Why are B2B or business-to-business transactions so much in focus these days?
B2B dealings were always important, for as long as you can think. But with web-based B2B procurement systems gaining ground, companies are concentrating more on B2B strategies that can deliver the best results.
A good proportion of any company’s resources are devoted to managing inter-organizational activities such as:
B2B dealings were always important, for as long as you can think. But with web-based B2B procurement systems gaining ground, companies are concentrating more on B2B strategies that can deliver the best results.
A good proportion of any company’s resources are devoted to managing inter-organizational activities such as:
- Procurement of goods and services
- Focus on product development
- Transactions between companies
Among the above three, procurement of goods and services involve the largest expense component of a business.
Procurement of goods and services, also called B2B procurement, gobbles up nearly 50% of a company’s revenues.
Procurement, typically, involves two types of purchases.
1. Direct Purchases
Direct purchases refer to raw materials and components that go into manufacturing the final product of the company that is ultimately sold to customers.
2. Indirect Purchases
Indirect purchases can be office supplies, computers, and stationery.
B2B dealings now have a new tool to manage purchases very efficiently and cost effectively.
The new tool is the internet.
The emergence of electronic markets has added to the choices available for companies.
The web based procurement has made the tasks of search, interacting, processing, monitoring, and control exponentially easier than the traditional methods.
A classic example is the B2B portal, Esources.co.uk.
According to an Esources review, the portal has greatly simplified inter-organizational processes and information exchange.
Web based B2B transactions has immensely improved the supply chain and economic benefits to companies.
This is reflected by the fact that B2B sales via e-commerce are expected to constitute nearly 12% of all sales by the year 2020.
Moreover, a new dimension has emerged on customer service. Customer service no longer begins with the checkout process, but starts much before the sale.
There is no any doubt that for B2B a new era has begun.
