How to Onboard Suppliers to your platform (the right way)

Creating and successfully going along with a supplier onboarding process is not an easy task.

The supplier relationship and the supplier onboarding process become even more complicated when you realize potential suppliers need more than going over payment terms and a compliance risk evaluation process.

But let's not forget: suppliers can be the missing link to a perfect work process.

Many businesses and even SaaS companies have to form solid business relationships with prospective suppliers, but only a small percentage of these businesses do it right.

That’s why it is important to know how to onboard your suppliers. The right way.

What is Supplier Onboarding?

Supplier onboarding, in the traditional sense, is an approval process for strategic suppliers you want to welcome into your business processes. Though the supplier onboarding process originates from a need for strategic sourcing businesses, for mutually healthy relationships in business, it is crucial to be aware of supplier performance and the essential services that can be expected, supplier risks, supplier compliance with a given business, and its policies, and more formal approval requirements.

It is also important to keep in mind that supplier onboarding is not supplier management. It is the preparations and precautions you make to prevent supplier management from getting out of hand.

So, if you are facing problems in managing your suppliers, that is a big fat sign that you might want to revisit your supplier onboarding processes.

One more thing to keep in mind is that a vendor onboarding process is not necessarily the exact same concept as supplier onboarding, though the terms are used interchangeably. While vendors are often active in e-commerce and SaaS, suppliers show way less presence in SaaS and tend to work with businesses that they can actually "supply" for.

Confused?

The supply chain tends to confuse me, too 🤷‍♀️ Check out our vendor onboarding article for more 👈

Why Supplier Onboarding Matters?

Supplier onboarding is important for all the reasons you can imagine just by guessing:

✅ Security and supplier risk assessment,

✅ Mutual trust between business partners,

✅ Better supply chain management and supplier relationship management in the future, 

✅ Financial health concerns,

✅ Procurement requirements that might be in the code of conduct of businesses and bigger institutions a business relies on, and more.

Moreover, a poorly designed supplier onboarding can damage supplier management in the long run.

You might be thinking that supplier onboarding is something that should be done only if there are problems with suppliers.

Wrong.

It is always better to detect and solve problems before they even turn into problems. True, you can’t undo mistakes, but you can start not making the same mistakes.

If you try to empower your supplier management without improving supplier onboarding, you would be doomed to forever trying to solve problems. But if you have a solid, streamlined supplier onboarding process from the beginning you can start seeing forward.

And that is exactly why supplier onboarding is so important.

But apart from all these reasons, supplier onboarding is important for the suppliers as well, especially since there is a concept we shouldn't be ignoring: supplier experience.

User Onboarding for Suppliers: Supplier Onboarding Redefined

User onboarding for suppliers is the process of adapting your suppliers to your business and the workflows you will be following together in the future and making sure that the supplier experience is delightful to create a smooth running business relationship. While in traditional supplier onboarding the supplier experience is enhanced with proper documentation and supplier manuals, a redefined supplier onboarding process creates positive experiences for the suppliers using automated in-app onboarding to learn how to use systems in use and supplier self-service portals with interactive guides.

But why exactly is an automated, in-app supplier onboarding crucial to employ?

Why Is User Onboarding for Suppliers Important?

While risk management and the procurement process are common practices, it is hard for suppliers to get onboarded to systems and software in use without an automated in-app onboarding.

The procurement team or any other personnel within a company can give a tour of all the software for the suppliers, but it is still not ideal for enterprises with a long software list as well as a long supplier list. 

Even more importantly, suppliers might not be a single person but personnel of the supplier company and thus, onboarding one or a few people to a software to then find out they need to be replaced might require more user onboarding for suppliers.

So, all in all, an automated in-app user onboarding for suppliers can:

✅ Be an alternative onboarding method for big companies with many suppliers,

✅ Help keep the onboarding process stable in the face of change, e.g, when onboarded personnel changes,

✅ Make onboarding and digital transformation more digestible and easy to understand,

✅ Save onboarding time and money for onboarding teams and help create an efficient supplier onboarding process

You still might be confused about one thing after I have mentioned compliance teams, onboarding teams and procurement teams.

Let's take a look at:

Who Should Do Supplier Onboarding?

Procurement teams and compliance teams are traditionally the ones responsible for supplier onboarding, but if it is user onboarding for suppliers we are talking about, an onboarding team or any other personnel with the right third-party supplier onboarding software can do the job.

What about the companies who need or don't need supplier onboarding?

If supplier management is a topic on your agenda, then so is supplier onboarding.

If supplier management isn’t in your job description, then it makes sense for you not to do supplier onboarding; instead, you can work with supplier management agencies.

But of course, it is up to you to take the first step toward supplier onboarding.

In the end, supplier onboarding is a team effort that requires all supplier managers to collaborate and create a supplier onboarding process that suits your business. And if you decide to go with a supplier onboarding agency, you still need to be involved in the process.

How Much Does Supplier Onboarding Cost?

Onboarding suppliers can range from $1k-10k and up to many more thousands of dollars, especially for an enterprise-level company.

However, one thing is for sure: the price of NOT onboarding suppliers is way higher than the price for onboarding suppliers.

During a supplier onboarding process, money can go to expected and unexpected expenses, including:

• Working with a supplier onboarding agency,
• Hiring a supplier onboarding manager,
• Using tools such as analytics or database software, and
• Other expenses

So it is best to come up with the best supplier onboarding process possible to avoid wasting time and money.

