Basic Supplier Challenges in Business to Business E commerce

For suppliers that are considering whether to embrace B2B e-commerce, it is important to understand the business and technical challenges, as well as the functionality necessary to achieve success online. These challenges fall in three major categories:

Making products and services available to multiple business customers
Receiving orders from multiple customers
Managing the online business

Making Products and Services Available to Multiple Business Customers

The first step in any electronic selling environment is providing suppliers with the ability to get their products and services to market. Several challenges must be overcome to make this possible.

Catalog Considerations

What separates a good catalog from a bad catalog? The characteristics of successful electronic catalogs include the ability to create and manage custom catalogs, including catalogs that provide customized pricing for individual customers or specific selling channels. Interaction with existing sources of product, pricing, and inventory information (ERP, supply chain, and other back office applications) is also critical. Additionally, an effective catalog system should provide Web-ready information (photos, short and long descriptions, links to additional information, etc.) and proper classification data (such as UNSPSC) to be effective with customer applications.

Catalog Publishing

Any effective solution must provide the ability to publish product and pricing information. This can be done in whatever format is required to meet the needs of any customer, without adding new layers of complexity for the supplier.

Direct Buyer Interaction

As a supplement to catalog publishing and directly tying it to the suppliers’ ability to differentiate themselves, an effective sell-side e-commerce application must go beyond simply passing data between buyer and supplier. It must also enable collaboration between applications and the people that use them. This functional requirement is known as Remote Shopping and has been given different names by technology vendors of buy-side applications (Round Trip/OCI—SAP/Commerce One; Punch Out—Ariba; Tap Out—Clarus). Not only does the supplier’s solution need to have this capability, but it must also understand the standard ways that different customers have of interacting.

Business Exposure and Search Ability

Even if you can make your products and services available, how do you make them easy to find? How do you make it easy to begin an electronic relationship with your company?

Receiving Orders from Multiple Customers

After a supplier has made its products and services available electronically, it must then be able to deal with the various types of orders that will be generated. Although “many orders from many customers” is a good problem to have, it comes with two key challenges: accepting multiple orders and order management.

Accepting Multiple Orders

Much like the challenge of making products and services available to customers who use different platforms and technologies, receiving orders from multiple customers using different order formats and delivery and communication protocols can be difficult. An effective supplier solution must insulate the supplier from this complexity by seamlessly handling the delivery and transformation of all orders, regardless of format or protocol. This offers a dramatic benefit to both buyers and suppliers because it allows each to use its preferred business processes and order formats while communicating easily with the other. In addition, inside a supplier’s systems, data and information from all customers will be similar.

Order Management

Equally challenging are the many ways that incoming orders can be managed. This varies greatly depending on the existing processes of the supplier. As a result, suppliers must have the ability to process orders locally within the sell-side environment and integrate them directly with existing order management and back office applications. For that to be truly manageable, the solution must be intelligent enough to orchestrate and execute the supplier’s business processes, depending on the characteristics of the order.

Managing the Online Business

The third key challenge (and opportunity) for suppliers when choosing a solution for effective online selling is understanding how the solution will interact with their existing technology infrastructure, as well as what additional value it will provide to the organization. Many e-commerce solutions focus primarily on external integration and data exchange, but fail to address key internal challenges for the supplier.

Existing Technology Investments

Suppliers of all sizes and complexity have made investments in applications such as enterprise resource planning (ERP), accounting, supply chain management (SCM), customer relationship management (CRM), and more, all of which may run on different technology platforms. Attempting to replace or work around these applications is expensive and complicated. It is also unnecessary, especially when the tools and technologies exist to allow suppliers to leverage those systems to their fullest while adding incremental value.

Existing Business Processes

In addition to existing systems, most businesses have internal processes that provide significant value to the organization. An effective solution should leverage those processes and complement them by providing the necessary tools and workflow features.

Business Intelligence

After the challenges and functional requirements previously described are met, the supplier has the opportunity to leverage a B2B e-commerce solution to enhance its decision-making capabilities. It is not enough for a sell-side solution to simply provide an electronic means to trade with multiple customers. It must provide, at a minimum, strategic information about what a company is selling and to whom. A B2B e-commerce system begins to provide real value when it can deliver the data needed to help suppliers answer such questions as:

Which channel (procurement, marketplaces, my Web site, etc.) is generating the most orders or revenue?
Which customers are buying which products and services?
Which products and services are providing the highest margins?
If I am paying to participate in an electronic marketplace, is there sufficient return on investment?