The Top Three Hurdles to B2B Collaboration—and How to Overcome Them
If it seems like every day more of your customers are asking you to participate in B2B collaboration, there’s good reason. By eliminating barriers to shared information and extending visibility beyond the walls of the organization, B2B collaboration lets them—and you—cut costs and maximize efficiency, making it easier to deal with the pressures of a complex global market. As a seller, you gain in other ways as well. Partnering with customers to achieve mutual goals helps you build trust and strengthen relationships, enabling you to grow sales by 40+ percent and increase customer retention as much as 48 percent. And that’s only the beginning.
What Is B2B Collaboration?
Accepting your customer’s request to join the Ariba® Network is a key first step towards B2B collaboration, which is enabled when buyers and sellers fully automate their orders and invoices to allow straight-through electronic processing of the order-to-cash cycle. Supported by back-end integration, direct connectivity, or touchless processing, B2B collaboration provides the information and control you need to accelerate processes, improve strategic decision-making, sell better, and deliver more of the personalized attention buyers want—including a highly customizable, consumerized purchasing experience—without adding staff. This makes your life easier in many ways, helping you to:
- Reduce stress in your day-to-day interactions with customers
- Eliminate repetitive manual tasks, like rekeying orders and invoices
- Get paid faster and lower DSO by an average of 22 days
- Shorten the order-to-cash cycle 65 percent
- Shrink order and invoice processing costs as much as 75 percent
- Cut order and invoice error rates 50 percent or more
Yet despite these heady-sounding benefits, plenty of sellers still hang back, wanting to take advantage of B2B collaboration but daunted by the challenges of implementation. If you’re one of them, take heart. New cloud-based software-as-a-service (SaaS) solutions are making B2B collaboration more accessible than ever, offering resources and support that let almost any business participate.
Overcoming the Obstacles
So what most often gets in the way of B2B collaboration? A recent Aberdeen report1 outlines many of the hurdles that impede both B2B leaders and followers. Below are three of the most common—along with solutions you can use to overcome them.
Hurdle #1: Lack of infrastructure or resources to support and sustain B2B integration initiatives.
B2B collaboration is still relatively new and represents a sea change in the way companies do business. So it’s not surprising that many organizations need to ramp up or realign infrastructure and resources before participating. The good news? It may be easier than you think.
What’s the solution? Rather than trying to create everything internally, consider outsourcing to develop the resources required. Many SaaS solution providers can provide the infrastructure and support necessary to help you make and maintain the transition, while offering the advantage of lower up-front and overall costs plus faster time to value than traditional approaches. Collaborative B2B networks like the Ariba® Network offer a many-to-many resource that you can leverage across multiple customers to maximize ROI, greatly expanding your visibility to buyers at the same time. And tools like the Ariba Integration Connector, powered by Dell Boomi2, use an integration-as-a-service approach to streamline and expedite B2B collaboration (see details below). While you’ll need some sort of back-end order and invoice or ERP system to begin, it can be as basic as an Excel file or QuickBooks—as long as you’re able to generate the files required for translation to cXML. A growing number of service providers are available to help you set up such a system if you don’t already have one in place. Keep in mind that B2B automation eliminates the need for many manual, repetitive tasks, freeing up time and resources that you can then repurpose to help move your B2B initiative forward.
Hurdle #2: Executive leadership is reluctant to invest in new technology.
With dollars and resources already tightly stretched, it’s understandable that management may resist spending on B2B technology. Often, however, this is because they don’t fully grasp the value B2B collaboration delivers.
What’s the solution? You can work around this hurdle by building a business case that clearly outlines the financial benefits of B2B collaboration for your company. Even a relatively simple before-and-after comparison of order or invoice processing costs can do the job. If your finance or accounting department doesn’t have this data, you can create it. For example, you might examine the time required to manually handle each paper-based invoice from inception to delivery via fax or email, then multiply that by the hourly billing rate of each person involved to get your current processing costs. From there you can determine how much you’ll save by reducing those costs 45 to 75 percent—the typical savings for businesses using B2B collaboration—and suddenly you’ve got a compelling set of numbers to win management buy-in. If you have access to more detailed information about your current costs, you can use the Ariba Directional E-Commerce Value Calculator to assess the potential top- and bottom-line savings you’d realize from B2B collaboration, which can go a long way towards helping you make the case to company leadership.
