B2B eCommerce Success the “First Time”
Sunday, September 18, 2016
Layer One - Vice President of eCommerce
The demand for On-line Business-to-Business (B2B) eCommerce is growing at a tremendous rate and it is no longer an option, but a necessity. But for those getting started there are pitfalls that should be avoided when beginning the journey. The following summarizes 10 keys areas to consider when embarking on your B2B eCommerce journey.
- Define eCommerce
- Think Culture and Organization
- Do Not Go It Alone
- Avoid Technology Driven Decisions
- Leverage Accelerators
- Start with Existing Customers
- Go Deep, Before Going Wide (start simple)
- Learn from Others
- Understand your data
- Move Beyond EDI and Legacy Thinking
1. Define eCommerce
B2B eCommerce is not one size fits all and companies need to define what B2B eCommerce means to them. Ideally, a 3-5 year strategy should be developed taking into consideration business drivers, processes, functional, cultural, organizational, and technical capabilities. Not only should these be taken into account on behalf of the company, but most importantly on behalf of their customers and channel partners. They need to ask the questions, “What would revolutionize our business model?”, “What would bring our company to its knees?”, “how do we surpass our competitors?” and “how do we become easier to do business with?”. They need to educate themselves on what makes up the Digital Ecosystem that enables eCommerce. This includes the front-office of eCommerce, Digital Marketing, User Experience, Data and Information Management. As well as its integration with the operational back-office such as ERP, PLM and MES. Not only are B2C concepts driving B2B change, but B2B must also take into account complex business models and nurturing trusted relationships that service their customers over extended periods of time. Those that do not take the time to develop an understanding of the Digital Ecosystem, develop their strategy and the execute tactically will be putting themselves at the risk of their competitors viewing them from their rear view mirror.
2. Think Culture and Organization
As B2B companies embark on eCommerce initiatives, they need to understand this is not just a Marketing or Sales driven effort. To succeed it really involves participation from operations, IT, customer care, finance, HR, Sales and Marketing. Each of these groups need to participate in driving out the eCommerce strategy. A RACI/RASCI matrix should be developed of roles and tasks required. Then mapping tasks to roles that are accountable, responsible, supporting, consulted and informed. After developing the RACI matrix, cultural and organizational changes may be required to facilitate a focus on the roles and tasks to be performed. Well-defined operating principles and governance processes may be required to further define the targeted culture and how organizational models will function within the company.
3. Do Not Go It Alone
No matter how talented you and others in your company are, using third party solutions and consultants will allow you to leverage a broader knowledge base and avoid re-inventing the wheel. Systems Integrators, Solution Providers and Software solutions have access to larger customer and business scenarios that can be applied to your business.
No solution is perfect, but the advances provided by third party software solutions will typically surpass those that can be provided by a homegrown solution. Instead of spending the time and money building commodity business processes and capabilities that could be provided by a purchased solution, focus your resources on integrating and augmenting the solution with capabilities that provide a competitive advantage to your organization.
4. Avoid Technology Driving your Path
Many companies put the cart ahead of the horse. They review technology solutions first and then base their strategy and execution on the capabilities provided by the solution. Then as the company understands the needs of their customers and partners, they find either the wrong solution was selected or they implemented it incorrectly. Over time, this results in continued dissatisfaction with the technology solution and the eventual starting over or re-platforming. It is important to take the time up-front to understand your customer’s and partner’s business drivers for doing business with you. What is will take to be “easier to do business with” should be priority #1. Then blend these with your internal needs and evaluate, select and implement the appropriate technology solutions.
5. Leverage Accelerators
Gone are the days of hosting everything on premise, building solutions internally and even purchasing software. Most software and solution providers offer cloud-hosted Software-as-a-Service solutions (SaaS) that can get you up and running quickly with pre-defined capabilities that are adjusted through simple configuration. These can be expanded over time to incorporate more complex capabilities as you mature. In cases where your requirements deem the need for a more complex custom implementation, leveraging a Platform-as-a-Service (PaaS) can still accelerate your deployment by providing you with a platform that can be deployed quickly. The great thing about cloud-hosted SaaS and PaaS solutions is they do not a require upfront spend on software. Instead, most are subscription or consumption based paying for the software as you need or use the service. Gone are the days of having to procure and implement hardware, software and infrastructure upfront and supporting it yourself. These are managed services on your behalf.
