Digitalizing Procurement Processes

Reducing costs in the supply chain continually needs new and innovative processes. Large procurement departments have sprinted to the digital world with Procure to Pay (P2P) Solutions. The integration of these systems with an online B2B marketplace like Dooka can help large enterprises realize the unmet value of their indirect spend.

P2P platforms, such as Coupa and SAP Ariba, have spread worldwide. These platforms have automated and digitized large parts of the procurement process to increase efficiency and transparency while reducing costs. Because of these benefits, companies have already invested time and money into their P2P systems. Many businesses have also spent considerable energy integrating P2P platforms with their ERP systems.

Most companies see the value and success when using these systems for direct spend categories. That’s because there are fewer suppliers and higher transaction values. However, many P2P platforms struggle with realizing value in the tail or indirect spend categories.

Managing tail spend through a P2P platform system is problematic. There are typically many more suppliers focused on low-value, high-volume items. However, tail spend can account for as much as 25% of total spending. So, it is clear that it can significantly impact bottom-line savings. Tail spend needs a specialized solution over and above the standard P2P systems.

Integrating Existing Systems with B2B Marketplaces

So what is this solution? There is a path forward that is becoming increasingly popular – the B2B marketplace. So, let’s take a closer look at these B2B marketplaces.

B2B marketplaces are an overhaul of how businesses procure goods and services. Rather than sourcing products from suppliers and managing those relationships themselves, businesses purchase from a marketplace that sources the products and manages the supplier relationships. This marketplace provides total price transparency without any of the usual supplier management hassles. Suddenly, corporate purchasing can have all the benefits of a modern, digital marketplace with no compliance issues. 

In addition, by utilizing a marketplace’s supplier network, procurement departments can quickly and easily find the best possible prices for their goods. Some B2B marketplaces even allow buyers to sort suppliers according to their specific requirements and specifications so that they can only buy from suppliers that meet their needs.

B2B marketplaces also offer increased pricing transparency and terms, making it easier for buyers to find better deals on tail spend items. In addition, B2B marketplaces typically have more stringent quality control measures, which can help reduce the risk of procurement fraud.

Finally, good B2B marketplaces come equipped to automate paperwork and approval processes associated with tail spend. By automating regular tasks such as Purchase Request or Order Generation and two-way matching, buyers can save time and money on their tail spend purchases.

The Added Benefits of a B2B Marketplace Integration

Although companies have already invested funds and energy into integrating P2P solutions with their ERP systems, there is no reason a B2B marketplace can’t still be of great benefit. With a B2B marketplace, buyers no longer have to handle and manage supplier relationships. The B2B marketplace can sort products, manage suppliers, and offer an easy-to-use interface that makes shopping for things like stationery, IT supplies, fixtures, and fittings way easier. B2B marketplaces are the future for realizing value in tail/indirect spend.

A good B2B marketplace will work perfectly with existing P2P and ERP processes. Integrating these systems makes procurement a seamless, easy, and quick process, saving businesses tons of overhead. Beyond just integration, B2B marketplaces can optimize the value of P2P systems by reducing the total cost of the indirect spend category. A B2B marketplace will ensure a P2P system investment will deliver maximum value.

If your company is looking for ways to save money on procurement spending, a B2B marketplace may be the right solution. By working with a reputable B2B marketplace provider, you can gain access to thousands of suppliers and millions of products, all while enjoying increased transparency and savings.