Tag Archives: B2B

How to Select a Marketplace Platform – What You Need to Know

Marketplace solutions will drastically improve end users’ experience, increase our own efficiency and revolutionise how suppliers and buyers engage with one another – so here’s what to look for in a Marketplace Platform.


Over the past two decades, we have seen an outstanding increase of B2C e-commerce platforms, now representing 30% of total trade1. As a result, it is no surprise that B2B e-commerce is also seeing significant growth in popularity built upon B2C e-commerce platforms’ success.  Until recently, B2B e-commerce platforms have been limited to a small number of indirect categories such as MRO or Travel & Transportation. However, we are now seeing companies expand their use of marketplaces across indirect categories due to an understanding that the path forward is to transform the Source-to-Pay process to allow end users to self-service their requirements.

Marketplace solutions will transform the overall Source to Pay (S2P) process in three ways:

1. Improve the end-user experience from search to buy, allowing budget holders to buy “in three clicks” as they are used to in their personal B2C shopping experience, thus increasing client satisfaction

2. Drastically reduce procurement teams’ time and effort responding to tail & tactical needs so they can focus instead on value-add activities and strategic supplier relationships

3. Improve the way suppliers and buyers engage with each other, with a focus on small and medium businesses — a move from “off-line” to digital offers via the marketplace reduces the visibility gap of products and services offered by large and small suppliers.

In this blog, I outline the transformation journey to prepare for a marketplace approach, as well as identifying how to select the right marketplace platform for your needs.

Transformative journey for end users, sourcing team and suppliers 

The Covid-19 crisis has accelerated S2P digitisation and the need for CPOs to propose new approaches that satisfy both end users and suppliers. These include improving end user satisfaction through self-sourcing, focusing the sourcing team on value-add activities, and complying with preferred supplier strategies.

Improve end-user satisfaction through self-sourcing

For a certain level of need, under a certain spend clip threshold, it can be onerous for end users to follow company guidelines, be trained on ERP or e-sourcing platforms and to try to find the products or services they want. The risk of this burdensome process is that end users may go “off-line” (outside of Procurement’s visibility), select their preferred vendor, then issue a retrospective PO to their organization.

Whereas, embedding a marketplace platform into the company’s ERP or e-sourcing platform will transform the “procurement end-user journey,” giving the power of sourcing and selecting vendors to the end-users to suit their needs and leveraging the natural “best buy” environment of the marketplace platform to improve savings.

Focus the sourcing team on value-add activities

Once the traffic of spot buy and tactical needs is funneled through a marketplace environment, the sourcing team can focus on the strategic needs of the organisation. They will also gain visibility to the tail and tactical needs of their organisation thanks to the analytics capabilities embedded into the more advanced marketplace environments. With this view, they can analyse the marketplace traffic and supplier revenues and consider switching some relationships from tactical to strategic.

Comply with preferred supplier strategies

In an “off-line,” non-digitised environment without means to track spend, it can be difficult to push tail and tactical spend to preferred suppliers such as minority vendors, corporate social responsibility (CSR) suppliers and small to medium suppliers.

The degree of supplier digitisation and ability to offer products and services “on-line” clearly allows procurement organisations to put those highly digitised suppliers and offerings in front of their end-users more easily than suppliers who are not as digitised. Marketplaces level the playing field for smaller suppliers.  And, marketplace ranking capabilities linked with supplier performance (such as EcoVadis ratings, on time delivery, minority spend, etc.) gives Procurement Sustainability Managers the ability to build preferred supplier lists directly into the marketplace environment and funnel end-user demand to those suppliers.

As companies decide to invest in marketplace capabilities, there are some key criteria to consider before selecting the platform that best fits your organisation’s needs.

How to select the right platform

Public vs. private B2B marketplaces

Public B2B marketplaces are the most developed solutions across the platform industry today. They follow the same principles of the B2C environment where suppliers and their associated products, services and pricing policy are fully managed by the platform owners. Platform owners may decide to provide their own products vs. those provided by suppliers invited into the marketplace, with limited visibility to alternative suppliers for the procurement organisation.  Consider the following key benefits and limitations of public marketplaces:

Public Marketplace benefits for Procurement organisations:

·  Content is fully managed by the platform owners

·  Onboarding of vendors is driven by the marketplace

·  Integration within current procurement platform is easy

Public Marketplace limitations for Procurement organisations:

·  Limited categories are available

·  Limited ability to integrate with legacy supplier base to offer products and services that the organisation has a history of buying

·  Payment process is often managed directly in the platform and control of spending is more difficult

·  Inability for an organisation to monetise their own supply chain

Given the limitations of public marketplaces, we are seeing a rapid rise in private marketplace platforms.  In some industries, the use of private marketplaces is quite natural. The hospitality industry, for example, was among the first to build procurement private marketplaces to propose to their franchisees and agents the ability to leverage their combined buying power, thanks to the digitisation of their needs both on the product and service side.

