Can Amazon Start to Support The P2P Process in B2B? What Will it Take? Pierre Mitchell - February 6, 2015 2:24 AM | Categories: eProcurement / Procurement, P2P, Technology | Tags: L1, Sourcing and Categories Part 1 In our previous story on Amazon’s grand new entrance into B2B through e-procurement integration with ERP business applications, we touched upon Amazon’s initial foray into the procure-to-pay (P2P) process via a simple “punch-out” integration via cXML coming [ironically] from an Oracle cloud e-procurement application. The scenario Amazon and Oracle are enabling is a spot-buy requirement not met by traditional corporate e-procurement shopping and search options (built on internal catalogs and supplier-specific punch-out catalogs). Under this scenario, the user “punches out” to Amazon and then merrily shops around the consumer-oriented mega-bazaar before having to get approvals back in the e-procurement application. FREE Research: A Foundational Look at P2P Technologies Then, the PO is placed and the supplier gets paid (by Amazon – less its 10-15% “referral fee” and item/subscription/other fees). In a “fulfillment by Amazon” model where inventory is stored and fulfilled at Amazon distribution centers, the merchant (aka supplier) also pays picks/pack/ship/storage fees (pricing is here). The bottom line is that this process where Amazon is financially intermediated into every transaction can be very efficient and user-friendly from a requisitioner perspective, but it’s not very effective from a spend management standpoint in a real B2B context, even given the fact most companies end up over paying for tail spend SKUs regardless of specific merchant or distributor. To really support B2B properly from a P2P and broader F2F (forecast-to-fulfill) standpoint, Amazon, or any other B2B focused e-marketplace must be able to support the requirements (even for mid-market companies) that buyers want from not just a punch-out supplier like Amazon, the e-tailer, but also a buy-side supplier network. This requires a philosophical focus on buyer requirements (way beyond price) rather than merchant requirements. In our upcoming Spend Matters PRO analysis, we’ll dive into the details surrounding: Market opportunity Personalization Controls Pricing Privatization Selective self-disintermediation Platform: web services and business services Search and supplier discovery Workflow Settlement and financing Direct/supply chain Omni-channel demand from the buy side Global trade Co-opetition and ecosystems As you might be able to glean from the list, this isn’t just about Amazon, but more about the future of B2B e-commerce and its relation to e-procurement and supply chain. Worlds are about to collide. Stay tuned! Related ArticlesProcurement and B2B Disruptors: Getting Ready for ChangeExtending Procurement Information Architecture to Provider Ecosystems (Part 4)Extending Procurement Information Architecture to Provider Ecosystems (Part 3)Analytics at the Core of P2P and E-Invoicing: Bridging the A/P, Finance and Procurement GapExtending Procurement Information Architecture to Provider Ecosystems (Part 2)Extending Procurement Information Architecture to Provider Ecosystems (Part 1)Extending Procurement Information Architecture to Provider Ecosystems (Part 1) Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.