After decades of playing defense to protect their turf, sellers will up their game and leverage the power of communities to grow and win big, says Tony Harris, Senior VP and Head of Marketing and Solutions for SAP Business Network.
When business networks came on the scene more than two decades ago, sellers were skeptical for many reasons. Would they be squeezed by buyers for lower margins? Would overhead increase from new processes or technology? Concerned they would lose business, many joined these networks and played the game in a purely defensive way, blocking and tackling with online RFPs, catalogs, orders, and invoices.
But the game has changed. Today’s savvy sellers see the value in connecting and collaborating with their customers in a digital community that helps them find new business, be more efficient, build customer loyalty, and stabilize cash flow. As one of our customers told us, “Business networks are powerful. They allow us to orchestrate our full supply chain and better engage suppliers so that we can operate and maneuver with insights, speed, and quality.”
With this in mind, we’ll see suppliers will go on the offensive, using business networks to their competitive advantage. And they’ll score on many fronts.
Business networks reshape how business gets done by reaching across functions and companies and spanning industries and geographies. Beyond simple order-to-invoice transacting, today’s top business networks bring buyers and suppliers together to solve pressing strategic and business planning problems.
From misaligned supply and demand to labor and raw material shortages, to social, economic, and environmental concerns, when buyers and suppliers collaborate strategically on a shared platform, they reduce risk and increase their competitive advantage.
Business today mirrors our personal lives in that it is more digital than ever. Remote workers accessing web apps and using software-as-a-service is commonplace in most industries and job functions. Market-leading suppliers are adapting their operations to accommodate the new ways in which their partners need them to interact, using business networks as a foundation for collaboration. Point-to-point data sharing no longer gets the job done.
Today’s market leaders reach the head of the pack by sharing intelligence within an ecosystem. Businesses whose customers leverage digital solutions to connect with them have streamlined their processes, increased visibility into data, improved control, and gained greater efficiency and productivity in their operations. All of this results in genuine cost savings for both organizations.
The efficiencies created by cross-company, collaborative digital workflows far surpass the traditional, manual processes that have long burdened the sourcing, procurement, and accounts receivable/payable functions. Today’s top business networks normalize core planning and transactional processes into common, digitalized, cross-company workflows that enable partners across a supply chain to perform at peak efficiency.
For many businesses, the goal is to provide total visibility and transparency, while simplifying and standardizing the way buyers and suppliers work together. Rather than simply communicating, this enables them to share data and convert that data into business insights.
Business networks enable faster payments by eliminating the paper invoices and checks that more than 80 percent of companies still rely on. Additionally, buyers on today’s top business networks take advantage of dynamic discounting and other working capital management solutions to make cash available more quickly to their suppliers. This is a key competitive advantage for businesses striving to take control of their supply chain.
Business networks are more than just transactional platforms. They also provide an efficient and scalable way for suppliers to showcase their capabilities to vast numbers of qualified buyers in active purchasing cycles.
The right networks put sellers directly in front of buyers with interactive catalogs and consumer-like shopping experiences that make the procurement process fast and accurate. Rather than executing repetitive marketing efforts across redundant channels, sellers can share their information once and be discovered across a network of buyers ready to purchase.
Early adopters have discovered the potential of this “seller’s business network strategy” to drive new business. So much so that it is no longer a well-kept secret.
Business Networks Are Here To Stay. That’s Good News For Suppliers.
Seeing the exponential growth of today’s top business networks, many suppliers who initially took a wait-and-see strategy as business networks emerged may have since jumped in. And those who expected the concept to flame out may now feel left out in the cold. But it hasn’t, and they shouldn’t.
Business networks are more accessible than ever, and they are growing because the sellers who participate can also grow their businesses. Today’s top business networks are the new model for supply chain collaboration. By embracing them, sellers will change the dynamic and drive powerful outcomes for their businesses.
As one business leader said so well, “We cannot imagine a world without SAP Business Network. They enable a consistent, efficient approach that helps us work as partners with customers and build long-lasting relationships.”