most common channel that companies use for collaboration with trading partners and suppliers outside the four walls of their organisation. In fact, some of the world’s largest organisations routinely send documents such as purchase orders, demand forecast spreadsheets, invoices, and shipping confirmations via email. While email can be an excellent method for regular business communications, it is typically not robust enough for critical business transactions, where immediate feedback and visibility are required.

Imagine that you are sending a purchase order (PO), containing more than 100 line items, to one of your suppliers. And you are sending this via email. Imagine, also, that the purpose of this PO is to procure critical direct materials for your manufacturing process.

What happens if you need to make a change to the order? What happens if your supplier contact is out of the office and the order remains in their inbox for an extended period of time? How will you know if certain items are delayed or out of stock? Ultimately, how quickly can you respond to changes before it negatively affects your company and your customers?

Participating in a business network enables you to extend your ERP and collaborate seamlessly and digitally with your suppliers and other trading partners. It integrates with ERP for a fully digitalised experience. In addition, as highlighted below, you can gain efficiency, visibility, and compliance with a business network.

#1 Automation of procurement and accounts payable collaboration workflows

Improve operational efficiency with near real-time digital collaboration. Purchase orders generated from your ERP can be digitally sent to your suppliers via a business network. Your suppliers can confirm the order and send back an advance shipping notice so you know that the order has been placed and when it will arrive. Any changes to the order will update related documents as well, providing you with a complete audit trail of the transaction. The image below illustrates the flow of documents from buyers to suppliers, facilitated by a business network.

Thanks to the digital online dashboard for purchase orders, your suppliers can easily manage POs from anywhere. And if one employee is out of the office, then other colleagues can easily manage the increase in workload. In addition, you, as the purchaser, will be able to easily view and discern where your purchase order is in the process.

#2 Simplify spend compliance

A business network is more than a digital means of transmitting documents. It is highly configurable with over 100 business rules that you can enable based on your own processes. The business rules provide automated validation of the documents coming in from your suppliers, reducing the need for manual review and exception handling. For example, you can set a rule that requires suppliers to invoice only for shipped quantities or require suppliers to choose from your list of validated tax values.

#3 Invoice status visibility

Invoice and payment information is accessible via self-service for your suppliers on a business network. They can immediately see if there are issues with their invoices and take action for quicker resolution and payment. This removes the need for phone calls and emails to your accounts payable team with enquiries related to invoice and payment information, freeing up resources for more strategic work.