Once again the topic of B2B dominated my research interactions over the last 10 days. First, SAP and Crossgate announced an expansion of their relationship: SAP will now resell Crossgate technology under the “catchy” name SAP Information Interchange by Crossgate. We had predicted back in January that SAP would have to make a stronger commitment to B2B as a result of customer demand, and this is one example that SAP is returning to its customer-centric roots. There’s also evidence in the company’s recent open letter to customers.
Mickey North Rizza and I also spent time last week with Kristin Muhlner, CEO of RollStream, to get an update on its business. RollStream is a provider B2B community management tools focused on helping companies improve the effectiveness of their relationships with trading partners. Over the last year, the company has seen solid growth in industries like healthcare, retail, and high tech, establishing partnerships with B2B heavyweights like GXS. Products like RollStream’s augment the capabilities of existing B2B infrastructure to help with activities like trading partner onboarding and certification. Many of the B2B providers in the market—Axway, Inovis, SEEBURGER, and Sterling Commerce, for example—have also added community management capabilities.
I believe the main reason behind this disconnect is lack of awareness. It’s clearly not lack of need.
Challenges to building a community
After our conversation with RollStream, I spent some time thinking about community management. It’s a favorite topic of conversation with the vendor community, but it hasn’t been a front-of-mind issue to date for most of the customers I work with. I believe the main reason behind this disconnect is lack of awareness. It’s clearly not lack of need.
We recently surveyed 150 companies across five verticals asking about their challenges and priorities for B2B. When you look at their biggest challenges, No. 1 was forecasting and planning for new B2B requests (38%), and No. 2 was managing the diversity of customized requests (33%). This was particularly true for very large companies, or those with more than $10B in revenue, that rated forecasting issues two times as big a challenge as companies with less than $10B in revenue. In addition to these challenges, the onboarding and ongoing management of trading partners were identified as the biggest performance gaps.
The goal of any community management program should be to develop tighter trading partner relationships and to establish more continuous interaction to address some of these challenges. But first, there are a number of hurdles to overcome:
- Mutually beneficial—The early examples of successful community management deployments have been focused on upstream activities with suppliers. Although this can lead to cost savings, it can also reinforce the adversarial relationship between customer and supplier. Ensuring your community management programs are developed in conjunction with your trading partners, not at their expense, is important for long term success.
- Business and IT driven—The B2B infrastructure for most companies I work with is managed within IT. Much of the investment in community management technology has been driven by the line of business. There’s a very real risk of misalignment if both business and IT aren’t directly involved in developing your community management program.
- Many to many—To date, a lot of activity has been between a company and its suppliers in a one-to-many model. The more companies that get involved in a community, the more opportunity there is to develop a network effect and significant value across an entire ecosystem. This is why the B2B providers are so interested in the concept of community management. It’s something a vendor like SAP could make serious hay with, given the size of its installed base.
As companies rethink their B2B strategies for 2010 and beyond, they need to look at the opportunities and potential roadblocks to developing a strong trading partner community.
Realizing the promise
The three most important benefits of a company’s B2B program are improving cost to serve, compliance with customer requirements, and improving the strategic nature of relationships with customers, according to our survey. The last one was cited as most important, but also more difficult to achieve than the others. The reason often ties back to some of the community management challenges I mentioned above. But as companies rethink their B2B strategies for 2010 and beyond, they need to look at the opportunities and potential roadblocks to developing a strong trading partner community.
Start building your community in Scottsdale
Improving relationships with trading partners through better technology automation can make a difference, but it still can’t replace the development of personal relationships between the participants themselves. Try as we might to reduce travel expenses, there’s still a critical need to sit down with partners and identify the opportunities for joint value creation.
Of course, there’s no better place to do this than at our annual Supply Chain Executive Conference in Scottsdale, Arizona, where you can network with peers and hear thought-leading presentations from our top-notch analysts and guest speakers on how to rebuild the supply chain infrastructure for sustainable growth. And if you want to chat with me about B2B and building the community, I would love to meet you there.
Any comments or feedback is welcome at dennis.gaughan@gartner.com.
