The success of a supplier relationship as a strategic enabler ultimately begins with effective onboarding across all of the firm’s priorities. Today, those priorities often align to several focus areas:

Addressing multi-origin and multi-dimension priorities requires a suite of tools, applications, and processes, which not all vendors are capable of providing. Onboarding the right partner and implementing the right technology are paramount.

Modern technologies embedded within Business Spend Management platforms like Coupa are critical to executing an efficient and controlled supplier onboarding process. Coupa Supplier and Risk Management is a tool to collect, approve, and monitor supplier information as the original entry point for engaging with a supplier.

When working with companies to help revamp new vendor onboarding, there are numerous pain points we commonly observe across people, process, technology, and data.

Vendor Onboarding Challenges

1. Manual Keying and Recording of Supplier Information in Static Forms and Systems

New vendor onboarding forms are often PDF or word-based formats without field validation or the ability for conditional fields. This results in inconsistent data collection and mis-entry.

2. Prematurely Entering a Business Relationship With an At-Risk Vendor

Onboarding and committing to a business obligation in advance of obtaining necessary approvals can carry elements of financial, operational, regulatory, and reputational risks. Organizations may enter and sign agreements with vendors prior to all steps in the due diligence process being completed.

3. Transmitting Sensitive Supplier Information in an Unsecure Way or to Unintended External Parties

Sensitive personal and banking information are two of the most common data types transmitted over unsecure email and saved onto personal drives. Users are hyper-conscious of their financial details being mishandled and will discontinue use of a product or service if necessary.

4. Redundant Forms, Fields, and Supplier Records

Multiple versions of the same supplier record can plague companies of every size. Coincidentally, in larger organizations it’s often the case that different functions or entities make repetitive requests for the same supplier or stakeholder information from suppliers. This makes consolidated spend reporting a challenge and can lead to multiple vendor records when all along one record would’ve been sufficient.

5. Poor Workflows and Visibility Into Onboarding Status for Suppliers and Internal End Users

Lack of visibility requires inquiry, follow-up, meetings, and often delays.  As a result, data challenges can create additional downstream reporting issues.

6. Absence of Data Validation Around Key Fields

Data validation of key identifiers such as Tax Identification Number (TIN) is a common root cause of duplicate records and master data issues. Suppliers or end users may enter vendor information, but there’s no application to validate the accuracy of this data.

Scott Harris, product manager at Coupa, noted “Each bit of information collected should conditionally drive the different forms, fields, and approvals required to meet those needs – and systems like ours are expected to easily help manage it all.

“We are seeing buying organizations hungry for expertise in both process and technology. Service implementers are bringing all these topics together smartly, as well as from in-product templates and prescriptions that are already working well for other buying organizations.”

As companies seek to address some of the challenges described above through supplier onboarding optimization, there are multiple levers to consider in the improvement journey.

Supplier Onboarding Optimization Plans of Action

1. Technology and Integrations

Enhancement of Tools and Technology

Replace static forms and email approvals with modern applications like Coupa Supplier and Risk Management to support onboarding processes. These tools contain native data entry validation that will reduce errors and create a more efficient and user-friendly user experience for internal stakeholders and future suppliers. Modern tools also contain audit logs that record workflow steps and approvals.

Build Bi-Directional Integrations Between Applications

Develop integrations between key systems to eliminate redundant data entry activities and reduce the risk of creating duplicate supplier records. A strategic implementation partner can ensure the firm’s entire ecosystem of tools and platforms work in cohesion and reduce redundancies or siloes.

Consider all systems, applications involved, and data requirements in the Supplier Lifecycle Management and Source to Pay when determining the system integration architecture (Sourcing, Supplier Risk, Onboarding, Risk Assessment, Contracting, Purchasing, Receiving, Quality and Performance Review, Invoice Processing, Financial Reporting, Payment, Supplier Analytics). Note: Native integrations exist between many Coupa applications that simplify the need for custom integration development.

2. Data Governance and Controls

Employ an Effective Data Model With Data Governance

Develop standards around a supplier data model to set the stage for technology solutions that can support the overall model for new suppliers and changes to existing suppliers. Consider the system of record for supplier and transactional data along with potential use of data warehouse in the overall design.

Specific application requirements and complexities around legal entity structure and supplier sites can impact the design of the model, source data specifications, and necessary transformations. These standards should include measures to avoid supplier duplication which is supported by native functionality of many modern applications.

A data governance model should also define when a new supplier is required to be created. Modern BSM applications like Coupa have native functionality to identify and flag duplicative vendor records so that one vendor is not reflected within two separate data objects.

Ensure Approval Workflow Facilitates Effective Controls

Align approval workflows with functional expertise and process stage gates to ensure the necessary checks and balances are in place when onboarding suppliers.

Data stewards should have visibility into onboarding or be directly involved in approval chains to help reinforce the enterprise data standards. Approvers provide supplier acceptance and approve overall accuracy of the information provided.  Ensure approvers should have clearly defined roles and responsibilities surrounding the data points they are reviewing and criteria for approval or rejection.

Engage Third-Party Risk and Leverage Entity Controls Where Appropriate

Modern applications for new vendor onboarding will validate TIN with Government tax authorities and validate address and banking information fields with third parties.

3. Strategy and Process

Involve Functional Stakeholders in Requirements Gathering, and Design

The teams that leverage the information gathered in onboarding can provide perspectives around required data points, question format, and target systems. These teams bring requirements that align to overall company strategy along with the needs of their respective functions. Functions like Third-Party Risk provide insights that can ultimately help mitigate supplier risks.  

Follow Effective Change Management Principles

Ensure the redesigned onboarding approach is clearly understood by the business and suppliers alike.

At minimum, change management should cover the processes around requesting new supplier details as well as changing, approving, and approving existing supplier information. Ensure change management is supported by company leadership, driven by change agents within the business and functions, and reinforced by the technology.

Complementing training efforts with clear and concise communications helps ensure new applications, processes, and roles resulting from the changes can be adopted.   

Enable Smarter Onboarding

Procurement organizations that strive to partner with internal and external stakeholders as a strategic enabler can achieve these goals with Coupa’s Supplier and Risk Management solution. It’s embedded within the Coupa suite of Business Spend Management applications, and onboarding vendors can be used for transactions in parallel with the onboarding process.

For expert Coupa implementation support, contact CrossCountry Consulting today.