Although many companies intend to fully automate their supplier transactions, it appears that they’re prepared to do more talking than walking – for now at least.
Microsoft Canada Co. released the results of a joint study conducted with Stamford, Conn.-based market research firm Gartner Inc. at a B2B integration seminar in Toronto recently. The study looked at nearly 1,200 current and potential supplier enablement or business-to-business (B2B) technology users – including 150 Canadian firms – gauging what solutions they use and what they’ve learned from their experiences.
Microsoft found that only a small minority of respondents had automated more than 50 per cent of their transactions. One in three have automated five per cent or less. Although companies connect with their suppliers in a variety of ways, 67 per cent use database catalogues and one-third use Web-based catalogues. However, 40 per cent of respondents still rely on paper-based methods.
Those companies moving ahead with B2B automation are doing so mainly because customers have demanded that they do so, or in a bid to improve internal business processes, said Rochelle Coleman, senior solutions manager for Mississauga, Ont.-based Microsoft Canada. “There’s a lot of opportunity, a lot of people waiting for this technology to happen,” she said.
But they’ll have to wait until companies overcome some important hurdles, Coleman added. They include concerns over how to deal with so-called Tier 2 or smaller suppliers that may not have extensive technology resources, the process of reporting and the task of integrating B2B applications with existing tools.
Coleman said the process of automating B2B is crucial to the success of companies in the e-economy, backing-up the statement with research figures that project e-commerce B2B transactions will total US$6.3 trillion by 2005. “The value proposition for technology remains tried and true,” she said. “Canadian organizations are executing on their B2B aspirations. But not with the quick-buck mentality…of recent years.”
The Microsoft-Gartner study also found that most companies want B2B software that’s customizable, but still prefer something out-of-the-box.
Coleman also noted that the least important consideration for companies when weighing their B2B options is a fear of establishing an online presence that is similar in look and feel to their competitors.
Microsoft addresses some of these issues with its Solution for Supplier Enablement, described as an integrated technology solution that enables suppliers to cost-effectively connect to any customer’s e-procurement system or marketplace. Launched last November, Microsoft claims the solution is built to maximize suppliers’ existing IT investments, reducing integration work and allowing suppliers