Sep 12

The SMB Digital Transformation Challenge

By Parker Sproul Procurement No Comments

The SMB Digital Transformation Challenge: Why SMBs Have Typically Been Digital Laggards in Procurement

While essentially every company could benefit from digital transformation — whereby they adopt digital technologies and processes to improve everything from customer experience to IT efficiency — many organizations have yet to fully embrace this change. In particular, small- and medium-sized businesses (SMBs) typically lag large enterprises (LE) in digital transformation, particularly for procurement functions.

SMB Roadblocks
The reason why SMBs lag larger competitors often relates to the size of an enterprise. For example, a survey of mid-sized business IT professionals, conducted by Spiceworks and sponsored by CenturyLink, found that the top roadblocks to digital transformation include:

Budget
Limited time and staff
Competing IT priorities
Resistance from end-users and internal decision makers
Limited skill and expertise

As this list indicates, some of the top roadblocks are tied to the resources that an organization has. And in general, larger companies have more resources. As such, digital transformation becomes more attainable as budgets increase and when employees aren’t as stretched for time.

For procurement, a lack of resources means that SMBs often cannot invest in the technology necessary to obtain visibility into spend and streamline buying processes. Procurement activities at many companies tend to be decentralized and manual, leaving organizations without the insights needed to improve in this area.

Still, these challenges are by no means limited to SMBs, it just tends to get easier as companies gain more resources. A global survey of procurement and operational leaders at companies of varying size, conducted by the University of Applied Sciences Würzburg-Schweinfurt with support from SAP Ariba™ ,found that 83% of respondents think digital transformation will be impactful but only 5% already have highly automated processes. Similarly, the survey found that data/analytics quality is the largest roadblock to more efficiency, followed by budget restrictions.

How SMBs Can Improve Digital Transformation in Procurement

While finding the budget and convincing internal stakeholders to adopt procurement technologies may be difficult, change can be cost-effective in the long run.

For example, research from The Hackett Group finds thatdigital transformation helps typical procurement groups reduce process costs by 30%. The research also finds that top procurement groups have lower labor costs and staff levels than their peers, and they improve efficiency by standardizing and automating routine tasks.

This means that SMBs don’t necessarily need to add additional employees to keep up with competitors, but they can instead leverage technology and digital processes to become more efficient with the resources they do have.

Fortunately, procurement technology is also becoming more readily available for SMBs, whereas in the past, procurement platforms tended to be priced at a level that only large companies could afford. Now, SMBs can implement systems that allow them to move from using paper-based supplier catalogs or ordering from disparate websites to centralized marketplaces. Doing so enables employees to find all the items they’re looking for in one place online, much the way they shop for items in e-commerce marketplaces like Amazon and eBay in their personal lives.

By centralizing purchasing activities, SMBs then get the added benefit of gaining visibility into their spending, particularly the small tail spend purchases that would otherwise be hard to track. Doing so enables companies to find cost savings such as by identifying unnecessary spend and implementing cost controls so that employees stay within budget.

Digital transformation in procurement doesn’t have to be overly complex, but by moving purchasing activities onto centralized platforms, SMBs can gain the insights and set the controls they need to improve efficiency. Moreover, SMBs can link digital procurement activities into the rest of their digital transformation, such as by sourcing digital-minded suppliers that can provide added value to other functions.

To learn more about how SMBs can embrace and improve digital transformation in procurement affordably, explore Premikati Marketplace, a solution that runs on the SAP Ariba Buying and Invoicing Technology at a price geared toward SMBs. You can also get in touch with us for more detail.

About PREMIKATI

Founded in 2009, Premikati, Inc. is a WBENC certified woman-owned Supply Chain Business Process Outsourcing (BPO) firm, providing cost savings and financial, contractual and supplier risk mitigation services to purchasing organizations for mid and large enterprises while leveraging best-in-class purchasing processes and technology. Premikati has partnered with SAP and is one of only five companies globally to have been granted the most exclusive partnership level with SAP Ariba, as a BPO Partner.

Sep 12

Digital Transformation in Small and Medium Sized Businesses

By Parker Sproul Procurement No Comments

SMBs and Digital Transformation: Is Your Company a Laggard or a Front Runner?

SMBs have long been seen as being “behind the curve” in terms of transformative businesses processes. This unfortunate placement puts slow adopters at a disadvantage, blocking access to cost-saving solutions and process optimization.

