Transcript Positioning Yourself to Win in The Networked Economy

Ariba Network
Best Practices
Defining the Buyer Compliance Policy
Leigh Tangretti, Director Network Services
© 2012 Ariba, Inc. All rights reserved.
Agenda
• Network Enablement is a Journey
• What is a Buyer Compliance Policy and why is it important?
• The key elements of a Buyer Compliance Policy and associated
•
2
best practices
Key Collaborative Commerce Questions to ask yourself
© 2012 Ariba, Inc. All rights reserved.
The Path to Best-in-Class is a Journey
Hi
Specialize and
Sustain
(Learning & Collaboration)
Process Maturity
Capture More Complex Areas
Phase
3
Expand and Enable
Increase Adoption
Phase
2
Launch and
Leverage
Get Early Savings
and
Organizational
Wins
Phase
1
Low
Adoption
(technology/automation)
3
Hi
Agenda
• Network Enablement is a Journey
• What is a Buyer Compliance Policy and why is it important?
• The key elements of a Buyer Compliance Policy and associated
•
4
best practices
Key Collaborative Commerce Questions to ask yourself
© 2012 Ariba, Inc. All rights reserved.
Buyer Compliance Policy
5
•
The foundation for Collaborative Commerce communication is the
Compliance Policy
•
•
The Compliance Policy directly affects supplier enablement efforts
All internal buyer stakeholders should be aware of and able to
communicate the Compliance Policy
A strong Compliance Policy will result in more suppliers transacting electronically
6
Agenda
• Network Enablement is a Journey
• What is a Buyer Compliance Policy and why is it important?
• The key elements of a Buyer Compliance Policy and associated
•
7
best practices
Key Collaborative Commerce Questions to ask yourself
© 2012 Ariba, Inc. All rights reserved.
What is the Buyer Compliance Policy?
The governing policy by which a Buyer manages their Collaborative
Commerce program.
EDICT
Designed to define the policy
Communication
Internal and external
communication materials to
educate on the policy
Non-Compliant Process
Buyer defined seller
escalation path for sellers
not supporting the policy
8
© 2012 Ariba, Inc. All rights reserved.
Defining the EDICT
E
D
I
C
T
9
• EXPECTATION
• Inform suppliers of the project and what you want them to do
• DEADLINE
• Set a deadline date for enablement
• INCENTIVE
• Provide an incentive for participation
• CONSEQUENCES
• Establish realistic and executable consequences for Non-Compliance
• TOGETHERNESS
• Assure your suppliers that these changes are mutually beneficial; You are in this
together.
© 2012 Ariba, Inc. All rights reserved.
Defining the EDICT
E
• EXPECTATION
• Inform suppliers of the project and what you want them to do
• DEADLINE
• Set a deadline date for enablement
DDear Seller,
I
C
T
10
Your participation in this
• INCENTIVE
• Provide an incentive for participation
program is required…..
• CONSEQUENCES
• Establish realistic and executable consequences for Non-Compliance
• TOGETHERNESS
• Assure your suppliers that these changes are mutually beneficial; You are in this
together.
© 2012 Ariba, Inc. All rights reserved.
Defining the EDICT
D
• DEADLINE
• Set a deadline date for enablement
• DEADLINE
• Set a deadline date for enablement
DDear Seller,
Completion of Ariba registration is expected by
I
11
• INCENTIVE
12,for2012.
•November
Provide an incentive
participation
C
Registration on the Ariba Network must be completed
2 weeks of receiving the Relationship Request
•within
CONSEQUENCES
•Letter.
Establish realistic and executable consequences for Non-Compliance
T
Email, Fax transactions will cease as of
•Paper,
TOGETHERNESS
•November
Assure your suppliers
that these changes are mutually beneficial; You are in this
12, 2012.
together.
© 2012 Ariba, Inc. All rights reserved.
Defining the EDICT
I
• INCENTIVE
• Provide an incentive for participation
DEADLINE
Dear• Seller,
D
• Set a deadline date for enablement
By participating in this program, you can obtain the
•following
INCENTIVE benefits:
I
• Provide an incentive for participation
Accelerated cash flow
Continued business with our company
C
T
• CONSEQUENCES
Document visibility of payment status online
• Establish realistic and executable consequences for Non-Compliance
Favorable payment terms
•Preferred
TOGETHERNESS
supplier designation
• Assure your suppliers that these changes are mutually beneficial; You are in this
Processing
efficiencies
together.
Improved vendor visibility
12
© 2012 Ariba, Inc. All rights reserved.
Defining the EDICT
C
• CONSEQUENCES
• Establish realistic and executable consequences for Non-Compliance
DEADLINE
Dear• Seller,
D
• Set a deadline date for enablement
Consequences of not participating in this program will
•expose
INCENTIVEyour too:
I
• Provide an incentive for participation
Extended payment terms
Paper processing fees
C
• CONSEQUENCES
•Discontinuation
Establish realistic andof
executable
consequences for Non-Compliance
paper delivery/receipt
T
• TOGETHERNESS
• Assure your suppliers that these changes are mutually beneficial; You are in this
together.
Discontinuation of business
13
© 2012 Ariba, Inc. All rights reserved.
Defining the EDICT
T
• TOGETHERNESS
• Assure your suppliers that these changes are mutually beneficial; You are in this
together.
DEADLINE
Dear• Seller,
D
I
C
T
14
• Set a deadline date for enablement
We are very pleased to announce a progressive
•change
INCENTIVEwithin our company that will improve the way
interact
with
our suppliers. We have entered into a
•we
Provide
an incentive
for participation
relationship with Ariba, the leading global provider of
collaborative business commerce solutions, which will
• CONSEQUENCES
allow our suppliers to easily extend their back-end
• Establish realistic and executable consequences for Non-Compliance
systems and processes to benefit from electronic
transactions.
• TOGETHERNESS
• Assure your suppliers that these changes are mutually beneficial; You are in this
together.
© 2012 Ariba, Inc. All rights reserved.
What is the Buyer Compliance Policy?
The governing policy by which a Buyer manages their Collaborative
Commerce program.
EDICT
Designed to define the policy
Communication
Internal and external
communication materials to
educate on the policy
Non-Compliant Process
Buyer defined seller
escalation path for sellers
not supporting the policy
15
© 2012 Ariba, Inc. All rights reserved.
Components of an Adherence Policy:
Internal Communication
•
•
The most effective deterrent to supplier compliance is conflicting buyer
messages
Internal Communication should include:




