There are platform, technology, process, and ERP details to take into account when you’re in the market for a dynamic discounting (DD) solution for your company. But one of the most important features to consider is the level of service that you and your suppliers receive with the dynamic discounting platform you choose. The all-important human element can mean the difference between success and failure with any system.
For a long time, business applications have been utilizing the Software as a Service (SaaS) model for centralized computing solutions. Today, the trend is shifting in a new direction: Software with a Service (SwaS), also known as Do It For Me (DIFM). Rather than selling a technology solution that requires the purchaser to add headcount and ongoing project hours to launch it and keep it running, cutting-edge providers include expert service as part of the total package.
At C2FO, we have found that the SwaS model is the most beneficial for buyer companies and their suppliers. Here are some of the expert service categories that we recommend you look for as you research dynamic discounting solutions, along with key considerations for making your selection.
If you ask your IT department how many project hours they have available right now for launching a new enterprise software solution, chances are you’ll get a number somewhere near zero. Despite being in complete agreement about the value of the solution, they may still be strapped for resources to help it go live so the company can start using the program as quickly as possible.
In our experience, the ideal launch situation involves hands-on, expert assistance from the dynamic discounting provider with minimal input from your company’s internal team on an as-needed basis. If there’s an option to have the provider’s IT expert spend time on site at your company for the initial connection, you may be able to accelerate the go-live process significantly and decrease the time it takes to begin using the technology. The IT director of a multinational specialty retailer that recently took advantage of the accelerated launch option that C2FO offers said, “The on-site approach was easy and reduced our IT requirements and level of support needed.”
Also, because data security is a core attribute of any dynamic discounting program, it’s important to be able to confer with your provider’s IT experts as security standards evolve.
- Dedicated go-live team including project management and IT professionals
- Hands-on, on-site launch assistance as needed
- Access to ongoing IT support
- High-level security expertise
Supplier onboarding and education
This is the area that can make or break your dynamic discounting program because supplier participation is so vital. It’s a very time-consuming and multifaceted process, so it will be a huge advantage to you if your provider is prepared to handle all of the steps rather than leaving them to your internal teams.
The first step is to inform and educate your suppliers about your dynamic discounting program, preferably before it launches. That gives them time to learn how it works and ask any questions they might have about its use. Because your suppliers are busy running their businesses, it can take numerous points of contact before they engage with the program, so it’s important to target them with the right message at the right time.
Communication with suppliers is an ongoing process as you seek to encourage participation from suppliers with different need states and bring on new suppliers.
- Dedicated project management for all stages of onboarding
- Multi-language marketing and education messaging
- Long-term communications planning and execution
- Insight into supplier needs by segment
Supplier relationship management (SRM)
Onboarding depends heavily on a staff of working capital professionals who are available to communicate with suppliers by phone or email to explain how the program works and advise them on how to optimize their participation.
This is truly a team effort that requires a dedicated project manager to coordinate each phase, along with a sizable group of professional supplier relationship managers (SRMs) to support your supplier base. Most large corporates will require SRM teams around the globe who can interact with suppliers in multiple languages and the appropriate time zones for their locations.
It’s also important to take into account the various levels of support your suppliers may require. Large enterprise-level suppliers are likely to have more strategic cash flow needs and require a different approach than the smaller core suppliers who seek ongoing working capital for business operations. Specialized SRMs are necessary to support the needs of all tiers of your supply chain.
Unless you are prepared to devote significant customer service resources to handle initial and ongoing supplier onboarding and support, you will need to find a dynamic discounting provider that can provide those key SRM resources for you.
The treasury lead of a large grocery distribution firm says he chose C2FO as his dynamic discounting provider in part because, “We have a very low-margin business, so when we can improve gross margins without increasing staff, that’s a slam dunk.”
- Global supplier relationship management team
- Multilingual supplier support
- Enterprise and strategic supplier specialists
To get the most of your dynamic discounting program, you will need to put the program to use within your company, monitor it regularly, and manage its performance over time. Particularly with a market-based dynamic discounting system, it’s desirable to frequently optimize your market’s price discovery to ensure that you’re meeting your KPIs.
A dedicated account manager who is an expert in your dynamic discounting program and well-versed in your business objectives can help you interpret the data generated by your program and make recommendations to enhance its performance. To this end, at C2FO, we have a team of data scientists who support the account managers. The account manager can help you develop rate strategies and provide frequent reporting and reviews to ensure that your results are matching up with your goals.
- Dedicated account management contact(s)
- Program data reporting and interpretation
- Expert recommendations for program optimization
Working capital advisory
Whether you’re still in the planning phase or well into the use of your dynamic discounting technology, your company stakeholders in treasury, finance and A/P have a lot of strategic decisions to make.
It’s helpful to for them to be able to get advice from professionals with equal experience in key disciplines such as A/P, treasury, and finance—and in using your chosen dynamic discounting solution. These experts can help provide insights including:
- How to use dynamic discounting to optimize the value found in the A/P process.
- What it will take for your dynamic discounting program to create maximum working capital value for your company.
- The best way for your treasurer to strategically balance DPO impact and cash utilization.
- How to develop a holistic supply chain strategy utilizing SCF, dynamic discounting and P-cards at the same time.
Although your company’s executives could eventually learn how to manage those thorny issues on their own, their time is better spent concentrating on your core business. While you’re vetting dynamic discounting solutions, be sure to find out if your provider offers working capital consulting services to help address all of these issues and more.
- Professionals experienced in A/P, finance, and treasury to optimize your working capital strategies
- Guidance and tools for improving profitability using your dynamic discounting platform
Making your choice
It’s easy to see that applying the SwaS model to dynamic discounting technology provides a huge advantage for any company wishing to reap the benefits of such a program with minimal effort and use of internal resources. When you research the best dynamic discounting solution for your company, be sure to look for the best combination of proven technology and end-to-end service and support.
Ultimately, you want a dynamic discounting program that comes with a suite of professional services that take all the guesswork out of running the program effectively and efficiently. Your best choice will be the one that minimizes administrative and labor costs, generates a fair return on your excess cash and meets the needs of your suppliers.