The results of “The buyer and the supplier as value creators” survey show that for almost 43% of buyers and 40% of suppliers the biggest potential to create a shared value is in cost reduction. Some other areas include cooperation on innovation, improvement of the process of ordering from the supplier – all on the electronic market.
Cost reduction is understood as optimisation of processes on the supplier’s part – this is the main area where buyers and suppliers see the potential for creating additional value through closer cooperation. For the buyer, more effective processes of the supplier mean lower purchasing costs of a service or product in the future. For the supplier, cooperation with a client – who is often bigger and more experienced – is primarily a new source of know-how and technology.
Today the offering process is a dialogue
Although 34% of buyers and 60% of suppliers indicated the price as the key factor in the supplier selection process, the significance of a long-term cooperation is increasing. The offering process is not finalised upon specifying the buyer’s requirements that the supplier needs to adjust to. The process is a dialogue, a search for shared solutions that affect the object and the form of the purchase. The market is characterised by a growing pro-active approach of buyers and suppliers, “Today we speak about a Total Value of Ownership, which means a shared effort, engagement in R&D projects to modify a product or service, searching for a specific know-how, or about a partnership relation where the supplier is a part of the buyer’s investment. This kind of cooperation with the supplier is not such an abstract idea today.” – said Grzegorz Filipowski, a Member of the Management Board, the Director of Advisory in Marketplanet.
Transactions are moving to an electronic market
The studies show that buyers appreciate the possibility of electronic communication with suppliers (27% of buyers selected communication as the main functionality of electronic tools in their purchasing organisations). The electronic market for companies, which in fact, is one virtual “place” where the supplier meets the buyer, is a response to the needs of the both sides. It addresses the buyer’s need to select the best supplier, change the current one or expand its supplier base. For 66% of buyers the access to a categorised supplier base is a key functionality of the electronic market for companies, out of which 19% point out the need for supplier’s certification from an external body. From the suppliers’ point of view, the most important factor is easy and fast access to the global procurement market (almost 32%) and the possibility to make buyers aware of their presence.
From the perspective of buyers and suppliers the electronic market is also a base of knowledge about the market or pricing benchmarks and gives access to personalised electronic banking. The idea of the entire process being conducted in one place, from the onset of a need for a purchase, through searching for a supplier, to making an electronic banking payment – an innovative electronic market – is close to reality.
New technologies require new rules
Transactions move to the web, which requires a faster technological adaptation. This is not just about the possibility to communicate, asses or prepare reports, but about the speed, universality, usability. The integration of Social, Mobile, Analytics and Cloud technologies (society, mobile technology, BIG DATA, cloud solutions) is starting to significantly affect internal business processes of companies, the ways of communication and contact with business partners. A new place for transactions involves reaching out to new promotion and sales tools. Companies not only adopt e-commerce methods, but the B2B rules need to generally employ the electronic commerce behaviours from the mass market. The most effective promotional channel remains positioning. Over 26% of buyers search for suppliers by key words, which often limits the number of potential companies to the results obtained based solely on their positioning. Social media start to become an important factor, with almost 30% of buyers and 25% of suppliers willing to use it to assess their trade partners.
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About the survey:
“The buyer and the supplier as value creators” survey is the first study in Poland which addresses the buyers’ and suppliers’ attitude to create a shared value. It was initiated to discover the priorities sellers and buyers have in B2B area. The respondents were purchasing and sales managers who were asked to fill in online questionnaires. The survey was conducted in the period from June to September 2014.