16
Initiative Announcement letter to Internal Resources from Executive Sponsor
Training for Key Stakeholders
FAQs/Talking Points for Key Stakeholders
Periodic reminders of Initiative (desk drops, buyer Intranet posting, Email,
performance reviews)
Key Internal Communication Messages
Strategic



Business strategy, expected value and benefits
Program timeline and measures of success
Critical success factors
Operational





Specific operational changes resulting from the initiative
Process, technology and people objectives
Consideration of local operations and impact
Team accountability and involvement, particularly as it relates to
adherence
Actions to be taken to prepare stakeholders
Individual




17
Impact on individual & team goals and objectives
Individual job and career benefits: “what’s in it for me?”
Specific job requirement changes/impact on roles & responsibilities
Activities and preparation for change resulting from program
© 2010 Ariba, Inc. All rights reserved.
Sample of Internal Communication
Overview
Strategic
Operational
Timeline
18
© 2012 Ariba, Inc. All rights reserved.
Components of a Compliance Policy:
Supplier Communication
•
The Compliance Policy should be pervasive in all supplier
communications:






•
19
Relationship Request Letter
PO Terms & Conditions
RFXs
Business Awards/Contracts
Payment (Remittance Notes)
Supplier Intranets, Extranets, etc.
Key Stakeholders should emphasize the Compliance Policy during supplier
interaction
Supplier Relationship Request Letter should
“Issue an EDICT”
Togetherness
Expectation
Incentive
Deadline
Consequence
20
What is the Buyer Compliance Policy?
The governing policy by which a Buyer manages their Collaborative
Commerce program.
EDICT
Designed to define the policy
Communication
Internal and external
communication materials to
educate on the policy
Non-Compliant Process
Buyer defined seller
escalation path for sellers
not supporting the policy
21
© 2012 Ariba, Inc. All rights reserved.
Components of a Compliance Policy:
Supplier Enablement NCE Process
22
•
Non-Compliant Escalation is a key component of the Supplier Enablement
process
•
For buyers with SE Services, NCE is a joint process that can maximize
enablement success
•
To be effective, the NCE process must incorporate the consequences
outlined in the “EDICT”
SE Services NCE Process
On Hold Report
Buyer NAE
Contact
Action 1
Resolve NAE and Ariba
Supplier Enablement
resumes progress with
supplier
Action 2
Action 3
23
Reject supplier for
participation in
Collaborative Commerce
initiative
Execute appropriate
consequence
“On Hold” Supplier Report
Vendor Name
Vendor ID
Acme Corp
414412
Widgets R Us
400345
Don's Tree Service
418901
Supplier ANID
Status Reason
Comments
5 Jan MV: Spoke to Ana at Ext.
208;She said they will not
participate without new business.
AN01234567890
13 Dec MV: Spoke to John; He
Supplier declined
said he would not pay the SMP
fees
AN213419836152 participation due to fees
19 Jan MV: Cannot locate Don's
Tree Service; Phone number is
AN19816100012 Invalid contact information invalid
Supplier declined
participation
Terms of
Use
Accepted
Trading
Relationship
Accepted
Vendor
Contact First
Name
No
No
Ana
Yes
No
John
Yes
No
Best Practice is to resolve On Hold
status relationships within 10
business days
24
Vendor
Contact Last
Name
