Harnessing procurement efficiency

Harnessing efficiency is at the heart of any digital transformation journey.

Digitalization should revolve around driving efficiency and achieving cost savings. Otherwise, why do it?

Amazon is no stranger to simplifying shopping for its customers. It is why Amazon has become a global leader in e-commerce. But, business-to-business customers can have different needs than traditional consumers, which is what led to the birth of Amazon Business in 2015. Amazon Business simplifies procurement processes, and one of the key ways it does this is by integrating with third-party systems to drive efficiencies and quickly discover insights. 

Satya Mishra, Director, Product Management at Amazon Business, tells us all about how the organization is helping procurement leaders to integrate their systems to lead to time and money savings.

Many people shop on Amazon. What is Amazon Business, and how is it related to procurement?

Satya Mishra: “More than six million customers around the world tap Amazon Business to access business-only pricing and selection, purchasing system integrations, a curated site experience, Business Prime, single or multi-user business accounts, and dedicated customer support, among other benefits.

“I lead Amazon Business’ integrations tech team, which builds integrations with third-party e-procurement, expense management, e-sourcing and idP systems. We also build APIs for our customers that either they or the third-party system integrators can use to create solutions that meet customers’ procurement needs. Integrations can allow business buyers to create connected buying journeys, which we call smart business buying journeys. 

“If a customer does not have existing procurement systems they’d like to integrate, they can take advantage of other native tools, like a Business Analytics dashboard, in the Amazon Business store, so they can monitor their business spend. They can also discover and use some third-party integrated apps in the new Amazon Business App Center.”

Why would a customer choose to integrate their systems? Are CPOs leading the way?

Satya Mishra: “By integrating systems, customers can save time and money, drive compliance, spend visibility, and gain clearer insights. I talk to CPOs frequently to learn about their pain points. I often hear from these leaders that it can be tough for procurement teams to manage or create purchasing policies. This is especially if they have a high volume of purchases coming in from employees across their whole organization, with a small group of employees, or even one employee, manually reviewing and reconciling. Integrations can automate these processes and help create a more intuitive buying experience across systems.

“Procurement is a strategic business function. It’s data-driven and measurable. CPOs manage the business buying, and the business buying can directly impact an organization’s bottom line. If procurement tools don’t automatically connect to a source of supply, business buying decisions can become more complex. Properly integrated technology systems can help solve these issues for procurement leaders.”

Beyond process complexity, what other challenges are procurement leaders facing?

Satya Mishra: “In the Amazon Business 2024 State of Procurement Report, other top challenges respondents reported were having access to a wide range of sellers and products that meet their needs, and ensuring compliance with spend policies. 

“The report also found that 52% of procurement decision-makers are responsible for making purchases for multiple locations. Of that group, 57% make purchases for multiple countries.

“During my conversations with CPOs, I hear them say that having access to millions of products across many categories through Amazon Business has allowed them to streamline their supplier quantity and reduced time spent going to physical stores or trying to find products they’re looking for from a range of online websites. They’ve also shared that the ability to ship purchases from Amazon Business to multiple addresses has been very helpful in reducing complexity for both spot-buy and planned or recurring purchases. Organizations may need to buy specific products, like copy paper or snacks, in a recurring way. They may need to buy something else, like desks, only once, and in bulk, at that. Amazon Business’ ordering capabilities are agile and can lessen the purchasing complexity.”

How should procurement leaders choose which integrations will help them the most?  

Satya Mishra: “At Amazon Business, we work backwards from customer problems to find solutions. I recommend CPOs think about what existing systems their employees may already use, the organization’s buying needs, and their buyers’ typical purchasing behaviors. The buying experience should be intuitive and delightful. 

“Amazon Business integrates with more than 300 systems, like Coupa, SAP Ariba, Okta, Fairmarkit, and Intuit Quickbooks, to name just a handful. With e-procurement integrations like Punchout and Integrated Search, customers start their buying journey in their e-procurement system. With Punch-in, they start on the Amazon Business website, then punch into their e-procurement system. With SSO, customers can use their existing employee credentials. Our collection of APIs can help customers customise their procure-to-pay and source-to-settle operations. This includes automating receipts in expense management systems and track progress toward spending goals. 

“My team recently launched an App Center where customers can discover third-party apps spanning Accounting Management, Rewards & Recognition, Expense Management, Integrated Shopping and Inventory Management categories. We’ll continue to add more apps over time to help simplify the integrated app discovery process for customers.

“Some customers choose to stack their integrations, while others stick with one integration that serves their needs. There are many possibilities, and you don’t just have to choose one integration. You can start with Punchout and e-invoicing, for example, and then also integrate with Integrated Search, so your buyers can search the Amazon Business catalog within the e-procurement system your organisation uses.”

Are integrations tech projects?

Satya Mishra: “No, integrations should not be viewed as tech projects to be decided by only an IT team. Integrations open doors to greater data connectivity and business efficiencies across organisations. Instead of having disjointed data streams, you can connect those systems and centralise data, increasing spend visibility. You may be able to spot patterns and identify cost savings that may have gotten lost otherwise. 

“It’s not uncommon for me to hear that CPOs, CFOs and CIOs are collaborating on business decisions that will save them all time and meet shared goals, and integrations are in their mix of recommendations. 

“One of my team’s key goals has been to simplify integrations and bring in more self-service solutions. In terms of set-up, some integrations like SSO can be self-serviced by the customer. Amazon Business can help customers with the set-up process for integrations as well.”

How has procurement transformed in recent years?

Satya Mishra: “Procurement is no longer viewed as a back-office function. CPOs more commonly have a seat at the table for strategic cross-functional decisions with CFOs and CIOs.

“95% of Amazon Business 2024 State of Procurement Report respondents say the purchases they make mostly fall into managed spend. Managed spending is often planned for months or years ahead of time. This can create a great opportunity to recruit other stakeholders across departments versus outsourcing purchasing responsibilities. Equipping domain experts to support routine purchasing activities allows procurement to uplevel its focus and take on higher priorities across the organisation, while still maintaining oversight of overarching buying patterns. It’s also worth noting that by connecting to e-procurement and expense management systems, integrations provide easy and secure access to products on Amazon Business and help facilitate managed spend.”

What does the future of procurement look like?

Satya Mishra: “Bright! By embracing digital transformation and artificial intelligence to form more agile and strategic operations, CPOs can influence the ways their organisations innovate and adapt to change.”

Originally published in CPOstrategy.