Analysts call for new approach to B2B

The adoption of business-to-business (B2B) practices is struggling to get beyond the corporate suppliers and simplistic maintenance, repair and operations (MRO) procedures.

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By  Greg Wilson Published  August 7, 2001

The adoption of business-to-business (B2B) practices is struggling to get beyond the corporate suppliers and simplistic maintenance, repair and operations (MRO) procedures.

According to AMR Research, although cataloguing tools and methodologies have both improved the state of “supplier enablement is abysmal,” said analyst Bob Parker. “A new, radical approach is needed to overcome the current state of inertia,” he added.

Although AMR Research’s work has been conducted outside the region, there are lessons to be learned from the experiences of companies the US arena.

Initial B2B efforts assumed that the influence of the deploying company or consortium would be all that was needed to ensure supplier, trading partner and customer participation.

The hub entity would work out the classification details, and suppliers would then submit their content in according to those requirements.

“However, suppliers pushed back hard with legitimate concerns over losing distinguishing advantages and competing only on price,” stated Parker.

Technology developments such as Ariba’s Punch Out and Commerce One’s Round Trip, have gone some way to distinguishing suppliers online. However, solutions like Punch Out have continued to be problematic, “and buyers effectively gave up the ability to search a unified catalogue across all suppliers,” said Parker.

“Also, the specifications for integrated buying from the vendors and standards groups were vague, simplistic, and difficult for sell-side e-commerce vendors to incorporate,” he added.

Going forward, organisations are increasingly going to have to reach a compromise, which enables suppliers to differentiate themselves on something other than price. One approach suggested Parker, is to use the procurement platform as a supplier access point to those that have influence to approve and make purchasing decisions.

“Essentially, the supplier provides compliant product content in exchange for direct marketing opportunities,” Parker explained. “These direct marketing opportunities would involve targeting specific roles within the buying organisation and could take several forms.”

Advertising mediums would include banner ads, online educational seminars and e-mail campaigns.

It’s understandable that many companies will be nervous about giving suppliers this degree of access to employees. “However, if controlled properly, this type of program could not only create supplier incentives to quickly provide buyer-compliant information, but it may even become a source of income for the buying company over time,” stated Parker.

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