Spot Buying 101: Big Benefits from Small Transactions

Rob Mihalko

It’s summertime, and you’re hosting a big barbecue on the coming weekend. Your gas grill breaks unexpectedly, so on short notice, you head down to your local hardware store and buy a new one. Guess what you just did? You just made a spot buy.

Almost half of companies’ indirect spend

Companies make spot buys, too—all the time. They account for a whopping 42% of a company’s total indirect spend overseen by procurement, and half of the sourcing activities. In spot buyingcorporate procurement parlance, spot buys usually include one or more of these characteristics: one-time buys/emergency buys, low-dollar-value/low-complexity buys, unmanaged category buys, unique buys, or buys in a new commodity area that can’t be fulfilled by incumbent suppliers. At most companies, spot buying is definitely an under-managed, under-served purchasing type, with gaps in policy and process.

For sellers, most opportunities to participate in spot buys are unexpected—many times resulting in improperly routed requests for a quote (i.e. a phone call to the main receptionist).  At best, this can be distracting for sellers; worst case, business can be lost because the lead does not get to the right part of the organization for quoting.

How spot buying works

That’s where an online business network comes in. Buyers simply describe their needs in an online posting and get matched to sellers who are automatically notified of appropriate opportunities. Sellers have a single interface to evaluate and bid on spot buy opportunities quickly and efficiently. A streamlined response mechanism allows sellers to quickly submit bids, and gives buyers an easy framework for comparing them.

Clearly, spot buying is a lot different than the RFP process typically used by companies when making bigger-ticket, more considered purchases. The RFP process is longer, more formal and, at most larger companies, is well established and technology-enabled.

So if you’re a seller participating in an online business network, the good news is that you’re exactly in the right place to win more spot buy business.

Benefits for buyers…

Facilitated and accelerated by an online business network, buyers can find what they need in a way that’s economical, fast, and easy. They can procure the right product or services from a trusted community, on a platform that ensures they get it at a competitive price, and integrates spot buying with other key buying functions. Better matches between buyers and sellers mean faster turnaround, which in turn delivers significant savings in supplier identification cycles and resource costs.

… and sellers

Sellers have the opportunity to win business that is immediate, real, and needs to happen quickly. These sales are a great way for sellers to show off their capabilities. A spot buy win could be the beginning of a new customer relationship, or an opportunity to get added business with existing customers.

So, whether you’re starting a new relationship or building an existing one, spot buying presents a sure way to tap into 42% of a typical company’s business.

If you are a buyer, how are you managing your spot buys?

If you are a seller, how much of your business comes from quick-turn spot buys? If you’re already winning spot buy bids on an online network, how is it helping?

Let me know by commenting below.




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13 Scary Statistics On Employee Engagement [INFOGRAPHIC]

Jacob Shriar

There is a serious problem with the way we work.

Most employees are disengaged and not passionate about the work they do. This is costing companies a ton of money in lost productivity, absenteeism, and turnover. It’s also harmful to employees, because they’re more stressed out than ever.

The thing that bothers me the most about it, is that it’s all so easy to fix. I can’t figure out why managers aren’t more proactive about this. Besides the human element of caring for our employees, it’s costing them money, so they should care more about fixing it. Something as simple as saying thank you to your employees can have a huge effect on their engagement, not to mention it’s good for your level of happiness.

The infographic that we put together has some pretty shocking statistics in it, but there are a few common themes. Employees feel overworked, overwhelmed, and they don’t like what they do. Companies are noticing it, with 75% of them saying they can’t attract the right talent, and 83% of them feeling that their employer brand isn’t compelling. Companies that want to fix this need to be smart, and patient. This doesn’t happen overnight, but like I mentioned, it’s easy to do. Being patient might be the hardest thing for companies, and I understand how frustrating it can be not to see results right away, but it’s important that you invest in this, because the ROI of employee engagement is huge.

Here are 4 simple (and free) things you can do to get that passion back into employees. These are all based on research from Deloitte.

1.  Encourage side projects

Employees feel overworked and underappreciated, so as leaders, we need to stop overloading them to the point where they can’t handle the workload. Let them explore their own passions and interests, and work on side projects. Ideally, they wouldn’t have to be related to the company, but if you’re worried about them wasting time, you can set that boundary that it has to be related to the company. What this does, is give them autonomy, and let them improve on their skills (mastery), two of the biggest motivators for work.