With all the advantages that digital transformation promises, you might wonder what the hesitation is all about, but it could be due to one or more factors that include:

Lack of awareness. In small businesses, often there isn’t a dedicated technology officer to inform leadership of new and helpful tools. Unless there is somebody within the organization who has an interest in pursuing this line of action, the company will likely continue as they have in the past, gradually losing market share.
Cost-prohibitive nature of large analytic ERPs. Not every business is a good candidate for an ERP as these systems are often designed for the enterprise and not priced for a smaller operator.
Lack of manpower. Digital transformation does not happen overnight. Identifying the right technology, migrating systems, training staff, and generally managing change is a time-consuming and sometimes complex process. Many businesses simply do not have in-house staff who are trained adequately enough to see it through and hiring an outside company isn’t always possible due to budget constraints.

Procurement solutions: turning laggards into front-runners

Even if your digital transformation is underway, some departments are often overlooked or put on the back burner while more critical areas are addressed. Procurement is one such area, but in truth, it is one of the easiest to gain control over, helping you lower costs and gain some competitive ground.

Procurement is, perhaps, the largest area of total spend over which SMBs do not have complete oversight. In most cases, there will be several individuals spread out over various departments who are making purchases covering everything from office supplies to raw materials.

In the enterprise, these tasks are centrally managed through the ERP. Buyers can access a centralized list of preferred suppliers, leverage an integrated PO system for efficient financial reporting, and stakeholders are provided with complete transparency into all procurement activities.

How can SMBs take advantage of enterprise approaches to save?

The good news is, the ability to easily manage spending analytics and choose from a catalog of diverse suppliers is no longer the sole realm of the enterprise.

The solution: Premikati Marketplace

Running on the SAP Ariba™ Buying and Invoicing platform, Premikati Marketplace can accomplish all of these things, offering affordability and scalability combined with the simplicity and security of a cloud-based platform.

Premikati Marketplace is a B2B marketplace that features tens of millions of items from fully-vetted and sustainable suppliers. SMBs can access features like rock bottom pricing and leverage built-in spending control, driving value straight back to the bottom line.

“Finding frictionless ways for your business to initiate digital transformation in their organization is a growing trend and plays a key role to maintain competitiveness. The challenge is that businesses are just like consumers – they want fast time to value and convenience. Premikati Marketplace offers both for SMB companies by digitally connecting suppliers to help SMB companies buy goods at market-friendly prices with control and visibility that is required by companies. This is a great foundation for any business to start digital.”

Sean Thomson, SAP Ariba, Network & Ecosystems

@seanthomson0108

Benefits of Premikati Marketplace

There are many benefits of Premikati Marketplace, including:

Control spending across multiple departments and buyers
Reduce time spent on ad-hoc buying processes from days or weeks to just hours
Up to 35 percent reduction in costs overall
Cashback feature: receive a rebate of up to one percent on your P-Card for all purchases

If your company is lagging behind the pack in digital transformation, even small changes can deliver significant results. To learn more about how we can help you optimize your procurement spend, visit www.premikati.com/marketplace or call us directly to find out how we can help.

About PREMIKATI

Sep 12

Premikati and SAP Ariba Deliver Enterprise-class Procurement for SMBs

By Parker Sproul Procurement No Comments

For small and medium-sized businesses (SMBs), shrewd spending decisions can mean the difference between failure and success. But many lack the systems and staff to make procurement a mission-critical priority.

Premikati Inc. has a solution to their problem. Leveraging technology from SAP Ariba, Premikati introduced the Premikati Marketplace, giving SMBs access to enterprise-class procurement as a service.

“Small and medium-sized businesses have long wanted to take advantage of enterprise-class procurement, but they haven’t had the means,” said Marisol Buczynski Buchanan, CEO of Premikati. “Using the Premikati Marketplace, they can access millions of vetted suppliers and enterprise-class procurement tools that provide greater visibility into their spend and procurement process from end to end – all at a cost they can afford.”

As an SAP Ariba partner, Premikati has created the marketplace specifically geared to SMBs in just six weeks, from delivery to cutover to production. It provides them with critical elements they need in driving a simple, efficient source-to-settle process that quickly delivers results. Their customers can manage spending, connect with suppliers, improve cash flow, and drive compliance – all without adding complexity.

“The Sanders Group has been transacting over the Ariba Network for many years as a media technology and communications supplier to some of the largest companies in the United States,” said Mike Sanders, president of The Sanders Group. “With the Premikati Marketplace, we can now use the same SAP Ariba solution to purchase products and services we need to run our business. Premikati was able to get our team enabled and completing transactions within one hour of receiving our information.”

Technology Adoption