APC 2023: Your Definitive Guide to Supplier Portal Strategy
In this session, which took place at APC earlier this year, Costas Xyloyiannis, CEO of HICX and Marc Bengio, Sr. Director Corporate Technology – Procurement Domain Lead at Johnson & Johnson looked at demystifying the topic of supplier portal strategy.
Costas explained that the area has become increasingly confusing, as the number of different tools and systems used is growing. As he points out, “It is a term that is used all the time and it has become something of a catch-all. If you think about these tools, they solve a lot of different problems. Yes, the supplier has to log in, which technically means it’s a portal, but this is not really how a customer thinks,” he says.
So, how should we really be thinking about supplier portals or supplier portal strategy, and how can they be used to set suppliers up for success?
What is and isn’t a supplier portal?
Costas starts by explaining how it makes more sense to think about the landscape not in terms of portals, but rather in terms of different types of digital services.
“There are ‘many-to-many’ types of services, they’re networks. There are different types of networks. You can have transactional networks, with POs and invoices; data networks for curating data; and logistics networks.
You then have ‘one-to-many’ types of services. So, sourcing tools for example.
We don’t think these are actually supplier portals. We think of all these as individual digital services and enterprises make use of many of these services.”
He goes on to explain that a true supplier portal is an orchestrator of digital services and collaboration.
“In fact, when our customer is thinking about a supplier portal, they are actually thinking: ‘How can I orchestrate a single front end across all my different digital services?’”
Many see it as not supplier friendly, having to log into all these different portals. Therefore, in the past, we might have talked about a massive supplier portal strategy to cover all Procurement needs as a solution to this. However, as Costas comments, it is not realistic to expect one company to be able to provide all features and functionalities of all the best-of-breed technologies.
Giving an example from our everyday lives, he adds, “Let’s take logging into my e-banking. That’s like saying, wouldn’t it be great if HSBC, Chase and FX were all there. And let’s take this further. What about my utility provider and my mobile provider? I do have to log in to all these things. It’s not realistic for one to do all these services, and that’s the same for suppliers.”
What are the benefits of a centralized supplier portal strategy?
If it is necessary to accept that there will be multiple digital services co-existing in the landscape (and that one ‘mega-portal’ service cannot cover all use cases), where does that leave the experience for suppliers?
Fortunately, there is a solution to this problem – and it doesn’t mean cutting back on digital services being offered to suppliers.
As Costas maintains, there is now a growing number of industries and companies that are realizing the benefits of having a centralized, ‘orchestrating’ supplier portal that provides a seamless supplier experience across all or any of the various digital services.
He shares examples from organizations in the fast-moving-consumer-goods (FMCG) sector. “They’re certainly saying they want to be the customer-of-choice and to provide a very personalized experience. And so, they are also looking at orchestrating an experience across many different tools.”
“For example, we have one big FMCG customer who uses both Tradeshift and Tungsten. They actually don’t want to use just one. Because for them, there is value in giving the suppliers a choice: which one do you, the supplier, want to go to? This is a differentiator. That’s where the personalization of the process comes in.”
In this case, therefore, a centralized portal can provide access to multiple different services that various suppliers may be using in different circumstances.
Costas explains that an additional benefit is being able to add new digital services faster by having established your centralized supplier portal strategy, adding, “Once you are established and you have that engagement, then when you are deploying new digital services, you have instant value. Imagine you have 50,000 suppliers logging in daily and you want to deploy supply chain finance, for example. Immediately, all your suppliers can start to use that,” he explains.
Step 1: Start with supplier centricity
Supplier centricity involves seeing the world through the eyes of suppliers, considered as partners.
As Marc Bengio explains, “Our strategy is to drive that collaboration, both internally and with our external suppliers.”
However, there is huge complexity to manage, he says. Different functional areas, such as supplier performance management, risk management and resiliency, all require different tools. He explains that there is a need to ensure the experience remains unified, while also offering personalization for each individual supplier.
Marc continues, “We have indirect suppliers, we have direct suppliers. Products in the pharmaceuticals sector, in medical devices. All those needs must be built in, to make that seamless collaboration happen. But also, to create that very unique personalization.”
As Marc puts it, “The pandemic showed us the importance of suppliers, where, in many cases, we depend on our suppliers.” This drives the need to create an environment of collaboration which will benefit both buyers and suppliers.
Referencing advancements in other fields, such as customer and employee marketing, Marc suggests that an environment should exist in which you give equal attention not only to the employee and the customer, but to suppliers as well. Traditionally, out of the three, there has been less emphasis on the supplier, he says, adding, “We cannot live with one of the three missing.”
Step 2: Begin with the basics – a single sign-on experience
Marc explains that, from their own analysis, one of the highest priorities that came from listening to the suppliers’ perspective was suppliers highlighting the issue of having to sign on to different sites.
“One of the first things we started thinking, therefore, was, ‘let’s just bring them into a single sign-on, single experience,’” he says.
The same point-of-view emerged in the HICX Suppliers’ Perspective Survey, in which suppliers reported having to log into an average of 8.4 systems to serve just one customer. 38% reported that they must log into ten or more systems. The responses revealed how challenging and difficult it is for suppliers to manage individuals’ accounts associated with the various systems, while also creating multiple points of entry for data. Additionally, it is hard for suppliers to take ownership of their data due to lack of visibility across systems, duplication of data and the resulting inconsistencies from that.
Step 3: Orchestrating personalized experiences for each supplier
Marc continues, “The next layer is what we call ‘jobs to be done’. And as far as jobs to be done are concerned, the complexity is that these could sit in planning, they could be in sourcing, in R&D, or in quality. To deliver all of that, the supplier has different jobs to be done.”
“What we needed to do, therefore, is make that experience as seamless as possible, for suppliers to be able to jump from one thing to another, by creating an experience that is totally personalized. So, in total, we have over 40 jobs to be done, but you could have one supplier that has 10 jobs to be done, and for another it could be all of them,” he explains.
He continues, “People sometimes think the portal is just a door to somewhere. But no. It’s an orchestration. It’s two-way communication, two-way collaboration. You collect data, you provide data, you collaborate.”
Become the customer-of-choice
A supplier portal, therefore, should be thought of as the orchestrator of the underlying services that foster internal and external communication with your suppliers.
Benefits can be realized from more seamless collaboration, as well as the ability to offer more personalization options to all your suppliers. Furthermore, once you are set up, adopting new technologies will be much faster. These factors combine to put an organization in a very strong position to become customer-of-choice.
To succeed, start by listening to the suppliers’ perspective. Identify the biggest pain points, such as the single sign-on experience, and then expand further to orchestrate all processes from within the supplier portal.
