As we did last year, we end 2023 with a series of interviews, in which we asked Ákos Szabó, CEO of Fluenta Europe Ltd, first about the challenges and excitements the company and procurement in general has faced this year.
At the beginning of 2023, you said: "I think we are past the biggest blows, but the pain itself is just ahead. It is a bit like when you fall off your bicycle, and as you hit the ground, your adrenaline levels are so high that you cannot feel the pain; but when you get home, you realize how many injuries you’ve suffered and start to feel each and every one of them. The economic pain is going to be apparent now." Has this proved true this year?
I think so. Especially in the first half of the year. There was little new investment, not a lot of new projects. One of the first signs of change was around August and September, when we saw a surge in readership of our newsletter and professional blog posts; and then the market started to wake up. In fact, we had clients who realized halfway through the year that they would have more procurement events than last year.
Are companies brave enough to spend again?
On the one hand, yes, but on the other hand, they are more careful than before about what they spend on, how much, and how. They have started to take procurement more seriously, looking for ways to make it more efficient and cheaper. When demand and the economy were both growing in a "high-pressure economy", procurement was more about documentation and accounting and much less about planning. To put it a bit simplistically, companies decided what they wanted to buy and had to figure out how to realize that. But when the energy crisis suddenly pushed up the price of almost all products dramatically, many people recognized that it makes a difference how and how much they buy. In the last year or two, stable, efficient procurement has become much more important. The role of procurement managers and professionals has increased significantly. Even they themselves often have to find a way to cope with this, as they are faced with new expectations and new tasks. We can help a lot with this.
Talking about challenges... What was the biggest challenge or change for Fluenta this year?
One was certainly that we fundamentally changed the way we interacted with customers, making the communication more efficient. We opened up channels that we had never had before. We made a lot of our customer support self-service, and now you can do a lot more things online rather than live. We are putting more and more emphasis on knowledge sharing. We built an extensive knowledge center, so people can easily search for the information they need on our platforms. This helps not only them, but also their suppliers. We have often found that, even if our customer has created and managed their processes well, the supplier on the other side didn't really know how to use our system or was afraid to use it. With this free knowledge base, we make their job easier and prompt them to be more open to these solutions.
It was also a very serious challenge that we successfully completed to switch to a serverless technology for several services and migrate everything to Microsoft Azure. This was done by the end of September. In fact, we generated a good part of the challenges ourselves by making our customer service and software even more efficient. Our customers have already been generally happy, but we have always aimed to improve this even further. I am convinced that this is the best way to fight the effects of the crisis: to invest even more in quality. This is the way to retain existing customers and attract new ones in a difficult economic climate. We offer a high level of service in the Hungarian market, in Hungarian. This is one of our competitive advantages.
Was there any work you did this year where at the end of it you said: well, that was great, that's how you finish a project?
Yes, fortunately there were several. We are very proud of the fundraiser auction for the candelabras of Széchenyi Chain Bridge. As a result of the much longer than expected competition, the iconic ornaments of the bridge sold for €132,100, 400% more than the starting price. This money was donated to the hospital of Berehove, the sister city of Budapest. Another big success was the raw material purchasing auction for Gyulahús. The company had previously sent out bid requests by email and had to check and compare the responses one by one. They replaced this with our Fluenta Auction module, saving 12% on their first ever auction event.
How conscious and skilled are customers in operating such systems?
This varies widely. This year we have had partners who started using our systems perfectly on their own, with the help of our online training materials. At the other extreme, we have had agricultural hired hands bidding with their daily fee through Fluenta Auction. Some people asked their grandchildren to help them, but in the end, they all managed. And for us, it was just as much a success as anything else.
But we have also managed the purchase of energy storage silos and electricity. The lesson from almost all these procedures is that they can be carried out more cheaply and efficiently in our system. And one of the most serious problems and handicaps of the Hungarian economy for decades has been that small and medium-sized enterprises operate less efficiently than their Western counterparts.
About what 2024 might have in store for us, you can read more in the next part of our interview series in January.