In the procure-to-pay space, FinTech developers are often working for the buy side of the transaction. Procurement is looking a lot more like consumer eCommerce, especially for smaller, one-off purchases.
The eProcurement solutions arena keeps suppliers for these kinds of purchases on their toes, says Ergo Works CEO Anne Kramer.
Ergo Works provides ergonomic office products — furniture and tools geared towards employee productivity — that are often bought sporadically and aren’t always on the pre-approved list under corporate procurement guidelines.
Her company is one of the first to adopt SAP Ariba’s new Spot Buy solution, a way to automate the approval process for company purchases of off-contract items. Kramer told PYMNTS why Ergo Works jumped at the opportunity to join another B2B eMarketplace like Spot Buy and how a certain breed of supplier needs to remain agile as the line between B2B and consumer eCommerce continues to blur.
Shifting Procurement Tides
It’s now a motto of B2B commerce: Procurement is starting to look more like consumer buying, as procurers want to buy for their companies the same way they buy for themselves.
Kramer said Ergo Works has had to stay on top of this trend from the start, and that means the use of digital tools. The CEO said the firm has been on the SAP Ariba platform for more than 15 years, launched a website and an Amazon marketplace early on and still examines the latest procure-to-pay offerings that could help the supplier reach the modern buyer.
That’s part of the job of a modern supplier, Kramer said.
“As new platforms come up and companies embrace them, we have to be able to adapt to what their requirements are,” the executive explained. “We have to adapt and be nimble, and I think that’s what’s needed to succeed in this new marketplace to do business.”
Staying up-to-date with procurement demands goes beyond participating in the various platforms that put a supplier in front of a corporate shopper, however.
Kramer noted that accepting credit cards is one way to adhere to changing procurement habits.
“If we can’t take credit cards, we wouldn’t have a quarter of our business,” the executive said, adding that she does not share the same views as other suppliers that tend to avoid accepting commercial cards due to interchange fees.
“To me, that’s a no-brainer. What it means is paying a small fee or not getting an order,” Kramer said. “I’d rather get the order and lose the 2 percent and not have to go chasing my money and, if they don’t pay, to have to follow up with our staff, to call accounts payable."
“That takes time, and time is money,” she added.
Commercial card acceptance may not be the best option for suppliers that provide large-scale, expensive orders to corporate buyers, but for a company like Ergo Works, which often works with buyers making one-off purchases of lower value, card acceptance is worth the swipe fee, Kramer declared.
Another Sales Channel
Being able to accept cards and sped-up sales cycles are both reasons why Kramer said Ergo Works added SAP Ariba’s new Spot Buy solution to the mix of sales channels.
Spot Buy allows corporate executives to set controls on who in their company can make spot purchases that may not be pre-approved or on-contract. Like so many other B2B eCommerce marketplaces, Spot Buy is compared to Amazon by Kramer, who said the speed with which a buyer can make a purchase with a card and with which the supplier ultimately gets paid makes for another easy avenue to reach customers.
On the buy side, with corporate buyers wanting the same speed and efficiency to make purchases, executives have less visibility — and less time — to monitor employee spend. Making sure those purchases are compliant with company policy, however, remains just as important as ever.
Kramer said she acknowledges the efforts of platforms like Spot Buy as molding around these changing procurement needs, being able to pay with a commercial card, sourcing for products online and automating the approval process.
“I think they’re realizing that this is the way that people want to buy,” Kramer said of platforms like Spot Buy. “Buyers want to be able to do it on their computer or their phone, to pay for it right away. They just want quick; it needs to be efficient.”
Until now, the dialogue around these shifting procurement practices has repeated mantras like “the B2B of Amazon” or “a consumer-like experience for corporate buyers.”
But Kramer suggested a different story. Rather than B2B eCommerce becoming more like B2C, procurement and consumer purchasing are meeting in the middle to become more like each other.
“Amazon is now pushing to try to get more business clients, so they’re starting to look like Ariba, and Ariba Spot Buy is looking more like Amazon,” the executive explained.
Whether it's signing on to a B2B-centric marketplace, like Spot Buy, or participating in global eCommerce marketplaces, like Amazon and eBay, suppliers that fulfill unique, inconsistent and one-off orders from corporate clients need to make the procurement process as easy as possible for their buyers. For Kramer, that means staying up-to-date with buying habits and procurement technologies.
“You have to be able to adapt, and if you don’t, you’re going to die on the vine,” she warned. “You think you can do business the old way? No. There’s no way.”