The Maturation of the B2B eCommerce Market

According to this April 2010 article in the DemandGen Report, B2B ecommerce is indeed finally coming of age.

By now the arguments for their prediction should be familiar:

1. The internet is probably here to stay.  The “let’s wait it out because it could be a fad” days are behind us.  The dot.com era may have ended in a smug “I told you so” for some skeptical business leaders and IT managers, but now that the hype has finally settled, it’s time to get real.
2. Webshops save time and money.  According to the article, 50%-80% of quoting and ordering time can be saved and 100% of ordering errors can be prevented.  We agree.
3. B2C experiences set expectations for B2B.  It’s becoming harder and harder to ignore the discontinuity between smartphones that joyfully read your Amazon “we recently shipped your order” emails to you on the way to work and then getting to work and having to send a fax to place an order with your favorite industrial supplier.
4. I just hired my daughter.  Well, I didn’t actually hire her, but I did hire a fellow who is her age.  More and more of us baby boomers are being replaced with Gen-Xers and Gen-Yers.  The new generation will not tolerate the “old ways” of doing business.

So what’s holding the industry back?  We’ve conducted in depth interviews with over 50 SAP® based Manufacturers and Distributors who range in size from $10M – $3B in annual revenue in the past three years and here is what we’ve learned:

1. 6% don’t need an ecommerce website. Frankly, these folks are kidding themselves.  No one wants to talk to a customer service representative unless they have to.
2. 49% have IT departments that are too busy.  Nothing pains me more than having to listen to business executives who get the cold shoulder from their IT departments.  I’ve been in this industry for over 30 years and unfortunately some things never change.  It’s the same old blah blah blah.  We’re too busy to add real value to our company’s customers because we’re: “integrating a new subsidiary”, “upgrading to a new version of SAP®”, “implementing a new warehouse management system”, “building a new data warehouse”.  It’s phone, fax and email for another year!  What if we told you that we only need 30 hours of the IT team’s time to bring up a world class SAP® integrated webshop?  Still too busy?
3. 32% want to build it themselves.  These are folks that think they can do it cheaper and faster themselves and would prefer to “control” the technology once it’s in production.  Unfortunately, these are the same folks that end up being part of the 49% of the IT departments that end up being too busy to work on projects that add real value to the business because they underestimated the effort to build and support their own homegrown systems.
4. 13% are focused on their customers.  These are the enlightened organizations that are thinking in terms of the business.  They are looking for the fastest, cheapest way to deliver real value to their customers.  They are leveraging their investments in SAP®, taking advantage of open source products like Magento, and  investing in cloud based solutions to compress time.  These are our customers. :-)

I know 2012 is going to be a great year!

Sam