Reshape Recap: Get Smart on Smart Budgeting and Spending

During the second day of Amazon Business Reshape, Blaine Eberhart, Commercial Sales and Go-to-Market Leader of Hospitality, Retail, and Real Estate at Amazon Business, hosted a panel discussion, Get Smart on Smart Budgeting and Spending where he was joined by Daniel Lee, Business Prime Sr. Product Manager, Jackie Cavanaugh, Head of Nonprofit Sales, and Alex Joseph, Head of Product Management for Invoicing, B2B Payments Experience. The session dived into how customers can combine both Amazon Business and Business Prime features, customers can gain a big-picture view of spend and use these insights to empower their teams to spend flexibly, track performance and compliance with spending policies, and dream big. Below is a shortened summary of the 30-minute session.

Blaine Eberhart: Daniel, it’s been said that Business Prime is modernizing procurement. Where do you see Business Prime come into play when helping organizations leverage spend data to drive change?

Daniel Lee: When I think about spend data, I think it’s important to consider that Amazon Business has customers worldwide in different shapes and sizes who have various needs. If you look at a commercial organization, they are generally focused on reducing costs, streamlining efficiencies, and increasing profit margins. Whereas a government agency is primarily focused on compliance with spending policies and leveraging tax payer dollars to ensure money is allocated to the right places. Considering all the types of organizations out there, data is so critical. If you cannot actually see what your buyers are purchasing and their activity then you have no way of tracking and viewing how your organization is either performing or progressing.

At Amazon, we are taught to work backwards from the customer, which is how we developed Amazon Business Analytics and Spend Visibility. Each of these tools allows customers to combine buying patterns and spending habits to make proactive and informed business decisions in lean environments.

We’ve received feedback from one of our customers who leverages Spend Visibility who said the data is actually accurate. They can now focus on what their data means rather than spending more time on figuring out if the data is right. This allowed their leadership to act on making smarter policy changes and smarter operational improvements.

Blaine Eberhart: Pivoting to Jackie, how do we see organizations in the public sector leverage spend data and what are some of the initiatives Amazon Business is aiming to accomplish to better serve this industry?

Jackie Cavanaugh: We see two main themes in public sector with Spend Visibility, Guided Buying, and Buying Policies and Approvals. The first is that Administrators and Finance teams are looking to see what they expect. They are looking to see if their buyers are making compliant purchases within their organizations set policies and purchasing products that have been surfaced by utilizing Guided Buying. For example, with compliance around cribs in early childhood education, there are so many strict rules around the size, the specs, and the spacing between bars, which are all important and highlighted in the dashboards of Spend Visibility.

Most importantly, this is freeing up departments to get back to what their primary role is. We hear anecdotes from our education customers where teachers used to make a list of items they needed and submit for requisition. Some of the items would get rejected, so the order would come back to the start of the approval process again. This would cost them to lose a week and a half of time just in the approval workflow.

With the right guardrails in place that Guided Buying and Buying Policies and Approvals offer, organizations can have the right path in place to surface already approved products. This reduces the time spent searching and approving items while allowing teachers to get back in the classroom with the supplies they need—faster.

Blaine Eberhart: Alex, with all this increased organizational spend being aggregated to Amazon Business, where are we seeing payment solutions and invoicing make an impact for customers?

Alex Joseph: It’s interesting to explore, because there is a lot of this buzz for digital transformation for good reason. And it's happening in IT for enterprise customers. Pay by Invoice presents a digital solution and it makes it simpler and hassle-free for all businesses to do their configuration. First, it is key to look at cashflow optimization, and the second is compliance. How can you use it as a tool to help comply with organizational policies? And the third is efficiency in your operations.

Pay by Invoice is a payment term for you for 30 days. It starts after shipment and you get it without any added interest or fees. And if you're also a Business Prime customer, you have an opportunity to request an extended payment term for up to 60 days. This solution puts you in the driver's seat of cashflow optimization as a business. And of course, Amazon Business does give you the option to use any payment method of your choice including credit cards or electronic fund transfer. However, Pay by Invoice gives you the annual flexibility to reduce some of the complexity that you have when you deal with purchasing cards and expense management processes.

If you look into compliance, data is super important. You want to get access to the data, you want to monitor the spend patterns, and Spend Visibility really helps you in doing that.

Pay by Invoice also gives you a bird's eye view of your spend. You have a purchasing line for the entire organization and you can see how much is being spent. Plus, if you want you can request an increase in your purchasing line or you can request a decrease in your purchasing line for a defined period. If there is a seasonal aspect to your spending then you can choose to control spending during that time as well.

When it comes to efficiency and operations, there are several features in Pay by Invoice that can help you simplify your purchasing process. For example, invoice consolidation, you already get it consolidated across suppliers, but you can also consolidate across a period of time if it's monthly or bi-weekly.

One of our customers, BP, a global energy company, had to modernize procurement and simplify its cost-saving operations. So they were using Pay by Invoice, and then they switched to monthly invoice consolidation and that reduced their number of invoices from 500 to less than 10 a month. That's a pretty big jump.

Blaine Eberhart: What's one suggestion you'd have for procurement leaders who want to do some of these things but have no idea where to get started? Alex, I'll start with you.

Alex Joseph: Amazon Business exists to help customers enhance and simplify their procurement processes. If you are a large enterprise and want to integrate your systems such as SAP Ariba or QuickBooks to work within procurement applications, Amazon Business can integrate with them and you can get your invoices electronically delivered.

And you have several tools at your disposal when you work with payment methods and Pay by Invoice to make sure that your administrative cost is lower and you don't have to deal with the normal reconciliation effort or the expense management effort that comes with purchasing cards by leveraging Pay by Invoice.

Jackie Cavanaugh: Don't over-complicate it. Work with your customer advisor to tell them your top priorities and they can help you work back from there. We have a tremendous professional services team that can help customers with end user change management and more. We've done some really cool projects with them for customers, so let them know what interests you and what you'd like to get the ball rolling on, and it's pretty easy from there.

Daniel Lee: I think there's two things that I'll mention right off the front, one is that you can't manage what you can't measure. That's why data is incredibly important and I think this is actually important for your everyday life as well. The other thing is that intentions are great, but mechanisms are better. If you can get the right tools to track your data and have the right experience for your buyers with the data that you can collect, you can actually set up weekly or monthly reviews and identify key performance indicators (KPIs) where you can highlight positives from your procurement operations, but then also see areas of opportunity. As you're able to do this, you can actually constantly reiterate on your processes and identify where you can make changes. And it's not necessarily that you're going to go from zero to perfect overnight, but you're going to have a continuously improving process that over time you'll start to be able to achieve your goals that you're setting across the organization that become more complex as you start to layer more and more of these initiatives onto to your buyers and your employees.