Maybe that’s the result of the supply chain challenges we’ve all experienced in the last few years. But even more, I think it’s because businesses are struggling with outdated collaboration methods and a lack of visibility into their supply chains. Making matters worse, they don’t have the agility to react quickly to changing business conditions.

These organizations are feeling the need to take supplier collaboration to the next level.

If you’re feeling that way, check out the webcast, . I joined Mickey North Rizza, IDC group vice president, Enterprise Software, to examine how companies are collaborating with their suppliers today and how they can uplevel these interactions.

Additionally, we shared insights from an impressive research study of over 1,500 businesses globally, conducted by IDC and sponsored by SAP. The IDC InfoBrief, sponsored by SAP, (doc #US50854723, July 2023) examines today’s supplier collaboration and examines the benefits of business networks.

Collaboration, One E-Mail at a Time

Would it surprise you to know that most organizations are still using “old-school” methods to collaborate with suppliers?

In the IDC study, 68% of respondents said they use e-mail to transmit and receive documents and data relevant to procurement and supply chain collaboration. Other methods include telephone (44%), supplier/customer portals (38%), and EDI (26%). If there is a silver lining, half of those surveyed (50%) reported they are also using enterprise collaboration tools, such as Slack and Microsoft Teams, to help accelerate collaboration with suppliers.

What this means for most businesses – or parts of those businesses – is that collaborating with suppliers remains one-directional and inefficient. Just think how many e-mails and follow-ups it takes to find and purchase from suppliers – and the hours of time that takes.

Unlike the significant progress businesses have made by digitalizing their internal processes with enterprise resource planning (ERP) systems, their external processes and collaboration methods remain largely manual. In the Americas, 58% of IDC study respondents said they share documents like purchase orders and forecasts manually. The numbers are even higher in EMEA (66%) and APAC (64%). One survey respondent told IDC, “We have digitized our internal processes but then rely on ‘stone tablets’ to collaborate with our suppliers.” Suffice it to say, now is the time for businesses to focus their efforts on digitalizing how they collaborate externally.

We’re in a New Digital World

In , IDC’s North Rizza reminded us we’re in a new digital world that demands speed, agility, and resilience. Businesses need to move quickly, not only internally but also externally in their interactions with suppliers.

Which brings us to the old-school and manual methods like fax, phone, and e-mail. They’ve worked for years. But let’s face it, they can’t keep up with the requirements to collaborate in a digital world and their ability to provide supply chain visibility only goes so far. This is a problem because, as the IDC study finds, visibility and collaboration are challenges for most organizations. According to the study:

• 75% of organizations view collaboration as a work in progress
• 59% said a lack of visibility in their supply chain makes it difficult to see changes in time and react to them effectively
• 56% believe a lack of effective collaboration with external suppliers is a significant impediment to better business performance
• 26% view better collaboration as key to managing risk

Importantly, the IDC study also found that many organizations believe they are missing business opportunities because of poor collaboration. Among larger businesses (US$1 billion in revenue), 53% reported missed opportunities. The impact is even greater for businesses with $750 million to $1 billion in revenue, where more than 70% observed missed business opportunities.

Where is your organization in terms of lost opportunities? How can you get the data you need to make better decisions? How do you make sure you’re collaborating effectively with your suppliers, so you can acquire materials to support your business and stay competitive?

I believe old-school collaboration needs to give way to next-level business networks.

Next-Level Supplier Collaboration via Business Networks

“Business network” is a term we toss around a lot these days, almost to the point of confusion. Let’s get something straight: the old-school collaboration methods discussed here – telephone, fax, e-mail, even EDI – are one-directional channels, not business networks. To stay competitive, organizations need to extend the digital transformation they started internally with ERP systems beyond their four walls with a true, many-to-many business network.

makes this possible. It is a comprehensive business-to-business collaboration platform that can connect people, processes, and systems across multiple enterprises. It can enable you to digitize your transactions and create transparent, resilient, and sustainable supply chains.

51ˇçÁ÷Business Network is a many-to-many network that can help uplevel collaboration with trading partners across procurement, supply chain, logistics, finance, people, and asset management. Organizations can exchange data, manage workflows, and apply network-wide intelligence to help improve decision-making. For suppliers, 51ˇçÁ÷Business Network helps create opportunities to make their offerings available to more buyers and thus expand their supply base.

Ready to Go to the Next-Level with Your Suppliers?

I’ve only touched on a subset of the data and best practices in IDC’s important research. To start moving collaboration with your suppliers to the next level, check out and don’t miss our .

Eamon Ida is head of Solution Marketing for 51ˇçÁ÷Business Network.

But no matter where nations are on the roller coaster of steep rises, dramatic declines, and seemingly stable plateaus, inflation brings wide-ranging impacts that vary across industry, geography, and supply chain design. Adequate liquidity for smooth business operations can be affected. Centralized banking actions on interest rates can ease or restrict short-term lending and borrowing activities. Even supply chain challenges can dissipate or intensify as costs fluctuate and inventory on hand becomes less or more expensive.

