Written by Marijn Overvest | Reviewed by Sjoed Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Guided Buying in Procurement — Everything You Should Know

Key takeaways

  • Guided buying in procurement simplifies the process by offering a user-friendly platform to find pre-approved goods and services.
  • Its benefits include real-time vendor and catalog updates, enhanced spending transparency, and streamlined invoice processing.
  • Future trends in guided buying include AI integration, blockchain technology, and advanced risk management.

Guided buying in procurement presents a simplified and efficient approach to making business purchases. Read on to discover how it can streamline your procurement processes, enhance transparency, and fortify your financial integrity.

What is Guided Buying?

Guided buying is essentially a user-friendly online store designed specifically for businesses. It streamlines the purchasing process by presenting a curated selection of products or services. This approach guarantees that transactions take place with preferred suppliers, leading to the best possible prices and terms for the company.

What’s remarkable is that guided buying also upholds the organization’s purchasing policies, all without burdening buyers with the complexities of these policies. In essence, it simplifies and optimizes the procurement process, making it more efficient and compliant.

How Does It Work?

Imagine guided buying as an internal corporate version of Amazon, exclusively designed for company purchases.

It exclusively engages with specified suppliers and adheres strictly to the organization’s purchasing regulations.

This system is mainly used for routine, straightforward purchases. Complex and substantial acquisitions typically fall under the purview of the procurement team.

Within the guided buying framework, different organizations adopt varied approaches. Some grant purchasing privileges only to select members within the procurement department.

Others extend this capability to ordinary employees, aligning with their roles and budget constraints.

Dedicated procurement software solutions provide precise control over authorization for purchases, ensuring that acquisitions conform to the company’s established rules.

How to Apply Guided Buying in Procurement

If you want to enhance your procurement process with it, there are a few simple best practices to consider when setting up a new system.

Here’s a step-by-step guide to help you get started:

1. Invest in Spend Management Software

Get comprehensive cloud-based spend management software to set up guided buying smoothly.

This software offers features like custom buying permissions, integration with supplier catalogs, real-time data collection, and complete data capture for automating tasks.

It supports your digital transformation and business process management.

2. Identify Your Needs

Before setting up your system, carefully identify the goods and services required for both direct and indirect spending needs.

Create buying categories and identify preferred suppliers. Develop policies and procedures to match your procurement needs, assign roles and budgets, and provide tools for exceptions and purchase justifications.

3. Develop and Implement Procurement Policies

After identifying your needs, create procurement policies that align with your requirements. Assign roles, integrate purchase justifications, and establish tools for managing exceptions. Automate requests and data capture to control invisible spending.

4. Cover The Finer Technical Details

Make important technical decisions and design choices for your guided buying system. Integrate with preferred suppliers’ systems and design user-friendly landing pages.

Provide a robust search function and essential information for each product or service. Decide whether to integrate vendor data through an integrated punchout catalog or a discrete punchout website.

5. Launch Your New Guided Buying System

Once your system is integrated with vendors and ready to use, launch it with a user-friendly interface and a smooth adoption process.

Implement a change management plan to ensure a successful rollout. Raise internal awareness, provide training, and remind users about the guided buying system.

6. Utilize Spend Data

As you begin using the system, It will collect spend data over time. Analyze this data to identify opportunities for renegotiation, better terms, pricing, and strategic partnerships. This data is also valuable for gaining insights into spend management.

By following these steps, you can implement it successfully, streamline your procurement process, and make data-driven decisions for better efficiency and cost savings.

Difference Between Guided Buying and Spot Buying

Spot buying is the opposite of guided buying, involving unplanned one-off purchases, often in emergencies or unique cases outside regular business activities. It’s commonly used for low-value items to save time, but it may lead to maverick spending and conflict with ESG procurement policies.

Accumulated low-value spot purchases can harm the bottom line if unmonitored. To improve control, organizations should integrate low-value purchases into guided buying systems and reserve spot buying for exceptional situations.

Here are the key differences between guided and spot buying:

Spot Buying
It is considered spontaneous as it involves purchasing goods or services on the spot or on short notice.
Spot buying is typically a single-use procurement approach, focused on immediate, one-time purchases without long-term commitments.
It meets an urgent requirement by allowing organizations to quickly purchase goods or services on an ad-hoc basis to address immediate and unexpected needs.
Spot buying does not follow procurement policies
It is frequently not approved.
Guided Buying
It is planned; is a structured and controlled approach to procurement that involves pre-established processes, policies, and guidelines.
Guided buying is recurrent; involves a continuous process of providing structured assistance and recommendations to users.
It meets a previously planned requirement by providing a structured and policy-compliant procurement process that helps users efficiently navigate through their predetermined purchasing needs.
Guided buying follows procurement policies.
It is approved in advance.

