In today’s networked economy, the cloud-based business network is a great differentiator. As commerce networks such as Amazon and eBay have changed the way consumers buy and sell, today we’re seeing a new generation of collaborative networks embraced by businesses. The ability of a networked enterprise to streamline operations, improve collaboration with trading partners, enforce compliance, and better manage working capital presents business advantages that can’t be achieved in a disconnected business environment.
Not all business networks are created equal, however. Some networks have a regional or industry focus, while others have a narrow specialty such as invoice processing only. For organizations looking to achieve world-class results from a business network, here are nine things to consider.
Know the difference between a network and a portal.
While most business networks feature a supplier portal for real-time access to documents and data relating to transactions, the portal is not the network. A true business network is not restricted to one-to-one or one-to-many connections. It connects many buyers and many suppliers. If your “network” requires a separate log-in for each customer, it’s not a true business network. A true business network enables buyers to connect electronically with many existing suppliers already on the network. With no need to build the network from scratch, buyers can achieve results quickly. For suppliers, the ability to connect with tens or hundreds of customers from one network account is a major advantage, as is the ability to use the network as an e-commerce channel to land new business.
Configure smart invoicing rules to drive touchless processing.
Validating invoice data before posting for payment is essential to streamlining the procure-to-pay process. A business network offering a broad set of business rules that any business user can configure is key, enabling you to virtually eliminate the processing of invoice errors and exceptions. With the right business network, you can apply business rules to set line item unit price tolerances for order confirmations, set or ignore country-specific invoice rules, allow suppliers to send invoice attachments, make the requester responsible for ensuring the appropriate accounting on non-PO invoices, and much more. If an invoice violates a rule, that invoice is automatically flagged and sent back to the supplier for correction and re-submission. What results is a smart invoice process where you can achieve 98% or greater straight-through invoice processing.
Move beyond invoice management.
The real potential for transformation comes from the ability of a business network to enable trading partner collaboration not just for invoice processing, but also for management of related documents such as catalogs, contracts, purchase orders, order confirmations, change orders, service entry sheets, freight line items, advance ship notices, payment status, and payment remittance. This means that, from one platform, in the cloud, you can streamline essential collaborative business processes from procurement through payment. At the same time, you can improve compliance by driving more orders off catalogs and simplifying the matching of invoices to purchase orders, contracts, and service entry sheets.
Improve your ability to manage non-PO invoices with contract invoicing.
Invoice processing breakthroughs over business networks can extend to the management of non-PO invoices, which are often the most difficult, and costly, invoices to process. An advanced business network can provide valuable support for non-PO invoices by allowing you to match these invoices against—or create invoices from—a contract.
Don’t limit the spend coverage.
If a network handles transaction processing primarily for products ordered off catalogs, that will cover only a small portion of your total spend. A true business network must address other spend categories such as complex items and services and recurring third-party services. The devil is in the details, so make sure you probe into how the network handles the complicated matching and validation these service spend categories require.
Five down, four to go to complete the “cloud nine.” Next week, we’ll look at the other keys to collaborating over a business network. Until then, take some time to learn more about the networked economy.