Guest Post: Creating a “Customer Obsessed” Culture While Lowering Your Total Cost of Procurement Guest Post: Creating a “Customer Obsessed” Culture While Lowering Your Total Cost of Procurement

Guest Post: Creating a “Customer Obsessed” Culture While Lowering Your Total Cost of Procurement

by Michael Levin
Michael Levin Michael Levin Head of Product, Amazon Business, K-12 Education
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When speaking to finance and procurement departments at school districts, I often ask: “Who is the end customer that you serve?” The responses I receive, ranging from administrative assistants, teachers, school boards, and students, vary widely. While there is no single right answer, I’d suggest that they are all customers of procurement. With so many end customers, it’s important to have at least one guiding principle that influences how organizational decisions are made.  
 
As an example, “Customer Obsession” is one guiding principle that is woven into the cultural DNA and daily activities of every employee here at Amazon. It has allowed our company to be relevant, competitive, and grow. To us, being customer obsessed means starting with the customer and working backwards from their needs. If we understand our customers' needs and focus on them to the point of obsession, we’ll earn and retain their trust. At Amazon Business, a division of Amazon that focuses solely on B2B procurement, we demonstrate this customer obsession by building solutions that empower procurement teams and their staff to save time and money when dealing with complex processes, to help them focus on their core mission: in this case, delivering high-quality education for students. 
 
I spend lots of time interacting with the various K-12 stakeholder groups including superintendents, school principals, and teachers and I often ask how the role of procurement supports the success of their mission. While many procurement teams tend to focus on their specific needs, the end customers often don’t feel supported by procurement. A few examples:
  • One principal of a mid-sized district told me that his procurement team has a reputation of spending more time telling people what they can’t do, rather than helping people accomplish what they need to in a more efficient way.
  • A superintendent of a fiscally conservative district with $1,000 less to spend per student than neighboring school districts said his procurement team has never set foot in a classroom and was disconnected from the time pressures of their teachers and school administrative staff.
  • One of the top ten largest school districts in the U.S. shared that their average teacher will wait 2-3 weeks for classroom supplies to arrive from a central warehouse. As a result, teachers resort to buying classroom supplies using their personal funds in order to avoid delays.
Research conducted by MDR and the Great Council of City Schools shows that, on average, teachers spend 3+ hours a week just identifying needed items1, wait 14.3 days for a purchase order to be issued2, and another 5-10 days to receive the products3. School districts, in turn, spend $93 from requisition to check4 in soft costs to process an order. As a result, the internal cost to procure can be more expensive than the item being purchased.  
 
Whether or not you believe there is truth in the perception that procurement processes are directly aligned to customer needs, finance and procurement teams should strive to be customer focused.  This means being problem solvers, proactive, curious, and feeling empowered to continuously improve processes that are not optimized for the end customer.
 
So, what can your district do to be customer obsessed?
  1. Simplify your procurement process for small dollar purchases by reducing the number of manual touch points and implement an automated process. With Amazon Business, teachers and staff can browse millions of products, review and order what they need conveniently, and find the best fit for their budget. What if teachers don’t have Skyward access? Teachers can build a shopping list on Amazon Business and then share their cart with a Skyward requisitioner to process the order. We hear that this streamlined purchasing solution gives teachers confidence knowing the requisition will be approved quickly. 
  1. Don’t measure your success solely on directly negotiated contracts; be open to piggybacking cooperative contracts. Most direct contracts are negotiated with one thing in mind: price. While directly negotiated multi-year, fixed-price contracts make sense for certain high-stakes categories, they often don’t consider other factors that your end users care about (e.g., easy-to-use ordering interface, order tracking, and fast shipping). Amazon Business delivers the buying experience end users want. Still need to track compliance? Through OMNIA Partners, Amazon Business was awarded a multi-year competitively solicited cooperative contract for books, classroom, office, and lab supplies. For example, a procurement director of a suburban Houston school district, who is a proponent of cooperative contracts, told us he gives schools the autonomy to purchase based on best value no matter where it came from. He empowers them to make the buying decision based on several factors (e.g. lowest price, delivery date, quantity needed).  
  1. Implement tools to provide purchasing transparency, and proactively assess end user behaviors to identify strategic procurement opportunities. Amazon Business offers an easy-to-use reporting engine called Amazon Business Analytics that provides rich insights into purchasing across schools, departments, and users. One district procurement team used our reporting to identify a trend in the purchase of school security cameras that can be accessed on mobile devices including iPhones and iPads. With this information, the procurement team was able to identify the requirements for a competitive solicitation that met stakeholder needs.   
 
 
Want to learn more? You can visit the dedicated Skyward and Amazon Business site here and find out how to create and integrate your Amazon Business account with Skyward.



1 MDR, 2017, Teachers as Consumers: Background, Interests, Buying Patterns, and Media Uses
2 CGCS, 2018, Performance Measurement & Benchmarking Report, PALT for Informal Solicitations
3 Amazon internal analysis, 2017, Standard shipping times
4 CGCS, 2018, Performance Measurement & Benchmarking Report, From Requisition to PO  

 

Michael Levin Michael Levin Head of Product, Amazon Business, K-12 Education
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