The term B2B or business-to-business refers to commercial interactions between businesses “conducted electronically over the internet.” (Electronic Commerce: A Managerial perspective. 2008).
This could be in terms of sales made to:
- Small businesses.
- Medium and large size businesses.
- Institutional, government, health care, educational organisations, etc.
B2B could be seen in terms of business done online, whether buying, selling or trading in goods, services or utilities. Therefore, a major aspect of integration with regard to B2B could be in terms of integration of exchanges. Just as two executives need to be on similar wave-lengths to carry out effective business, it is also necessary for two computer software systems to be in sync, compatibility, or in harmony with each other, in order to achieve mutual business objectives.
Some of the major issues relating to integration of B2B exchanges could be seen in terms of:
- Availability of protected Broad Band internet platform and a wide public/private electronic marketplace where business could be carried out in a well regulated manner.
- Excellent co-ordination between buyers and sellers of goods, services and utilities in order to offer best advantages of B2B offerings.
- The fundamental reason for B2B is to cut traditional store costs. Thus, it must meet its professed benefits of increased revenues, lowered costs and also reduced bottlenecks and other obstacles to trade which often permeates traditional business.
- For a B2B seller, the most critical factor is to know who his intended customers or market are, and more significantly, how he could establish contact with them. Similarly for a buyer, the most critical factor is how to get the best buy by spending the least, in terms of efforts, time and money. B2B needs to serve these objectives efficiently, effectively and with quick market response, if it needs to achieve any remarkable degree of success. Again the major challenge is to computerize, or mechanise business in order to achieve business economies.
- The mere fact that a company has established B2B protocol does not render it B2B reliant. It needs to be able to respond to market overtures and serve customers well in order to become B2B efficient.
- “B2B EC has limitations as well, especially regarding channel conflicts and the operation of public exchanges.” (Electronic Commerce: A Managerial perspective. 2008). It is seen that the ground realities of B2B business have undergone sea changes over its eventful history. If companies feel that they could floor investor with high-sounding jargon with no performance backing it up, they are in for a shock. Nowadays “Investors were no longer satisfied with growth in revenue and market share. They now expected firms to demonstrate their potential for profitability in the near term.” (Andrews 2001, p.5).
- It could also be seen that increased B2B usage needs to be seen in terms of increased employee costs for mobilising and sustaining B2B operations. In the event such costs are not sustained, it would have a demotivating effect on employee morale and may affect long term performance.
In real terms the benefits that could be derived from B2B would be in terms of the investments in efforts and time that are applied in it. For a start-up company, the benefits of B2B would take time and efforts to sustain, but it is believed that positive results would entail a heightened use and deployment of B2B in all facets of corporate activities.
However, the main barriers to implementation would be more from the technical side rather than the HR angle since deployment of the right techniques and data base inputs are more crucial aspects for long term success of B2B. This is accentuated from the fact that availability of broad band connectivity, platforms and trained, experienced technical man power resources are intrinsic for its success.
“Often companies are trapped in adapting their business skills timely and they rush to embrace the new paradigm without any preparedness. Service technology companies not adapting to the emerging Offshore collaboration paradigm constitute the leading example of what may happen to these players.” (BXB the Evolution of the B2B Paradigm: B2B Overdrive Too Much Too Late. 2009).
Thus it would be unwise to blame B2B technology for the failure of its players. Thus it is necessary to make judicious, well planned and organized B2B road map before embarking on it on a large scale or long term basis. It would be worth the effort to study the suitability of B2B in SME’s through the experiences of rival or competing firms and their success rate before, during and after induction of B2B technology.
Moreover, it is also seen that B2B may be successful in one enterprise but may have restrictive success in another, although they may both be manufacturers of same product lines, services or utilities.
Thus, it is necessary to make a thorough thread bare analysis of one’s own strengths, weaknesses, opportunies and threats, and all cost benefits, including how one could possibly merit from B2B, its real time implications and other important matter before serious considerations are viewed by CEO’s of SME’s and Small scale business units.
Actually, participation in a new improvement system, like B2B Exchange should not create new problems; rather they should resolve the current ones.
Bibliography
ANDREWS, Scott. (2001). B2B Exchanges and Their Supply Chain Integration Role: The SciQuest Experience: The Electronic Commerce Environment. Olin. P.5. Web.
BXB the Evolution of the B2B Paradigm: B2B Overdrive Too Much Too Late. (2009). Knol: A Unit of Knowledge. Web.
Electronic Commerce: A Managerial perspective B-2-B E-Commerce: Selling & Buying in Private E-markets: Ch.5: B2B E-commerce: 5.1.Concepts, Characteristics and Models of B2B EC. (2008).
Electronic Commerce: A Managerial perspective: B-2-B E-Commerce: Selling & Buying in private e-markets: Ch.5: B2B E-commerce: The Benefits and limitations of B2B. (2008).
Electronic Malls White Papers: B2B Market Places Opportunities, Risks, and Limitations. (2003). Web.