Supplier Onboarding in the Age of Open Data: What Buyers Need to Know

Open data is freely available and modifiable so it can be used, reused, and redistributed by interested parties participating in public sector procurement. It is transparent by nature and when used to enhance the supplier onboarding process, it plays a vital role in supplier risk identification and management.

This is important in the new age of procurement, which prioritises transparency and accountability in supplier selection. This assures the public that decisions are made fairly and ethically, with no undue favour or corruption.

Open access to supplier data and contract-specific information ensures stakeholders are always on the same page, turning procurement into a partnership rather than a linear relationship down the supply chain.

It suits the UK government to a T, as it encourages collaboration and innovation in public sector procurement.

Open data in procurement has other benefits for buyers, especially regarding supplier evaluation and selection.

Open Data Enhances Supplier Onboarding & Selection

First, let’s look at supplier (also vendor) onboarding. What is it exactly?

The onboarding process does two things:

1) Buyers collect open data on new suppliers so they can evaluate them thoroughly.

2) Buyers show successful suppliers the ropes so they can integrate their systems and align their processes, enabling them to work together effectively.

The idea is to optimise the selection process and lay the foundation for strong supplier relationships.

Data Collection for Supplier Selection

Before you can assess suppliers, you must have criteria against which you can weigh them. Set parameters; for example, if they meet 70% of Y and 100% of A, they pass. But, if they meet 35% of Y and 100% of A, they fail. The parameters must be clear, so you must know exactly what 35% looks like and how it’s applied. 

Second, suppliers or vendors must know what’s expected of them. If you don’t tell them that Y requires 70% to pass, they might focus on something that carries less weight.

A typical supplier onboarding checklist and evaluation template considers the following information:

• Suppliers’ past performance. Do they perform consistently well or are they hit and miss?
• Do prospective vendors have well-established sustainability credentials or are they completely lacking? If they’re relatively new to public procurement, have they developed a sustainability plan?
• Is the business financially healthy? Not; do they have vast reserves, but can they take a knock without going bankrupt?
• Are they compliant with all public procurement regulations, laws, and requirements? This is important because if your suppliers are a compliance risk, you run the risk of non-compliance by association and face penalties.
• Do suppliers adhere to ethical working policies? Do they pay staff a living wage? Are they linked to modern slavery? Do their contractors rely heavily on fossil fuel consumption?

Open Data Assists Supplier Management & Risk Assessment

You need a wealth of data to complete the vendor onboarding checklist and evaluation form, and to assess their risk potential. Background checks, for instance, can reveal unethical business practices. 

Geographical risks can pose a major danger to your operations. For example, locations in high-flood areas risk business disruptions and product damage. Can you survive supply chain disruptions or delayed product delivery?

Supplier information also enables buyers to verify accreditations and certifications, including sustainability and data security certifications and membership to industry organisations and associations. 

Procurement Platforms & Vendor Portals in Supplier Onboarding

Public sector procurement platforms, like Delta eSourcing, simplify supplier onboarding and management by allowing buyers to create portals or hubs where all relevant information is published and stored.

These portals meet transparency requirements by making all data available to everyone included in the hub. Delta eSourcing’s portal is customisable, so buyers can tailor their hubs to support their unique needs and ensure the suitability of suppliers. This is a bit like a prequalification process, so buyers don’t waste time with suppliers who don’t tick all the boxes on the checklist. 

The portals facilitate clear communication to ensure data is shared properly and there are no misunderstandings. This is essential in the supplier onboarding process, which runs smoothly and almost hitch-free. 

All stakeholders must have access to open data, especially key decision-makers in the onboarding process, like the procurement team, finance department, inventory managers, and the purchasing department.

Best Practices for an Efficient Supplier Onboarding Process

Here are some tips to help you optimise the supplier onboarding process.

1. Avoid confusion all around by assigning onboarding management to one person, who will then be the point of contact in the process
2. Use supplier onboarding software to automate as many repetitive tasks as possible. This frees up staff to focus on key processes, reduces human error, and generally improves efficiency. This is very important from a compliance perspective. 
3. It’s ok to use the vendor onboarding template as a base, which you can customise to suit each contract or supplier.
4. Check-in regularly to manage supplier performance and reduce potential risk.
5. Ensure your data security measures are as robust as possible. It’s strongly recommended that you get ISO 27001 certified, as it’s an international standard for information security management. 
6. Establish clear expectations and criteria for suppliers, including compliance with the Procurement Act 2023, Social Value Act 2015, and other industry standards.
7. Prioritise communication to nurture supplier relationships and foster a culture of collaboration. 

Separate strategic suppliers from the regular kind. Strategic suppliers can be divided into two categories: Those who have the potential to provide the most strategic value (more beneficial than plain old value) and suppliers you’ve already worked with and have established relationships.

Your onboarding process can be different for these suppliers because of the nature of your relationship and your experience working together. 

What Does the Future of Supplier Onboarding Hold?

AI and automation will play a critical role in supplier onboarding. They’re already used but expect their functionality and capacity to increase in leaps and bounds. Supplier onboarding software, for instance, is becoming ever more advanced.

Currently, software automates background checks, financial assessments, and compliance tracking. These are important factors in supplier risk assessment, enabling buyers to decide if the risk is worth the value provided or if vendors should be removed from their list. 

Central hubs or portals will consolidate data from various sources and segment suppliers according to preset criteria, including location, contact details, supplier profiles, services/products, sustainability, performance metrics, and compliance. This does three things:

1. Enhances efficiency because data is accessed from one central platform and not spread across multiple tools or sources (like spreadsheets and legacy systems).
2. Enhances collaboration among decision-makers, including finance and procurement teams, and quality assurance. 
3. Easy access, collaboration, and efficiency facilitate suppliers’ data analysis, reducing the load for admin staff and accelerating procurement processes overall.  

Automated workflows take on many manual processes, accelerating the supplier approval process and increasing the accuracy of all data stored on the portal. Electronic signatures also speed up the supplier evaluation and award process because documents don’t have to be shared, printed, physically signed, scanned, etc. 

Automation can manage contracts to ensure they are always compliant with regulations, certifications, and other requirements. It can also keep track of important dates and send timely reminders so that no steps are missed and contracts rendered invalid – or even continue past the closing date. Both of which affect compliance. 

Real-time data & Real-time communication

Because the portal is centralised and everyone has access to the data, all updates, changes, and adjustments are shared in real time. This also means that any communication regarding updated data – or anything at all – also appears in real-time for all stakeholders on the portal.

This is particularly important when an urgent situation arises and needs to be addressed immediately.

There is another primary benefit and that is transparent communication. Communication is open to all stakeholders and everything is above board. This fosters trust because there are no secrets or questionable decisions. It also builds vendor relationships and encourages collaboration and innovation. 

Two things that are currently very important to the UK government. 

Delta eSourcing, Supplier Onboarding, & Open Data

Delta eSourcing provides buyers with customisable, branded portals to manage contracts, monitor supplier performance, and actively engage with stakeholders. 

That’s not to mention the range of other tools and services available, including analytics and solutions for buyers and suppliers in all the UK’s industries.

Contact Delta now. Book a free demo and see for yourself how our procurement tools can boost your procurement strategies, including supplier onboarding, and increase satisfaction on both sides of the procurement line.