How big does a business need to be before they can afford procurement software? And how many features does the software need to have to still enable it to deliver value?
My guest today is Adam Thomas from a small but growing startup oboloo. Based in London, the company is focused on delivering a practical source-to-contract software solution to small and medium-sized businesses (SMEs).
Providing simple, affordable and easy-to-use procurement software to SMEs: Adam Thomas from oboloo
The first question we tackle is what is their definition of an SME, because everyone defines the term somewhat differently.
Oboloo sees their typical customer base as being companies with an annual turnover between £5 million and £100 million. They identified this space because typically none of the established procuretechs who do what oboloo does are very active in this segment of the market.
The software itself is essentially a simple source-to-contract (S2C) platform and has 4 core modules:
- E-sourcing
- Contract Management
- Supplier Management
- Savings Reporting
Adam explains that they are seeking to tackle the more strategic aspects of sourcing and procurement rather than the transactional P2P space. The value proposition being through time saved as a result of digitisation, as well as the value identified through the e-sourcing module and being able to store this data centrally for future reference.
Leveraging the data - i.e. performing a spend analysis - from their P2P transactions (which could be integrated with oboloo) can then drive the initiatives that can be conducted through the oboloo platform.
What about SMEs and startups without a dedicated procurement team?
Adam explains the importance of consistency when managing external vendor spend, whether that is on spreadsheets or shared drives. As a company grows, these processes should grow with it.
So, regardless of whether a company has a dedicated buyer, the procurement process itself requires a more robust solution to be able to store data in a single, easy-to-use repository. Sending out simple RFQs and uploading a contract into a database isn’t rocket science at the end of the day, and employees can still use the system even if they’re not procurement professionals.
Where is oboloo seeing the most interest in the market?
It tends to be less about traditional, established SMEs vs. growing startups and more about the modules themselves. Adam mentions that there is a lot of demand and interest for their contract management module right now, whereas the e-sourcing and supplier management functions are not as sought after.
If they just want contract management, why not buy a specialist tool?
Simplicity is the easy answer.
A lot of businesses at their core just want to have a simple database. While oboloo does have additional functionality, the objective is to ensure that the customer can upload a contract into their system with the least amount of hassle.
This increases adoption and reduces the “desk drawer” problem in many organisations, where contracts actually registered in the database are just the tip of the iceberg.
How did they find the sweet spot between price and features?
Having all of the core functions and features that an SME requires to run their business was the goal. Does it have auction functionality, for example? No, but then practically speaking, an SME customer can go out and find a separate solution for this. The likelihood is that this would be a very infrequent requirement.
Ultimately, going back to basics, the objectives Adam states are:
- Process & outcome
- Budget
- People
If the employees don’t accept, adopt and use the software, then as an end goal of digitally transforming your business, you have failed to a large extent.
It’s more difficult from a design concept to make things simple, than it is to make something complicated. Enabling everyone to use the system without necessarily realising that they are “doing procurement” is their goal!
Adam’s 3 main advantages to SMEs to use a procurement platform
I couldn’t have said it any better!
- You spend a lot of money on marketing, so protect that revenue and don’t let it seep out through not managing your purchases
- Help promote your values and work with suppliers who share those same values
- Increasing the number of touch points you have with your suppliers can help drive broader collaboration on things like innovation
*Small correction requested by oboloo
oboloo’s Charities programme offers charities and non-profit organisations a discount off the Standard oboloo software subscription price. The discount may vary between countries.
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