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3 ways to reshape procurement—now and for the future
Cutting costs to maintain business continuity while juggling multiple suppliers may do more harm than good. Here’s how to save money today while preparing for future growth.
Cost cutting is a business reality in uncertain times. With buyers hesitant to spend, many companies have reacted by reducing expenditures, particularly when it comes to procurement. From shortages of essential supplies to unpredictable fulfilment and delivery, the strain on the just-in-time supply-chain model makes procurement a vulnerable part of operations.
However, simply slashing spending while continuing to juggle multiple suppliers may do more harm than good in the long run. Organisations can be better served by rethinking supplier strategy and staying the course on digital transformation. Ultimately, it’s this shift that will drive sustained cost optimisation and streamline purchasing.
Here are several strategies that help our customers—and can help you—reduce costs today and accelerate future growth.
1. Strategic sourcing = supplier optimisation
Operational disruptions and shortages have organisational buyers looking for new suppliers—whether it’s healthcare organizations or school districts enabling distance. By considering a strategic B2B supplier model, organisations can reduce the variables and risks associated with sourcing. Amazon Business does this by bringing together hundreds of thousands of sellers in one digital store. We verify sellers and credentials, and ensure deep selection across all business categories—so that our customers don’t have to.
“Amazon Business helps us proliferate Intel technology through a very familiar shopping experience. The impact of Amazon Business is that it’s changing procurement as an activity. Customers have access to hundreds of thousands of suppliers, which makes procurement more efficient, and dynamic pricing and discounts drive real value for businesses.” Phil Vokins, Cloud Services Director - Intel Canada
2. Digital transformation is still king
A significant portion of procurement costs are still structural, including processes, systems, and infrastructure required to buy, triage, process payments, and to get goods delivered to the right groups. Digital transformation will continue to eliminate overhead and reduce the total cost of purchasing. And machine learning is playing a vital role in that process, powering recommendations and search so buyers can find what they need quickly. You can also gain efficiency by automating common tasks such as approval workflows, reorder lists, and scheduled deliveries. For larger organisations, punchout integration with e-procurement systems has cut out steps in the buying workflow. All of these tasks add up, reducing costs and freeing up employees’ time to focus on high-value work.
“As the CPO I’m looking to embrace digital platforms that better serve our customers while maintaining cost competitiveness. Purchasing through Amazon Business has enabled my category team to focus on the more strategic priorities within the procurement function, rather than get encumbered with low-value spend.” Shahzad Saleem, Chief Procurement Officer, Capita
3. Unpacking the black box of spend data
We’ve also learned that our customers want more insight into their organisation’s spending so they can recognise opportunities to reduce costs. Moving spend to a single, online store allows you to see the complete picture for supplier analysis, cost analysis, and product selection. You also get better insights into buying behaviour using advanced analytics and dashboards. You can see who’s buying what and for how much. Monitoring buying behavior and discovering patterns help you make better decisions and establish policies to guide employee spending.
“With Amazon Business, we can focus on what the data means rather than on whether it is accurate. We used to review purchasing data every two or three months. Now we can look at it in real time, which makes us much more agile in our decision making.” Mark Arrigotti, Head of Global Procure2Pay – Uber
Contact us to talk about how Amazon Business can help you thrive in disruption.
