Since the 1990s, with the launch of Amazon, there has been a revolution in the way people buy things. Now, the same revolution that started for us as consumers three decades ago, is starting for businesses, Samuel Oppenheimer, head of strategy at Dooka, tells SmartProcurement.
It started slowly but became exponential. In 2021 over 2 billion people shopped online – a market value approaching $5 trillion.
And yet, with widespread adoption of online shopping amongst consumers, the majority of businesses globally still buy things in a more traditional, mechanical and often frustratingly process-driven way. How many times have we heard from our employees, “why is it that I can buy something at home with a few clicks, but I have a world of pain when buying something at work?”
At work, the simplest of purchases often involve purchase requisition forms, approvals and multiple purchase orders. And the host of suppliers is carefully managed year after year like a shepherd managing his flock, often at considerable expense to the company. Large enterprises around the world are starting to question the status quo. There has to be a better way.
There are, of course, reasons why procurement and purchasing have doggedly remained the way they are – even for non-strategic spend, indirect spend, and tail spend. Businesses work differently. Businesses need controls. Businesses have to maintain standards. And businesses need to control budgeting and spending. Consumer marketplaces like Amazon, Jumia and Takealot just do not have those controls, and so they fall into the category of “rogue spend” – to be avoided at all costs!
Now, the same revolution that started in the 1990s for us as consumers is beginning in the world of procurement. A few of the global digital procurement and purchasing platforms have recognized the unique needs of large enterprises, and now offer businesses the controls that they need whilst purchasing goods from a marketplace.
It was really important for us to focus specifically on one region – the African continent. Africa is one of the fastest growing regions in the world, and we want to provide businesses with the procurement technology they need to further accelerate that growth whilst also helping them meet strategic objectives like localisation of purchasing. That is why we are launching the Dooka marketplace now, which pairs the experience of consumer shopping with the controls of business procurement.
This new type of B2B marketplace looks and feels like a standard B2C shopping experience. The differences are behind the scenes. Like the vetting of suppliers to meet individual corporate purchasing standards, the integration with ERP, purchasing and accounts payable processes, and the digitisation of end-to-end systems. These are the critical factors that make it workable for large enterprises looking to reimagine the way their indirect procurement works.
Revolutionary ideas are about finding new and better ways to do what we have always done. When we do something day in and day out, it just becomes “the way things are”, the status quo. Most large companies globally are starting to scrutinise “the way things are” in procurement, and focussing more on “the ways things could be”. Are we really getting the best pricing? Is the current system being abused at the company’s expense? Can we focus our procurement efforts more on doing our high value direct purchasing more efficiently, and find an easier way to buy the indirects?
Anything revolutionary is challenging. The early inventors of motor vehicles met with enormous resistance. There were, of course, reasons why travel doggedly remained the way it was. Horses could run on any surface. Cars needed smooth surfaces. And there were no smooth surfaces. But the rise of the automobile happened and the world was joined by criss-crossing smooth tarmac. And it happened because the early adopters had the vision of where it would lead.
It took a while before a certain critical mass was reached, and then those places that first embraced the new technology and invested in the required infrastructure – roads and filling stations – made the most rapid technical and economic advances. The followers stayed on horseback, and became the economic losers.
A solution for a better way of purchasing is here, and it is here in Africa for African companies.
Now it is all about who has the vision.
By Samuel Oppenheimer, Head of Strategy and Business Development, Dooka, Johannesburg