Working to Transform Hotel Procurement

Both now and in the future, an essential strategy for hospitality companies to achieve business growth is through procurement transformation. The digital realm offers a wholesale shift in how purchasers handle internal processes and outside providers, and how stakeholders conduct business. It’s more vital than ever for organizations to maximize this potential operations game-changer.

Future hospitality industry trends are overwhelmingly positive, and while companies are reinvesting in construction and renovations to ensure their product remains competitive, they must simultaneously focus on transforming procurement. This is where technology — and technology partners like Amazon Business — become critical.

The move to online procurement is already underway. The pandemic accelerated digital transformation, and the trend is holding strong: 91% of B2B buyers prefer online purchasing and 68% plan to make at least 40% or more of their purchases online in 2022 — up from 56% of buyers in 2021, according to Amazon Business’ 2022 State of Business Procurement Report.

Growth through Enhancement

Truly powerful revolutions in procurement are comprehensive. Hospitality companies must achieve centralized compliance and control, mitigate risk, drive savings, and provide a streamlined purchasing experience for their business buyers. But by emphasizing value creation, focusing on customer service, and achieving efficient spend management, procurement can become a strategic partner, contributing directly to business growth.

By partnering with Amazon Business, procurement teams are freed-up to focus on value-added work and achieving growth, by virtue of the efficiencies of the platform. And through procurement transformation, hoteliers can implement intelligent procure-to-pay solutions, enabling accelerated purchasing agility with a centralized purchasing source. This maximizes business impact and frees more time to building business.

The Manpower Impact

Staffing resources is currently a huge issue for not only hotels, but all of travel, as the industry — which already struggled with this problem — has rebounded more quickly than supply can accommodate. Procurement transformation can also help to alleviate some of the labor shortages, freeing up valuable time for skilled employees to focus on business growth.
Digital procurement solutions also make it easier to train employees and scale purchasing across an entire organization. Employees have access to more information on their purchases, so they can make the right decisions. Plus, purchasing apps also dramatically reduce friction and increase convenience for employees; they can access and manage users and policies, and order and approve purchases, anytime and anywhere. Features like Amazon Business’ Single Sign On (SSO) technology help make this possible.

Top Priorities: New Age Edition

Corporate purchasing objectives are fortunately not just about cutting costs; priorities are also squarely focused on making more responsible buying decisions, from utilizing more local suppliers and sustainable products, to increasing supplier diversity. Drivers of operational efficiencies and reduced costs also rank highly on wish lists.

Streamlined Purchasing

Procurement leaders want to know how they can make the buying process easier, whether it’s for buyers, accounts receivable, accounts payable, inventory managers, and any and all other roles that procurement impacts. According to research, 82% of business buyers want the same experience in the procurement process as when buying personal items at home.

Procurement needs to be quick, easy and accurate, and not waste any unnecessary time and resources, with efficiency and uniformity across multiple locations and geography. Most employees are already familiar with buying on Amazon, so training them on a custom Amazon Business procurement portal isn’t very difficult; required processes are more focused on specifics like employee buying policies, using Guided Buying.

This ease and flexibility can be seen in Amazon Business’ relationship with Vacasa, manager of more than 12,000 vacation properties worldwide. Amazon helps keep Vaasa’s rentals supplied; often with unique furnishings that vary by location and have to reach secluded destinations fast and reliably. About 500 general managers across Vacasa access its Amazon Business account, with a central team of just five operations support staff. The partnership is so successful that Vacasa expects to increase the share of purchasing it makes through Amazon Business from 14% to 20% over the next year.

Increased Operational Efficiencies

Procurement leaders (some 60% or more) are looking for even greater savings goals than those in the past, and building more operational efficiency — namely by using digital solutions — is the key to reaching those goals. Platform integration, however, is utterly essential.

A huge advantage of the Amazon Business environment is its ability to integrate with over 100 hotel procurement platforms that include BirchStreet Systems, Coupa and Fourth, as well as 150-plus leading procurement software applications such as Oracle, Okta, QuickBooks Ariba, Jaggaer and PeopleSoft. The integrations help to ease typical pain points in onboarding and data flow. Purchasing controls and protocols set within an existing enterprise system seamlessly extend onto the Amazon platform.

Amazon Business can also help cut costs through ordering efficiencies, including business lists for easy reordering; discounts for recurring and bulk deliveries; and customizable delivery preferences for each chain/outlet location. Many buyers also prefer single order invoicing; Amazon Business procurement allows for this time-saving feature.

Support More Diverse & Small Businesses

Purchasers are now setting ambitious goals for buying from small, local and minority owned businesses. In fact, according to Amazon Business’ 2022 State of Business Procurement Report, 84% of procurement leaders say their companies intend to increase purchasing budgets reserved for Black and minority owned businesses in the coming year.

The main obstacle is that many purchasers (55% of those polled by Amazon in 2022) struggle to find certified Black and minority owned suppliers. One solution is Amazon’s seller certification program, which designates some 14 different categories, including Black, Hispanic, female and veteran owned sellers. Amazon’s 2022 research found that 91% of buyers take seller certifications into consideration when purchasing.

In fact, Amazon is constantly working to connect enterprise buyers with more diverse sellers. In 2020 Amazon increased its offering of sellers with diversity credentials by 68%, and continues to expand the counts each year. Amazon also created dedicated storefronts for products sold by Black and Woman owned businesses.

There are also internal controls and data views to help. As administrators, purchasers can set company buyer policies and display customized badges to help promote these diverse sellers internally to employees. Back-end reporting and data visibility is just as robust, so buyers can track, visualize and understand a company’s diversity business spend and its proximity to reaching pre-set budgetary goals.

Improved Sustainability

Most large enterprises now have clear sustainability goals. In fact, 72% of companies now reference Sustainable Development Goals in their annual reports, according to a 2019 PricewaterhouseCoopers study. Further, Amazon Business’ 2022 State of Business Procurement Report states 63% of B2B buyers say improving sustainability in their purchasing practices is a top goal.

Amazon, as declared in its Climate Pledge, is to reach net-zero carbon emissions by 2040 — 10 years ahead of the Paris Accords–and heavily promotes sustainability within its culture. Some solutions are simple: Buyers can set up monthly “Amazon Days” to consolidate deliveries, reduce the number of boxes used and cut transportation waste. No rush shipping, off-peak delivery and the use of pallets also add to shipping sustainability. And Amazon is constantly innovating frustration-free packaging, to minimize waste and use curbside recyclable materials.

Finally, Amazon launched its Climate Pledge Friendly initiative, highlighting more than 80,000 products with sustainability certifications, such as EPEAT and EnergyStar, and/or Amazon’s Compact by Design certification. It’s a timely initiative, as 89% of B2B buyers say they would be more likely to purchase more sustainable products if it were easier to identify them online, according to the 2022 study. The Amazon Guided Buying steps administrators set within the platform can direct buyers toward selecting these specific sustainable products.

The article was originally published on Business Travel News.