Breaking Down Barriers—How Frictionless Procurement Will Enable a Revolution for Industrial Sellers and Buyers

The manner in which industrial products are currently resourced is no longer fit for purpose. In terms of procurement and supply chain complexity, the traditional seller/buyer model perpetuates historic inefficacies in how one company does business with another. On a macro level, it holds back the urgent improvements required in global energy and power infrastructures to support the picking up of the pace needed to achieve net-zero targets.

Put simply, the infrastructure that drives industrial projects requires much greater transparency, connectivity, and speed.

Selling and buying industrial products has changed for good. While much of the world slowed down and was impacted significantly by COVID-19, some sectors, like energy and IT infrastructure, grasped the opportunity to grow. According to the 2020 ARTS release, online sales increased by 43% that year. Emerging from the pandemic, many industries now require 24/7 product availability and streamlined procurement processes, driven by customer expectations for instant service, resilient supply chains, and technological advancements like AI that enhance efficiency and competitive edge. As businesses adapt to this new reality, the pulse of industrial commerce beats to the rhythm of innovation and digital transformation, ushering in a future where procurement is more efficient, timely, and cost-effective.

Making Procurement Smarter, Not Harder

Frictionless procurement has become a clear initiative for companies far and wide with clear benefits. It combines insights and investment into action, empowers accelerated timeframes through advanced digitalization and enables companies to succeed by managing supplier performance.

For many companies today, the choice is stark: those that embrace frictionless procurement can profit from such a transformation, but those that don’t run the risk of being left behind. Advancing frictionless procurement requires continual technological progression and focus to achieve a frictionless state. Companies such as Alibaba and Amazon exemplify data-driven business-to-consumer platforms that demonstrate the potential for fully digitizing the selling and sourcing of industrial products. According to a 2021 survey, 87% of B2B buyers identified new suppliers online compared to 78% pre-pandemic, and it’s a figure we expect to rise. The frictionless procurement approach to commerce eliminates intermediaries, empowering OEMs worldwide to connect directly with SMEs and enable procurement teams to secure the most competitive prices from the global market.

Companies are Taking the Leap

A great example is to watch how the power and energy industries are racing to adopt the changes needed to meet global climate imperatives. Conventional industrial procurement models have long been inefficient but are now woefully outdated given rapid urbanization and infrastructure decentralization. Excessive intermediaries complicate transactions with unnecessary layers, prompting innovative industrial sectors to adopt tools that streamline processes, reduce costs, and boost competitiveness.

Outdated distribution channels can contribute to slow progress as well. They impede the pace at which transactions can be conducted. Purchasers are no longer prepared to invest valuable time in searching websites and scanning product images for the right equipment. They want to know immediately if you have what they need. The frictionless procurement model delivers that.

It also brings SMEs and OEMs together worldwide at a rapid pace. Furthermore, it has the potential to position the energy sector–which has often been criticized for lagging behind industries like aviation and automotive when it comes to new technology adoption–ahead of these rival verticals in enhancing digital technology adoption in the procurement process.

Ultimately, the frictionless model disrupts the current procurement landscape, overcoming obscurity by giving buyers more clarity on what products are available and what they’re purchasing. It also advances smart buying by offering needed reporting and analytics tools for data-driven purchasing decisions.

For sellers and purchasers, it opens the door to new markets, liberating them from excessive geographic constraints. Buyers gain expanded options, just-in-time availability, and cost savings by accessing more flexible price structures from the open international market without being tied to limited and often more expensive sellers.

Smaller-sized OEMs, with their lean and flexible business models, can quickly adopt new technologies. This leads to increased efficiencies and reduced costs, ultimately benefiting their customers with better services and lower prices.

Facing Procurement Challenges Head-on

Increased digitalization is disrupting conventional buying and selling models across businesses. There is no going back to how industrial procurement transactions were carried out before the pandemic. More than 75% of B2B buyers and sellers say they prefer the convenience of remote human engagement over face-to-face interactions.

As we approach the deadline for net zero targets, the transformation of energy and power infrastructure needs to speed up, as does the resourcing of projects. Increased transparency, connectivity, and speed will empower industrial projects to make substantial impacts. From boosting profit margins to meeting climate goals and optimizing staffing, an enhanced procurement infrastructure is essential. Against the backdrop of a need for urgent change, current procurement models are not fit for purpose, and the natural adoption of frictionless procurement will happen. It’s time to make sure your company is ahead of the curve.

—Junaid Ali is CEO of the Prismecs Companies, Prismecs and eIndustrify.