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ABX – Amazon Business implementation and insight from Oxfordshire County Council

10/15/2020 By

Earlier this month Amazon Business held its annual flagship event Amazon Business Exchange online. ABX brings together the procurement, finance and supply chain community to connect, collaborate and share knowledge and best practice, and to learn about how Amazon Business can help organizations of every type build more efficient processes.

Todd Heimes, Director of Amazon Business International, explained in his opening keynote how global events are disrupting an already challenging marketplace of accelerating technology and competition. The supply chain particularly, he explained, is having to become more agile to thrive and take advantage of changing trends in buying behaviour.

So over the course of the two mornings we were introduced to European procurement and commercial leaders from different industries and sectors who have implemented Amazon Business to help them gain better control of spend behaviour while retaining flexibility in the process.

There were many inspirational presentations at ABX, and you can still tune in to listen to them on-demand by registering here. One of the standout presentations in our opinion that gave clear advice for others thinking about adopting Amazon Business for their organization came from Paul Ashby of Oxfordshire County Council in England. He shared his experiences and learnings from implementing an Amazon Business account across the local authority.

Paul is Senior Commercial Officer at Oxfordshire County Council and is lead for all purchase-to-pay activity. He is also responsible for driving best practice in indirect spend categories, development of policies, procedures and systems, corporate governance, supplier relationship management and contract management. So he has a wide lens on the council’s procurement processes and moreover its significant annual spend of about £600 million.

The session was moderated by Evan Hatfield, Amazon Business Head of UK Education and Local Government Accounts, who asked some pertinent questions about the main business drivers behind the council’s adoption of Amazon Business as the standard platform for ad-hoc purchasing activity. He also asked about the council’s journey through the implementation process, the structure of the procurement team, and how it supports the various business units that provide about 80% of the county’s services to a population of about 650,000 people.

Paul gave some insightful and informative answers based on his first-hand experience of implementing the system, which will be valuable advice for other organizations thinking of doing the same, maybe as part of a wider digital transformation process. You can listen to that here: How can you best configure and leverage Amazon Business to meet public sector needs.

Spend Matters had the opportunity to talk to Paul and ask a few questions of our own that we think will resonate with our readers of senior procurement practitioners.

ABX as a learning experience

Of the event itself Paul told us: “It was enlightening for me to hear the experiences of other organizations, both public and private, from throughout Europe; it’s good to get perspectives beyond the UK. It was also good to learn what Amazon Business has in store for the future and the developments that we can build on in our business account. I was especially interested to learn from other organizations that the principles and processes around procurement, regardless of region, seem to have a lot in common, because that means that we can learn from each other. This is why events like ABX are really valuable.”

Of course both private and public sector organizations can benefit from a streamlined approach to ad-hoc spending, but clearly public sector organizations have by nature more stringent rules to follow, owing to legislation, regulation and accountability for public money. So we asked Paul about:

The applicability of an Amazon Business account specifically to the public sector

“One of the aspects that I have found really useful” he said, “is the controls and compliance that are built in; in fact that was one of the reasons for implementing Amazon Business across the council. I’ve just begun to implement purchasing workflows for example for particular product categories where we want to ensure we are compliant, but without conflicting with corporate contracts that might exist elsewhere for those commodities. The main differentiator in the public sector is we have to ensure more rigour around governance and compliance. One area is VAT, where Amazon Business has given us easier access to VAT invoices, controls, management reporting and access to information, so these are real benefits for us. When it comes to reconciling transactions in the payments system, previously we were more reliant on the individual getting it right, whereas that is inbuilt with the Amazon Business integration and all the line item details are taken care of for VAT purposes.”

A growing marketplace of suppliers is a win-win

We were also keen to understand any wider concerns that a public sector organization might have about implementing a system across the authority that has seen such phenomenal growth and success that it might occupy a monopolistic position in the market.

“It’s something I gave a lot of thought to,” he said. “I realise there is a negative perception of some of the large companies becoming almost too big and powerful, but Amazon, while they sell some goods and services directly, do support thousands of suppliers down the supply chain. So we look at Amazon Business as a marketplace, and not as a single supplier.

“When I look at what our buyers are purchasing, many of those goods and services come from the resellers. And I am actively thinking about how we, as a public entity, can influence that supply chain through working with Amazon Business to support local businesses. The current Covid situation has made that more relevant for us, and one of our objectives is to support a thriving local economy. Small independent traders have found it difficult to keep afloat, as shopping experiences change and much of it goes online. There could be a real advantage for small businesses to use an already established platform and logistics service, with millions of users worldwide. So, on the contrary, I’d encourage our small enterprises to get on-board with the platform and open their business to a wider market.”

Filling the gap in public sector frameworks

Much of the tail spend that goes through a local authority P2P system is of relatively low value. Many items come in at under £50. It’s not an area that procurement leaders want to dedicate a lot of time and effort to managing. “An Amazon Business account is an efficient way of doing this,” advised Paul, “without undermining any other contract you might have in place with other supplies.”

“As a council, we provide such a diverse range of services that whatever you can think of, we probably buy it! We might, for example, be supporting a young person to set up home for the first time, so we are buying all sorts of commodities, in this case from an iron to a washing machine. The question for a procurement leader might be: ‘where are all the contracts for these consumer items?’

“Most contracts on public sector frameworks are not really aimed at small consumer or incidental purchases, another example being schools’ learning materials. So it’s in the interest of suppliers of these types of item to step up to the plate and compete.”

It was an insightful and fascinating discussion with Paul, and his sentiments around using ABX to share and spread best practice digital transformation knowledge was echoed by Dave Brittain, Director of Amazon Business UK & Ireland, who works across both B2B and B2C:

By bringing the supply chain and procurement community together, we aimed to equip customers, both private and public sector, to shape their buying processes in a way that can help them move forward.

Finance and procurement leaders learnt that no matter the size or type of their organization, the benefits of digital procurement allow you to embrace transformational change, and that when accelerating digitalization, businesses can make procurement one of the key players in their broader transformation and growth story.

Our goal is to improve an organization’s existing supply chain model, to minimize the administrative work and support businesses to focus on maximizing their core mission. ABX connected us to customers, allowing us to collaborate and adapt to current challenges.”