Microsoft has opened Dynamics 365 Finance and Operations to external users like vendors by creating a portal that links end-to-end users to the procurement process. Through the portal, vendors can view an interface where they can access part of your information in real-time. The data available to the vendor is controlled by security roles. Overall, this portal can be seen as a reduction of emails to and from your vendor.
The vendor collaboration module allows the vendors to respond to purchase orders (PO), invoices, requests for quotations (RFQ) and even manage the consignment inventory information. It is a software as a service solution (SaaS) hosted, maintained, and supported by Microsoft Dynamics 365. So, companies and vendors will be working with real-time data within Microsoft Dynamics 365.
Some benefits of having an ERP integrated vendor portal system include the vendor’s ability to confirm and propose relevant changes to the POs, with easier updates on prices and delivery dates once a PO or an order quotation is submitted. Moreover, the main advantage of the Vendor portal is allowing clear transparency over the entire procurement process and leverage company-supplier collaboration.
In order to be able to work with vendor portals, some configuration is required. Section 1 is a detailed overview of the main setup. Then the second section of this blog looks at the request for quotation creation.
The vendor collaboration feature allows better communication with the vendor. To connect an external party to Microsoft Dynamics 365, it is necessary to create a new user account. The vendor user account will have limited access to Finance and Operations, which uses Azure business-to-business collaboration (B2B). To use vendor collaboration functionality the following configuration must be in place: i) Information for vendors responding to PO’s; ii) User workflow; iii) Vendor setup; iv) Log in Dynamics 365 Finance & Operations.
A vendor has options to respond to purchase orders. As part of vendor collaboration set up, those options need to be configured in Procurement and sourcing > Setup > Vendor collaboration > Information for vendors responding to POs. The standard possibilities for responses are defined as: accept, reject, and accept with changes. The information message can include a small text indicating additional business and contractual details.
The configuration of “User request workflow” is essential to validate and approve a vendor’s collaboration after setting up the vendor, which can be found in System administration > Workflow > User Workflow. Below is a detailed example of how to set up this workflow.
Figure 1 User request workflow
An essential piece of configuration for vendor collaboration is the creation of a vendor account as well as the creation of a user account accessing the company’s ERP system. Moreover, there are two ways of processing this configuration: Inviting a new vendor as a collaborative user or adding a new contact to an existing vendor and inviting it as a user.
To request the new vendor registration into the company’s system, a prospective vendor registration request must be created in Procurement and Sourcing > Vendors > Vendor collaboration requests > Prospective vendor registration requests. After creating the record, a user invite will trigger an external user request workflow and a registration invite will be sent to the vendor via email. The vendor will log into the company’s ERP system and complete the registration wizard by entering company and contact’s key information. When the registration is completed, all details provided by the vendor can be reviewed and a vendor group can be specified in the Supplier requests form (Procurement and sourcing > Suppliers > Supplier collaboration requests > Supplier requests). Once all the information is reviewed the vendor will be approved and automatically created in the company’s system and an email will be sent to the vendor confirming this.
After creating the vendor in the system, additional configurations are required in Accounts payable > Vendors > All vendors. The first configuration is to change to "Active (PO is auto-confirmed)" the "Collaboration activation" field under the general tab in the vendor master. This option will automatically confirm the purchase order if the vendor accepts it without requiring any change. Another option would be the Active (PO is not auto-confirmed), in this case, the purchase order will need to me confirmed manually after the vendor acceptance.
Additionally, in the Purchase order defaults tab, set the “Purchase order prices/amount” to ‘yes’. This configuration enables the supplier to visualise the price information of the purchase orders, including the unit price, discounts, and all charges.
Configuring the vendor contact in the vendor account is crucial for vendor collaboration. To avoid errors, two main points need to be checked. The first is the configuration of the “User Request ID” number sequence in Human resources > Setup > Human resources shared parameters > Number sequences, and the second is to ensure that external roles such as Vendor (external), Vendor admin (external) and Vendor prospect (external) are created in System administration > Security > External roles, with the correct party role.
The last setup is to add a vendor contact to the vendor account, by click on the top ribbon > Vendor > Set up > Contacts > Add contacts. A new contact form will open, defaulting the Contact ID and the supplier to which the contact will be for. The user must fill in the contact’s general information such as first and last name. Then, the provisioned user must be setup by click in ‘Provision supplier user’ (top ribbon > Requests > Contact). The Maintain vendor user roles form will open, the “email (user alias)” and the “business justification” fields must be entered as per figure 1. Under “Legal entities the person is a contact for” section the user must tick the Supplier collaboration access allowed field. As well as, ensuring that the “Maintains supplier documents and responds to supplier inquiries in the supplier collaboration interface”, and “Maintains supplier contact persons and supplier user requests” user roles are assigned, in order to assign the relevant roles to the user contact. Finally, the user can submit the Provision user request. If the business requires several user accounts for the vendor portal, additional contacts can be assigned to the vendor account.
Figure 2 Provision vendor user request for vendor's contact
Submit the user request for supplier’s contact to user workflow. To accomplish this, in Vendor collaboration > Contacts > Vendor collaboration user requests, select the relevant request number and submit it to the workflow which updates the status to ‘Pending approval’.
If the request is for a new user, when the workflow is approved its status will update to “Azure AD B2B user invitation”. At this point a provision user will be created automatically in the system and an excel file with all the relevant information will be sent to the vendor. After the provision user is created, the new user will receive an email notification with the information to access the vendor portal. In cases where the request is to modify a user, when the request is approved a provisional user will be created automatically in the system. Finally, in both cases, the user request is completed, and the workflow is ended.
The vendor is now able to log into Microsoft Dynamics 365 Finance & Operations using the user account created before. The vendor user will only have access to the vendor collaboration module and respective workspaces as showed in figure 3.
Figure 3 Vendor accessing the company's Microsoft Dynamics 365 Finance and Operations
Microsoft continues to invest and improve the vendor collaboration portal, aiming to streamline the business processes. Moreover, Microsoft has announced new features, due this year, regarding updates and changes to vendor information through the portal, namely the vendor banking information. Which we are eager to investigate as soon as the release has happened.