Interview with Piotr Matysik - President of Marketplanet
Has the pandemic influenced the approach of companies to purchasing processes? What has changed?
Since we have been operating on the market for 20 years, we have already witnessed crises. We have gone through various phases of economic development and each time we’ve observed certain recurring trends in the behavior of current or potential customers. The pandemic will certainly change their approach to more digital transformation and accelerate many decisions, focusing on modern tools and the Internet. Looking at it analytically, services such as ours, i.e. optimizing processes, should be invested calmly, when you have appropriate resources, and preferably if you do not act under the pressure of time. We can see, however, that when the madness of a crisis begins, for example at the time of pandemic that we have experienced since last March, many companies act a bit too impulsively. They more often make decisions that may be accurate, but solve problems in the short term only. We also observing it when communicating customer needs. They are only temporary, solving their problems here and now. On the other hand, when we refer to history, to what companies did when they were emerging from crises, then the way of looking at these services or "arming oneself" with new electronic tools was more rationalized. Many companies suddenly started turning to digital transformation, and one has to be very well prepared for this. Now we are observing a great deal of interest in our offer, both in the area of improvement of purchasing as well as in searching for solutions in the financial area (automation of settlements, electronic communication with suppliers). The number of inquiries about our services is growing significantly. However, the pandemic situation in the coming quarters will certainly affect the pace of their consumption.
And what does it look like in the long term perspective?
We can see that the importance of automation and digitization processes is increasing. These are all areas in which we as a company are present. Our purchasing tools enable the transition to the 100% paperless services. This is also reflected in the design of our product range - we offer companies the transition to electronic tools and processes. We provide them with optimization of procurement, billing, invoice and purchasing processes. It is basically about the entire process , starting from planning purchases, announcing inquiries and auctions to suppliers, selecting them, through signing a contract, placing orders, and then sending these orders to suppliers, and finally collecting them and issuing invoices. In short, we give it all in one electronic tool. Therefore, its application can handle many different tasks , supporting ERP systems.
Why do companies want to use this type of platform? What exactly are the benefits?
Companies use platforms of this type for two main reasons in fact: quick gaining of financial results and process automation. The tools we offer have been known on the market for over 20 years. Basically, the same functionalities have been available for those nearly 20 years. Now, it is more about the market's readiness to consume them. And this potential is there because many companies have not yet switched to electronic workflow, which became more evident during the pandemic. The sudden increase in interest in solutions such as electronic signature, digital document flow or automation of financial services is now obvious. In addition to the platform itself, we are also advanced in building a supplier cloud that we can offer to virtually any company, providing communication with suppliers in an easy, online form. What's more, as part of the cloud, we offer a whole range of additional services, such as e-signature, OCR, i.e. image recognition from invoices or other documents and, finally, financial services.
What financial services are we talking about?
We are currently in cooperation with Faktoria, in the phase of implementing a product that allows our clients to use electronic factoring. Many corporations, including those from outside Poland, have very long payment terms as part of their corporate standards for their suppliers, to which they send orders of not necessarily high costs - these are sometimes very large amounts of low-value orders, e.g. with a value from 2,000 up to 10,000 PLN, with payment terms, e.g. 90 or 120 days. In such cases, the buyers themselves ask us if we have a factoring service that they could connect to shorten their suppliers' waiting time for payment, so that they would meet the corporate requirements and their contractors could get the money for a small fee, even after a few days. When it comes to accelerating the pace of money circulation for companies relying on large volumes of low amounts, acceleration is critical. Therefore, we are now entering the space of modern services, also when the supplier needs financing.
Can you observe any specific trend on the Marketplanet platform itself in recent months?
The increase in inquiries for access to the supplier database is clearly visible. This is also related to the fact that the current system of cooperation with suppliers has been slightly reevaluated. Organizations are looking for alternatives to increase security. Thanks to contracts with multiple suppliers, they are more certain that orders will be processed on time and that ordered goods will be produced and delivered on time. Unfortunately, the crisis related to COVID has raised the transaction risk significantly and companies have very consciously started searching for new sources of supply. This could be perhaps even greater value than seeking the lowest possible price. The other trend is the constant conversion of these analogue buyer-supplier relationships into an electronic formula using the supplier cloud itself.
What exactly is the support provided to buyers and suppliers on the platform?
How does the platform combine the needs and requirements of both parties of a transaction?
It depends on the scale of the buyer's business. We currently have a group of very large clients - for example, PGE Capital Group, mBank, Orange, Tauron Group, NBP, Veolia - these are large structures that have developed a model with their suppliers in which there is no other method of submitting offers than the electronic path. This is a very important thing that has happened in the last few years. Suppliers have learned to sell online, not only on Allegro platforms, and to appear on price comparison websites. They have to manage access to large organizations directly, because these large companies digitize their purchases en masse by implementing their own tools. Since we transfer the process to the electronic zone, the supplier receives a whole chain of benefits , i.e. an electronic order and in the same way can determine the manner of executing this transaction, not only in the purchasing process, but also in the settlement process. It is also much easier for this large entity to distribute or settle such an e-invoice later. As I mentioned before, you have to remember to take into consideration the scale because a large company may have, for example, over 20,000 active suppliers. In this case, it is much easier for them to handle all these processes in one electronic channel, and then send out e.g. 40,000 orders monthly and receive the same number of invoices. In turn, for small buyers, the value is access to a significant number of suppliers and the ability to negotiate prices, thanks to which they buy cheaper and more efficiently.
What type of IT solutions are becoming more popular in this area? Is there any clear trend visible?
Over the perspective of those 20 years, technology has become quite common and easily available. Our experiences with customers and with the product show that the most important thing is the customer's need and responding to it. A clear vision of what the client wants to achieve with these tools is important. Our technology must be scalable, so that when we launch our products, we can scale them in terms of the number of users, transactions and suppliers. What is extremely important, the technology must be safe, because we work with confidential customer data in planning, tender and transaction processes. In each case as that , the user interface is extremely important and of course the ability to work on mobile devices.
And what will the further development of the company look like?
While cooperating with the largest clients, whose names I have already mentioned, we will continue to help optimize processes, deliver new modules, applications, etc. Today we have very advanced software to support P2P (purchase to pay) processes as we have consistently aimed to cover the entire P2P process with electronic tools. On the other hand, the biggest changes in the company's strategy consist in moving the product offer to the cloud. We have already undergone the transformation of the entire organization from a design model to a product model in the subscription formula. We have created a "customer journey" characteristic of our customers and our products. The cloud offer is sold in a subscription and we have set up all mechanisms related to modern marketing and solutions supporting sales, e.g. CRM and call center systems. A very important part of our strategy is the expansion of the supplier cloud - a space in which we have approximately 70 thousand companies that actively cooperate with our buyers every day. This allows us, based on the API, to easily add external services, such as the aforementioned OCR, financial services or e-signature.
How important for your company is public procurement? What are the characteristics of this segment of your business?
The area of public procurement is very important to us. All analyses indicate that this market is the location of a very large volume of money (the value of contracts awarded in 2019 based on the provisions of the Act in Poland amounted to PLN 198 billion). It is practically in every country in the world that public procurement constitutes a significant value of the market purchases. We have been operating on the public procurement market from the very beginning, offering modern solutions supporting tender procedures. Also in this area, we focused on our cloud tool and we already have about 1000 entities there, which has happened in less than 1.5 years, and we still observe an increase in the customer base.