August 6, 2014 | Feature Article | by Karen Master
Making B2B Commerce as Easy as Consumer Buying
Chakib Bouhdary, President of Business Networks at SAP, talks about how SAP and eBay are simplifying business commerce
As a consumer, if your refrigerator stops working, you get online, find a few suppliers, compare prices and with a couple of clicks, buy a new one and have it delivered and installed. But what do you do as a business when your assembly line shuts down because a key part failed?
For most companies, managing such unplanned, time-sensitive and mission-critical purchases – or as they are known in the industry “spot buys” – is a challenging, costly, and risky process. But a partnership between SAP and eBay promises to make this a lot easier. In this interview, Chakib Bouhdary, talks about how these two companies are joining forces to make it as simple for companies to find and buy items to run their businesses as it is for consumers to purchase books and music.
SAP News: What makes spot buys so challenging?
Chakib Bouhdary: Spot buys account for more than 40 percent of the average company’s total spend. What makes them so difficult to manage is that they require time-sensitive supplier identification, qualification, and bidding. Most companies lack the tools to facilitate this.
As a consumer, if you need a new phone, you get online and order it and in three days, it arrives on your doorstep. Or, if you’re willing to pay more, you can have it overnight. But what do you do as a business when you need an ergonomic chair for an employee who is starting tomorrow?
You can’t afford to have a category manager take this kind of spend through a strategic sourcing process, which can take anywhere from six to 30 weeks. You need a solution through which employees can make purchases now, and do it in compliance with your procurement processes and policies.
How will SAP’s partnership with eBay simplify this process?
At SAP, we operate the world’s largest business-to-business trading network. It is used by more than 1.5 million companies to transact over half a trillion USD in commerce on an annual basis. And eBay has built one of the world’s largest online marketplaces, where practically anyone can buy and sell practically anything.
In connecting our communities through Ariba Network Spot Buy, we can simplify business commerce and make it as easy for companies to find and buy the items they need to run their operations as it is for consumers to find and buy the items they need to run their lives. We can eliminate the complexity that is hindering business commerce and enable companies of all sizes to run better and fuel growth.
How will buyers benefit from Ariba Network Spot Buy?
For the first time, global procurement organizations can apply spend management rigor to non-contracted spend, eliminating maverick buying and improving processes. Individual buyers will be able to easily search for, and buy, items from the largest base of qualified sellers through their existing procurement systems. Employees will have a better process for spot buys. Lastly, procurement will gain spend control and visibility into a large category of spend that has previously been extremely difficult to manage.
What opportunities does the solution open for sellers?
Selling organizations of all sizes gain access to the world’s largest community of business buyers. The buyers have budget, are in active purchasing cycles and are open to a new channel for business. This enables the sellers to win new customers and gain additional business from existing customers.
So how does Ariba Network Spot Buy work?
The solution will display appropriate business-related content from eBay Marketplace and deliver it inside SAP’s cloud-based procurement solutions, including Ariba Procurement Content, Ariba Procure-to-Pay, and Ariba Procure-to-Order. By leveraging the new offering, procurement organizations can provide access to eBay Marketplace content inside their Ariba cloud procurement applications. The solutions apply specific business rules to ensure that purchases are made in compliance with company policies. This will allow end users to easily buy the things they need, with the controls and visibility that procurement desires.
How is Ariba Network Spot Buy different from other offerings aimed at indirect materials such as Amazon Supply or online catalogs and distributors?
Spot buying is not a shopping problem that can be overcome with catalogs for indirect materials alone. It’s a procurement challenge that requires a combination of technology, content, processes and expertise to solve. SAP – and only SAP – can deliver this through the combination of its Ariba Network, its cloud-based procurement applications and its relationship with eBay’s expansive catalogs for indirect goods.
How will it change the game for business commerce?
Despite all the money that has been invested in technology to simplify business commerce, it’s still really hard. With Ariba Network Spot Buy, we can eliminate the complexity that is hindering business and enable companies of all sizes to run better and fuel growth.
