March 4, 2014, 3:14 PM

It's critical to transform smartly toward B2B e-commerce

If you want your organization to survive, is there an option other than using digital technologies to enable major business improvements?

When they surveyed 1,559 executives last year across multiple industries, MIT Sloan Management Review and the business and technology consultancy Capgemini Consulting found a troubling conflict: 78% of the respondents, they wrote in their “Embracing Digital Technology” report, said that “achieving digital transformation will be critical to their organization within the next two years.” But the survey also found that 63% of respondents said the pace of technology change in their organization was “too slow,” and the most frequently cited obstacle to digital transformation was a “lack of urgency.”

These findings, and the striking contrast between them, strongly resonated with me as we work with manufacturers and distributors on their e-commerce initiatives. These initiatives are a foundational element in most businesses for digital transformation.

When you reread the first finding above, it doesn’t state that organizations need to be embracing or progressing toward digital transformation in the next two years, it’s says “achieving.”Wow! That’s analogous to becoming a successful race car driver in two years when you just walked out of the exam for your first driver’s license and you are still a full-time student! It would take all of your time and attention to accomplish the task at hand. Moreover, the report doesn’t say that achieving this is important or relevant, it says it is “critical.”

If you want your organization to survive, is there an option other than using digital technologies to enable major business improvements?

When I read the article by MIT Sloan Management Review and Capgemini and reflect on the manufacturers and distributors we work with, I can only think of one organization in the past two years that had a sense of urgency in their decision making—just one. In contrast, I would say that almost all have discounted or ignored the innovation in digital transformation taking place around them, almost as if a cloak of immunity exists. They apparently feel they’re immune from digital competition.

To accomplish digital transformation, there is a consistent message in many of the articles published today about the need to carve out small teams of resources to spark this innovation, to give these teams liberties in their efforts, and to allow them to fail fast. And, once they have a success, it’s important to allow them to continue to iterate on that success and gain momentum for the transformation. It’s a great approach because you have to keep the existing business engine in place and running.

E-commerce efforts, however, are often still treated like technology projects of the past: Once you get it installed by the I.T. organization, you season it with a little marketing, and you’re done. But a digital transformation is not that simple.

If we look five to 10 years out, most business transactions will happen in an electronic manner—with either e-commerce, EDI for transferring purchase orders and other business documents, or punchout technologies that, for example, electronically link a buyer from a seller’s product catalog to the buyer’s financial system to generate a purchase order—and the entire business model will definitely be transformed as a result.

So it’s curious why the adoption is slow. The transformation is inevitable and has great opportunity attached to it for those with a sense of urgency. In contrast, those who find themselves left behind will potentially learn the definition of “critical” in a most unfortunate way.

Insite Software is a provider of B2B e-commerce technology used by companies in the manufacturing, distribution and retail industries. Its technology also supports mobile commerce and integrates with enterprise business software systems including customer relationship management, content management, financial accounting and inventory management, payment gateways, and shipping services.

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