When looking at the Kraljic model, where purchasing card (P-card)-type purchases can be categorised as non-critical items, a new trend has emerged that further streamlines the purchasing of low-value, high-volume items, as well as other ad hoc items.
This new trend is online marketplaces and e-catalogues, says Anita Carolus-Opperman, Nedbank Corporate Card National Sales Manager, in this month’s SmartProcurement.
“Not only is the world changing rapidly, but the way organisations do business is also changing at lightning speed. It is imperative for organisations to keep up with new technologies across the entire business to remain competitive, and this includes the procurement function,” says Carolus-Opperman.
P-card purchases already streamline the traditional Procure-to-Pay (P2P) process by eliminating unnecessary steps, cutting costs and adding extra control and visibility of spend, thus making misuse of the card even more difficult. With online marketplaces the streamlining is now even more advanced and there are a number of online marketplaces and e-catalogue tools a company can choose from.
How does an online marketplace work?
• An organisation’s suppliers are loaded onto the tool online and they can upload their catalogues onto the tool. This can be a generic catalogue or one with negotiated prices specific to the buying organisation.
• Cardholders have access to the catalogues and can add items they need to purchase in a basket. Added controls specify which cardholders may buy which products, limiting them to only a select few products in the catalogue.
• The method of payment is the P-Card, which is loaded securely onto the tool and never visible to the buyer or supplier.
• The supplier is then paid after the delivery of the purchased items.
Technology is enhancing the way business is done globally and companies should adapt to the changes as quick as possible and leverage the technologies available to them, as this will inevitably be how business is done in the future.
For more information on how your company can benefit from a P-Card programme and where online marketplaces will fit into your company send an email to Anita Carolus-Opperman at AnitaCarolusO@nedbank.co.za