B2B e-Commerce Platforms: Like ‘LinkedIn’ for your Supply Chain
- The Ultimate Guide to e-Invoicing and Supplier Engagement
- Chapter 1: Introduction - Calling Time on Half-Measures
- Chapter 2: Most procurement management software wants to put you in a box
- Chapter 3: B2B e-Commerce Platforms: Like ‘LinkedIn’ for your Supply Chain
- Chapter 4: Supplier Engagement Plan: Set yourself up for Success
Why the emergence of B2B e-commerce software platforms is a game-changer in fostering increased connectivity between businesses
We talked to Gert Sylvest, co-founder and General Manager of Small Business and Fintech Products at Tradeshift, about why the emergence of networked digital B2B e-commerce platforms has proven such a game-changer in terms of incentivizing and accelerating digital connectivity between diverse groups of businesses. You can watch the recording of our conversation here.
If you’re a large enterprise looking to digitize, then you need to be willing to share in the upside of the digital transformation projects you are driving
Co-Founder and General Manager of Small Business and Fintech Products at Tradeshift.
Why do so many enterprises struggle to get more than a handful of suppliers to adopt and use e-invoicing solutions?
Large buyers have failed to share in the upside of the digital transformation they are trying to drive. The value proposition isn’t there for suppliers, so when they’re asked to participate in these projects, they refuse.
What made you believe that B2B e-commerce networks could bring about change?
We’d seen a huge wave of innovation in the B2C space around e-commerce networks and cloud over the decade before that. Companies like eBay, which itself was kind of a two-sided marketplace, were reaching massive scale. All of these networks gave stuff away for free and then used that connectivity to distribute value-added services that further incentivized people to join.
It was very clear to us that there was a complete absence of e-commerce network models in the B2B space. Everyone was connecting companies more or less point to point with business models that were built around making money from the transactions they facilitated.
When we founded Tradeshift, we didn’t think about it as a company that turned paper into bits and bytes. We felt the idea of connecting companies on a network designed to bring value to every participant was a far more compelling proposition for everyone who joins.
What does Tradeshift mean when it talks about “supplier value”, and how does that help drive better supplier engagement?
Joining Tradeshift means joining a B2B e-commerce networked platform with thousands of other buying and selling companies. Think of it like a trading community, something that can open up a variety of opportunities for anyone who connects, from access to marketplaces that help them reach new customers to access to finance to help them grow their business. Any company that joins Tradeshift has the freedom to connect with other businesses on the network or invite their customers and suppliers to join. It’s up to them. And that’s the major difference.
What evidence can you point to that shows the Tradeshift B2B e-commerce network delivers genuine value to suppliers?
Already today, we have financed billions of dollars in early payments for suppliers. We’ve been able to achieve this exactly because of the underlying economic model of our network and the way we let businesses opt into embedded financial services according to their needs.
We transact more than $260 billion every year on the Tradeshift network. Collectively it’s a fertile environment for financiers, enabling them to bring attractive financial services to businesses that would not have had access before. It’s also a trusted environment for buyers and suppliers to connect with new trading partners and grow their business through B2B marketplaces that operate on our platform.
In any given month, we have over 100,000 active suppliers transacting through our network. The more businesses that connect to the Tradeshift network, the more likely it becomes those new customers will find a large chunk of their suppliers are already connected and using Tradeshift. It’s a flywheel built around the value proposition we’re offering at the core of the network.
The big thing for me is just how easily I can get cost estimates and purchase orders sent to me by my customer and then flip these in an instant into an invoice. My invoicing process is a cinch now compared to what it was before and it certainly saves me a lot of time.
Kairos Project Management Solutions, South Africa
What does a world look like where B2B e-commerce networks like Tradeshift aren’t driving connectivity between buyers and suppliers?
I’m a firm believer in the power of the underlying economic model of networks and the global marketplace this creates. If you can bring companies together in this kind of network-based community, then it’s also a very attractive place for other service providers who can bring their own value to the overall proposition.
In the absence of these economic models and incentives for participation, digitization will run at a snail’s pace. If companies don’t see the upside to digitization, then they will continue to resist it. We’ve seen this for the past 30-40 years already.