The B2B e-commerce market is set generate $6.7 trillion in revenue by 2020. To get in on the revenue stream, suppliers across the globe are investing more and more into developing their digital B2B commerce capabilities. So far, the initial investments have generated benefits for 99% of organisations studied, research shows. The top priority moving forward is getting further IT systems to meet customer demand, through investment in cloud-based services, e-commerce platforms and mobile applications, among others.
A report from Frost & Sullivan puts the B2B (business to business) e-commerce network on track to generate $6.7 trillion in revenue by 2020. Given the value of capturing even a small piece of the projected $6.7 trillion pie, competition has been heating up, as many B2B e-commerce decision makers are recognising that the race to be number one has well and truly started.
To understand the impact of digital B2B commerce and how players are tapping into the market, Vanson Bourne conducted a study into key trends and developments. The study was commissioned by Intershop, and involved 400 e-commerce decision makers across the UK, US, France, Germany, Scandinavia and the Benelux.
Digital B2B commerce payoff
The study shows that almost every organisation (99%) taking part in the study is currently seeing their digital B2B channel delivering at least one benefit. The highest cited benefit (by 54% of respondents) is that digitalisation allows their organisations to reach customers that would not buy from their organisation before. For 46% of those surveyed, B2B digitalisation allows the organisation to generate more total sales and more sales per rep, while for 41% of organisations the payoff comes from providing fast access to relevant information.
Top priorities going forward
The survey highlights that, in terms of investment priorities, surveyed companies have already (in the past 12 months) invested in cloud based services (62%), e-commerce platforms (48%) and mobile applications (47%). These three categories are also the areas in which more of the surveyed organisations plan to invest in the near future. The technologies of least interest in terms of investment in the past 12 months are supplier portals (18%) and manning product content (16%).
Overall, 99% of organisations have invested in at least one of the technologies in the past 12 months, and 98% plan to invest in the coming 12 months.
The development of B2B e-commerce networks requires a considerable effort in aligning IT and technology with business customer expectations and ease of doing business. Getting the IT systems right is therefore a top priority for decision makers. The vast majority of respondents (94%) say their organisation needs to integrate at least one – or more – IT system into their B2B e-commerce landscape within the next three years.
The most integrated systems so far are product management information systems. 54% currently have such a system, while 37% plan to introduce one in the coming three years. Web content management systems come in second, 43% have integrated such a system and 35% plan to do so within the coming three years. Digital asset management systems are also already widely integrated (42%) or will be introduced in the coming three years (41%). The least integrated system is procurement. Currently, only 22% have such a system in place, and only a further 19% plan on introducing one in the near future.
The report finds that the effects of B2B e-commerce are having organisation wide impacts for 97% of organisations. The business functions most affected by the development of the channels are sales (50%), marketing (45%) and order entry (39%). Each of the top three areas is also expected to be further influenced by the further rollout of the technology.
The areas the least affected by the addition of new business channels are finance (24%), ERP (17%) and product management (14%). Overall however, 94% of organisations foresee that B2B e-commerce will continue to bring wider changes within their organisation as they invest further in digital sales tools.
Getting B2B e-commerce right is a key priority for decision makers, measuring success of efforts is therefore present at 99% of organisations surveyed. The key metrics at organisations surveyed are in three segments: increasing customer loyalty, reducing costs and generating return on investment.
The most measured factor in the ‘increasing customer loyalty’-metric is whether customers are satisfied with the channel, at 65%, followed by whether the channel encourages customers to return. Lifetime customer value comes in at number three (31%). In terms of cost reduction, the most often measured factor is spend per customers (47%), followed by spend per company (44%). For the ‘return on investment’-metric, the most tested factors are revenue growth (64%), average order value (48%) and conversion rate (32%). The factors least tested are abandonment rate (13%) and cross-selling/up-selling (29%).