Vendor Contact
Phone
(212) 555-5555
Smith
(404) 777-9311
NCE Tracking Process
# Supplier Name
Supplier ANID
Supplier
Vendor ID
1 Acme Corp
AN01234567890
414412
2 Widgets R Us
AN213419836152
400345
Supplier declined participation due to
12/13/2010 fees
3 Don's Tree Service
AN19816100012
418901
1/19/2011 Invalid contact information
25
NCE Date
1/5/2011
On Hold Reason
Supplier declined participation
Date NCE
Response
Sent
Count of
Escalations
1/8/2011
1
12/15/2010
3
1
Date
Escalated
1/15/2011
Date of
Escalation
Response
NCE Status
Notes
In Progres
Conference Called scheduled for 1/21/11
Escalated
Called Procurement Manager to intervene
New
Supplier Enablement NCE Process
Supplier
Enablement NCE Process
Supplier resists
enablement
request
Supplier
registers?
Yes
Yes
Process complete
Ariba escalates
supplier to NCE
contact, with
reason code
Ariba
reengages with
supplier
Ariba escalates
supplier to NCE
contact, with
reason code
Buyer
NCE Contact
Buyer
Stakeholders
26
Ariba
reengages with
supplier
No
Ariba sets supplier
status to “Closed”
and assigns
appropriate Status
reason
Yes
Buyer
Ariba
No
Is supplier still
Active?
NCE Contact sends
appropriate
response based on
reason code and
copies Ariba
NCE Contact
escalates to key
Procurement/SC
resource for
support
NCE contact
shares result of
interaction with
Ariba
Procurement/SC
engages with
supplier
Procurement/SC
reports results of
supplier interaction
to NCE Contact
Process complete
Agenda
• Network Enablement is a Journey
• What is a Buyer Compliance Policy and why is it important?
• The key elements of a Buyer Compliance Policy and associated
•
27
best practices
Key Collaborative Commerce Questions to ask yourself
© 2012 Ariba, Inc. All rights reserved.
Key Collaborative Commerce Policy
Questions
•
•
•
•
•
•
•
28
Is participation in this initiative mandatory?
Do we have a desired deadline date for suppliers to convert from paper POs/invoices to the Ariba Network?
Should we provide incentive for the supplier to participate? If so, what incentives are we comfortable and/or
prepared to offer?
Do we want to alter payment terms for suppliers participating in collaborative commerce?
Will we allow a supplier to just receive electronic Purchase Orders? Or, will we only issue electronic Purchase
Orders if the supplier also submits invoices electronically?
Are there any suppliers that we do not want or cannot move to the Ariba Network?
Do we want to incorporate mass recruitment techniques?
Key Collaborative Commerce Policy
Questions
•
•
•
•
•
•
•
29
Do we have a new supplier set-up process? How does it need to be modified to include supplier set-up on the
Ariba Network?
How do we want to handle one-time vendors? Should they register on the AN?
Should we return paper invoices received after a supplier has registered on the AN?
Can we include supplier participation in collaborative commerce as a condition for the award or renewal of business
with our company?
What communication channels do we have available to publicize our collaborative commerce initiative to our
suppliers?
Do we have an effective way to communicate our collaborative commerce policy to internal stakeholders?
Do we have executive buy-in and support for implementing our collaborative commerce policy?
Questions
30
© 2012 Ariba, Inc. All rights reserved.