Before deciding to build your own private marketplace, a procurement organisation will need to size the effort required to build and maintain such an environment.  Consider also the following key benefits and limitations of private marketplaces:

Private Marketplace benefits for Procurement organisations:

·  Procurement organisation is fully in control of the suppliers onboarded

·  Historical vendors and associated content will help end-users buy-in

·  Fully aligned with internal procurement process including vendor payment

·  Organisation’s ability to monetise their own supply chain

Private Marketplace limitations for Procurement organisations: 

·  Content critical for marketplace adoption is managed by the procurement organisation

·  Potential lack of supplier competition on the marketplace

·  Time and effort required to set-up the environment vs. a plug and play public marketplace

Other critical aspects to consider when evaluating marketplaces

Products and services

Marketplaces are developed and implemented mainly to reduce the effort of managing tail and tactical spend. Within that spend remit, services are often as important as products. However, if a marketplace environment is optimised for products, it can be a challenge to add services.  Customisation and specification refinements are typically required to handle both.

Today, some platform providers have dedicated their platform to services while others to products — the end-user has to select one or the other environment based on his or her needs.

Collaboration capabilities

When selecting a private marketplace, if the procurement organisation has a say in the functionality, be sure to look at the platform’s collaboration capabilities between the end-users and suppliers. Collaboration bots can refine user needs and are a key enabler to self-source. 

RFQ capabilities

One of the first objectives of a marketplace is to control tail and tactical spend.  But next, we can expect the marketplace environment to manage much larger spend. To be successful in with larger spend and to differentiate further from e-catalogue providers, marketplaces need to increase the average spend clip levels while keeping a “best-buy” environment. Having “three quotes and a buy” capability within the marketplace will allow end-users to manage small RFQs directly for both products and services and will push upwards the level of spend transacted on the platform.

Analytics

Analytics capabilities are important for both the sourcing team and the suppliers. It will bring to the sourcing team a clear view of the organisation’s needs and potential missed savings reporting (such as when end users do not select the best available prices). For the suppliers, it is equally important that they understand how they are positioned in term of pricing, but also that they understand the most popular products and services to continue providing them and increase their revenue while participating in a “best-buy” environment.

With all of their benefits, whether public or private, we can expect B2B marketplaces to continue their rapid expansion into procurement organisations.  Marketplaces can dramatically improve user experience, enabling end users to self-serve when buying.  They can free up procurement staff to focus on more strategic activities.  And, marketplaces help connect buyers and suppliers and give more visibility to SCR suppliers and their offerings. 

Please comment or reach out to me to further discuss the value of marketplaces.  For more information, register for an upcoming webinar sponsored by IBM.

(1)   Brohan, M. (Dec 1, 2020). Gross sales on B2B marketplaces will finish strong in 2020 Digital Commerce 360.  https://www.digitalcommerce360.com/2020/12/01/gross-sales-on-b2b-marketplaces-will-finish-strong-in-2020/

Beyoncé And Supply Chain Diversity

Are our supply chains tunnel-visioned, or do they support a diverse range of ethnic minorities, women, military veterans, people with disability, or ex-offenders trying to build a new life?


A few months ago, Beyoncé dropped a surprise new single. Hang on, what’s that got to do with Procurement with Purpose (PwP), I hear you say?

Well, apart from the fact the sing is really rather good, Black Parade is linked to her wider initiatives around charitable work (through her BeyGood initiative), black empowerment and consciousness. Revenue from the track is being used to benefit BeyGood’s Black Business Impact Fund – administered by the National Urban League – to support black-owned small businesses in need.

She has also launched a directory of black-owned businesses ranging from art & design, restaurants, beauty products, lifestyle, wellness, bookstores and more. It’s a fairly basic site, and pretty much all the firms listed there appear to be B2C (consumer focused) rather than B2B. But her move may raise more questions about how organisations approach their corporate buying, in particular when it comes to minority-owned businesses that could be used as suppliers. Recent events and the Black Lives Matter movement have made many of us think about racism and bias in our lives, and that applies in the supply chain as much as it does anywhere. So, that takes us back to procurement with purpose.

Diversity (broadly speaking now) in the supply chain is actually one of the most fascinating topics within the whole PwP world. For a start, there are any different types of diversity. Should you buy more from firms owned by people from black and other ethnic groups? What about female-owned businesses? Or those owned by folks with disabilities or health issues – or maybe those firms that employ such people? What about firms that are owned by support military veterans, or ex-offenders trying to build a new life?

