E-procurement reduces B2B sales costs by making information more transparent and automating procurement workflows. Greater insight into data, meanwhile, allows businesses to make better purchases.

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Brady Behrman

Businesses that sell to other businesses are innovative where products and services are concerned, but conservative with regard to their relationships with customers and suppliers.

After all, if B2B sales processes work and everyone knows how they work, why make changes? That attitude is part of the reason that only 38% percent of manufacturers have an e-commerce store and more than 80% of manufacturers and distributors process orders manually.

Because the productivity of modern businesses depends on the efficiency of their supply chains, e-procurement brings benefits to all areas of the business. Supply chain and procurement inefficiencies have consequences for manufacturing, administration, logistics, and other business-critical operations. Electronic procurement is not just a convenience for individual buyers; it’s also a catalyst for faster and more reliable operations throughout the organization.

According to a survey of procurement professionals by Supply Chain Digital, 44% of businesses use e-procurement automation to eliminate manual data entry tasks and 40% to reduce order-to-delivery timescales by implementing procurement processes that all stakeholders can access as required.

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Reducing the cost of selling

How does the digitization of procurement processes achieve this? By automating much of the procurement pipeline and ensuring that relevant data is available to those who need it.

Electronic procurement automates many of the manual sales processes involved in traditional B2B selling. Automation reduces transaction costs for both buyers and sellers by minimizing manual administrative work and increasing the accuracy with which orders and other data are transferred between buyer and seller.

With e-procurement, every purchase order, invoice, decision, authorization, warranty, and contract is stored and searchable, bringing transparency and accountability to procurement. It is always clear who is responsible for each stage of the procurement workflow. That makes it easier to discover maverick spending, mismanagement, and procurement process failures. Analytics can be used to automatically surface relevant information, presenting it via intuitive dashboards so that the procurement process can be optimized and costs reduced.

But better access to information doesn’t just improve internal processes. It has an effect on the market. When businesses use e-procurement to access searchable supplier punchout catalogs, for example, there is greater pricing transparency and enhanced access to multiple suppliers.

More choices, faster decisions

Today’s buyers tend to research a small number of potential suppliers because traditional procurement is labor- and time-intensive. That often leads to sub-optimal pricing because of low competition among suppliers. With e-procurement systems that improve the exchange of information, buyers benefit from reduced costs, accelerated decision-making processes, and access to more vendors.

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Greater insight into data also allows businesses to make more intelligent buying decisions and rationalize procurement processes. This can have benefits across the organization, but to take one example, analysis of indirect and tail-related spend has helped larger businesses generate saving of up to 15%.

As sellers adopt B2B eCommerce platforms and buyers adopt eProcurement platforms, the B2B market becomes more efficient, more accountable, and less expensive for both buyers and sellers.

Brady Behrman is CEO of PunchOut2Go, a provider of technology that integrates e-commerce sites with procurement software. Follow him on Twitter @PunchOut2Go.

Top photo by rawpixel on Unsplash.

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