You might be surprised to learn how much revenue an inefficient system is costing your company. For most SMBs, the cost of procuring the products and services you need to run your business might be costing more than you think. Fortunately, going digital gives you a crystal clear image of what might be happening.

Thanks to the caliber of digital platforms available today, it has never been easier for SMBs to operate efficiently and even compete with much larger firms from the very beginning of their journey. These digital capabilities are within reach from an implementation standpoint, and they are cost effective as well. They make the difference between a SMB continuing to grow and becoming a statistic.

According to the World Bank, small and medium-sized businesses (SMBs) represent 90 percent of all businesses and more than half of all employment worldwide. This means SMBs have a significant impact on the economic well-being of individuals and communities; their success is everyone’s success.

BestAuction is proud to partner with many SMBs. We have been amazed and inspired by what they have been able to achieve through digital procurement and e-Auctions. In fact, with the support of agile procurement technologies, many of these companies have been able to mature their procurement capabilities and processes ahead of the competition, creating a lasting advantage while making scarce resources go further.

We have seen all of our users realize three key benefits, each of which offers significant value for SMBs:

100% Transparency in the Purchasing Process

As simple as it sounds, many SMBs do not have an actionable understanding of where their spend goes or what they get in return. Managing procurement through centralized digital channels provides clear insight into spend and suppliers, allowing budget owners to identify opportunities for improvement. 

Using e-Auctions creates this same level of transparency on a per-contract basis, driving optimal outcomes by harnessing market forces and allowing suppliers to make their bidding decisions based on as much information as possible.

40% Shorter Procurement Life-cycles Using Digital Channels

For SMBs, time is literally money. Streamlining procurement is not just about buyer convenience, it is about operational effectiveness. Every contract and purchase request corresponds to a business need. The sooner the need is met, the sooner everyone gets back to work – growing the business and pleasing customers. 

In addition to increasing competition, e-Auctions also accelerate the procurement process, empowering decision makers to act with confidence but without delay. And the best advantage of all – e-Auctions do not require SMBs to select the lowest bidder, but they do contribute to price compression between comparable options, opening the door to value as well as savings.

Higher Cost Savings Achieved Through Reverse Auctions

In our experience, companies that leverage e-Auctions as part of their digital procurement strategy not only achieve increased transparency and decrease time to an award decision, they also save more. Depending on the category in question, we have seen anywhere between 8-38 percent savings resulting from these events.

For instance, a UK-based car repair services company with nine shops in the London area was looking for an accounting firm. They used an e-Auction to bring together five pre-selected potential suppliers with the assistance of our team of specialists. The auction resulted in 15.8% savings compared to the suppliers initial bid prices. These funds were then available for discretionary reinvestment by the company’s management team, an advantage for any SMB.

According to ITA, about half of all startups survive to reach the five-year point. This affects business owners as well as their staff. According to the same article, SMBs have an annual staff turnover of 10-12 percent. Low survival rates translate to lost jobs, but visibility into spending activity, shorter procurement cycles, and more advantageous pricing position SMBs to continue growing and innovating – defying the odds and achieving the vision of their founders and leadership teams.

SMBs can now transform and digitize its procurement process using BestAuction platform at bestauction.com to unlock the hidden value in procurement.

Share this article