Platforms, Marketplaces Pave the Digital Path for Better B2B Ecosystems
Originally appeared in PYMNTS.com
It’s become commonplace to look to the consumer and consumer-focused commerce to see just how far digital platforms and online marketplaces have come.
But through the past two years, B2B has seen its own digital shift — one that is ongoing and will change the way trillions of dollars’ worth of goods and services are sourced and paid for.
The pivot is measured not just in terms of technology — where apps and portals make price discovery easier than ever, intuitive and nearly instantaneous. The pivot is also transforming the ways in which buyers and suppliers interact with one another, with benefits that improve cash flow across companies and inject more parity, and even a sense of collaboration, into their relationships.
There’s a growing awareness on the part of chief financial officers (CFOs) as to the advantages inherent in digital transformations.
In PYMNTS’ study, “Business Payments Digitization: A Path to a Better Balance Sheet,” done in collaboration with Corcentric, 71% of CFOs said they would beef up their digital payment initiatives.
That strategy comes amid the recognition across 95% of CFOs that accounts payable (AP) and accounts receivable (AR) are “very” or “extremely” important considerations in building healthy corporate balance sheets.
Digital operations also improve security, as cited by roughly two-thirds of respondents.
This push toward digitization also lends itself to joining and using marketplaces and platforms to get the back-office functionality they need, often through application programming interfaces (APIs). The payments themselves are taking on a consumerized tint, informed by the likes of Amazon and the platforms that are a staple of everyday retail activity.
In any number of PYMNTS interviews, executives helping hasten the evolution of B2B eCommerce and modernization have pointed to the fact that there’s a demographic shift that offers a tailwind. Digitally savvy millennials are moving into the back-office positions that are helping to do away with the paper invoices and the paper checks.
Changes Are Global in Scope
The changes are far-reaching, global in scope, in fact — and financial institution (FI)/enterprise interactions offer a microcosm. As USEND Chief Operating Officer and Chief Technology Officer Ran Grushkowsky told PYMNTS, FIs need to provide flexible cross-border payments offerings. Third-party APIs are a cost-effective way for banks to support streamlined back-office functions.
Separately, as Michael Vittum, senior manager and go-to-market lead for payments and commerce at HubSpot, told PYMNTS, “buyers of B2B technology expect to have the same quick, seamless experience that matches [business-to-consumer (B2C)] experiences offered by companies like Amazon or DoorDash. The pandemic [has] driven this gigantic shift in buyer behavior, and businesses must adapt to that in the post-pandemic world.”
Paper processes miss the opportunity to capture valuable customer data and measure trends and patterns because they cannot integrate this information directly into AP and AR systems.
Trina Dutta, vice president and general manager of B2B payments automation and global commercial services at American Express, told PYMNTS that business owners and CFOs have been approaching providers — American Express among them — to help make their AP departments fully virtual.
Increased adoption of technologies like straight-through processing and integrated end-to-end AP and AR platforms will generate even greater process and operational efficiencies between buyers and suppliers, she added.
Along the way, we’re seeing announcements of platforms that help with product supply and sourcing. In just a few local examples, Chinese lifestyle brand platform Onion Global has launched “Hoomuch,” a service platform that provides tools and business support for B2B customers.
FinTech-as-a-Service platform Rapyd has launched Virtual Accounts, a product designed to let businesses expand globally while still supporting local payments.
To get a glimpse into the fundamental shift that can occur across the most fundamental of verticals, consider the steel industry. Shep Hickey, CEO of online platform Bryzos, told Karen Webster that firms scramble to find supply amid global shocks. The platform operates as an online steel marketplace that facilitates trade between buyers and sellers — with a buy now, pay later (BNPL) component that improves trade credit too.
“As people see the need for business done this way, it has its own virtuous cycle,” said Hickey, who was speaking of the steel trade, but that comment can apply throughout the B2B landscape itself.
To learn how we can help, contact Corcentric today.