Here's how:

6 Steps to a Successful Supplier Onboarding Process

There are often discussions about supplier onboarding best practices; however, it is clear that there is no set of rules for supplier onboarding.

Every supplier onboarding process should be tailored for your specific business – taking into account the size, the field, and of course, the suppliers. You must have a clear picture of your needs and the way you work with suppliers.

However, regardless of who does the supplier onboarding, when, and where, if supplier onboarding is completed in these six steps, chances are it will be successful.

1- Prepare for the supplier onboarding process

As you might have caught up already, a supplier onboarding process is not really a walk in the park.

So obviously, a lot of preparation goes into making a supplier onboarding process a successful one. You might want to start with deciding whether you want to handle the process in-house or get third-party help.

Another thing to prepare for is, of course, the financial part of the onboarding process. Most of the time, onboarding suppliers is pretty affordable.

Unless you are on the verge of bankruptcy, you’ll be fine.

2- Set the standards

Half of the supplier onboarding process is deciding which suppliers you want to work with. And to do that, the best thing to do is to come up with a set of evaluation and approval criteria.

Depending on your field of work, these criteria could range between:

• Service record and potential risks of the supplier
• The financial history of the supplier,
• The pricing and payment details provided by the supplier,
• The potential for a mutually benefiting partnership,
• Potential contract terms and estimated contract renewal dates,

And a lot more.

What matters is that you are aware of your supplier standards and are able to reflect them onto your supplier onboarding process.

3- Talk about what to expect & what you expect

Now that you have picked eligible suppliers for your company/platform, it is time for a talk.

And ideally, write it all down.

Ask what you need to know and be prepared for what your suppliers would want to know; you can come up with a supplier onboarding questionnaire too.

For example, some mutually important questions are:

• What does the supplier need to set up in order to start working with your platform?
• How can you streamline supplier information and communication in general?
• What will the supplier onboarding process going to look like for you, and how can it be improved to become a more efficient process for both sides?
• Are supplier meetings in person or online allowed/expected/required with the supplier in general?
• What are the supplier onboarding deliverables in terms of milestones and deadlines?

By quickly identifying possible frictions through these questions, you will not only guarantee a way smoother supplier onboarding but also create a healthier, stronger relationship with your suppliers-to-be.

4- Connect and collaborate (online)

It would be super medieval if you had to meet up with your suppliers every time you had something to discuss.

That’s why supplier portals (a.k.a. vendor portals) exist.

If you don’t have a vendor portal, do set up one right now.

You’ll need it.

And if you do have a supplier portal, let’s get those suppliers onboarded there too. And, yes, we all know that adopting technology is hard.

But I have just the right solution for you.

Supply your suppliers with the best onboarding tool: UserGuiding

Suppliers and companies working with suppliers, let's be honest:

Supplier onboarding is one big hassle.

There are so many legal processes to go through and by the time you decide a supplier is the right one for you, their contract terms might just change or orientation sessions might go south.

And when it is time to onboard them to the systems you use, more bad experiences might await.

So, don't make it a hassle.

Instead, create an interactive guide with UserGuiding to give suppliers an overview of your platform or just the vendor portal.

With UserGuiding, you can make sure your suppliers get the idea behind what you show them with features like:

✅ Interactive guides, product tours, and walkthroughs,

✅ User onboarding checklists,

✅ Hotspots, tooltips, and in-app messages,

✅ Resource centers,

✅ NPS surveys,

And more with powerful analytics, user segmentation and targeting, and high customization😎

👉 Start onboarding your suppliers NOW 👈

5- Create a working culture for suppliers

You are almost done onboarding your suppliers, and what this means is, that they are a part of your business now.

To keep everything running smoothly, you need to include them in your own inner workflows and let them have a taste of your company culture.

One important action to take here is to make sure it is easy enough to communicate with the suppliers for everyone on the team or throughout the company, whoever is a stakeholder.

Thankfully, you already have the supplier portal to rely on.

But if your supplier onboarding processes require the suppliers to be active within your organization, too, you might want to review and improve the suppliers’ workflow.

After all, it is company culture that helps us engage in healthy communication.

6- Revise and repeat

It didn’t turn out as good as you imagined?

Revise and repeat.

There is no bigger mistake in supplier onboarding than abandoning the process altogether. If it doesn’t work, make it work.

The most rewarding processes take time to perfect. Savor the experience.

What’s more, chances are you didn’t mess up worse than when you didn’t have a supplier onboarding process at all.

Get up and start again.

Free Supplier Onboarding Checklist to Download (in Excel, Word, PDF, Notion, and PNG formats)

Onboarding your suppliers can get messy and it is always good to have a piece of reference.

That’s why we have prepared a free supplier onboarding checklist you can download in Excel, Word, PDF, Notion, and/or PNG formats.

The checklist has three stages:

1. Before contact with the supplier(s)
2. In contact with the supplier(s)
3. After agreeing with the supplier(s)

It’s completely free; we’ll send you a notice for you to download it. Don’t forget to let us know if you want to get the checklist.

To Wrap Up...

A successful supplier onboarding process is still unknown territory to many.

But hey, it’s time to explore that territory now.

And to make sure you are not lost, there is the free-to-download checklist we have prepared just for onboarding suppliers.

If you are ready to start your successful supplier onboarding process, don’t hesitate. Even if you get lost along the way, it’s the experience that counts.