Employees feel overworked and underappreciated, so as leaders, we need to stop overloading them to the point where they can’t handle the workload.

2.  Encourage workers to engage with customers

At Wistia, a video hosting company, they make everyone in the company do customer support during their onboarding, and they often rotate people into customer support. When I asked Chris, their CEO, why they do this, he mentioned to me that it’s so every single person in the company understands how their customers are using their product. What pains they’re having, what they like about it, it gets everyone on the same page. It keeps all employees in the loop, and can really motivate you to work when you’re talking directly with customers.

3.  Encourage workers to work cross-functionally

Both Apple and Google have created common areas in their offices, specifically and strategically located, so that different workers that don’t normally interact with each other can have a chance to chat.

This isn’t a coincidence. It’s meant for that collaborative learning, and building those relationships with your colleagues.

4.  Encourage networking in their industry

This is similar to number 2 on the list, but it’s important for employees to grow and learn more about what they do. It helps them build that passion for their industry. It’s important to go to networking events, and encourage your employees to participate in these things. Websites like Eventbrite or Meetup have lots of great resources, and most of the events on there are free.

13 Disturbing Facts About Employee Engagement [Infographic]

What do you do to increase employee engagement? Let me know your thoughts in the comments!

Did you like today’s post? If so you’ll love our frequent newsletter! Sign up here and receive The Switch and Shift Change Playbook, by Shawn Murphy, as our thanks to you!

This infographic was crafted with love by Officevibe, the employee survey tool that helps companies improve their corporate wellness, and have a better organizational culture.


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Supply Chain Fraud: The Threat from Within

Lindsey LaManna

Supply chain fraud – whether perpetrated by suppliers, subcontractors, employees, or some combination of those – can take many forms. Among the most common are:

  • Falsified labor
  • Inflated bills or expense accounts
  • Bribery and corruption
  • Phantom vendor accounts or invoices
  • Bid rigging
  • Grey markets (counterfeit or knockoff products)
  • Failure to meet specifications (resulting in substandard or dangerous goods)
  • Unauthorized disbursements

LSAP_Smart Supply Chains_graphics_briefook inside

Perhaps the most damaging sources of supply chain fraud are internal, especially collusion between an employee and a supplier. Such partnerships help fraudsters evade independent checks and other controls, enabling them to steal larger amounts. The median loss from fraud committed
by a single thief was US$80,000, according to the Association of Certified Fraud Examiners (ACFE).

Costs increase along with the number of perpetrators involved. Fraud involving two thieves had a median loss of US$200,000; fraud involving three people had a median loss of US$355,000; and fraud with four or more had a median loss of more than US$500,000, according to ACFE.

Build a culture to fight fraud

The most effective method to fight internal supply chain theft is to create a culture dedicated to fighting it. Here are a few ways to do it:

  • Make sure the board and C-level executives understand the critical nature of the supply chain and the risk of fraud throughout the procurement lifecycle.
  • Market the organization’s supply chain policies internally and among contractors.
  • Institute policies that prohibit conflicts of interest, and cross-check employee and supplier data to uncover potential conflicts.
  • Define the rules for accepting gifts from suppliers and insist that all gifts be documented.
  • Require two employees to sign off on any proposed changes to suppliers.
  • Watch for staff defections to suppliers, and pay close attention to any supplier that has recently poached an employee.

About Lindsey LaManna

Lindsey LaManna is Social and Reporting Manager for the Digitalist Magazine by SAP Global Marketing. Follow @LindseyLaManna on Twitter, on LinkedIn or Google+.


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Connected Cars Rev Up For A Revolution [VIDEO]

Michael Zipf

Every two years, almost a million car enthusiasts flock to the Frankfurt International Motor Show (IAA), the world’s largest automotive trade fair, to enjoy the legendary spectacle of automakers rolling out their latest models to an accompaniment of flashing lights, throbbing bass beats, and stylishly dressed dancers.