Benefits of Guided Buying

Guided buying serves as a pivotal agent of efficiency in procurement. This approach liberates the time of procurement professionals, allowing them to channel their efforts into tasks that promise benefits for the organization.

Here’s an in-depth exploration of its benefits:

1. Updated Vendor and Catalog Information

Ensuring the currency of vendor and catalog information is a cornerstone of guided buying platforms. These platforms open up a portal to real-time access, offering a treasure trove of essential vendor data.

This encompasses intricate details, pricing structures, and the nitty-gritty of payment terms, all centralized within a single, easily accessible repository.

2. Increased Spending Transparency

With meticulous precision, these platforms automatically monitor every facet of the purchasing journey, encompassing requisitions, purchase orders, and vendor order submissions.

This includes the vital stages of approvals, and pre-approvals where needed, ensuring that the data is not only comprehensive but also readily reportable.

3. Expediting Invoice Processing

The intricacies of invoicing are elegantly streamlined to ensure that each invoice embarks on a well-defined route to the accounts payable department.

Here, they undergo a rigorous examination, scrutinized against approved purchase orders and the accompanying receiving documents. The integration with Accounts Payable Automation software further refines and enhances this process.

4. Integration with the Modern Finance Tech Stack

These platforms seamlessly integrate with your existing accounting software, ERP systems, and various other pertinent applications, culminating in the creation of a modern finance technology stack.

This dynamic linkage empowers the correlation of spending data with specific projects and budgets, facilitating real-time tracking of actual expenses versus the initially planned outlays.

5. Simplified Procurement

The need for specialized expertise or elaborate sourcing events is appreciably diminished. Users, therefore, experience a more streamlined and accessible buying process, while at the same time fortifying adherence to procurement policies and automating the intricate approval workflows for purchase orders.

6. Leveraging Spend Analytics

These platforms amplify your ability to govern and manage expenditures by capitalizing on comprehensive, transparent spending data.

This, in turn, furnishes deeper insights into the financial outlays of your organization, thereby empowering the formulation of strategic sourcing decisions.

7. Reduced Risks for Fraud

By employing a dedicated procure-to-pay solution that seamlessly incorporates guided buying, the platform effectively curtails the risks linked to unauthorized expenditures, procurement fraud, and invoice fraud.

This proactive approach strengthens the overall financial integrity of the procurement process.

Challenges and Solutions in Guided Buying

Now, let’s dive into the complexities of guided buying in procurement, exploring the challenges that organizations often encounter and the innovative solutions.

1. User Adoption and Resistance

Encouraging employees to embrace it can be difficult, as they may resist changing their well-established purchasing routines.

To enhance user adoption, organizations should focus on creating user-friendly interfaces, offering training sessions, and providing ongoing support.

Clearly articulate the benefits of guided buying for both the organization and individual users. Consider implementing recognition programs or incentives to motivate employees to embrace the new system.

2. Supplier Integration

Integrating a diverse array of suppliers into a guided buying system can be intricate, especially when suppliers operate on different procurement platforms.

Overcoming this challenge demands collaboration and standardization. Opt for procurement platforms with flexible integration options.

Maintain open communication with suppliers to align their systems with your guided buying platform. Establish clear integration standards and procedures to expedite the process.

3. Data Quality and Visibility

Inaccurate or incomplete data can lead to suboptimal procurement decisions and restrict insight into spending.

Addressing data quality and visibility issues requires the establishment of robust data governance policies.

These should include automated data validation, regular data audits, and consistent data capture processes.

Leverage analytics tools to gain deeper insights into spending patterns, enabling more informed decision-making.

4. Complex Approval Workflows

Elaborate and time-consuming approval processes can hinder the efficiency of guided buying.

Streamlining approval workflows involves the design of predefined rules and the application of automation.

Simplify the approval process by categorizing purchases and applying specific rules. Continuously monitor and optimize approval workflows to ensure they align with the organization’s evolving needs.

5. Maverick Spending

Even with guided buying in place, employees may still engage in maverick spending, making unauthorized purchases outside of the established procurement procedure.

To combat maverick spending effectively, set clear policies within its system and automate approval mechanisms.

Raise awareness among employees about the consequences of non-compliant behavior.

Regular audits are instrumental in identifying and rectifying instances of maverick spending, emphasizing the importance of adhering to established procedures.

Successfully conquering these challenges in guided buying necessitates a blend of technology, policy development, employee engagement, and an unwavering commitment to continuous improvement.

When approached strategically, these challenges can transform into opportunities for more efficient and cost-effective procurement processes.

