With the economic outlook remaining uncertain and costs being managed closer than ever before, it's surprising that there are still many businesses in the UK hospitality sector that are not yet taking advantage of the benefits that e-procurement, or online buying, has to offer. Steven Henderson, Beacon's Managing Director, shares his views on why this may be.
Consumers have well and truly got on board the ‘online buying train' (or e-procurement in business-speak), sourcing everything from groceries, entertainment and fashion to electronics and furniture. Not only are they happy to buy from UK suppliers, many consumers will even search the web for the right product and price, regardless of where in the world it will be sent from.
As consumers, we understand the benefits. We can track deliveries. We can see our purchase history. We sign up for special offers and to find out when products become available. We specify delivery instructions, update our customer information settings, and a whole lot more besides. So why do so many businesses in the hospitality sector still buy everything the way they have done for decades?
It is estimated that only 8%of hospitality businesses currently create purchase orders via an e-marketplace (Internetweek stats), which leaves a lot of scope for improving efficiency. Most organisations still use their old tried and tested methods of calling suppliers, tackling invoices manually, and physically checking all re-order quantities. Chef, the housekeeper and bars manager all have their favourite suppliers that they talk to daily or weekly. Therefore, perhaps the biggest reason why businesses are only slowly adopting e-procurement is down to perceptions of what e-procurement means.
Perhaps the biggest perception is that online buying will change the personal relationships that many people have with their suppliers. Consumers buying on the web have never had the same types of relationships with suppliers that we have developed from calling to place daily and weekly orders, so does that explain one difference? The reality is that e-procurement is an enablement tool that doesn't change buyer/supplier relationships.
Head chefs are sometimes the loudest opponents of e-procurement. They are used to calling up to get special deals and finding out about products. However, six months after it has been introduced, chefs are often the biggest supporters of online buying. They realise they can still get special offers, check prices, and find out product information but they can also track issues like late deliveries, product complaints, stock run outs, and so on. In other words, they now have effective data with which to manage the supplier relationship. They also realise how much time they have freed up for themselves.
So, in the same way that the early adopters of social media were consumers and most businesses fell into the next early majority category, will the same be true for business e-procurement? It will be interesting to watch but for businesses looking carefully at their costs, the benefits are there today.