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 of the four walls of their organization. In fact, some of the world's largest organizations send documents like purchase orders, demand forecast spreadsheets, invoices, and shipping confirmations via email on a routine basis. While email can be a great method for regular business communications, it is typically not be robust enough for critical business transactions, where you need immediate feedback and visibility.

Imagine that you're 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 sits in their inbox for an extended period of time? How will you know if certain items are delayed or out of stock? Ultimately, how fast can you react to changes before it negatively impacts your company and your customers?

Participating in a business network allows you to extend your ERP and collaborate seamlessly and digitally with your suppliers and other trading partners. It integrates with ERP for a completely digitalized 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 efficiencies  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 ship 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, giving you a complete audit trail of the transaction. The image below illustrates the flow of documents from buyers to suppliers, facilitated by a business network.

Because of the digital online dashboard of 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 influx. In addition, you, as the buyer, 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 for 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 only invoice 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 faster resolution and payment. This eliminates the need for phone calls and emails to your accounts payable team with inquiries related to invoice and payment information,  freeing up resources for more strategic work.