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.
In part 2 of this series, we'll talk in detail how the concept of Search - Buy - Pay is changing modern eProcurement.