There is a growing trend among organizations of all sizes: using technology to support a variety of vendor management activities. There are several new and interesting technologies that organizations are using to simplify processes, analyze spending patterns and establish a more disciplined approach to vendor management. Here are three that have really matured in the last several years and are worth strong consideration given the benefits they provide.
1. Payment Automation Solutions
Payment automation is one of the fastest growing of the three technologies. Automation allows organizations to streamline a variety of cumbersome and time consuming tasks related to paying your vendors. There are a variety of solutions in the marketplace, including ACH, multi-use commercial cards and, one of the more interesting solutions, virtual payments. All of these solutions simplify tasks and provide enhanced visibility that helps organizations reap valuable benefits such as:
- reducing fraud,
- lowering processing payments costs,
- centralizing and streamlining processes to improve efficiency of invoice payment,
- improving cash flow, and
- establishing more disciplined cost controls.
Certain payment automation solutions can also generate extra revenue for your organization through rebates. There are a variety of products that provide these revenue sharing opportunities – from commercial cards to electronic payments to gift cards. And while banks have traditionally been the primary source of these products in the past, vendors like Comdata and Wex are designing unique and creative products that are flexible and fast to implement.
This is an emerging and exciting area that is growing in adoption.
2. Sourcing (Bidding) Automation Systems
If your organization does a reasonable amount of bidding – that is, formal RFPs, informal quotes or perhaps both – then sourcing automation may be another opportunity to consider in 2016.
Sourcing automation centralizes and simplifies all of the tasks related to formal and informal bids, including vendor registration, document posting and online notifications – making communications with prospective vendors straightforward and easy. My experience is that most organizations employ time consuming manual processes for these activities, relying upon email, fax and telephone quotes. Using sourcing software automates these activities and provides many advantages including:
- Efficiency – All formal and informal bidding activities can be managed through the sourcing platform including details of the solicitation, bid documents and all communications with prospective vendors. These platforms provide a one-stop shop for everything related to your solicitation, making it much easier on you and the vendor.
- Accuracy – In addition to being time consuming, manually consolidating quote information is prone to error; even the best employee can make mistakes that result in inaccurate comparison. Sourcing platforms take care of all of the calculations for you, and make it easy to use side-by-side comparisons to analyze results.
- Control – In many organizations the informal quote process is ad hoc, with people throughout the organization doing their own thing to get competitive pricing. Oversight is difficult and reconstructing historical activity is next to impossible. Sourcing platforms make documentation automatic and oversight easy.
Sourcing automation is a growing trend and the options are becoming less expensive and easier to implement. An emerging solution is the “group” sourcing platform which costs little to nothing to use, and is relatively easy to implement.
A leader in this space is SourceSuite, which currently manages over 15 group sourcing ‘communities’ including the Michigan Bid System, the Rocky Mountain e-Purchasing System and one that my company developed in partnership with them (and recently launched), the Vendor Centric Purchasing Platform. SourceSuite offers a no cost model to organizations that want to subscribe to their core platform, and, instead, charge only for more advanced features. It’s a great model if you can find a platform that’s been developed for your industry.
3. Expense Reporting Software
A third technology to consider is expense reporting software. While larger organizations automated expense reporting long ago, there are many that still do expense reports the old fashioned way – with pen and paper.
If this sounds like you, then you know how painful this can be. The process is slow, there is no visibility into ‘what’s out there’, and getting reports reviewed and approved can feel like moving a mountain. So if you’re looking for low hanging fruit, expense reporting may be a good place to start.
Nearly all the leading expense reporting tools are cloud based, reasonably priced and fairly easy to implement. Chrome River,Expensify and Concurare three that have a large and growing user base. However, there are lots of good products out there and some are designed for specific verticals like professional services or government contracting. So if your expense reporting process is still manual, this is an easy and relatively inexpensive technology to consider.
Author: Tom Rogers
Job Title: CEO
Organization: Vendor Centric
Tom is the founder and CEO of Vendor Centric, he has been a trusted advisor to nonprofit organizations for 30 years, with a focus on helping them align the right people, processes and systems to mitigate third-party risk and drive more value from third-party contracts and relationships.