Electronic trading is a relatively new way to do business and has brought with it challenges that both customers and their suppliers face during their virtual 'interaction'. Lizette McIntosh, supplier activation manager of MarketSite Africa, takes a look at some of the issues facing suppliers and buyers today and the challenges of facing e-commerce.
All shook up
Many suppliers experience the e-commerce revolution only when they are approached by one of their customers who have implemented an e-procurement system.
This means that the adoption of technology in the supplier organisation is often accompanied by a lot of pain. It requires an adaptation of their business processes to accommodate the buyer's new methodology and exerts greater pressure on the supplier in terms of the way he/she is managing the business.
It requires an instant knowledge and understanding of technology; the employment of new and foreign business processes; the laying out of cash to respond to the technological demand, all of which require a reluctant acceptance of the buyer's expectation. Usually the relevant change management skills are not present and the result is negative reticence to this new way of doing business. Suppliers feel that they are being 'bullied' into adopting new business strategies, employees who are expected to perform the tasks feel exploited as they are expected to do extra work and acquire extra skills without necessarily receiving extra remuneration.
Same as it ever was
Another factor delaying the adoption process is the tardiness of suppliers because they typically do not prepare for e-commerce. Very often the attitude of doing business the same as it has always been done before, stands in the way of advancing their electronic trading participation. And often enough these are the very suppliers that are approached to change their ways.
The fact is that the technology and accompanying skills required for a successful e-commerce partnership are missing from most supplier companies, and those that may have come a quarter of the way still require greater training and experience to fully utilise the tools for their own and buyer's benefit. The reality of employing two sets of business processes or incorporating an electronic process into a paper-based process, is cumbersome, costs money and effort and encourages resistance rather than acceptance. It forces the supplier into a business strategy for which he is not ready and throws his business into turmoil as he needs to speedily respond to a pressure which he has not prepared for. This may be at the cost of the business with one of his most valued customers. Where does this leave the organisation which is dependent on the support of every customer on his books?
Re-engineer for future growth
Suppliers need to take a long, hard look at their business and evaluate its current position versus where the owners or shareholders want it to be in the future. The increased number of retrenchments and the work-from-home trend coupled with extensive use of the Internet bring about more and more competition, which businesses can ill afford. There are a number of options - close down, merge or re-engineer for future growth. Easier said than done. However, the fact is that re-engineering for future growth must entail a solid strategy for the development of an electronic presence.
For a small business with financial constraints, the change does not have to be an immediate and drastic one. The most basic electronic presence which already creates an advantage and opportunity for every business, is the use of e-mail. Careful and responsible use of e-mail enables the company to communicate more effectively with its customers.
The next step would be to establish an Internet presence. This can also be a phased in with a simple website at first to at least give the company an opportunity of being visible to a much larger audience. From there the company can develop its strategy into offering on-line ordering, checking of stock, price lists, product specifications, technical support and other services that can easily be converted into an electronic self-service format.
The investment does not need to be an immediate lump sum that cripples the business and a change of business processes that catch the employees unprepared. It can be gradual, over a period of months, at a pace that is financially comfortable while at the same time the reskilling and internal changes are taking place.
It is important for companies to know who to contact and where to go. MarketSite Africa is SA's largest trading portal, with over 400 actively trading suppliers on board. We have extensive experience in helping suppliers prepare for e-commerce and are able to offer advice and assistance that takes the supplier's current business and financial means into consideration.
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