Bringing B2B Ecommerce into Your Purchase to Pay Process

Business to Business (B2B) Ecommerce has become one of the hottest topics for discussion in recent years, and with good reason.  According to Forrester, by 2020, the B2B eCommerce segment will be a $1.13 trillion market.

Why B2B Ecommerce Matters and the Changes that Need to Happen

With more than 40% penetration (approximately 3B people) of the world’s population using the Internet today, the globalization of supply chains has taken hold, creating its own challenges and opportunities for sellers and buyers.

Communication is Imperative

Noted by a Traxpay blog covering the trend, it has become increasingly necessary for trading partners to collaborate outside of traditional office hours, bridge time zone disparities, and overcome the gaps created by lack of proximity, inconsistent processes, and dynamically changing business requirements.

Finding B2B Ecommerce’s Place in O2C and P2P

On the buyer side, the Purchase-to-Pay (P2P) process includes discovery, sourcing, procurement, contract management, electronic purchase order generation, invoice receipt, approval flows, document matching, discount management, and finally, payment. Each company is also subject to complex business rules on both sides of the transaction, whereby both parties need to generate and track documents that capture promotions, discounts, and dynamic business conditions.

Unless organizations on both sides of the bargaining table can improve processes and implement technologies to prevent bottlenecks and streamline O2C for sellers and P2P for buyers, the entire network could be built on unstable footing.

18 Objectives for Purchasing Departments Considering B2B Ecommerce

A recent whitepaper by Open ECX took a deeper look at the synergies that could be created by bringing B2B Ecommerce technology into the P2P process, noting the commercial drivers, benchmarking opportunities, ROI calculations, and these key objectives to measure your organization against:

1. Reduce the number of delinquent orders (without Purchase Orders)
2. Increase the number of e-Orders
3. Reduce authorization complexity
4. Reduce transaction costs
5. Reduce headcount
6. Increase FTE productivity – in terms of invoices processed per year
7. Increase the level of transaction automation
8. Reduce the number of Cheque payments (non e-Payment)
9. Increase the number of e-Remittances – remove all printing, paper handling and post by automating the delivery of remittance advices
10. Reduce the number of invoice queries and errors – using interactive collaboration tools to resolve queries / disputes quicker and more effectively
11. Drive towards 100% raised orders – orders drive / control payments. Missing or incomplete orders increase process costs, increase process times and frustrate goods      receipting and invoice clearing process
12. Increase the use of Evaluated Receipt Settlement (ERS)
13. Drive towards 100% Goods Received Note (GRN) input
14. Reduce the number of International P2P centers
15. Create a single international payment center (defined by Open ECX as a “Payment Factory”)
16. Reduce PO process cycle time
17. Reduce transaction complexity – removing consolidated invoices and moving towards single line invoicing
18. Increase e-Invoices to above 75% of transaction volume

Taking the Next Step

When organizations look to simplify the purchasing process with B2B ecommerce, they first must look at the challenges and opportunities that exist before they get on board:

• Opportunities include smarter use of big data, improved customization, enhanced opportunities for administration, efficiency, and automation, among others. Learn more in the Future of B2B Ecommerce Part 2: The Opportunities.
• Challenges include but are not limited to the complexity of the sales cycle, differing organizational priorities within the procurement department, and the unfortunate fact that many parts of procurement are still too reliant on paper, remaining too transactional to embrace the true value of ecommerce. Learn more about some of the challenges in the Future of B2B Ecommerce Part 1: The Challenges.

We’ve covered a lot of information on the past, present, and future of B2B Ecommerce. Learn more by following @WEXIncNews on Twitter, and by reading through the following resources:

• B2C Lessons for B2B Sellers
• Growth in e-Commerce Fuels Development of Mobile Security Solutions
• A Brief Look at Tokenization in the Payments Industry
• Proof of Concept in B2B Ecommerce: Amazon Business Hits $1B in Year One
• B2B Ecommerce Accelerating, Study Finds
• Will Blockchain Technology Power the Future of Payments?
• The Top Payment Trends Shaping Strategic Thinking in 2016, Part 1
• The Top Payment Trends Shaping Strategic Thinking in 2016, Part 2