ModernizingVendor OnboardingWhy businesses need a new approach to vendor

onboarding–and how to achieve it

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Modernizing Vendor Onboarding

White paper

Why businesses need a new approach to vendor onboarding–and how to achieve it

As businesses grow, one process that often remains rooted in the past is vendor onboarding, which continues to be ine!cient and cumbersome for both the business and the vendor.

Why does this matter? Because outdated vendor onboarding processes ultimately result in businesses wasting a lot of resources while also missing out on the most ideal and cost-e!cient partnerships.

Larger businesses often have way too many onboarded vendors for the same service or good. When a business has twenty vendors for the same thing—especially when that ‘thing’ doesn’t hold strategic value—it’s clear that the people in the company don’t know which vendors the company is working with. If they did, the need to onboard a new vendor would have never come up in the first place (because there’s already a vendor for that).

Why don’t employees know which vendors their company is already working with? Because information about existing vendors is nearly impossible to find. It either lives in the company’s ERP, which most employees don’t have access to, or it’s saved in spreadsheets managed by people in di"erent departments across the company–spreadsheets that are rarely up-to-date or synced.

Employees don’t know which vendors the company is already working with.

At the root of outdated vendor onboarding processes are three main challenges: Vendor Onboarding Steps

The process of onboarding a new vendor typically

involves:

Approving the request for a new vendor.A request can come from anyone in the companyfor any need, from a new stapler to a new designer.

1.

Identifying a chosen vendor.It’s typically up to the requestor to find the vendorthey want to work with, and to justify their choicevia an approval process involving their direct manager and/or the procurement manager.

2.

Completion of required form.The vendor completes a detaild vendor onboardingform and goes through additional legal, complianceand security processes.

3.

Adding the vendor to the ERP.Finance manually enters the vendor’s information into the company’s ERP after verifying that the dataprovided in the onboarding form is complete.

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4.

Challenge #1:

The vendor onboarding process involves a number of

stakeholders from the business side, including the

requestor and his or her manager, the procurement

manager, and a person from the finance team. But it’s

only the main POC, or requestor, who vendors typically

have access to. And there’s good reason for that;

opening lines of communication between yet-to-be-

onboarded vendors and Finance can quickly

overwhelm the finance team. But this creates problems

when someone other than the POC needs to address

matters with the vendor. For example, when Finance

needs to clear up an error in the onboarding form the

vendor provided (a common scenario).

Communication with the vendor isn’t straight-forward.

Challenge #2:

The lack of visibility into what vendors the company is

working with is one thing. But there’s a second

transparency issue stemming from the fact that the

various sub-processes involved in vendor onboarding

take place in siloed systems. This prevents stakeholders

from being able to easily understand where an

onboarding process stands if it’s not currently with them.

It also brings rise to a number of other issues. For

example, employees can’t prepare for what’s in the

pipeline or properly prioritize onboarding-related tasks.

The business POC doesn’t have an easy way to

accurately update vendors who are growing impatient

with the lengthy onboarding process. And stakeholders

who get involved late in the game miss the underlying

context in which the need for the vendor originally arose,

then become bottlenecks when they need to gather this

information for themselves.

The vendor onboarding process lacks transparency.

Challenge #3:

Slow Processing time No status visibility Wasted resources Poor vendor communication

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Broken communication chains, error-prone manual tasks and long delays characterize outdated vendor onboarding

processes. These processes are full of ine!ciencies that create major frustration for employees and vendors alike.

Outdated vendor onboarding hurts your business—and your people.

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For the employee making the original request to work with

a new vendor, the vendor onboarding process is highly

frustrating. He needs to bother a lot of people trying to

find out whether there’s a vendor for his need. And, if he’s

onboarding a new vendor, he’s bothering people again

trying to keep track of where the process stands.

The employee

The procurement manager views vendor onboarding as

strategic. With this, it’s of prime importance to her that she

be involved early in the vendor onboarding process—

something that doesn’t always happen when department

managers approve new vendor requests. Ensuring the

company is partnering with the best vendors and getting

the best terms becomes a major challenge.

The procurement manager

There are four straight-forward tactics that can allow businesses to overcome their vendor onboarding challenges and

achieve smoother, more e!cient processes.

Transforming vendor onboarding operations

When it’s up to Finance to manually enter vendor information

into the company’s systems, their work becomes time-

consuming and error-prone. Finance becomes the

bottleneck of the entire process, and also needs to rely on

the POC for addressing issues with the vendor’s information.

The finance person

Vendors may increase prices or even reject working with

a business whose onboarding process is too cumbersome,

giving the impression that other important processes (like

issuing payments) will also take too long.

The vendor

This is essential for achieving streamlined and informed vendor onboarding processes. With an updated vendor database,

employees can easily find out whether there’s a true need to onboard a new vendor. When they deem that onboarding

a new vendor is necessary, the fact that they’ve already consulted the company’s vendor database helps justify their

onboard request, simplifying matters for the procurement manager. Furthermore, by steering companies away from

onboarding new vendors unnecessarily, an updated vendor database keeps the business working actively with those

vendors they’ve already chosen to onboard, fueling engaged, positive partnerships and driving major time and cost savings.

Solution #1:Create an up-to-date vendor database.

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Only by involving the procurement manager early on in the process will businesses ensure that their teams are working

toward valid end goals and keeping the company’s bests interests in mind. The need for the vendor must get approved

by a procurement manager before the vendor is invited to work with the company. This can be as simple as introducing

a process in which the requestor completes a vendor onboarding request form that the procurement manager must approve.

Solution #2:Involve the procurement manager early on.

Beyond o!ering vendors and Finance a more pleasant onboarding experience, moving toward digitized processes

minimizes errors and saves time. Businesses should digitize all of the forms and agreements the vendor must

complete, as well as the finance team’s process of entering the vendor’s data into the company’s ERP. This will also

enable businesses to more easily collect valuable business data (such as who else the vendor is working with) for enriching

their vendor profiles.

Solution #3:Digitize manual, error-prone processes.

With all vendor communication and onboarding-related processes happening in a single, centralized platform, businesses

can overcome the challenges that arise from relying on siloed systems, emails and spreadsheets for a process as

comprehensive as vendor onboarding. It enables every stakeholder in any approval flow to easily understand where the

process stands at any time, and when they are required to take action. This keeps vendor onboarding moving forward

quickly and e"ciently, helping businesses save money and valuable employee time.

To learn more about how you can achieve modernized vendor onboarding processes that save time and money,

visit Approved.com or contact us for a demo.

Solution #4:Move onboarding processes into a centralized platform.