Get sourcing right before B2B: Cap Gemini

Contrary to popular belief, B2B e-commerce is not dead, says Cap Gemini Ernst & Young's Philip Robers.

Contrary to popular belief, B2B e-commerce is not dead, says Cap Gemini Ernst & Young's Philip Robers.

Philadelphia-based Robers, CGE&Y's global director of supply chain and B2B who was in New Zealand and Australia to talk to CGEY clients, says he has seen plenty of B2B interest in the region.

“Some of the technologies that were initially put place were too narrow and costly and organisationally companies weren’t really oriented to doing B2B. They still had old processes in place and there were internal barriers.

“We went from irrational exuberance to people being really down on e-business and e-commerce, and I think that’s incorrect.”

Robers says the cost of B2B has reduced dramatically.

“In early days when you started talking about connecting to supplier in a B2B marketplace you were talking $US150,000 to $US250,000 to do just one connection. You can now do that for $US5000 to $US10,000 and you can connect to many marketplaces for that price.”

From organisational point of view CGEY is telling companies to take a more holistic approach to their procurement. Just putting in an e-procurement package or connecting to a market place isn’t a silver bullet that will fix everything.

CGEY Australia supply chain leader James Hunter says organisations have to go back and make sure their sourcing strategy is OK.

“Things like getting the right suppliers, getting the right contracts, how they interact with suppliers – when they get that right they are then saying, now we can use e-procurement. If they do it right then they can use e-procurement to buy off those contracts.”

CGEY recommends organisations use an “investment engine”, says Robers. “People might say to the CIO, ‘We want an e-procurement package’ but they should be able to say, ‘Not yet, first let’s bet sure we’ll be ready for it.’

“First look at your supply chain and get some quick wins. Find some ways to get inventory down, costs down, serve certain customers better or reduce taxes. Most companies have opportunities where they can save money without using any technology. Then reinvest some or all of those savings into longer term improvements. A mistake is to get some quick wins, bank them and then try to move on to something else. You tend to slide backwards. You should invest that money in sustaining those wins.”

Robers says an unmistakable trend is that CRM and supply chain are coming together.

“They are managing the supply chain by looking at customer demand. Understanding how to leverage these two things in a company should be basic to their supply chain strategy.”

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