Todd Pruzan, HBR
Welcome to the HBR Video Quick Take. I’m Todd Pruzan, senior editor for research and special projects at Harvard Business Review.
One of the key drivers of any organization’s growth is its sourcing and procurement operation, and a streamlined procurement system can play a large role in whether an organization is serving its customers. Today, we’re talking about that with Terra Watkins, who is controller at Farm Credit Mid-America, a cooperative lending institution whose mission is to secure the future of rural communities and agriculture. Terra, thanks for being with us today.
Terra Watkins, Farm Credit Mid-America
Thank you, Todd. I appreciate the opportunity.
Todd Pruzan, HBR
Terra, what are some of the main sourcing and procurement pressures that your sector faces, and what was Farm Credit Mid-America trying to accomplish by improving those processes?
Terra Watkins, Farm Credit Mid-America
Some of the main sourcing and procurement pressures we faced [were] having a variety of different purchasing processes across the organization. We have 88 offices across five states with over 1,600 employees, and what happened was that made it hard for us to gain any insight or visibility into our discretionary spend where it pertains to suppliers, products, and even shipping costs.
Ultimately, our goal was to keep our customers at the heart of what we do. We wanted to create a better experience through this process so that we gave time back to our customer-facing team members so that we could focus on our external customers. Additionally, we wanted to provide the association with cost savings, spend visibility, and elimination of inefficiencies when it came to our teammates traveling to pick up supplies.
Todd Pruzan, HBR
Well, that all makes sense. How did adopting another sourcing and procurement platform help your organization refine your processes, make better decisions, or build your growth strategy? And what can you do better now than you used to be able to do before you switched?
Terra Watkins, Farm Credit Mid-America
Amazon Business provided a spend analysis for us for our credit card spend habits and the vendor landscape. Through that, there was data that helped us uncover how widespread the Amazon Business spend was across the association. It revealed opportunities to gain an efficient consistency throughout our buying process.
They helped compare cost of supplies across the industry [for] selling similar products we often purchase. We’re able to create preferred buying lists for our purchasers as well as save on shipping costs. Moreover, one of the most important points is that we are—a portion of our business is—tax-exempt. We were able to carry that tax exemption over to our Amazon Business platform.
Typically, what would happen is that we would consistently supply our suppliers with the tax exemption. Through Amazon Business, we no longer have to do this. We now have greater visibility into our discretionary spend and products. We have the ability to contain costs through workflow and approvals. We have the ability to consolidate vendors and leverage Guided Buying for our teammates.
Additionally, with Subscribe & Save, we have created continuity in automation and supply ordering, so that further leads to enhanced team member productivity, again focusing on our customer experience.
Todd Pruzan, HBR
I can see how the customers benefit from that. Terra, the expectations for a great customer experience keep rising. How do those rising expectations influence employees’ expectations of their workplace technology to give them an equally good experience?
Terra Watkins, Farm Credit Mid-America
Our employees’ expectations start at the top with our CEO and his ability to embrace digital transformation—but not only that, he also has the need to constantly evolve so that we remain relevant and secure in the future of rural communities and agriculture. We consistently look for ways that technology can drive both efficiency and customer experiences.
I believe Amazon Business has done just that. Digitalizing our finance and purchasing through integration of Concur, our invoicing and expense platform, and Amazon Business, we’re positioned better for sustainable growth. That’s what immediately comes to mind when I think about our team members’ experiences.
We’ve created an approval workflow that feeds Amazon Business directly into Concur. This eliminated the need to attach invoices and receipts or seek approval for the purchases, as this is automatically done for our purchasers. Additionally, Subscribe & Save and Guided Buying have been huge. Prior to leveraging Amazon Business, our teammates spent a good portion of time traveling back and forth to local vendors to purchase supplies.
The practice took time that shifted the focus away from our customers. Through Subscribe & Save, our teammates get what they need at a click of a button on a recurring basis, and it’s delivered to the office doorstep. That’s huge for us. Guided Buying takes the guesswork out of what we buy but also helps us contain costs.
Ultimately, the ease and efficiency give time back and create an overall good customer experience. We are entering our second year of using Amazon Business platform, and frankly, I’m not sure how we did not consider leveraging the platform sooner.
Todd Pruzan, HBR
That’s amazing. It sounds like a huge difference. Terra, thank you so much for a great conversation today and for all of your insights about procurement.
Terra Watkins, Farm Credit Mid-America
Absolutely, Todd. I appreciate the opportunity. Thank you.
To learn more about Amazon Business, please click here.
