There is much hype around business-to-business (B2B) within the e-commerce world. With more acronyms than there are letters in the alphabet to make them, and innumerable options and products each claiming to be the panacea of all e-commerce ills, a host of vendors refer to their B2B or business-to-consumer (B2C) products as essential e-commerce or B2B applications. Scare tactics used by many vendors bombard decision makers in the marketplace with a sense of urgency and mass confusion.
But B2B is not all hype - nor should it be an intimidating prospect, says Commerce Centre CEO, Stewart Barker. The adaptation to the B2B way is an inevitable, natural progression. The future holds promise of e-marketplaces being the normal place for conducting business transactions; as with traditional business as we know it, some will be more efficient than others, some will require more in-depth technology, skills, insight or larger investment than others. Essentially, the e-marketplace will still facilitate commerce between businesses - it will just be moved from a paper and telephonic level to an electronic level.
Barker believes South Africa`s evolution towards B2B is about 12 months behind that of the US and UK. "B2B as a technology and an institution has not evolved much further than the theoretical stage for the local market. Certain initiatives are starting to deliver tangible results, processing transactions and showing cost efficiencies and automated access to customers, but most local ventures are not showing benefits at this early stage. It will take another 12 to 24 months to mature to a level where the average local corporation can access the e-marketplace comfortably," he predicts.
Local forerunners in the race for B2B tend to be substantial companies which trade internationally and are therefore under pressure to evolve, says Barker. "Sasol and Iscor are typical examples of those who have entered the market, as well as the more nimble of the banks, with an established customer base and substantial size to acquire the technology. The typical B2B route for banks is an effort to shift the scope from merely a B2C focus to include B2B, where the customer base evolves from being paper- and ATM-dominated to electronic communications," he says.
Barker believes sure-fire success for a B2B initiative in the South African landscape will frequently occur when there are multiple trading partners with a high degree of complexity involved in the business cycle. "A good example of an industry which would benefit from timeous, accurate exchange of data is the FMCG industry, which has more than 6 000 trading partners, and where the number of credit notes is disproportionately high compared to the number of invoices - this indicates the complexity and points to the deficiencies in the current system."
The strength in B2B exchanges is when multiple partners are involved - the exchange becomes more ad hoc than with electronic data interchange (EDI), and the business cycle is not predictable. This means some of the vagaries of current market inefficiencies can be solved through the use of electronic trading, by getting closer to the customer and understanding supply chains more effectively.
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