Real-World Example of Guided Buying Success

SAP Ariba stands out as a prominent player in procurement and supply chain management software.

Their innovative solutions have been instrumental in guiding numerous organizations toward successful procurement practices.

One notable facet of SAP Ariba’s impact is the significant improvement it has brought to organizations’ adherence to their procurement policies.

By deploying SAP Ariba’s platform, companies have managed to foster a culture of compliance within their procurement processes.

Moreover, SAP Ariba has bestowed upon these organizations a gift of enhanced transparency in their spending. With the platform’s implementation, a clearer, more comprehensive view of their expenditures has emerged.

This allowed businesses to gain a deeper understanding of where their funds are allocated. This newfound insight empowers them to make data-driven decisions and allocate resources more strategically.

One of the most pressing concerns in procurement is maverick spending – unauthorized or off-contract purchases that can erode the bottom line.

SAP Ariba’s solution has been pivotal in curbing such rogue spending behaviors, thereby safeguarding an organization’s financial health.

For instance, let’s consider the case of Accenture, a global professional services firm. They sought to optimize their procurement operations and decided to incorporate SAP Ariba’s platform. The results were nothing short of remarkable.

Accenture streamlined its entire procurement process, resulting in more efficient spend management. As a direct consequence, they achieved substantial cost savings.

In this tale of Accenture’s success, we see a testament to SAP Ariba’s prowess in revolutionizing procurement.

The journey from improved compliance to enhanced transparency and finally cost savings exemplifies how SAP Ariba’s guided buying solutions have left an indelible mark on the world of procurement, ensuring that businesses operate at their best while reaping the rewards of smart, strategic purchasing decisions.

Future Trends in Guided Buying

Here are some future trends in guided buying that you mway want to know about.

1. Guided Buying with AI

SAP Ariba’s guided buying with AI represents a game-changing approach to procurement. This innovative system seamlessly combines adherence to procurement policies with user-friendly accessibility.

It streamlines the purchasing journey, enabling users to effortlessly locate their desired items, promotes spending within the organization’s catalog to curtail extraneous expenses, and facilitates personalized support from the procurement team.

Additionally, it offers swift access to preferred suppliers while incorporating valuable compliance safeguards.

2. Blockchain Technology 

Blockchain, often associated with cryptocurrencies like Bitcoin, is making significant strides in the world of procurement.

It offers a revolutionary approach to enhancing transparency, traceability, and security within the procurement process.

In the evolving landscape of guided buying, the integration of blockchain technology not only guarantees a higher level of security and transparency but also opens doors to entirely new procurement methodologies.

It’s a future trend that promises to redefine the way organizations buy and collaborate with suppliers, ultimately leading to more secure, efficient, and trustworthy procurement processes.

3. Risk Management

As we look ahead to the future of guided buying, one of the paramount trends on the horizon is the integration of advanced risk management tools.

Guided buying systems are evolving to incorporate sophisticated risk assessment capabilities, enabling organizations to assess and mitigate supplier-related risks in real time.

This transformative trend empowers procurement teams to proactively identify, evaluate, and respond to potential risks, ensuring smoother and more secure procurement processes.

By leveraging real-time risk assessment tools, organizations can make informed decisions, minimize disruptions, and fortify their supplier relationships, ultimately enhancing the resilience and reliability of their supply chain operations.

Conclusion

Guided buying in procurement is the compass that simplifies and optimizes purchasing processes within organizations.

While challenges like user adoption and maverick spending may arise, innovative solutions, including AI integration, blockchain technology, and advanced risk management, are set to shape the future of guided buying, promising enhanced efficiency, transparency, and security in procurement practices.

As organizations embrace these trends and overcome challenges, they’ll steer their procurement processes toward a future of greater resilience and success.

Frequentlyasked questions

What are the benefits of guided buying?

Guided buying streamlines procurement, freeing up professionals for strategic tasks. Key benefits of guided buying include: real-time vendor and catalog updates, enhanced spending transparency, streamlined invoice processing, integration into the modern finance tech stack, simplified procurement, leveraged spending data, lowered risks associated with unauthorized expenditures and fraud.

What are the guided buying roles?

In Guided Buying, team members have designated roles (such as owner, contributor, or viewer), whereas in SAP Ariba Buying, team members serve as contributors. Guided Buying offers the flexibility for users to choose automatic team buying for each new shopping session.

What is the difference between Ariba Buying and Guided Buying?

SAP Ariba Guided Buying is a persona-driven tool seamlessly integrated with SAP Ariba Buying. It offers a unified platform for non-procurement users to search for and purchase goods and services, reducing the need for extensive procurement department involvement.

About the author

My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

Marijn Overvest Procurement Tactics