Ergo Works Inc. sells specially designed products like a “vertical” computer mouse and ergonomic chairs that buyers often request in one-off purchases, such as when they need to quickly equip a new employee starting tomorrow.
In many companies’ official procurement systems designed to control corporate spending, such special purchases often aren’t among pre-approved purchases, Ergo Works founder and CEO Anne Kramer says.
And that can kill a sale—or at least make it a lot of trouble, she adds. For items not covered under a procurement contract, a buyer may have to request a price quote, setting off a lengthy process in which Ergo Works prepares the quote and then awaits the buyer’s purchase order. “It’s precious time out of my busy day,” she says.
But Ergo Works recently shipped a vertical computer mouse—specially designed to allow the user to control the mouse from the side instead of the top, which can reduce stress on wrist and forearm—in a one-off purchase transacted as if it were part of an authorized corporate procurement system.
That’s because it was—sort of.
That one-off sale of a vertical mouse, Kramer says, was the first to ship under a new off-contract purchasing service, called Spot Buy, included within an e-procurement software from SAP Ariba, a unit of business software company SAP SE. Ariba’s procurement software acts as a spend-management system that lets client companies control spending by employees, restricting purchases to approved lists of products from approved suppliers, and under contracted pricing. As employees place orders, transactions are automatically sent to their companies’ financial management systems to post and to provide data for spend-management reports.
No matter how hard companies try to control spending by employees on things they need to do their jobs, however, there is always the chance some workers will go outside of a company’s authorized procurement system to purchase what they want on the web.
And sometimes with good reason, such as when their company’s procurement contracts with suppliers don’t have what they need, when they need it—like a vertical computer mouse, for example.
Problems arise when such purchases stray outside of approved products, suppliers and spending limits. And with such purchases often placed on an employee’s unauthorized corporate or personal credit card, it can create extra work to process requests for reimbursement.
Spot Buy is designed to do away with such hassles, Ariba says.
Spot Buy appears as an option within SAP Ariba procurement software to let buyers place orders for products not covered under procurement contracts. Buyers can search through Spot Buy by product category, brand and price. The sellers can be available on their own e-commerce sites or on eBay.com. As buyers place an order, Spot Buy automatically indicates if the pending purchase falls within their company’s spending policies and, if necessary, automatically routes the order for approval by a buyer’s superiors.
Kramer says Spot Buy offers sellers like Ergo Works, which operates its own e-commerce site at AskErgoWorks.com, ways to expand their selling opportunities. A one-off purchase to a new customers can lead to contracts to supply more complex projects, she says. Ariba displays in its Ariba Spot Buy online catalog products from sellers registered with the Ariba Network as well as products listed by independent sellers on such e-marketplaces as eBay.com, NeweggBusiness.com, Pricefalls.com and Amazon.com. Ergo Works is an Ariba Network seller and also sells products through these e-marketplaces.
Another advantage is that, by listing product prices through Spot Buy, sellers can effectively avoid the minimum advertised price, or MAP, policies that manufacturers place on resellers. Manufacturers use MAP policies to prevent resellers from kicking off price wars that can lower the value of a manufacturer’s brand. “Spot Buy gives us the opportunity to sell below MAP pricing, but it’s not considered advertising a price to the public,” she says.
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