Impact of Centralised Procurement on B2B E-Commerce Industry

by Helena Williams

Ever since the advent of procurement as an industry, it has continuously developed and advanced with time. Every business which is involved in procuring goods from other places is frequently reassessing their marketing strategies and operating models. This is not simply to endure the fluctuations in the market but to leverage them.

When it comes down to corporate procurement, it turns into a huge responsibility and the buying subcontractors need to become better. While their vision is bigger and they are more innovative, they must also be determined to meet all the requirements.

Change is necessary

Businesses all over the globe are on the lookout for consumer-like experience in this industry. Several initiatives were taken throughout the world which has been successful in promoting E-procurement and B2B E-commerce in the past few years.

For those who aren’t sure why every other business is shifting towards E-commerce from the conventional method, there are clear reasons behind this switch. Most of them are basic advantages like transparent information, self-serving, organized buying, better analytics and improved efficiency in deciding. Everybody wants these benefits and this is why the recent change has occurred.

Paradigm shift

Up until recently, business-to-business E-commerce was enjoying the success of business-to-consumer E-commerce across the world. But, things are changing fast and within the upcoming few years, B2C E-commerce will be surpassed by B2B E-commerce concerning the volume of sales.

This indicates the rise of more procurement experts. B2B procurement may go through major changes sooner than expected. Till now, B2B E-commerce was walking hand in hand with the B2C E-commerce trend. But, the future seems different as both business models will embark on separate journeys.

What could the future of procurement be like?

Although not certain, the gamble is that procurement in the future is likely to follow a more center-led method, which will be in close quarters of the evolving technology and have sustained connectivity to the sublets.

Presently, a do-the-needful system is followed for buying office supplies, which refers to finding the best manufacturer for a region. Even with the brilliant advancement made in technology and procurement, the process of centralised procurement did not experience many.

The old centralised procurement

Power, control and authority were all that could be said about centralised procurement during early 2014. Additionally, if it were so that a company followed a more de-centralised approach, there were very fewer chances of it accepting a centralised procurement function which strictly controls. Decision-makers who dealt with the purchases were at the company headquarters. However, it can be easily said that the function was never intended to promote an authoritative system.

The new centralised procurement

With the change, people need to see it from an alternate angle encompassing direction setting, cutting down the costs and optimizing the processes. The activities of a company may be distributed across various locations, and in terms of a big company, there is a need for plenty of resources, buying subcontractors, and tools so that it can function optimally. One of the main factors behind the troubled management of a company’s buying practices is that various buying teams procure in various locations and go untracked.

New trends in the procurement industry

Remember, even a business buyer is a consumer, so the basics are unchanged. However, business buyers purchase goods for their business and their designs are driven by needs, unlike B2B E-commerce. In the latter, the purchasing activities are mostly for leisure and fun and are driven by the urge. So, it is safe to say that B2B E-commerce is going to go beyond B2C E-commerce not only in terms of business volume but also in the implementation of technology.

The industry will also see another trend in B2B E-commerce – the success of niche players. As is the case with B2C E-commerce, the specialists have to work according to the generalists. But, in B2B E-commerce, there is a huge probability that generalists will achieve more success by offering effective solutions to the niche issues that a business faces in purchasing.

As more companies are shifting towards B2B E-commerce, an increased amount of procurement data will be acquired. Using this data, the B2B E-commerce players will better recognize a buyer’s behaviour and provide them with useful, personalised, and data-driven insights.

Throughout the last few years, procurement experts have been considering how technology can be implemented with strategies to overcome confusion. With a center-led procurement approach, businesses will experience a trouble-free process where the extra and unnecessary expenses will be sliced down while establishing a quality platform for transparent and dependable procurement. Also, in this way, procurement will gain the perks of aggregation as well. Now all that’s left is to discover when the industry goes through this change.

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