The Impact of Digital Transformation and Data Management on Supplier Experience
Table of Contents
Voice of the Supplier Survey 2024
In today’s fast-paced business world, suppliers are a driving force behind any brand’s success. Yet, despite this strategic importance, working with large enterprises often feels more challenging than it should be for them.
We launched the Voice of the Supplier Survey 2024 to shed light on the real experiences and frustrations of suppliers, and one of the areas we asked about was just how much digital transformation and data management are impacting their daily operations. From navigating multiple digital platforms to handling an overwhelming amount of administrative tasks, suppliers are caught in a complex web that will increasingly require more streamlined solutions and a new approach.
In this article, we delve into the survey findings around the impact of digital transformation and data management, offering insights and practical strategies for enhancing supplier relationships and simplifying the technological landscape.
We cover:
- What do suppliers experience during your digital transformations?
- Where to start when looking at the impact of digital transformation
- How to ensure long-term success as digital transformation and data management gathers pace
What do suppliers experience during your digital transformations?
In our first Voice of the Supplier Survey back in 2022, we wanted to get a real sense of what suppliers felt about working with their most important customers. This survey discovered that doing business with large enterprises wasn’t as smooth as it should be, but the new survey shows that little to no improvement has been made here – and for some, the situation has become worse.
At the most recent HICX Supplier Experience Live Event, Duncan Jones, former VP and Principal Analyst at Forrester Research summarizes what is happening well, as he explains, “The future looks more like a multi-planetary system, a solar system if you like.” He’s referring to the ever-changing tech landscape in Procurement and Supply Chain, and the explosion of digital tools that suppliers need to navigate. Our 2024 survey reflected this, with 31% of suppliers stating they had to log into ten or more systems to do business with their key customers.
This tech overload also showed up in the responses to other questions in the survey. 60% of suppliers felt their most important customers expected them to do too much admin work, and 61% agreed that these customers sent out too many data requests.
So, what does this tell us about suppliers? Ideally, they’d prefer a simpler ‘steady state,’ based on a more transactional relationship: getting invited to tenders, making offers, delivering products, and getting paid. For buyers, however, the ‘steady state’ involves far more complexity than that, such as the need for compliance documents, quality information, performance metrics, and tax information.
These additional requirements often result in yet more technology, further complicating matters for suppliers. As a result, the reality for suppliers is a constant back-and-forth of transactions, plus all these extra data requests and updates on top.
Where to start when looking at the impact of digital transformation
In the complex world of supplier management, everything starts with onboarding – a crucial phase that sets the tone for the whole relationship.
Costas Xyloyiannis, CEO of HICX, highlights a pressing issue in this regard: “We can all admit that there is a massive data problem, or rather, a data entry problem.” He explains that, from the get-go, people are entering the same information repeatedly across various tools, leading to huge amounts of data redundancy.
Ruth Bromley, Director of Procurement Enablement at Heineken, echoes the sentiment, emphasizing that enhancing the supplier experience must start at onboarding.
Adam Hubbard, Supply Chain Governance and Performance Manager at EDF, adds that it’s crucial to “streamline and centralize onboarding processes to avoid duplication and ensure consistency.”
How to ensure long-term success as digital transformation and data management gathers pace
Streamlining onboarding is just the beginning. Managing suppliers effectively also means keeping data up-to-date and relevant. However, our survey shows suppliers are being overwhelmed with administrative tasks. Anthony Payne, CMO at HICX, says, “Suppliers are suffering badly from initiative fatigue.”
New initiatives originating from other parts of the business adds further to the complexity suppliers face – and remember, this is happening to suppliers across all their clients, not just from your organization. While buyers can demand information whenever they require, it is increasingly important – and more productive – to start co-ordinating efforts on when and how these requests are made. They must remember that suppliers, for their part, have agency. In other words, they can choose to some extent how much they are willing to engage, impacting your business either positively or negatively.
The importance of segmentation and supplier marketing
Central to solving these issues is segmentation. This does not mean traditional procurement segmentation that has been used for internal purposes, but rather segmentation that focuses on optimizing the supplier experience. This could mean targeting specific communications to certain suppliers, launching different workflows, or customizing portals and interfaces for various supplier groups. The goal is to simplify things for suppliers, making it easier for both parties to provide and process information and data.
For example, in the customer marketing world, segmentation is used to deliver the right message to the right person at the right time. Applying this to supplier management means sending specific initiatives to the right suppliers with relevant content at convenient times. This approach improves supplier engagement and efficiency, very similar to how effective marketing strategies work.
Segmentation will be crucial in supplier management and experience management. By using data-driven segmentation strategies, organizations can tailor their approaches from onboarding through to ongoing communication and collaboration, addressing some of the biggest pain points in supplier relationships.
Enhancing your business efficiency and success
The Voice of the Supplier Survey 2024 reveals in stark detail this critical need for simplifying and streamlining the supplier experience. As digital transformation continues to reshape the procurement and supply chain landscapes, businesses must prioritize reducing the complexity that suppliers face.
By focusing on efficient onboarding, minimizing redundant data entry, and employing smart segmentation strategies, organizations can foster stronger, more productive relationships with their suppliers. The future of supplier management lies in creating a balanced, less burdensome environment for all that allows suppliers to thrive. Implementing these changes not only benefits suppliers but also enhances overall business efficiency and success.
