By Carsten Storm, Head of Marketplace, Digital Experiences, SAP
From headline-making supply chain snafus to seismic shifts in where and how we work, the pandemic has forced businesses of all sizes to adapt and innovate in the face of unprecedented challenges. In fact, 89 percent of organizations say they’ve changed their business models over the past two years, according to a new research report from Futurum Research, sponsored by enterprise software leader SAP.
For many, this evolution included new investments in digitalized operations and enterprise software to power critical efficiency, flexibility and business continuity. It also ushered in a new era for technology procurement in which more solutions and a streamlined purchasing process reigns supreme.
As a follow up to the pre-pandemic SAP/Futurum buyers’ journey report, the 2022 B2B Digital Buyers’ Journey: Forces Shaping the Future of Enterprise Procurement – a survey of approximately 1,000 global decision makers, software buyers, and IT leaders – set out to uncover the forces transforming the B2B enterprise software procurement and buying landscape.
Here are the top takeaways that are sure to shape business software buying in 2023 and beyond.
The Future of Enterprise Software is Digital
The pandemic’s e-commerce boom intensified expectations for fast and convenient one-click shopping. And with U.S. online sales predicted to grow by 56 percent in the next few years, it’s clear that e-commerce platforms are the future for forward-thinking B2B enterprises, too.
Digital marketplaces like SAP Store are powering this surging industry with features like demos, purchasing options and reviews, all in one place. Unlike traditional single vendor sites, digital marketplaces offer a vendor-neutral platform that adds a layer of impartiality, transparency and predictability to the procurement process. Along with helping distributors differentiate from the competition, online marketplaces are predicted to increase net digital revenue by at least 10 percent in just one year.
So, if you’re not utilizing these modern-day mega malls, you may be missing out. In fact, more than half of procurement professionals we surveyed said they prefer purchasing online and 77 percent said they’re currently using digital marketplaces to do so.
Advantageous procurement teams are also contributing to a shift in when digital purchases are taking place. Rather than waiting for upgrade periods, they’re looking ahead to forecast future needs. Turns out, almost a quarter of digital buying now happens before a specific need arises.
The Search for Smarter Solutions is on
From tools connecting hybrid workforces to supply chain management technology, modern solutions to tackle today’s most pressing challenges are in demand. It’s no surprise that 41 percent of respondents said their software needs have significantly changed over the past two years. Their top purchases also highlight an important shift in business priorities, with consumer-centered software, database and data management and developer tools, taking center stage.
The report also revealed that despite a growing demand for new enterprise technology, buying it has not become any easier. The pandemic brought major disruptions to the procurement process and a majority of business leaders said they’re still looking for ways to streamline it.
Roadblocks range from geographical — over a third said procurement teams are more spread out than two years ago — to organizational, such as staffing issues stemming from increased employee turnover. For bigger companies with more than 50,000 employees, this pain point was even more acute: 55 percent said staff shortages are significantly slowing their procurement operations.
Bottom line? To stay competitive and keep up with growing demand for innovative enterprise software solutions, procurement teams must find new ways to streamline the buying processes.
Procurement by Committee is Causing Delays
When it comes to choosing the best software, our data shows that there are more cooks in the kitchen than ever. Buying decisions usually require input from multiple stakeholders — often at least four people per team, according to the research. And the larger the company, the more complex the decision-making mix. When it comes to businesses with more than 50,000 employees, a quarter of respondents said at least 11 leaders are needed to sign off on a typical purchase.
The demographic of the mix is changing, too. Sixty-one percent of respondents — more than double the number from our pre-pandemic survey — said corporate executives have become increasingly more involved with selecting software solutions.
While a variety of expertise can be useful, and interest/buy-in from executives is certainly preferred, increasingly bogged-down decision making is becoming a barrier to implementing change. More than a third of those surveyed said a lack of group consensus is impeding procurement, and ultimately adoption of the tools that are critical to competing in today’s rapidly changing landscape. Unsurprisingly, more than two-thirds of respondents said reaching a consensus remains a major challenge with 62 percent blaming increasingly distributed teams for decision delays.
Thus begins the delicate dance of ensuring you have the right stakeholders and leaders providing buy-in, while remaining efficient and moving decisions along in a timely manner. While it sounds like a daunting task, this balance is achievable with the right digital partner and collection of software solutions that lead to a well-orchestrated workflow and collaboration process.
Your Transformation Toolkit
To thrive in today’s volatile market, every company has become a technology company requiring more cloud-based solutions that are easy to buy, use and implement into business processes. The 2022 B2B Digital Buyers’ Journey survey underscores the importance of digital marketplaces and resources like SAP Store and SAP.com in enabling efficiency, productivity and agility across industries.
This vibrant ecosystem is helping enterprises adapt and evolve while guiding a digital transformation journey that will empower businesses to navigate the challenges of today and build a more resilient tomorrow.