While the giant exhibition halls on the ground Couple buying a car --- Image by © Don Mason/Blend Images/Corbisfloor echo to the sound of visitors jostling to examine paint work and leather, sleek sports cars, people carriers, electric vehicles, and the ubiquitous SUVs, the atmosphere in the New Mobility World exhibition on the first floor is altogether calmer. Nevertheless, this is where pressing issues about the future of mobility are being discussed.

The exhibitors here include Samsung, IBM, Deutsche Telekom, and – making its debut appearance – SAP. Awake to the far-reaching revolution that lies ahead of the automotive sector, these IT companies are in Frankfurt to showcase ways in which information technology is already making it possible to connect today’s highly digitized vehicles with each other, with their drivers, and with the technological infrastructure around them.

Revved up for a revolution

Chris Urmson considers the convergence of vehicles and IT to be “the most exciting development of our age.” Speaking in Frankfurt, Urmson, who heads up Google’s driverless car program, described the number of people killed on America’s roads every year – 36,000 – as “unacceptable” and stressed that his company’s intensive research into autonomous vehicles was aimed at improving road safety.

Robert Wolcott, Professor of Innovation Management and Corporate Entrepreneurship at Northwestern University’s Kellogg School of Management, spoke of “a new industrial revolution” whose impact would be “on a par with that of the railroads in the 19th century.”

So it’s no surprise that the IT sector is steering its focus toward the automotive industry.

At the IAA’s Smart City Forum, SAP has teamed up with various cities to present solutions designed to put an end to the daily traffic gridlock. And, to judge by the figures below, their capabilities are sorely needed:

  • By 2050, around 70% of the global population will be living in cities.
  • The number of cars on the planet is set to almost double by 2030.
  • Experts predict that the volume of freight traffic on Europe’s roads will increase 80% by 2025.
  • On average, a car driver in Germany spends 36 hours stuck in traffic jams every year.

Smart cities for a better quality of life

Smart Traffic Control enables cities to optimize traffic-light controls and free up additional car lanes during the rush hour to alleviate congestion, while data collected by RFID chips, sensors, cameras, and induction loops is used to compile congestion profiles and monitor real-time traffic issues. The Chinese city of Nanjing, which is home to 8 million people, has chosen to adopt smart traffic control technology to crunch the 20 billion data points captured in the city every year to produce actionable information for predictively responding to traffic congestion. And the software even learns as it goes along. In June of this year, the city signed a Custom Development Project with SAP. Currently, the SAP HANA platform helps Nanging analyze the data generated by its 10,000 taxis. The plan is for other modes of transportation to provide data in the future too.

“Smart traffic is one of the hottest topics for the world’s ever-expanding cities,” says Norbert Koppenhagen from the SAP Innovation Center Network, who is also at the IAA to showcase SAP’s cooperation with the German city of Darmstadt, near Frankfurt. “If we can keep the traffic flowing, we’ll make city-dwellers’ lives a whole lot more livable.”

The SAP Vehicle Insights cloud application links vehicular data with sensor data to provide actionable insight into driver behavior patterns and efficiency. The software helps logistics and mobility services providers monitor live vehicle conditions and manage their services within the constraints imposed by pollution and traffic congestion. The SAP Vehicle Insights also helps fleet operators manage their fleets optimally.

City App is another innovation being showcased in Frankfurt. Developed in collaboration with the German city of Nuremberg, this app features crowdsourcing functions that allow citizens to report defects and damage in their immediate vicinity. Algorithms assimilate these reports with data about factors such as traffic density in the affected city zone to help municipal authorities optimize their response.

There is also considerable buzz around TwoGo, the mobile app that lets employees at enterprises, institutions, and municipal authorities link up and share their daily commute to the office. “This is an exciting time for TwoGo,” says Alexander Machold, a member of the TwoGo business development team. “We’ve got vehicle manufacturers, parking garage operators, local authorities, and government ministries all looking into how TwoGo could help them cut costs and develop new business models.” What’s more, he says, the app sometimes opens the door to cross-selling opportunities for other SAP solutions.

“The number of connected cars on our roads is growing; more and more vehicles are being outfitted with sensors; and even driverless cars are becoming a genuine possibility. All in all, this is a great opportunity for us to transform cities, industries, and businesses sustainably to create a better future,” says Stephan Brand, Vice President, PI Analytics Applications, Products and Innovation at SAP.