6. Start with Exiting Customers
Becoming an eCommerce practitioner takes time. Companies must build internal and customer momentum through positive on-line experiences and feedback. To build momentum initially, the focus should be on existing customers who have been using your legacy approaches (email, fax, phone, EDI, forms-based, static solutions). A pilot group of existing customers will be more responsive to providing constructive feedback and improving how they currently interact with your company. Make sure you include different types of customers allowing for a broader range of feedback and ideas. Feedback from existing customers will allow your strategy to target enhancements with the greatest benefits and sustain momentum. This will then position your company for capabilities that attract and convert new customers.
7. Go Deep before Going Wide
Many companies first eCommerce implementations fail. Why? Because they want everything that could be eCommerce, for all products. This is more than they can absorb culturally and financially. Instead, develop a strategy and execution plan that starts with commodity business processes and products. Then as you mature, add more complex capabilities.
Evaluate starting with a subset of products and expand overtime. This subset may be a specific product line, short tail products or standard, non-configured products. Starting simple will allow you to learn and react quickly, while reducing internal and external risk. Then go wider over time to include additional product lines, longer tail products and configured product offerings.
If your currently exchanging transaction between customers via EDI and other back-office legacy approaches, start servicing the customer by providing on-line order status, pricing and availability look-ups. Then expand to spot-buys, change requests, cancellation requests, drop shipments and so on. This crawl, walk, run approach will allow you to mature to a broader on-line transactional model over time.
8. Learn from Others
Your company does not want to learn things themselves the hard way. Do whatever you can to learn from others that have both failed and succeeded. Join user groups, search out other companies you can collaborate with, attend conferences and read as much as you can. It is important to educate yourselves on the lessons learned of others and avoid pitfalls.
9. Understand your Data
B2B Manufacturers are famous for poor data quality. Whether it be due to configured products with unlimited variations, complex specifications or the lack of formal industry standards, this is an on-going struggle. Data quality used to be an Information Technology discipline, however small to mid-market organizations are creating business data stewards to manage customer, product and pricing data. Large organizations are creating centralized Information Management groups within the business to drive standards and control processes that IT could not. If you participate in an industry that has created a standards group with a data exchange such as the Electrical industry, you are fortunate. This has allowed Distributors to obtain data from one source verses each of their multiple suppliers. Data standards groups should be leveraged where possible. Digitally focused companies need to constantly review the state of their data quality and data integration approaches.
10. Move Beyond EDI and Legacy Thinking
Heard this many times, "we do business with our channels via EDI, we do not need an on-line solution" or "our products are highly configured and engineered to order. These cannot be designed on-line”.
So let's step back and look at the bigger picture. Just because you receive orders through EDI, fax, phone or email does not mean your customers do not require on-line capabilities that make you easier to do business with. Just because you have an order in your ERP system does not mean your customer would not like to know the status of that order without having to pick-up the phone or wait for EDI shipment notices. What if the customer made a mistake and needs to adjust the order or cancel a line item preventing a return? What if they needed to perform a spot buy because they needed to get an order out the door and drop shipped the same day? Let's forget the order all together. Wouldn’t it be convenient to collaborate on an engineered to order project on-line? Share specs and design documents real-time, understand the status of project tasks and exchange questions and answers. Maybe even providing on-line personalized services or a support portal for your customer managing everything from their service subscriptions, install base of products and licenses, software patch downloads, service dispatches, and providing preventative maintenance alerts. The opportunities are vast if you can think past what you have done in the past and move forward with on-line capabilities that improve your services in a manner that makes you easier to do business with.
In summary, arm your company with as much ammunition as you can to make your first eCommerce initiative a success. Leveraging the above will only help guide you down the correct path when starting your on-line journey.