B2B marketplaces have been around for about 15-20 years and have become popular with SMEs but they have yet to fully penetrate large corporate procurement departments. Concerns about scale, quality, and reliability have made leaders hesitant to change their longstanding reliance on dealing directly with suppliers. This is especially true for the more complicated purchases that fall under the label “indirect spend” e.g. IT.
The times are changing, the new generation of IT buyers have a different mindset and with the power of digital and analytic tools to back them, they are opening new avenues for procurement departments to generate value in areas outside their traditional focus on transaction management.
Indirect IT spending is increasingly challenging for chief procurement officers (CPOs)
Indirect spending is rapidly growing - controlling spending, compliance, and risk has become a bigger headache too. The best B2B marketplaces should contain only high-quality, pre-screened vendors (Markit integrates the IT catalogues of approximately 300 leading global IT distributors in 33 countries, offering an unparalleled total of 3 million unique IT products in total). The value of Markit and other leading B2B marketplaces extends beyond wide vendor and product choice to catalogue and permission customisation, dynamic/real time pricing and stock availability and spend management and control mechanisms – all critically important for IT procurement functions looking to save time as well as money. The time saving benefit of advanced B2B marketplaces can’t be understated – they can free procurement teams from time-consuming, often repetitive, transactional work that fails to take full advantage of their more advanced capabilities. When part of a broader procurement system that includes such elements as shared services or digitized sourcing, marketplaces free up procurement teams to place more focus on value-adding activities, such as strategic purchase categories, innovation, and sustainability.
Markit makes it easy to identify the right products/distributors and improves the buying experience by making simple and transparent. Our 9,000+ clients (including 20% Forbes Global 2000) have immense choice and gain additional value and greater purchasing efficiencies and our distributor partners reach our ever-growing, international client base without the need for additional marketing, sales, fulfilment, transactional or logistical functions.
Hours and time zones are irrelevant, Markit like other big B2B marketplaces are truly global and 24/7.
The key benefits of B2B marketplaces to Indirect IT CPOs (according to McKinsey)
- Huge vendor/product choice. Markit offers 3 million unique SKUs.
- One stop shop (in Markit’s case, CPOs have a single log-in and can perform purchasing in 33 countries and counting)
- Faster, cheaper delivery (Markit’s business operations in 33 countries = low cost local delivery and local currency invoicing)
- Savings – in pure product savings our clients average 12%+ per annum (compared to less than 5% average through other indirect IT purchasing methods)
- Integration – An increasing number of Markit clients are seamlessly integrating with Ariba, Ivalua, Coupa and other leading S2P platforms for simplified negotiations, contract compliance, ordering accounting, reporting and so on.
- Managing spend and compliance – single point access to Markit’s dashboard of transparent performance data and transaction histories means CPOs can easily take control of spending and establish spending limits by buyer role and create restricted catalogues or favourite lists for various buying groups. This considerably helps reduce maverick IT purchasing.