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Why Outsource the Onboarding Process

Onboarding-SignThe onboarding process is not your “core competence” Mr or Ms Retailer. You need to be putting your efforts into sourcing stock and improving your marketing presence and dozens of other projects. Think about outsourcing to experts where ever possible.

We are not necessarily talking about outsourcing your whole e-commerce operation. Yes, in some cases you might consider, but we are concentrating today on adding (onboarding) new companies with new products. This idea works for both small businesses selling online or big retailers streamlining their processes.

Some of the benefits to look forward to are saving time and saving money.

You and your staff do not have the time to add e-commerce connections. There are dozens of  new projects already in your competency requiring your resources. Fulfillment is one of your biggest overhead expenses. Look for less costly ways, look for outsourcing the onboarding processes. There are benefits, “economies of scale”, in any operation. Look for a professional and efficient fulfillment company to give you the best solution to add new e-commerce hookups. It is yet another opportunity to expand your business without adding staff.

When a retailer uses e-commerce outsourcing for their “onboarding” process, it means the work required to make suppliers compliant with the retailer's systems and requirements (such as EDI and connectivity) are outsourced to a third party. It is a great idea for retailers that do not have the the internal manpower or processes. The decision must be based on the amount of effort needed versus any benefit achieved by developing onboarding as an in-house competency. Yes, if the volume is low, responsibility can be assigned to existing personnel, but sudden “spikes” in implementations or a merger may alter your decision.

Selection of an onboarding process vendor should first of all concentrate on experience. How long have they been in the business? Has their experience been in similar environments: EDI documents in particular. Do they have the resources to deal with spikes in activities and mergers/acquisitions. A good knowledge of your business is important so as not to overly tax  your own in-house resources in developing the onboarding process.

At times companies have found the benefits of outsourcing do not exceed the cost. The reason for this may be that the outsourcing company does not have a deep enough understanding of the internal business processes. This situation means that internal resources have to be commited to help the onboarding process or that the onboarding vendor  is exceeding planned hours. It is critical to make some “worst case“ projections.

Other factors that must be addressed include how strategic EDI is to your business because bigger competitors are more efficient. The variable  cost of the onboarding process may change significantly as the business itself changes. The model must be periodically reviewed as the business changes.

While smaller businesses outsource all EDI and e-commerce or use service bureaus, all types of companies have utilized outsourced onboarding.

Brief overview services that an onboarding vendor can supply.

Trading Partner StartUp: Develop a process along with your company and assist  new participants who are experiencing difficulties with the process. Stratify partners into those experiencing difficulties and those who jump right in and get it right the first time. Go after the partners with the largest volume first.

Marketing and education: create any required educational or promotional material required by the onboarding process. Done with the aim of getting vendor support and buy-in.

Test Transactions: During onboarding, provide testing and tracking as participants begin to go live.
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