Hurdle #3: Over-reliance on offline technologies (email and fax).
Many sellers cling to inefficient email/fax handling of order-to-cash processes to avoid the culture change B2B collaboration requires. They may also fear that e-commerce will cause them to lose personal contact with their customers, which they consider central to their competitive advantage.
What’s the solution? While it’s true that B2B collaboration represents a whole new approach to business, staying focused on the rewards it offers—and encouraging other stakeholders to do the same—can make the shift easier. Email and fax simply move paper-based processes online, whereas B2B collaboration gives you and your customers all the benefits of a fully automated order-to-cash cycle. What’s more, hanging back only delays the inevitable, since companies are adopting B2B collaboration in ever-larger numbers. For example, Aberdeen research shows that it ranks as the second and fourth most important strategy by best-in-class buyers and suppliers3, and 83 percent of industry leaders currently have a B2B collaboration initiative in place.4 By moving ahead sooner rather than later, you’ll position yourself as a seller partner able to deliver the service, speed, and purchasing experience today’s buyers increasingly demand, giving you a major edge over sellers who lag behind.
Both industry statistics and experienced B2B sellers easily squelch the myth that B2B collaboration separates you from your customers. The nature of your interactions will indeed change, but in ways that strengthen rather than weaken the relationship. For example, sellers that integrate increase retention rates by an average 48 percent5 (check out this Ariba LIVE session on SlideShare to hear one seller’s results). And instead of feature-function-benefit sales calls or discussions about transactional/logistics issues, you can connect with customers on a strategic level that focuses on the value you give to their business.
Paving Your Way to B2B Collaboration: Ariba Integration Connectors
Ready to take the plunge, but not sure where to start? Consider using an Ariba Integration Connector, powered by Dell Boomi. Bundled as part of the Enterprise and Enterprise Plus subscription packages in the Supplier Membership Program, this solution offers a simple, cost-effective way to help you integrate to all of your customers through the Ariba Network.
What is an Ariba Integration Connector, and how can it benefit me?
As a cloud-based6, on-demand integration service, an Ariba Integration Connector connects your back-end system to the Ariba Network without requiring you to manage software updates or maintain hardware. The solution is designed to make integration easy for sellers with no EDI or cXML technologies. Ariba does the necessary mappings on your behalf, eliminating the need to maintain multiple connections internally. As a result, you’re able to:
- Process documents faster
- Increase order and invoice accuracy
- Reduce disputes
- Eliminate manual work and duplicate data entry
- Efficiently manage business transactions
- Get paid faster
Enterprise sellers receive the basic integration option, enabling connectivity with Intuit® QuickBooks® and Sage small business accounting software products; Enterprise Plus sellers receive the extended integration option, which enables connectivity with business systems such Microsoft Dynamics® GP and Sage 100 ERP software (view the online list to see all systems currently supported). Sellers at any subscription level can gain access to the solution through an optional upgrade process.7
Where Can I Learn More?
For additional information on how Ariba can help you build B2B collaboration capabilities, or to find out more about Ariba Integration Connectors, contact the Ariba Electronic Supplier Integration team at AskAribaTech@ariba.com.
1B2B Collaboration: No Longer Optional, Bryan Ball, Aberdeen Group, May 2012.
3Chief Supply Chain Officer Survey, Aberdeen Group, February 2012.
4B2B Collaboration and Business Intelligence Survey, Aberdeen Group, April 2012.
5“The Tech Trends for B2B Sales Today,” Selling Power, July/August 2011.
6 Behind-the-firewall deployment is also available.
7 You can find information about optional upgrades by logging into your Ariba Network account and clicking on “Service Subscriptions.”