The gap between “Buying at Home” vs “Buying at Work” has never been larger than it is today. Anyone who has to buy things on behalf of their company -- which today is a growing number of non-procurement users -- knows that buying at work is far more complicated than making an online purchase at home. It's cumbersome to find the right item. Often the exercise ends up at the supplier's website. The forms and approvals change. What should take minutes can take hours. Hours that could be spent doing more important things for the business.
Why is there such a difference? Purchasing is purchasing, right? While B2C eCommerce continues to evolve at a meteoric rate, enterprise procurement solutions haven’t really evolved much since 2002. Unlike modern corporate procurement solutions, e-commerce evolved. Now, for most people, the search is the first stop for any e-commerce transaction.
eProcurement Beginnings - CIF catalogs and Punchouts
eProcurement solutions spawned from Enterprise Resource Planning (ERP) systems in the late 1990’s. Within the eProcurement pioneer systems like. SAP SRM, Ariba Buyer, CommerceOne, suppliers provided static catalogs to their customers via a standard catalog format (known as Catalog Interchange Format or CIF).
CIF Catalogs are rigid, ugly, and difficult to maintain. Moreover, early eProcurement systems looked like ‘early eProcurement systems’ and were not easy to navigate. To address some of the usability issues, in the early 2000’s, the idea of “Punchout Catalogs” was seen as the path towards a more B2C buying experience. Accessing a supplier’s catalog via a PunchOut catalog allows users to exit the ugliness of eProcurement and enter the beauty of a B2C eCommerce world. Through the PunchOut process, eProcurement end-users escape the eProcurement system and are allowed to shop on more familiar B2C shopping sites. As a result, the majority of the major B2B suppliers (Staples.com; Grainger.com; Fastenal.com; CDW.com; Dell.com, OfficeDepot.com) have invested heavily in their respective eCommerce sites.
As eProcurement solutions listened to a steady drumbeat of critical feedback surrounding the software’s usability, these solution providers embraced Punchout connectivity, as it allowed the eProcurement end-users the ability to experience B2C eCommerce while shopping at work.
Punchouts are not the Panacea for Spend Under Management
Corporate procurement organizations have invested heavily in technology solutions intended to drive efficiencies only to realize that they are no closer to achieving the goal of maximum spend under management. As Ardent Partners research has shown, average procurement organizations have only 60% of total spend under management, and it isn't growing. Current procurement technology has taken them as far as it can.
Today, buyers come in all shapes and sizes. Whether it is the corporate buyer who manages and purchases for multiple categories on a daily basis or the line worker who needs to purchase a new part, buying is happening throughout the business and users have specific expectations based on how they buy things online at home. Users are looking at the existing procurement tools, scratching their heads, and finding ways around the process.
Procurement needs to be maniacal about the user experience & ensure that the tools they deploy will actually be adopted by an ever-increasing and demanding user community.
The modern business to consumer online buying experience is driving overall user expectations for the purchases they do at work. And, when they buy at home, they start with a search.
Procure to Pay (P2P) has Evolved
Corporate Procurement’s options have been historically limited when it comes to P2P solutions. They have evolved over the last 20 years, but most have stopped at the point where they deliver a cloud-based technology, but still require punchouts for many of the purchases.
Consumers don’t punch out when looking for a plumber, why should they have to visit a different site when buying items for work?
A Next Generation P2P Experience
With the drive to create the next generation experience for their users, Procurement organizations need technologies that are built on 3 critical elements:
- Rich Content -- Images, Descriptions, Characteristics, as well as configurable items.
- Contextual Search - The ability to deliver relevant, contextual information to end users throughout the buying process
- Scalable, Cloud-Based Capabilities -- The capability to support the millions of SKUs across the marketplace.
When these elements are combined, B2B users get the benefit of a B2C buying experience at work. Users log into the purchasing site, search for items, and see only the appropriate results. They add the items to a cart, and the requisition is submitted. this simple, B2C purchasing process encourages users to take advantage of the e-Procurement system to do their buying, increasing adoption and overall engagement.
Search - Buy - Pay
A P2P Solution that creates real value for an organization must provide the organization value in 3 key areas of Procurement: Search - Buy - Pay.
Search - The buying process begins here. The interface and infrastructure driving the end-users buying process must be intuitive, and promote high levels of adoption. Within the technology, The search process has to be simple contextual and provide relevant results to the user, making it easy to add the products to a cart and submit the requisition, without the need to punch out.
Buy - The “Buy” process should seamlessly integrate the capabilities of enterprise Procurement with the simplicity of the B2C buying experience. This includes dynamic and complex approvals workflows that can be automated based on rules and thresholds.
Pay - integrated with the search and pay, Invoicing, three-way matching, and settlement processes are streamlined, reducing the time and resources managing reconciliation exceptions.
Early Adopters are Seeing the Benefit
Our customers have learned that an engaged user community performing their buying in an eProcurement system designed with B2C in mind, like the BuyerQuest system, has a direct impact on Procurement Metrics.
- A Quick Service Restaurant was able to drive high levels of adoption across their disparate enterprise driving significant cost savings
- A Media and Entertainment company saw a multi-branded deployment that brought tens of thousands of users to Procurement without the need for training, achieving their savings and rebate targets in record time.
- And Education services business with a large millennial user base was able to increase adoption and realize dramatic reductions in invoice processing costs, with nearly half the transactions occurring on a mobile device.
The Buying Experience Continues to Evolve - Procurement must Adapt
Only 10 years ago, making purchases on a mobile phone seemed impossible. Today, a large percentage of consumer buying occurs on devices other than a computer. Users have expectations and strong opinions about what they see when they make an online purchase.
Taking a page from the B2C world and creating a consumer-like buying experience for your internal users can have immediate, quantifiable impacts on Procurement metrics, and therefore the business as a whole.
With this transformative shift in corporate buying comes a shift in how Procurement will measure success. In our next post, we'll discuss the evolving metrics for eProcurement.