Or maybe it’s not the ownership that matters. What about SMEs (smaller firms)?  Some would suggest that those businesses drive successful economies and by supporting them at an early stage, buyers can capture innovation and also promote wider social and economic benefits. Others, particularly in the public sector, look to support local business, on the grounds that this will keep the money flowing in the local economy rather than being sucked up to some distant head office.

All these options mean it can be hard to know where to start. But in many countries, it is clear that minority-owned businesses in particular do have a tough time as they have to overcome all the usual hurdles faced by start-ups anywhere, plus they face the bias (conscious or unconscious) that does exist.

We’re  not going to solve that problem in one article today,  but as well as highlighting that this may develop into a high-profile issue, a few suggestions for now.

·         Firstly, take a look at how easy it is for any new or small firm to become a supplier to you. How can they put themselves forward? Are your supplier qualification and selection processes designed for huge firms, rather than start-ups? Do you put accidental barriers in the way, demanding onerous contract terms, expensive insurance and so on? Too many large firms are virtually impossible to break into, which is not good for the agility and dynamism of their supply base, never mind the difficulty for minority-owned suppliers.

·         Secondly, if you haven’t looked at these issues, seek out organisations that can help you work out an approach. MSDUK has done good work in the UK to promote minority owned businesses, WEConnect International does the same with female owned enterprises, and there are others covering different groups and issues and across different countries.  The good news is that large organisations don’t have to move very much of their spend into supporting these causes to really make a difference.

·         Thirdly, there are some good case studies around. Accenture has been one of the leaders in this area with their supplier inclusion and diversity programme, and there are others who have made strides in this field.

·         And finally, how about Beyoncé for US Vice-President?

This article was originally published by Procurement With Purpose on 20 June 2020 and is republished here with permission.

Why Buying From Social Enterprises Is As Easy As A, B, C

If you’re looking to boost the sustainability of your category plan, try seeking out social-enterprise suppliers. While we all know change can be challenging, and some buyers are reluctant to shift from tried and tested suppliers, this simple A, B, C approach empowers you to make things happen – and support social enterprise with buying power.

Do you want a quick and easy way to get more sustainability into your category plan?

How about an approach that’s focused on suppliers rather than the scope of what you buy? The answer is to ‘buy social’ – purchase from a supplier that is also a social enterprise.

B2B social enterprises are increasing in number both here in the UK and globally. They’re a great way to promote sustainability because:

  • Social enterprises have a positive social or environmental impact at the heart of their business model.
  • Their scale is significant – they make a contribution of £60 billion to the United Kingdom’s GDP.
  • Social enterprises are more diverse in their leadership and workforce, and we all know that diversity is proven to help businesses succeed and grow.
  • Building social value into your supply chain can help your business attract and retain talent, enhance your brand and access new sources of innovation.

And the good news is that buying social is as easy as A, B, C!

A: Analyse Your Spend

Given that there are more than 100,000 social enterprise suppliers in the UK alone, there’s every chance you’ve already got them in your spend. Make sure you analyse spend before you start to source new suppliers – and get your Buy Social KPIs off to a flying start.

Once you have identified that existing spend, why not amplify the impact by highlighting these suppliers to your buyers and getting even more spend with them if you can?

Sometimes you will find them in unusual areas. One of my teams identified that we already used a local social enterprise for kettles and other household goods. We decided to direct more of our buyers to that cause, which meant increased revenues for that supplier – and all it took was an email from our procurement team.

B: Baby-Steps Approach Gets Quick Wins On The Board

Sometimes changing suppliers is a difficult thing to do. People can be reluctant to shift their spend away from suppliers they’ve used for years. So a baby-steps approach could help by giving your team an early success story to build momentum. Try starting with a low-risk category of spending.

Janette Evans-Turner, Head of Sourcing & Procurement at Zurich Insurance, quite literally took a ‘baby-steps approach’ when engaging with the social enterprise From Babies With Love. Members of her team identified a social enterprise they could use in a low-risk category of spend to ensure that there was a minimum of fuss – and they were able to redirect their spend from a mainstream retailer to a social enterprise.

‘It was easy to approach the buying department as the change didn’t seem that big,’ Janette reports. ‘When we explained to our colleagues in human resources the double whammy of benefits that the change to buying social with From Babies with Love could bring, they were chomping at the bit to get started!’

C: Commit To A Challenge

The final step in the process is a commitment to a target that you want to achieve. Companies such as Amey have put in place ambitious targets to increase their spend with social enterprise and the results have been impressive.

They signed up to the Buy Social Corporate Challenge, developed and delivered by Social Enterprise UK, to support this:

  • The Buy Social Corporate Challenge programme, launched in April 2016, is designed to make it as easy as possible to buy from social enterprise suppliers.
  • There are 24 high-profile businesses signed up to the Buy Social Corporate Challenge representing a broad range of industries – including built environment, financial services, technology and communications.
  • More than £65 million was spent with social enterprise suppliers by Buy Social Corporate Challenge partners in the first three years of the programme.
  • 100% of Buy Social Corporate Challenge partners in the UK rated the quality of their social enterprise suppliers as comparable or better than existing suppliers.

