Those who know me well know that every time the Olympics roll around, my wife and I partake in a “friendly rivalry” over the sport of track and field. Being from Los Angeles, I root for Team USA, while she is a die-hard fan of her native country of Jamaica. Much to my dismay, she often gets bragging rights around the house.
Despite Jamaica having many world-class sprinters, they don’t always win simply because they are faster than our guys. They often beat us because we tend to make a mess of the handoffs during the team relay events…. and it drives me crazy. It also reminds me of what I see in supplier finance.
What our relay problem taught me about supplier finance: a smooth handoff is key to success
Watching these clips, I can’t help but be reminded of the common problems that corporations face when launching a supplier finance program. I hear about it practically every day. The story goes like this:
- Company X decides to increase working capital efficiency by implementing a supplier finance program
- Company X chooses their preferred technology vendor or big bank provider based on tech features, who has the most money, or existing relationships
- The vendor launches the program, gets a few big suppliers onboard, and then quickly passes the supplier education and onboarding responsibilities on to Company X
- Despite having all the tools and talent to be successful, Company X’s progress stalls during this transition
Stop rueing what could have been and focus on making a successful transition
Talent, size and speed can only get you so far. What you really need is execution to get you to the finish line.
I encourage all Fortune 1000 companies considering supply chain finance and other early supplier payment solutions to focus on executing the handoff as seamlessly as possible. You need to ask your provider what type of service they plan to offer before, during, and after the launch of your program. The key service areas you need to consider are:
- Will they train your team on what the program objectives are, how the program and technology work together, and how to answer common questions from suppliers?
- Do they offer educational resources and outreach to your suppliers to make sure that the program is seen and understood by potential participants?
- Do they offer 1-to-1 support directly to your suppliers, helping explain the finer details of your program and its benefits to the supplier?
- Will they provide ongoing monitoring, usage statistics, and program maintenance to ensure that uptake remains high?
- Will they help your evolving needs over time, as your corporate objectives change?
In this day and age, cash is pretty much a commodity. Any multi-bank solution can get you a competitive lending rate. The technology out there is largely the same. So what’s going to win you a first place finish in supplier finance?
A smooth transition, backed by attentive service before, during and after the handoff, is the key to winning gold.