Transforming the Buying Experience by Using Real-Time Data

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The transactional process of buying and selling goods and services will always be the essence of the procurement function within an organization. However, the form and substance by which procurement departments fulfill this role is in the process of major transformation. Form is changing in terms of the point of view of processes, roles and tools, and substance is changing in terms of procurement’s impact on the broader organization.

Procurement organizations across the world are engaged in a massive digital transformation, and now all of the parties involved (buyers, internal users, vendors, technology solution providers, third party service organizations) are assimilating the new paradigm and trying to get the best out of it to achieve their own goals.

RELATED WEBINAR: Transforming Procurement in Real-Time

In this article, we will detail a very important part of this new paradigm: the user experience at the time of purchase. We will then show how this experience can be transformed for the better with real-time information.

Before starting, I want to reiterate what the term "real-time data" connotes in the purchasing process. It promises procurement access to all structured and unstructured information that is up-to-date at the time of the procurement decision. This information guides and provides certainty to users exactly when the business event occurs.

Transforming the Employee Role into the New Purchasing Paradigm

In the past, when employees needed to make a purchase, they would pick up the phone to talk to their purchasing executive and explain their request or send an email with the specifications of what they needed to buy. Employees were only concerned about receiving the good or service requested of their purchasing executive. This executive could be a member of the purchasing department or the person responsible for purchases within another department such as IT or marketing.

The arrival of “e-store” procurement solutions at the turn of the century, along with the promise of better control and purchasing analysis afforded by this software, kicked off the digital transformation of purchasing. This new self-service buying gave greater responsibility to the employee (procurement end user), who now finds the good or service in an e-store, makes the necessary comparisons and makes a final purchase decision. The requisition then must be approved via a workflow and approval hierarchy in order to become a purchase order that reaches the corresponding vendor.

This new procurement process, combined with new technology solutions, transformed significantly the role that employees (end users) have in purchasing goods or services. For this transformation to be sustainable, it is important that the user is provided all the same information that the person on the other end of the phone used to have. Real-time information elements at the time of purchase are fundamental to enabling an informed purchase decision. The user needs to be guided to the right item or service, at the right price, from the right supplier, appropriate to their needs and compliant with the requirements and objectives of the organization.

Here is precisely where new electronic purchasing solutions play an important role. A digital procurement strategy cannot simply pass the responsibility from procurement to end users who simply want to make a purchase and get on with their day jobs. The use of real-time data in conjunction with complete automation of the process is the ultimate driver for a successful procurement technology. Additionally, cutting-edge innovations with artificial intelligence and predictive analytics to support the purchasing process are now evident and will play a major role in the future of e-procurement solutions.

The Role of Technology in the New Buying Experience

The new role of the employee includes greater responsibility for the company's purchases, which has led companies to explore technology solutions that assist users with their buying responsibility and simplify decision-making.

Unfortunately, many companies launched new technologies and found themselves with an adoption crisis. Before anything else, procurement solutions must first and foremost provide a buying experience where end users want to use the tool, or even the most advanced technology will go to waste.

For this, astute procurement teams realize that users want an easy-to-use and time-friendly interface that allows for fast visualization and navigation in everything that interests the user. Procurement rules are vital, but should be enforced “behind the scenes” and with minimal disruption to the user experience. Real-time data is required to deliver these capabilities:

  • Powerful search engines with access to detailed, real-time information on products and services in external and internal catalogs
  • Real-time comparison of all the similar products and/or services found during the search process (including prices, features, functionalities, images, etc.)
  • Audit capabilities to check that purchases are within an active contract or otherwise invoke business rules to handle over-contract pricing or off-contract items
  • Tracking capabilities against the existing budget at the time of purchase. The budget can be at the user or area level, depending on the policies of the company.
  • Price validation information to ensure that purchases are made at the best price at the time of purchase and comply with the contract. The solution must have the ability to provide real-time information that guides users to make the right decision. An example may be an alert showing that there is a lower price, a promotion or a volume discount.
  • Supplier validation information (previous performance, potential risks, and ratings or comments from other users) in real time to ensure that the purchase is made with the most appropriate supplier
  • Integration with real-time information from the existing inventory system(s) to confirm that the purchase is only made when there is no existing inventory
  • Guide compliance capabilities to enable organization policies, to meet diversity goals or drive spend to small businesses or environmentally friendly vendors
  • Real-time alerts related to potential risks, or simply alerts with data or information relevant and helpful to the moment of purchase such as minimum order amounts to avoid shipping costs

Transforming the Buying Experience for the Benefit of the Organization

The user buying experience is a high-priority topic in new e-procurement solution reviews, and usability is more and more at the forefront of discussions, especially for those organizations that have seen previous technology investment for procurement fail to drive compliance. A digital procurement transformation is successful only when employees use the solution to fulfill their purchasing requirements and thereby improve management and oversight of company spending.

Beyond usability, the experience that users have when buying is enhanced with access to real-time data. The buying experience also has a direct relationship with how careful they are with the company budget. So not only are the employees who make the requisition or purchase order impacted, but also users who approve them, and who in many cases have overall budget and P&L responsibility.

Better management of company spending and better care of company budget are enough to justify a serious focus on an improved user experience. However, they are not the only benefits. A buying experience supported by real-time data can give the organization many additional benefits such as increased productivity in the purchasing process, more informed decision-making, accelerated realization of estimated savings, reduced risks from poor purchasing decisions and greater certainty in delivering on business targets.

Stay tuned for the third and final article in this series covering the impact of real-time information on corporate purchases.

Related: Free Webinar

Join Spend Matters’ Xavier Olivera along with a series of guests from Aquiire and the LDS Church as they discuss the benefits of real-time data and how they and others are using it to their advantage.

Register now for one or all of these quick-hit 15-minute webinars:

  • PART ONE: Achieving True Purchasing Control Through Real Time Data, Guided Buying, and Compliance
  • PART TWO: How Real-time Data Transforms B2B Procurement Shopping and Supplier Management to Accelerate Savings
  • PART THREE: User Adoption and Huge Savings through Real-Time Procurement Marketplace

View the webinar here.

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