The Trouble with B2B e-Commerce

Business to Business (B2B) e-Commerce is often viewed as the poor relative of Business to Consumer (B2C), following several evolutionary steps behind, and being relatively easy to develop. However, once you look under the covers the picture is often very much more complicated.

B2C certainly leads the way for online transacting from a user experience standpoint with the large retail brands setting the standards for easy search, configuration and purchase. Big navigation, faceted search and one touch purchases have become common and the default expectation of buyers, be they at home buying a new pair of jeans or at work buying 10,000 widgets. Savvy B2B businesses were quick to spot that making the purchasing process familiar by copying these methods was an important tool in attracting buyers back to the site and so leveraged the hard work and research that had been done by the B2C retailers.

The real difference and challenge between B2B and B2C sits behind the visible site in the complexity of reflecting complex commercial agreements in terms of what B2B customers can purchase when, in what quantities and at what price. This knowledge is often embedded deep in ERP systems not known for their ease of integration or flexibility. B2B organisations are faced with the expensive choice of either integrating directly into the ERP system, a major challenge for many legacy systems or replicating the pricing, product, discount structures and payment methods outside of the ERP system, potentially causing a major testing and on-going support burden. All this whilst most B2C retailers are charging list price and using the banks to manage payments via payment card transactions.

This issue is often further compounded by the promotional transaction models that many e-Commerce site development tools provide. These models whilst B2C biased can be attractive to B2B organisations providing a new and interesting way of interacting with their business partners. This can cause the opposite problem to that outlined above whereby the backend ERP systems are unable to process these types of transactions, without significant development.

Whilst data is always an issue for an organisation wishing to open an internet shop front, the development of the backend systems necessary to support B2B can often become the rate and cost determining step in delivering a successful, fully integrated e-Commerce environment. This is further compounded by the fact that most e-Commerce consultancies and integrators are focused on B2C as that is where their work has historically come from, they do not have the necessary commercial modelling skills to help in the development of B2B e-Commerce backend systems and so cannot be used to accelerate development.

The heavy lifting associated with front end design has no doubt been undertaken in the development of B2C sites and been readily adopted by B2B e-Commerce, and both types of businesses face supply chain challenges in terms of accuracy, efficiency and transparency. The challenge faced by B2B organisations in reflecting the complexity of their commercial relationships is much more significant than for B2C companies and can have a major impact on the level of integration, functionality and ultimate cost of building and implementing an e-Commerce site. When embarking on an e-Commerce project B2B organisations must carefully consider how they are going to reflect their commercial relationships and pay close attention to what influence their current back end systems are going to have on this.