Many enterprises partaking in the B2C sector have integrated e-commerce into their core business models, providing consumers with the ability to purchase goods from anywhere with an Internet connection.
However, the B2B contingency doesn't receive much recognition, despite the fact that suppliers are offering procure-to-pay and e-commerce solutions for their customers to take advantage of. The implementation of Web-based procurement technologies has vastly changed the manner in which organizations manage relationships with their suppliers.
The prevalence and rise of B2B e-commerce
When comparing statistics between B2B and B2C online purchasing, one would discover that B2B enterprises are more involved in e-commerce than many would have initially estimated. For instance, Forrester Research found that 10.7 percent of all consumer retail purchases will occur online by 2017. In a separate study, Forrester discovered that 52 percent of procurement officers anticipate at least half of the transactions they sanction will occur online over the next three years. The latter research also acknowledged a few notable factors:
- Just under half (49 percent) of B2B customers prefer to procure products online.
- More than four-fifths (83 percent) of suppliers intend to spend capital and time deploying or enhancing their e-commerce solutions within six months.
- Most procurement officers (60 percent) desire advanced search functions.
- Sixty-nine percent of purchasing officers prefer to use instant payment systems as opposed to invoices.
"Business buyers are coming online with high expectations across the board," said Accenture North American Omnichannel Commerce Managing Director Brigid Fyr. "With three out of four buyers stating they would buy again from a supplier with an easy-to-use website, sellers have a large opportunity for growth by focusing on making the entire purchasing experience as easy as ordering a book online or downloading music onto a smartphone."
How e-commerce is transforming supplier relationship management
It's appropriate to view contemporary, digitized procurement processes as a two step-process, assuming that established partner relationships are long-term. The first stage involves an extensive vetting process consisting of conversations regarding finances, product quality, delivery models and sustainability commitments.
For obvious reasons, this phase can be quite arduous, depending on how skilled a supplier is at divulging information. In an age when people are focusing on progressive environmental and fair labor practices, it's important for B2B e-commerce companies to deliver data in an objective manner. Let procurement managers know exactly what they'll be getting into if they choose to establish a relationship. Depending on how well a company exercises best practices, transparency tactics will likely work in its favor.
The second phase concerns the cohesion of front-end and back-end systems to support B2B e-commerce initiatives. Researchers at the Nanjin Institute of Industry Technology wrote a white paper on the subject, developing an operation model composed of five components:
- Application portal: Provides personalized information to procurement officers based on their specific business needs. It connects distributors, suppliers and customers so that strategies can be better developed across long distances and time zones.
- Front-end trading system: Gives professionals the ability to scrutinize pricing models and weigh them against demand forecasts. After accurate estimates are discovered, materials acquisition processes can be delivered.
- Back-end support solution: Monitors and analyzes the logistics and manufacturing elements of e-commerce delivery. Allows transportation personnel and assets to coordinate operations.
- Partner and service support system: Synchronizes data from a B2B customer's applications, provides a portal through which the RFP process can be initiated.
- Enterprise service bus: Serves as the primary, underlying information delivery software, supporting cohesion across all engines.
As one can see, enterprises also have the ability to conduct endeavors related to spend management if they so wish. This e-commerce model unifies every consideration for procurement officers.