In this guest post, Procurement Leaders invites RFP365’s Dave Hulsen to explore the effects of consumer online purchasing tendencies on the b2b vendor selection process.
“Selecting suppliers is too hard. Why isn’t procurement more like buying stuff on Amazon?”
This was the indignant reaction from my team’s first millennial (person between the ages of 18-34). We were onboarding, and as she was new to the industry, I was explaining how traditional procurement worked (RFPs, weighted scoring, etc.). Her reaction? Absolute mortification.
I laughed at her horror, agreed it was cumbersome, and moved on. But a couple months later, she sent me this Forbes article, underlining:
“For years I’ve been going to procurement software events hosted by vendors,” she said. “Amazon is always the reference point for usability. ‘Why can’t buying for my business be as easy as shopping on Amazon?’ ‘Why doesn’t this procurement system work more like Amazon?’”
The quote references the launch of Amazon Business, an initiative which is all the convenience of the original Amazon (B2C) shopping, scaled for business to business purchasing. Same experience, but bulk quantities and discounts. (A frightening prospect for mom and pop wholesalers).
But Amazon Business isn’t just a convenient new B2B purchasing option. It’s a look into the future of procurement and the generation steering its course.
I’d argue, Amazon platforms have become a distinct ’usability’ standard because they’ve succeeded at what every good chief procurement officer (CPO) is trying to do:
- Effectively compare a myriad of suppliers.
- Make it easy for stakeholders to find exactly what they’re looking for.
The article got me thinking: why are the platforms we use to find simple products like great coffee (Yelp), or office pens (Amazon Business), infinitely better than the procurement tools we use to find critical vendors?
Traditional procurement begins with a static catalogue of pre-approved products and/or vendors. There’s no filter, no easy apples-to-apples comparison, no reviews, no real-time updates or access.
Conversely, platforms like Amazon’s (B2B or B2C) are extremely effective because they’re criteria based. You choose your parameters (customer rating, pricing, etc.) which drills down through the possibilities. Once filtered, you can easily compare competing products side by side, read customer reviews, and see real-time updates.
What makes these systems so popular, is they put the buyer in the driver’s seat. No static pre-programmed categories. Instead: digital, dynamic, fast. In other words, total control. Qualities the next generation will be conditioned to expect from all their purchasing processes.
Bottom line, the future of procurement, is in the hands of people who are used to total buyer control. Depending on how you look at it, platforms like Amazon’s have either spoiled or enlightened them as to what’s possible for purchasing. They’re used to finding complicated commodities (organic, top-rated, fair trade, non-GMO, free shipping, crunchy peanut butter) in 2 minutes online.
And since this generation is now becoming the global workforce majority, their tech standards will quickly become the purchasing team’s standards. Millennials want every tool they use at work to be as mobile, efficient, and as advanced as the devices they personally use. Which means better procurement technology will be priority for them, and therefore for the rest of us as well.
We know this:.
As I’ve seen with my own team, passing the baton to the next line of procurement officers will involve a shakeup, and likely a mantra of “digital or die.” Come prepared.
Dave Hulsen in the Co-Founder of RFP365. Connect with him on Twitter, or follow his blog.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.