B2B advances come slowly. But in the movement to any new platform, especially in the push toward electronic procurement, the key is to have a good roadmap — such as one that Vinimaya has offered through a recent whitepaper. PYMNTS spoke to Donald Carrington, the head of account management at Vinimaya, to get a sense of how and where firms can improve the way they interact with suppliers and manage spend.
PYMNTS: Why did Vinimaya decide to publish this whitepaper?
DC: To illustrate the primary challenges for buy-side procurement professionals and how they might be able to overcome them. It’s helpful to take a holistic look when designing and implementing a successful eProcurement program and to understand the impact it will have on the organization.
Simply implementing a full P2P solution without understanding the key goals and metrics for true success can be disastrous in terms of lost revenues, time, resources and internal credibility.
PYMNTS: What are some of the biggest challenges you have seen among suppliers, manufacturers and other B2B sellers when it comes to selling their products and services online?
DC: Suppliers have the challenge of trying to meet the often conflicting demands of their customers. For example, suppliers spend a lot of money to develop an online catalog to make it easy for their customers to shop.
But many customers may prefer to control and filter the content before it ever reaches them, and so they turn to hosted catalog solutions, which nullify the investments just mentioned. And then there’s the new challenge of keeping order and data flow correct.
If a customer actually accepts using an online catalog, the supplier is usually requested to customize the content end users will see and also the data attributes that are transferred back to the procurement system on checkout. There may also be data residing in multiple locations that cannot be aggregated in one place. For time and financial outlays, larger suppliers may be better positioned to handle these challenges.
This is why we as a firm continue to focus on best practices for supplier enablement and catalog content management. Vinimaya has tools in place, along with our patented cross-catalog search technology, to flag off-contract purchases and help clients avoid supplier price and product creep.
PYMNTS: Rogue spending has been pinpointed as a major problem for businesses. What types of technologies and procedures can businesses adopt to ensure that any money spend by the company on procuring goods has gone through the proper clearance?
DC: In order to successfully contain rogue spending, it is important for a business to have a user-friendly interface where people can quickly find and quickly buy what they need, and with the cross-catalog search capability just mentioned, that helps companies realize savings from their contracts that are in place.
Then there is the issue of requisitioning spend control, which is also called guided buying. Procurement professionals need visibility into the entire spend stream. This is typically accomplished by analyzing reporting from accounts payable to understand spend by supplier and/or commodity from all pay streams.
Once that visibility is established, it is important to couple that with requisitioning software that “guides” users into making the appropriate supplier and product purchase choices. And, of course, this all should be done without the necessity of having the user understand those policies and procedures.
Products such as ours have plug-in integration with the more difficult-to-use ERP and eProcurement systems to drive greater adoption, compliance and savings within procurement organizations.
To proactively control rogue spend, you would have functionality that identifies and stops that type of activity before it occurs. To reactively control rogue spend, you would provide exception reporting both during the requisitioning process and after the purchase is complete to allow for remedial instruction to the rogue buyer(s).
During the user selection process — when rogue spend is occurring — you would want to warn the user and provide alternatives to keep them in compliance.
Proactive collaboration with all suppliers is extremely important to a full-functioning B2B marketplace.
PYMNTS: How does digital procurement help with rogue spending?
DC: Nowadays, when time is of the essence and shoppers have little patience with “clunky” experiences, digital procurement is truly one of the only ways to drive user adoption of procurement strategies and policies.
It is essential the software platform utilized provides a similar shopping experience to the end user as they have at home. The ability for the user to shop in an easy-to-use and familiar, consumer-like environment entices them to stay within the procurement stream where compliant shopping can be maintained. Vinimaya’s solution development has been focused on creating an easy onboarding process for suppliers and managing their content.
PYMNTS: How can companies overcome the friction of foreign exchange and other issues that come with cross-border B2B procurement?
DC: Global buyers and sellers need new ways to connect. We, for example, are currently working with the Groupe Speciale Mobile Association (GSMA), and we partnered with them to create a global marketplace that brings telecommunications buyers and sellers together in an online commerce ecosystem. Through this platform, we help connect more than 1,600 telecom sellers and 400 buyers in a private online marketplace with customizable storefronts, adaptable across languages or currencies.
PYMNTS: Going digital can be about more than buying and selling online. It can also be about digitizing invoices and payments. How do you envision businesses in terms of eventually ditching paper invoices and paper checks? What methods will replace these tools?
DC: We believe that evaluated receipts settlement (or ERS) will become more prevalent as software can help drive real-time validation of purchase order pricing to contracted pricing.
A streamlined process like this allows organizations to settle goods receipts directly without receiving an invoice from the vendor. However, this can only be accomplished if the buyer is provided real-time, up-to-date data from the suppliers during the purchasing cycle, which has a predetermined shelf life.
The advantages are that purchase transactions are closed more quickly, communication errors are avoided and there are no price and quantity variances in the invoice verification.