What Can Primary Drivers for B2B Managed Services Tell Us About the Future of Supplier Network Adoption?

Just about all companies are far ahead in adopting EDI and what GXS and the Stanford Graduate School of Business term “B2B Managed Services” in the report, B2B Managed Services: Business Value and Adoption Trends, in comparison with supplier networks for eProcurement connectivity and e-invoicing enablement. Yet, given that we view supplier networks as a component of this broader collective market – whatever you want to call it – spanning indirect, direct, and services category connectivity with suppliers and partners, the adoption trends and rationale for the broader group might be indicative of supplier network specific adoption in the future. This is especially true given the maturity of the broader market segments.

The “frequency of business driver selection” suggests that the overall partner experience (i.e., “customer experience in this study) was the most common driver of adoption. Flip this and consider the need for a better “supplier experience” and consider how, as an industry, we might need to invert the investment criteria and value proposition for supplier networks from what has historically amounted to fee-based connectivity on-ramps for suppliers into our own systems—rather than a central value proposition on supplier enablement (e.g., ease of use, fast integration into their own systems, financing, benchmarking etc.)

In the Stanford study, “process efficiency” curiously came in second as a primary driver in selection, which is typically the only driver – at least to date – of the adoption of supplier networks from a buy-side perspective. Inverting “process efficiency” and “the customer/supplier experience” would represent a big shift for many network providers, despite the lip service that they tend to play to supplier benefits in their marketing. Tradeshift’s Christian Lanng (see recent posts here, here, and here) might have been on to something when he talked about the importance of flipping the network experience to focus as much (or more) on the supplier as the buyer as a means of creating value for small and middle market network participants.

Source: B2B Managed Services: Business Value and Adoption Trends, Figure 10

Source: B2B Managed Services: Business Value and Adoption Trends, Figure 10

The rationale for investment in B2B managed services beyond just cost reduction through efficiency is in sync with the overall value perceived from the study participants as well. To wit, “when considering the overall value of B2B managed services, 
96 percent of companies indicated that these services increased the value of their B2B integration program. For 47 percent of the participants, the increased value was combined with a reduction in costs.” In other words, integration and connectivity can help create new value for participants in a broader program, not just labor or related (e.g., phone, fax, shared services) efficiencies.

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