So why not follow this A, B, C process and see if you can start buying from a social enterprise or increase your spend with one today? Find out more about the Buy Social Corporate Challenge here.

B2B Is Dead. B4B Is Born

B2B or B4B? Does it really matter? After all, what’s in a title? Perhaps everything….

BoxerX/Shutterstock.com

Isn’t that a bold idea?

What’s in a title? Maybe everything.

Something that is very personal and possibly deep. A worldview that can shift our thinking and inspires us to do few things totally different.

Nah. How can that be? How is it possible?

How can you change a word, a preposition, ‘to‘ and replace it with ‘for‘ and call it a game changer?

We have seen it all. Haven’t we all been in business far too long to be moved by play of words. A small change from ‘To‘ to ‘For‘ means nothing.

Well, I don’t think so. And I’ll tell you why in a moment.

Let’s dive deep inside and explore the nuances that can help shape the idea.

Defining Business to Business (B2B) 

Business to business, also called B-to-B or B2B, is a type of transaction that exists between businesses, not consumers. This term got popular around the 1998 dot com era when the internet phenomenon was at its peak.

It was an acronym used to communicate how commerce flowed between two business entities. This term became so popular that it prefixed everything that connoted a transaction between two businesses.

B2B procurement, B2B buyer, B2B marketing, B2B sales, B2B market place, B2B e-commerce, B2B market research, B2B Software, B2B Offering and many more.

The idea caught on. It flourished. It also spawned into other variants. Say B2B2C or even B2B2G (where G is Government).

It was going well. Until now.

So why do I think that this terminology should die?

Simple reason. The word ‘to‘ in B2B is no longer relevant. To explore why this is not relevant we will need help of a dictionary.

Here is the English dictionary meaning for the preposition ‘to‘:

expressing motion or direction toward a point, person, place, or thing approached and reached, as opposed to from”.

In line with this meaning, so far businesses have marketed to, sold to, pitched to, offered services and products to and provided support to other businesses.

This was very much needed as businesses needed to take their products, services and support to other business. It metaphorically meant the direction was from left to right. Just like this arrow mark ‘—->’. One was the seller and the other was the buyer.

The word ‘to‘ is so ingrained in our psyche, like the arrow, the stress was more on ‘motion or direction‘. Our entire organisation structures were built to make, sell and service our customers. Along with it came top-down command and control, various functions/departments, centralised structures, and standardised routines.

To‘ was programmed deep in the business model. Resulting in a path dependency.

We are all perfectly ‘ locked in‘ by behaviours that connote – motion and direction from left to right.

Now, let’s use another lens to see the world.

The new world order – Business For Business (B4B) 

Before we explore this new terminology, let’s understand the meaning of the preposition ‘for‘ from English dictionary.

with the object or purpose of “

“suiting the purposes or needs of”

In the digitally connected era, as Nilofer Merchant points out in her book “11 Rules for creating value in the Social Era“, successful businesses like Uber, AirBnB, Tesla, GE Digital, Alibaba, Etsy, KickStarter create value through a different paradigm – networks, collaboration, community, social purpose and openness.

They are businesses built FOR businesses and consumers.

They are businesses built suiting the purpose and needs of their customers. There can be many sellers and buyers across a community.

Quoting General Electric, a 124 year old company, was once a seller of products to customers. Now it is a digital platform company with many buyers and sellers. It has now transitioned to a B4B company.

When you do something FOR somebody you do care for the other business or person. Not just for yourself. The preposition ‘forhumanises the act.

Suddenly you shift from providing ‘action and directionto a business and think about what can you do for another business. You can even ask, ‘Can I exist for my client’s success?“. This right away injects empathy into your business.

Business For Business. B4B. Injects empathy in the language.

In doing so, you will allow yourself to ask fundamental questions that can shift your thinking and behaviours:

  • What should be our business model that allows our customers be successful?
  • How can I structure my organisation for my customer’s success?
  • How can I create products, solutions and services for my clients to be successful?
  • How do I create a Go to Market model for my customers to engage, experience and buy?
  • How do I create experiences for my customer so that I can partner for an extended life time value?

B4B shifts thinking from you to your customer. It brings purpose and empathy in everything you say and do.

Over a period of time it perhaps will bring your business closer to the customer. Isn’t that we all want?

It all starts with one change in preposition – substitute ‘to‘ with ‘for’.

Magendar Rajasekaran is People Success Evangelist at Agility Nexus This article was orginally publishd on LinkedIn.