May 17, 2020

How the ‘Amazon Effect’ is impacting B2B sales

Sharon Ruddock, SAP
4 min
How the ‘Amazon Effect’ is impacting B2B sales
In the consumer space, we’ve seen online marketplaces quickly expand over the last decade in response to buyer demands for faster, easier purchases...

In the consumer space, we’ve seen online marketplaces quickly expand over the last decade in response to buyer demands for faster, easier purchases.

This expectation – a la the Amazon effect – has also made its way into the B2B sales space. More and more vendors are looking for ways to offer fast and simple-to-use options for purchasing solutions online digitally, taking the B2B sales cycle from a months-long process down to a minutes- and seconds-long process. 

Procurement, as a part of the B2B enterprise buying journey, has traditionally been a costly and long-term endeavor. According to Gartner, the buying group for complex B2B solutions generally includes six to 10 decision makers, who often gather a few pieces of information independently and then deliberate with the rest of the stakeholders. As B2B brands look to address the Amazon effect amongst their customers, this process needs to be faster. As a result, more sellers are taking their solutions and offerings online to create digital marketplaces that can address the e-procurement and buyer needs of today’s evolving brands. 

Digital marketplaces take a lot more of the leg work out of it for B2B customers – bringing what they need directly to them in a clear and concise way. With this shift, we’re not only seeing reduced costs and faster purchase rates, but companies are enjoying several other benefits throughout the buying process, including transparency and ease of use.

Transparency along the entire journey 

When it comes to B2B buying, visibility during the entire process, from discovery to purchase to implementation and beyond, is crucial as customers have a complex bill of materials. A recent survey from Futurum Research, in cooperation with SAP, found that B2B buyers crave more transparency and freedom in their buying process. During the discovery stage especially, 90% of respondents said they consider product trials to be an important feature. Having a clear understanding of the solution and being able to experience its functions in a hands-on, real-world way is critical to the decision-making process. Even more so, 88% of respondents cited price transparency as either the most important, or an important, advantage of a digital-buying program. 

For example, say you’re a business customer looking for an analytics platform and you need it fast. With access to a comprehensive, digital B2B marketplace, you can bypass traditional buying methods, and instead go online to find a full listing of products with transparent pricing. Similar to what consumers would find when scrolling through the Amazon website, solution pages have all relevant information and next steps in one single place. With details about the offering, including ratings and reviews, quick navigation to product trials and clear calls to action for purchasing in a central location, B2B customers are supplied with everything they need to buy. 

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Faster, simple ways to purchase for better business outcomes 

Along with transparency, the Futurum survey found that B2B buyers are motivated by the ease and pace of B2C shopping. Two-thirds of survey respondents cited time and resource efficiency as a primary reason for making enterprise software purchases online and 45% cited convenience as the primary reason. Additional motivators according to respondents include operational speed, simplicity and less friction.

As a whole, brands are moving away from traditional buying models for a process that is faster and simpler. For example, in order to stay agile and adapt to changing business needs, more than 80% of organizations are no longer relying on calendarized purchasing cycles for their procurement. From a B2B perspective, digital buying provides an optimal solution to meet this growing demand and supply businesses with the tools they need, when they need them. 

At the end of the day, B2B consumers are not much different than B2C buyers, but in most cases they have far more complex needs that come with an even higher service demand. They want the speed and efficiency of B2C transactions, while retaining key benefits of the traditional B2B buying process that come along with having a dedicated account representative. For example, B2B buyers have grown accustomed to feeling a sense of assurance that they have a trusted business partner who understands their previous business investments and what they need based on this history. B2B consumers are accustomed to simple, one-click buying habits in their own lives and expect this same simplicity to be replicated in their enterprise buying experience, but with a marketplace they can trust to provide them with a high level of care. Digital transformation has made this possible, offering online channels to B2B customers where they can discover, try, buy and use the business applications and solutions they need in a faster, easier and more connected way. 

For more information on procurement, supply chain and logistics topics - please take a look at the latest edition of Supply Chain Digital magazine.

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By Sharon Ruddock, SAP

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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