Over the years I have written a great deal about why “traditional” ERP-based procurement solutions have, with a predictability that is almost as certain as the sun rising every morning, failed to deliver the expected results. One of the main reasons is user adoption – or the lack thereof.
Back in 2007, when Microsoft made yet another failed attempt to acquire SAP, I had talked about the ubiquity of the former’s Office suite of applications as perhaps being a point of familiarity that would – at least in part – pave the way to user acceptance of the latter’s platform. The acquisition never happened obviously, and the industry continued to struggle with poorly designed procurement enterprise applications that quite frankly did not reflect the way in which the real buying world operates. In fact it was because of this disconnect between application functionality and buyer requirement that change management initiatives were introduced. After all, if the ERP solutions truly reflected the way in which buyers actually worked what change would really be required?
I was reminded of this disjointed history between what buyers really needed in the way of procurement tools and what ERP vendors tried to offer, when I came across a post from the In The Cloud blog.
In talking about how B2C consumer experience has forever changed the business world’s approach to B2B engagement, cloudBuy Chairman Ronald Duncan made reference to the following question being asked by corporate buyers; “why can’t we have the same experience sitting at the office as we do at home?”
Hmmmmm, let me think about that one for a minute. Where have I heard this before?
Within the context of the question to which Duncan referred, user experience and their resulting comfort level with the tools at their disposal has been, and will always be a factor relative to successful adoption. Whether in the private or business world, buyers simply want something that simplifies their job in terms of making best value procurement decisions.
The real question is whether or not this next generation of B2B procurement platforms will actually evolve as an extension of the B2C user experience or, follow the same independent model of ERP failures past.
Personally, I do not think that B2B e-commerce platforms will fall into the ERP trap of forced compliance.
To begin I think we have, as an industry and a profession, finally learned from our past mistakes and are therefore not likely to repeat them.
I also believe that our experience with the transformational titans of the e-procurement world – and you know who you are – have shown what is possible outside of the traditional 3-year, monolithic ERP implementation process that would cost organizations millions of dollars and lead to little more than unrealized promises.
Let’s also not overlook the fact that there is no longer any shame attached to the admission that what you once paid millions to try and achieve, can now be done for a fraction of the cost in a matter of weeks if not days.
All of this being said, the real reason for my confidence in the future of electronic procurement is the influence that the existing B2C world has on the fortunes of B2B e-commerce from both a financial and operational standpoint.
In a September 9th, 2014 PYMNTS.com article titled “Is The Difference Between B2B and B2C E-Commerce Disappearing?“, IndiaMART and InterMESH co-founder Brijesh Agrawal made the statement that “This whole e-commerce movement, which started as a consumer movement, will be adopted by businesses big time”. He then went on to suggest that “The distinction between B2B and B2C is going to die very soon”.
Referring specifically to consumables and supplies and other standardized-type products i.e. Indirect Materials, Agrawal can see no reason why buyers in the B2B world would not utilize the same kinds of platforms they use at home to buy for themselves personally. It makes sense.
In a highly mobile, 24/7 interactive world in which everyone is connected to everything in the cloud, there is little room for elongated learning curves and buyer compliance relating to cast in stone processes that confine as opposed to empower. Why would I as a buyer for example, happily go through an extended cycle to acquire a product at work, that I could get in a matter of minutes at home. It just doesn’t make sense.
Just to be clear, I am not suggesting that the same tools or platforms used to procure standardized products would be the same that one would use for more complex acquisitions. What I am saying is that with 80% of all Indirect Material transactional activity representing 20% of an organization’s total spend, there is a better way to procure these kinds of goods, and it isn’t through a rationalized vendor-based contract that flows through a user-elaborate ERP-type application.
So what does this all mean? Is Amazon the new SAP or Oracle?
Similarly to the increasingly blurred lines between the B2C and B2B worlds, when it comes to purchasing standardized products e-procurement is now e-commerce. The rest will fall into place from there.