Digital innovation grows business ecosystem

By SMEs Go Digital

Companies have widely embraced digitalisation for its operational benefits – improved efficiency, fewer mistakes, happier employees.

But that’s just the tip of the iceberg. When done right, a thriving self-sustaining ecosystem can result, giving rise to greater business success for an entire sector – big and small companies alike.

The story of locally developed e-procurement marketplace Eezee.sg and its network of nearly 11,000 business buyers and suppliers is one such example.

When large corporation Shell Singapore came on board as a buyer in October 2019, the partnership brought about benefits for not just Shell and Eezee.sg but SME suppliers too.

Shell’s digitalisation journey

Shell’s refinery on Pulau Bukom – its largest worldwide – makes about 30,000 purchases every year to keep it running. These range from everyday consumables like mosquito repellents and stationery, small industrial items like adhesives and tools to large equipment like heat exchangers. Given that some of these are bought from a similarly large number of suppliers, the traditional method of procurement was inefficient and time-consuming.

Numerous requests for quotations had to be sent out for each order. Suppliers – many of them offline traditional vendors – may take up to a week to respond. Arduous processes such as dealing with multiple quotes were overwhelming for buyers at Shell Bukom and there was no structured data to help the team analyse spending patterns.

“Why couldn’t we have an online shopping experience such as on Amazon or Lazada?” thought the team at Shell Bukom.

It was soon clear that Eezee.sg, a business-to-business (B2B) marketplace developed locally for the trading of industrial and business supplies, would make the ideal partner to reduce Shell’s procurement woes.

Launched in 2017, Eezee.sg allows users to search for, browse and purchase products from a wide variety of brands and suppliers in minutes. Unlike business-to-consumer (B2C) shopping websites, Eezee.sg caters to companies by allowing for 30-day credit terms.

Like any other digital solution, workforce training was key in ensuring that the new solution could deliver the expected benefits. As of June 2020 after a series of workshops and regular check-in meetings, over half of the trainees in Shell Bukom have transited onto this new procurement method.

The trickle-down effect

Indeed, a more agile way of procurement with Eezee.sg has resulted in significant payoffs for Shell Bukom ranging from an overall cost savings of 20 per cent due to competitive pricing and reduced man-hours spent on paperwork. Invoices are now consolidated, and orders are delivered to Pulau Bukom weekly.

Shell Bukom expects to more than double the amount spent with Eezee.sg in the second half of 2020.

Procurement data is now clear, structured and can generate insights on questions such as: Who is buying what? Which products are users looking at most? How often are users making purchases?

But the benefits have also extended to other parties in the procurement network.

This network effect reinforces the benefits that both buyers and suppliers on the e-procurement marketplace gain from digitalisation. In addition to optimisation of their business processes, buyers and suppliers can easily access a wider range of products and customers.

One such SME supplier is hardware and machinery distributor Hong Teck Hin Hardware & Machinery. Like many local SME suppliers, it supplied Shell Bukom a variety of industrial items such as lubricants and adhesives from December 2019 via Eezee.sg. As a result, Hong Teck Hin’s revenue from Eezee.sg went up by eight per cent.

Says Mr Ian Ong, co-owner and Sales & Operations Manager of Hong Teck Hin, “As large enterprises go digital and streamline their procurement through Eezee, we stand to increase our sales volume through that platform.” Currently, about 10 to 15 per cent of their total sales come from Eezee.sg.

There is no denying the element of free market competition on a transparent marketplace like Eezee.sg. This means that all parties have to up their game.

“For example, suppliers have to innovate by bringing in new and unique products to differentiate themselves from the competition. We support them with digital marketing and our search algorithm helps to match them with the right buyers,” says Mr Tan.

Poised to grow

Coming full circle, Eezee.sg has also grown in maturity. As they gain sector-specific knowledge through feedback sessions with Shell Bukom, the tech start-up continually makes customised improvements such as filtering out irrelevant products to streamline the browsing experience, attracting more suppliers to come on board and increasing transaction frequency and values through internal marketing.

“Having Shell as our customer in Singapore provides us a launchpad to greater things,” says Mr Seet, citing increased ease of converting more SME suppliers and leverage for heading abroad. The start-up aims to penetrate Indonesia and Malaysia by 2022 with the support of  Grow Digital, an initiative of ESG and IMDA, a piece of news that is welcomed by Singaporean suppliers looking to extend their reach.

Not only has Grow Digital been instrumental in helping numerous SMEs go overseas by matching them with potential clients, it also provides prompt access to financing offers, connects companies to cross-border e-payment facilities to alleviate currency risks and boasts a strong partner network including logistics firms for last mile delivery. Designed to ease the process of selling to overseas markets, enterprises can leverage these offerings via digital platforms supported under Grow Digital.

“We’re looking forward to achieving higher margins overseas. As Eezee expands to more overseas markets, I foresee growth opportunities in this area,” says Mr Jeffrey Seah, Manager of eBiz and Business Process Management of PDS International, which supplies a range of personal protective equipment to Shell.

While heartened by progress, Mr Seet humbly envisions success in a landscape where all stakeholders would see strategic value in procurement. “Leaders would go beyond measuring cost savings per item, but also variables like man-hour efficiency savings, effective warehousing, and inventory management. Much of these would be powered by tech and data.”