The Internet has changed the way we buy cars, while mobile technology is changing what we expect them to do. Learn more about The Hyperconnected Car.

This story also appeared in the SAP Business Trends community.


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Create A Culture That Doesn’t Fear Failure

JP George

A fear of failure could be holding back your business.

If the people on your team are worrying about being ridiculed or blamed for independent creativity or the downfall of an entire project, they are likely to hold back their ideas and stick to completing projects in the same way over and over again. In comparison, people who work in an office culture with no fear of failure feel free to bounce ideas around, which helps generate new practices, keep up with the times, push projects along, and can “wow” customers with innovation.

Changing the way your office works won’t happen overnight, but these five tips could begin to implement positive changes to help steer your team toward a working environment that is good for the staff and good for the business.

1. Recognize and reward

Employee recognition is the key to not fearing failure. When an employee or team member goes above and beyond; make sure they know that their hard work is appreciated and that an efficient system for providing employee recognition awards is in place. Even small things like suggesting a new way to carry out a particular process should be celebrated. If an employee, colleague, or team member has a suggestion that isn’t quite on-point, find the positive; for example, you might say, “You’re on the right lines, your idea will help speed the process up, but…” Always make sure to offer positive feedback first, then mention the thing that needs changing, and end with encouragement: “Once that’s ironed out, we can implement this — great work!”

2. Adopt a team mentality

Seems straightforward and fairly obvious for a first step, but so many companies do not know how to really generate a feeling of teamwork and inclusivity, and instead put up a front of “togetherness” while retaining the bad practices that divide a workforce. Start by calling a team meeting and setting some ground rules together. Yes, it’s a basic ice-breaking activity in almost all training sessions, but it also helps each person to display respect and hear the opinions of other members of the group. Suggest from the start that the team use “we” rather than individual pronouns when discussing projects, as it helps to dispel blame culture and reminds each person that they are all responsible for any successes and downfalls of the team.

3. Say “yes” more

When staff members and colleagues approach you with ideas and innovation, are you more likely to think “straying from the status quo is dangerous,” or are you willing to hear the person out and let their creative juices flow? Even if the first suggestion they offer is horrible, try not to say “no” outright or make the person feel bad for sharing. Try to find a way in which their idea can be incorporated, even if it has to be altered to fit the project. Saying “yes” to the inspiration and thoughts generated by staff and colleagues means that they will be likely to offer more ideas in the future, and without that openness, you might miss the next great innovation in your industry.

4. Blame less

Similarly, try to incorporate policies that encourage employee recognition rather than shame for sharing concepts. If failure does occur, do not publicly belittle the person deemed responsible, even in jest. This creates tension within the office or team and can make the person receiving the blame less likely to contribute in the future, and may even affect their personal well-being. Instead of blaming and shaming, discuss what went wrong as a group, and try to enforce the group mentality of “we could have done…” rather than “I/they/she/he did…”

5. Look for the positives

If, for any reason, your team does experience failure—and you should, otherwise you’re just not aiming high enough—try to see the positives, and discuss the issue as a group — not in cliques of us vs. them, but together discuss what the group could have done better. If a majority insist on blaming one or two people, move onto analyzing how communication channels could be opened up and ask members how inclusivity could be improved. After all, if only a few people are responsible for a project failing, the responsibility was obviously not being shared in an equal manner while the project was underway. There are positives to every situation, even if it is just the ability to improve your team dynamic.

The changes won’t happen immediately, but once the systems are in place and your staff, colleagues, and team members start to understand the goals within both the office and working environment as a whole, your employees’ creativity should start flowing and you will start hearing new suggestions regularly. Even if some don’t work well, remember to recognize employees and enjoy the rewards of your newly open and trusting workforce.

Want more employee engagement tips? See Boost Productivity With These 4 Brain Breaks.


About JP George

JP George grew up in a small town in Washington. After receiving a Master's degree in Public Relations, JP has worked in a variety of positions, from agencies to corporations all across the globe. Experience has made JP an expert in topics relating to leadership, talent management, and organizational business.

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