This article was originally posted on PYMNTS.com on October 14, 2019. PYMNTS.com is reinventing the way in which companies share relevant information about the initiatives that shape the future of payments and commerce and make the news.
The emergence of online shopping and e-commerce inevitably seeped into the B2B world, leading to rising demand for corporates to make purchases online the same way they do as consumers.
For some firms, particularly smaller ones, or those with one-off purchases of simple products like office supplies, the translation of B2C e-commerce to B2B is relatively straightforward. But for the vast majority of corporates’ online shopping needs, consumer-centric platforms don’t cut it.
It’s a realization that Mark Johnson, SVP and General Manager of Commerce, said came quickly to the industry.
“In B2C, you have one user type, you have products exposed in exactly the same way to all users, you have one transaction type,” he told PYMNTS’ Karen Webster in a recent interview.
When it comes to making purchases and managing vendors in B2B, corporates demand customization, he said. And in recent years, technology has evolved to allow corporates to manage the complexity of B2B and of their supply chain via marketplaces. This allows them to onboard their supplier base into a private portal through which they can conduct trade.
It’s Legos. Instead of buying the toy, we provide the Legos and say, ‘build any toy you want.
This application programming interface (API) approach means corporates can create their platforms, to onboard their entire supplier base and make purchases through private B2B marketplaces custom-built based on their supply chains and buying needs.
APIs' open opportunities
“This is the approach Sitecore takes today, but it took time to get here,” Johnson explained.
Corporates often work with hundreds, sometimes thousands of suppliers, managing different pricing negotiations, payment schedules, and discounts for each. Products are often complex components that cannot be adequately assessed with only a few pictures on a product listing web page. And based on various preferences, one organization might be managing dozens of different ways to pay their vendors.
This led to businesses being forced to explore ways to obtain a custom buying experience on their own. Historically, businesses often first went to their enterprise resource planning (ERP) providers for a solution first, Johnson said, pointing to the product and financial information already stored by such tools. Yet they quickly fell short, unable to offer holistic, custom order management and marketplace functionality that would handle their business’ complexities.
And though suppliers began selling online, businesses may have had to go to 200 different websites to procure goods from 200 different suppliers.
What API technology enables, said Johnson, is not only the ability to connect to their supplier base through a single portal, but also to manage orders, logistics, supplier interactions, contracts, payments, and other processes around the actual event of purchasing more holistically.
Payments enter the fold
Just as businesses demanded the e-commerce industry to offer a better, customizable way to shop for products and services, corporates are also increasingly requiring these service providers to address their need for payment customizations as well.
APIs also enable Sitecore to integrate with payment processors of clients’ choosing, an essential offering for businesses that might be using a range of different tools and payment methods to pay their suppliers.
Johnson explained that the company could support credit card processing within private B2B marketplaces, a relatively simple process for relatively simple B2B transactional needs. Yet this remains a small sliver of the transactions that move through these platforms: according to Johnson, only about $250 million of the more than $3 billion worth of B2B e-commerce processed on Sitecore’s technology is processed via credit card transactions.
The rest of the transactions are a combination of checks, purchase orders, ACH, wires, and often, a mix of multiple payment tools, making API integrations important for allowing users to customize their payment experience, too.
Johnson acknowledged that moving forward, continuing to explore innovative ways for customers to accept alternative forms of payments will be important for Sitecore. It will be necessary for corporate buyers, too, as chief operations officers continue to approach procure-to-pay as a strategic initiative within their enterprise.
As the B2B e-commerce market continues to evolve, flexibility around purchase processes, supplier management, order management, logistics, payments and more will all need to be integrated with platforms that can flex depending on users’ unique needs. According to Johnson, that is one of the most significant evolutions in how corporates drive adoption of e-commerce solutions — and technology overall.
Technology has changed, and now businesses can have best-of-breed and best-in-class technologies in a number of ways. Now, when businesses evaluate software for their business, they don’t need to change the way their business works to fit within the software — the software is designed to fit any business’ unique needs.