ECommerce technologies in the service of B2B projects

Note translator: below we publish the translation of the article, which is based on the results of researchers from the market for B2B projects of MIT Sloan Management, as well as commentary by Timofei Shikolenkov (@ihrthick), director of marketing and business development for Audiomania (Audiomania has accumulated experience not only in sales to the end user, but also in distribution - more on this here ).

The issue of effective use of eCommerce tools and e-commerce practices in B2B by distributors is not accidental: according to MDM-Baird Distribution Survey, two thirds of distributors are already conducting e-commerce practice, but their efficiency is concerned - for half of these companies, the share of eCommerce in total revenue makes no more than 5%. Linda Taddonio, Head of eCommerce Strategy at Insite Software, is trying to figure out the reasons for the current situation.

Most business transactions in the future will be carried out online - and yet, many companies have not yet developed an understanding of how important it is to ensure their presence in the digital world as soon as possible. The consequences of such behavior can be sad.
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MIT Sloan Management Review Data

Last year’s survey of 1,559 executive directors from various business industries, MIT Sloan Management Review and business and technology consulting agency Capgemini Consulting faced a disturbing contradiction:

1. As stated in the Embracing Digital Technology report, 78% of respondents stated that “the implementation of the transformation towards supporting digital technologies will be critically necessary for their companies over the next two years.”
2. However, the study showed that while 63% of respondents noted that the speed of technological changes in their organizations is “too low” and state that the most frequent obstacle to such changes is “lack of understanding of their urgency”.

These results and the impressive contrast between them have found a response in me since we work with industrialists and distributors in the implementation of their e-commerce initiatives. These initiatives are a fundamental element in the transformation of most businesses towards greater support for digital technologies.

The law of survival says: there is no "better late than never"

Re-read the first result from the MIT study: it does not state that organizations need to include the use of technology in their processes or make progress on this path, there it is argued that companies need to “transform”. Wow! This is akin to becoming a successful racer in two years, despite the fact that now you have just passed on the law, and you also study at the university on a full-time basis! To implement such a plan, you will have to devote all your time and attention to it. Moreover, the report does not say that the achievement of such a task is important or appropriate; it says: “It is critically necessary.”

If you want your company to survive, can you do something other than use digital technology to make a major business restructuring?

When I read the MIT Sloan Management Review and Capgemini article and mentally transferred the read to those industrialists and distributors with whom we work, I could only recall one company in the last two years, which had an understanding of the urgency of resolving this issue - only one. In contrast to the authors of the report, I would say that almost all such companies underestimate or ignore the significance of innovations in the digital transformations that are happening around, as if innovations remain invisible for these companies. As if they have immunity to competition in the field of digital technology.

How to ensure digital transformation in eCommerce

Many of the articles currently being published contain not unreasonable advice on how to transform towards supporting digital technologies — you need to form small teams to encourage such innovations, give these teams enough authority and resources, allow them to “quickly make mistakes”: make mistakes before they can lead to serious consequences. And, as soon as such a team achieves success, it is important to allow it to continue to develop it iteratively so that the transformation is gaining momentum. This is a great approach because it allows current business processes to exist and work.

However, attempts to develop in the direction of e-commerce are often perceived in organizations in the same way as technological projects of the past: an IT company provides you with a solution, you “spice up” it with a pinch of marketing and calm it down. But the transformation towards supporting digital technology is not so simple.

If you look ahead for 5-10 years, it becomes obvious that most business transactions will take place using IT - either through e-commerce, electronic document circulation for sending invoices and other documents, or using some new breakthrough technology, which, for example, will be able, through electronic communications, to give the buyer access to the seller’s catalog, and the seller’s access to the buyer's financial system to automatically generate a purchase order, and as a result, the entire business model udet work quite differently.

All the more surprising that the adoption of digital technology is so slow. Transformation is inevitable and carries tremendous opportunities for those who have a “sense of urgency.” And those who will be left behind will feel the whole sad essence of the phrase “critically necessary”.

Opinion Timofey Shikolenkova:

To better understand how relevant the opinion of MIT researchers is for the Russian market, we took a comment from the director for marketing and business development of Audiomania Timofey Shikolenkov (@timshick):

How “technological” is Russian eCommerce in general? Do company executives understand that they need to be actively interested in current digital trends and try to implement the most “fresh” IT solutions? How interesting and profitable for them?

The main problem is not that managers are not interested or poorly interested in modern technology. The problem is that many use technology in order to use technology. Few people consider the effectiveness of the implementation of certain solutions. Whereas these decisions require money. Sometimes considerable and constantly. From my own experience I can say that there are not so many modern high-tech solutions that can really give an effect right away. Requires a deep approach. Starting from retargeting and ending with individual product recommendations.

Many (if not almost all) IT solutions in Audiomania are made independently, “for own needs” - primarily because there are no products on the market that would meet all the needs of the company. It turns out, the movement towards maximum informatization is primarily the work of the companies themselves, and the existing market for IT solutions for e-commerce does not provide for their needs to create a system that provides not only compliance with today's needs, but also takes into account the growth and development of information technologies in the future?

Developing our systems, we solve, first of all, the tasks of increasing the efficiency of employees, reducing the costs of project support and implementation, and also reduce the risks from a poor-quality external product. However, even if we wanted to purchase some third-party product, this is often not feasible because of the possibilities, or more precisely, the impossibilities of these products. This happens all the time. Unfortunately, eCommerce products for the most part are made by people far from eCommerce. Far from specific practical situations, from specific business processes. Therefore, everything always has to be “finished”. Anyway, almost every company today creates its own product; everyone just starts from different stages.

What can businesses learn from eCommerce companies in terms of technology? Do distributors go to eCommerce? Does Audiomania have such counterparties and, if so, how comfortable and effective it is to cooperate with them in a fully digital format?

Technically advanced distributors are a miracle. At the moment there are a few. For the most part, those who were somehow connected with the computer business. I sold computers, components for them and office equipment. It was comfortable to work with such 15 years ago. It was possible to receive daily warehouse balances and update information on purchase prices.

I don’t know about distributors with which you can integrate and work online. At best, they will give you access to some kind of own interface in order to put the goods in reserve. Usually, everything ends with the distribution of balances in the morning, and often not automatically, but with the hands of a sales manager. And as the interactive manager is the same manager, responsible for Skype.

We try to demonstrate visually to distributors with whom we work, how the turnover can change if we give them to dealers in the hands of modern IT tools. But even with numbers in hands and concrete examples, it is far from always possible to get the situation off the ground.

Audiomania's experience in creating your own IT solutions:

• Automation of warehouse processes online store - 1 , 2

• Translation trade from offline to online

• Practices to improve customer experience