Digitization in B2B purchasing means having a global network of customers and suppliers. [shutterstock: 250348678, MaximP]
In times of digitization, one thing is for certain: global networks will dominate and shape the future - especially in procurement. Without networking there is no future, without collaboration platform there’s no networking. Amazon, Google and Uber have already led the way. The era of classic SRM and especially on premise solutions has long since ended. Networking platforms out of the cloud are trending now.
How digitized and networked are business processes in purchasing today, really? What possibilities do digital procurement networks offer? And just how present are these topics in the day-to-day lives of purchase managers? In the course of our survey and in collaboration with the university Niederrhein in Germany as well as the German Association for Supply Chain Management, Procurement and Logistics (BME), we asked companies about the relevance of digital networks in purchasing. The results show that a vast majority expects clear market opportunities and wants to invest more in this area.
“The multi-level trade will lose more and more of its importance in the close future.”
Which purchaser wouldn’t want an open, neutral and non-curated platform which develops freely and in an agile manner? The era of platforms has long since begun. Who is unwilling to accept this development will soon be the sore loser of the market. Professor Willi Muschinski, head of the survey and lecturer of procurement management, is therefore completely right in saying: “The multi-level trade will lose more and more of its importance in the close future. The automation of procurement processes as well as uninterrupted networks from customers to suppliers are vital competitive factors, especially for medium-sized businesses. Due to a growing digital procurement market, traditional 1:1 customer and supplier relationships will transform into n:n networking relationships with numerous providers, demanders and the maximum of know-how for everyone involved.“
Therefore, we examined the current atmosphere of the procurement market in our survey to create a comprehensive guide for purchasing managers with trends and recommendations of what steps to take regarding networks in B2B purchasing.
Majority sees procurement networks as important
Together with students of the university Niederrhein, we surveyed 438 staff members responsible for purchasing, a lot of which already use SAP as their ERP solution. The biggest group in our survey, purchasing managers, made up 33 percent. Nearly half of all interviewees works in large medium-sized companies.
“I strongly believe that highly networked companies will be able to expand their market advantage.”
All in all, companies think digital procurement networks important regarding their own digitization strategy: 83 percent of interviewees view procurement networks as important. More than half of respondents even view them as very important. With these results in mind, it’s no wonder that the willingness to invest was relatively high: 83 percent want to invest more in digital procurement networks as early as 2018. What’s worth noting is that the views expressed are not just buzz words on the digital agenda, but nearly half of interviewees had already budgeted these investments. I strongly believe that highly networked companies will be able to expand their market advantage.
Procurement networks as game changers
B2C has led the way, and also in the area of B2B the trend is going towards agile networking and collaborative cooperation. The Onventis survey shows that collaborative processes between purchasers and suppliers are already there, but they are often lacking comprehensive digital support all along the supply chain. The goal should be complete automation of procurement. That’s because through electronic networking and communication, coordination processes are shortened significantly and processing costs are optimized. The service of procurement platforms is primarily to simplify coordination processes to achieve better market performance for all networking partners.
“Everybody can profit from everybody!”
Networking in purchasing benefits both sides. For purchasers, the days of extensive market research before tendering are over, because the most fitting suppliers for the product they are searching for are displayed right away. The resulting transparency increases decision-making competence in purchasing. For suppliers, new market opportunities will arise. They present themselves with quality content through the network and grant purchasers a top choice. Everybody can profit from everybody!
That is exactly what procurement networks like Onventis Cloud Procurement Network are aiming for: To digitize operative and strategic purchasing processes and interconnect everyone involved as much as possible.