31.2 C
Thursday, June 20, 2024
HomeProcurementKey Success Factors for Business Purchases in E-commerce

Key Success Factors for Business Purchases in E-commerce

In recent times with the pandemic and maturity of e-commerce practices in a consumer world, businesses have started to explore processes that can derive from daily ‘online shopping’ actions. E-commerce technology helps to centralise non-critical and ad-hoc tail-end spend. It can integrate into companies’ existing e-procurement systems and purchasing workflows. With the power of network, vendors can easily be consolidated onto a single platform for easier management. Visibility of spend, as well as users’ behaviour analysis can help organisations to regulate for compliance, identify and control risks digitally and more efficiently. This article discusses the key success factors for business purchases in the E-commerce sector.

Streamlining Non-Critical Purchase Categories

These categories of purchases, also known as tail-end spend, are usually the most complexed and might consists of many spot-buy instances. As an example, maintenance, repair and operations (MRO) items or even stationeries for office use can fall under these categories. There are business-to-business (B2B) marketplaces that are focused on tail-end spend categories, where a user can browse, compare and make purchases. Unlike a static e-catalogue, marketplaces provide wider verticals of items for users to choose from. Users are not restricted to buy from single category or single catalogue from one specific supplier only.

Streamlining Non-Critical Purchase Categories
Image taken from SIPMM: https://publication.sipmm.edu.sg/key-technologies-implementing-digital-procurement/

Integrating Procurement Workflows

Many B2B marketplaces are well versed in existing business procurement processes and understand the need to be able to integrate with major e-procurement systems that most organisations are using. This integration, called a Punchout, enables a seamless experience from browsing, creation of Purchase Requests, routing to internal approvals, issuance of Purchase Orders, verification of Good Receiving, finance processing. Punchout provides a user interface that brings users from within their ERPs, onto an online shopping portal (B2B marketplace). This is where their browsing, comparing, ‘adding into cart’ actions are translated digitally back into existing workflows in the ERP that is usually customisable based on organisation’s needs. That is how an online shopping experience is integrated into procurement workflows. These digital connections save time and costs for the organisation, it also minimises need of traditional paperwork and reduce room for errors. It is similar as putting in an e-commerce site within your ERP to buy things for your business.

Integrating Procurement Workflows
Image taken from SIPMM: https://publication.sipmm.edu.sg/technologies-implementing-digital-procurement/

Centralising Vendor Management

Vendors that users purchase from can either be from the traditional open market, newly sourced suppliers by the marketplace service provider or existing contracted suppliers, it depends on organisation purchase policies. Vendors onboarding criteria can be input into the portal, performance of suppliers can also be automatically populated. Once this is implemented, live catalogues of numerous suppliers can be housed on a single platform. Suppliers will keep product listings updated, users have a unified channel to manager their purchases and their suppliers. All agreements, communications can now be managed on a centralised platform, updates are in real time, and it is accessible to everyone in the organisation. Instead of dealing with thousands of suppliers or products, this is all done on a single marketplace interface.

Indicating Regulatory Compliances

During the initial setup stage, one of the biggest concerns is business compliance while using e-commerce for business procurement. However, for the Punchout to work, the technology needs to be integrated with existing ERPs. Which means it doesn’t work directly with just any marketplaces, without this integration, it will not make sense for any organisation. Due to this nature of things, most B2B marketplaces invest deeply into their integration ability and ensuring it can be tailor-made to different organisations’ requirementfor compliances. For example, different cost centres, multiple level of approvals, suppliers onboarding criteria, price comparison process, term contract purchases, product specifications/certifications, price negotiation etc. Priority of service is given to be able to customise the platform based on client’s legal needs and policies. All these can be generated into reports that are reviewed by the Management on regular basis.

The full content is only visible to SIPMM members

Already a member? Please Login to continue reading.


Brady Behrman. (2020). “B2B Ecommerce Punchouts are Here: How B2B brands Reduce Manual Error and Bring Full Benefits of Online Selling to the Industry”. Retrieved from https://www.bigcommerce.com/blog/b2b-punchout-catalogs/#what-is-b2b-punchout-in-ecommerce, accessed 23/03/2022.

Dwarakanath Malekar, GDPSCM (2021), “Key Technologies for Implementing Digital Procurement”. Retrieved from SIPMM, https://publication.sipmm.edu.sg/key-technologies-implementing-digital-procurement/, accessed 23/03/2022.

Jessline Piong Li Chai, DPSM. (2021). “Major Considerations for Mitigating Procurement Crisis”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/major-considerations-mitigating-procurement-crisis/, accessed 23/03/2022.

Philip Charles Loges, ADPSM. (2019). “Crucial Digital Technologies for Effective Procurement”. Retrieved from SIPMM, https://publication.sipmm.edu.sg/crucial-digital-technologies-effective-procurement/, accessed 23/03/2022.

Julian Siew
Julian Siew
Julian Siew is co-founder of Eezee. sg, the biggest B2B marketplace for industrial and office supplies in Singapore. He has substantive years of experience in e-Procurement and the tech sector. Julian is in the midst of expanding the company’s business in Southeast Asia. He is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). He completed the Diploma in Procurement and Supply Management (DPSM) in March 2022 at SIPMM Institute.

Most Read