This article considers the reliance on suppliers purchasing portals.
It's a common practice for mid-sized corporates to take the path of least resistance in their use of e-commerce systems. Faced with the need to minimise inventory, optimise time to market, reduce departmental headcount, and the backlog of work in IT, a supplier offering to provide an ordering portal seems to make a great deal of sense.
Stick with this policy and fast forward a few years and it turns out that many departments may have become reliant on suppliers in a way that they never expected. And one that threatens critical processes. If one of these suppliers hits the wall or is seen to be hiking prices beyond fair play then how soon can their portal be replaced, and at what cost and risk to the rest of the finely tuned process flow? If a vital ingredient for a food manufacturer can't be purchased because of a systems failure then does the rest of the production line stop? How does this affect other inventory orders, deliveries, cash-flow, retailers, etc?
And if this supplier's system is the store for corporate assets, as in the case of a DAM or other document repository, then how to retrieve them even if you know where they physically live?
The remedy is a tough one because, just as there is no free lunch, there is also no magic wand. First assess the situation. Look for the signs of failing suppliers and act on the weakest cases first. Find an independent solutions vendor you are comfortable with and implement their portal making your suppliers part of the trading platform. Now if a supplier goes down it's a relatively easy job to introduce another in its place. And because it's your process that they have to adopt there are some other benefits such as a shorter time to productivity, better options for supplier management and retention of order data and intelligence into the future.
Working as I do in a company that supplier such systems, you would be suspicious that I have my own agenda. I'll happily admit to that. Will you admit that you may have put your organisation at risk by relying on e-commerce solutions provided by suppliers?
Keep safe.
James
James Evason is Business Development Director at marketingunity, a software company specialising in B2B ecommerce systems for marketing collateral development, production, procurement, fulfilment and supply chain management.
www.marketinguntiy.com
Friday, 19 February 2010
Monday, 11 January 2010
B2B Catalogue Ordering 2.0
If you are considering implementing a system-based solution for fulfilment of marketing collateral it’s easy to assume that a simple, standard e-commerce platform will do the trick. This article examines the broader requirements for control that the client will demand. It is also intended to lay the seeds of questions that a prospective buyer of such a system should consider asking of their shortlisted vendors.
There must be few internet-savvy individuals who have avoided purchasing a music download, an image, an ebook, groceries or clothing on-line. All of these interactions would have involved exposure to a basic catalogue ordering system, the signature features of which would be:
B2B Catalogue Ordering is an extension of this pattern, the extension being required because in business-to-business trading there are far broader needs than this simple 5-step process can fulfil. Let's take a look at the reason for this requirement.
Whilst the supplier (agency, printer or similar) and client organisations in a B2B scenario retain their own individual goals, there are fundamental alignments; the client wants to outsource provision of the service at reasonable cost and the supplier wants to win the clients business, also at reasonable cost. Once the obvious product costs have been negotiated, what remains is to manage the system administration overheads to such a level that both sides achieve their overall goals.
This is where the friction arises, driven by the clients secondary goal of achieving a level of administrative control which inevitable leads to management cost for the supplier.
A few examples of the client’s intentions will help to underline the point. These include:
The client will wish all of these controls and more to be in place – far more than the simple 5-point e-commerce approach.
The supplier, faced with this list of requirements, will be in jeopardy from either not being able to provide the ‘value add’ that the represent, and on the other hand by the cost of providing them!
To win the supplier must do both. The key is in the selection of the e-commerce package. Selecting too simplistic a system will lead to a disappointed client. The only course open to the supplier is to identify or develop a system meeting the client’s requirements but with enough sophistication to make living with them at affordable and minimal cost endeavour.
In this article we’ve looked at the agenda of the two parties in a B2B arrangement, and the criticality of system selection. But we've only skimmed the surface - from here we could focus on the needs of multi-currency trading, users speaking multiple languages, multi-territory considerations, order routing to production partners, and dealing with marketing partners, each of which I aim to cover in upcoming articles.
Keep safe.
James
James Evason is Business Development Director at marketingunity, a software company specialising in B2B ecommerce systems for marketing collateral development, production, procurement, fulfilment and supply chain management.
www.marketinguntiy.com
There must be few internet-savvy individuals who have avoided purchasing a music download, an image, an ebook, groceries or clothing on-line. All of these interactions would have involved exposure to a basic catalogue ordering system, the signature features of which would be:
- The user searches for products
- The user selects the desired products into a shopping basket
- The user goes to the checkout
- The system prompts for delivery and payment details
- The user reviews and gives confirmation for the order
B2B Catalogue Ordering is an extension of this pattern, the extension being required because in business-to-business trading there are far broader needs than this simple 5-step process can fulfil. Let's take a look at the reason for this requirement.
Whilst the supplier (agency, printer or similar) and client organisations in a B2B scenario retain their own individual goals, there are fundamental alignments; the client wants to outsource provision of the service at reasonable cost and the supplier wants to win the clients business, also at reasonable cost. Once the obvious product costs have been negotiated, what remains is to manage the system administration overheads to such a level that both sides achieve their overall goals.
This is where the friction arises, driven by the clients secondary goal of achieving a level of administrative control which inevitable leads to management cost for the supplier.
A few examples of the client’s intentions will help to underline the point. These include:
- System must be accessible to validated users and only they should be allowed to order from it;
- Ensure that all orders are attributed to a valid cost centre in the client organisation’s chart of accounts. The client will be looking to the system to police this and to provide intelligence and reports to illustrate expenditure per cost centre, etc;
- Valid cost centre referencing to guarantee that only a user linked to a cost centre can attribute the costs of an order to it;
- Spend controls to control expenditure by user, by cost centre and by sub-company;
- Payment by invoice, charge card or credit assignment and charge-down;
- Quantity controls to limit the quantity of any product that can be ordered both per order, and in a defined period, with limits for user, cost centre and sub-company;
- Product access limits to restrict access per cost centres to each product;
- Order approval process with trigger thresholds and appropriate routing;
- Support a broad range of products regardless of fulfilment approach, including stock managed, downloadable and print-on-demand products.
The client will wish all of these controls and more to be in place – far more than the simple 5-point e-commerce approach.
The supplier, faced with this list of requirements, will be in jeopardy from either not being able to provide the ‘value add’ that the represent, and on the other hand by the cost of providing them!
To win the supplier must do both. The key is in the selection of the e-commerce package. Selecting too simplistic a system will lead to a disappointed client. The only course open to the supplier is to identify or develop a system meeting the client’s requirements but with enough sophistication to make living with them at affordable and minimal cost endeavour.
In this article we’ve looked at the agenda of the two parties in a B2B arrangement, and the criticality of system selection. But we've only skimmed the surface - from here we could focus on the needs of multi-currency trading, users speaking multiple languages, multi-territory considerations, order routing to production partners, and dealing with marketing partners, each of which I aim to cover in upcoming articles.
Keep safe.
James
James Evason is Business Development Director at marketingunity, a software company specialising in B2B ecommerce systems for marketing collateral development, production, procurement, fulfilment and supply chain management.
www.marketinguntiy.com
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