There is no simple, magical financial instrument that can help businesses plan around the realities of , but intelligent technology can help. Tools such as artificial intelligence (AI) and predictive analytics can help companies anticipate and see around the corners of their operation, simulate and prepare for multiple contingencies, and pivot their business models as needed. Best of all, they gain numerous options to understand economic circumstances, predict the impact, take near-term actions, and establish structures to secure a position of strength.

Below are three key areas where these types of technologies can help companies understand the impact of inflationary challenges, act quickly, and prepare for what’s next.

Move Cash with Intelligence and Confidence

The overall value of money and assets reduces in the future, and having cash sooner allows a business to quickly accomplish more. To mitigate this risk, companies must recognize the potential impact of various scenarios, ranging from rising prices on commodities to shortages of raw materials. This knowledge then needs to be translated into comprehensive and clear cash flow projections and flexible strategies that can be adjusted to manage liquidity shortfalls and surpluses effectively.

Using , now part of SAP, finance leaders can guide their business down the best-possible pathways. They can choose to adjust receivables and payables strategies or tap the lowest-cost credit line available from their banking institution. Plus, working capital assets can be unlocked with financial tools such as dynamic discounting and supply chain financing.

The working capital management solutions accurately reflect inflationary conditions with AI-enabled forecasts and updated views that are always available to the business planner. From planning and simulation to picking the right funding alternatives and controlling processes, these functions work synchronously to help ensure effective coordination of cash movements – using a single source of trust integrated smoothly across the enterprise.

While every decision boils down to the movement of cash, the combination of well rounded, real-time information, auto-generated possibilities, and predictive insights can help businesses make the best choices with confidence. And as their values change over time, goods and assets can be purchased and maintained in the future at the original price with a carrying cost that’s less than the inflation rate.

Limit Exposure from Global Differences

Different geographies rarely have the same experience with inflation, but a rise in commodity prices inevitably increases raw material costs. And in higher or unstable inflation regions, currencies can depreciate quickly, causing exchange rates to spike.

These global economic fluctuations can be particularly risky for corporations that have borrowed capital in response to low interest rates over the last few years. Inflation is already eroding their planned repayment strategy for outstanding loans. And additional exposure to another region’s instability can further exacerbate cost pressures, squeezing margins tighter and limiting access to cash.

With the application, treasury managers and financial leaders can monitor risk positions, commodity price changes, and currency conversion rates, even during the most volatile economic situation. They can develop compliant hedge accounting strategies with a complete audit trail, while staying compliant with regulations such as the Market Infrastructure Regulation (EMIR) and the most recent version of the International Financial Reporting Standard (IFRS 9).

Treasury teams can also gain insights to tackle debt and manage investments more effectively. 51ˇçÁ÷Treasury and Risk Management offers information such as available cash, balance risk, and return on investment (ROI) and monitors investments against potential interest rate fluctuations. In addition, borrowing and lending transactions through the life of a loan can be captured, analyzed, and reported as they occur.

Act Quickly Today and Prepare for Tomorrow

When the engineering and production of manufactured goods grow more expensive, businesses must decide on whether to reduce margins or pass additional costs to the customer. It is a tough choice, especially when people already feel financially overburdened.

By integrating solutions with , procurement, supply, and logistics organizations can get the insight they need to generate more revenue from every spend event and optimize cost reduction. Together, they can run simulations and what-if analyses to identify and engage trading partners with the capacity and expertise to handle emerging situations such as scaled-up production and further drive down financial and material waste.

Of course, effectively managing inflationary risks requires businesses to have access to the right data to make decisions and move their supply chains forward. The combination of 51ˇçÁ÷Digital Supply Chain and 51ˇçÁ÷Business Network enables companies to manage resources more strategically in ways that help increase productivity, decrease operating costs, and free up employees for more mission-critical work. In addition, organizations can get ahead of supply chain delays and downtimes to prevent revenue loss and avoid unforeseen costs with visibility into inventory and production capacity, asset maintenance, and logistics processes.

Come from a Position of Financial Strength

With recent inflationary events in mind, understanding and managing the financial risks in the supply chain play a significant role in the race for survival. And companies that can step up and make the right decisions at the right time are the ones that have clear visibility over their procurement, supply chain, and logistics data and processes.

For many organizations worldwide, 51ˇçÁ÷solutions are already one of the most effective means of protecting their financial strength during times of inflation. And they will continue to alleviate their challenges as the portfolio continues to evolve to meet the needs of a changing economy and competitive landscape.

Inflation impacts costs, interest rates, and supply chains worldwide. .

Neil Krefsky is head of Finance and Risk Product Marketing at SAP.
Haresh Chhaya is a Treasury and Working Capital solutions leader at SAP.
Max Hendrickx is senior director of the Working Capital Management Center of Excellence at SAP.
Eamon Ida is director of Business Network Solution Marketing at SAP.