SAP hybris has released the results of new research that finds not only are B2B buyers going online, they’re doing so across platforms. This evolution of omnichannel procurement means suppliers are challenged to handle data flowing in from multiple channels, global partners and, of course, shifts in the way payments are made.
PYMNTS discussed the results of the research with Thack Brown, general manager and global head of line-of-business finance at SAP, and how omnichannel procurement behavior means solid payment strategies are more crucial than ever before for the buyer-supplier relationship.
Not Just Online
The market knows corporate procurement teams are going online to buy from their suppliers and manufacturers. The market also knows that sellers aren’t always equipped to handle the digital shift. Recent research has pointed to the inability for supplier websites to provide enough product information or support online checkout, meaning sellers can miss out on big business.
But what SAP hybris discovered is that suppliers today are even more challenged as procurement officials aren’t just using their desktops to buy from their corporate partners; they’re using their tablets, smartphones and other paths to purchase what they need.
For suppliers, Brown said that this is a problem on multiple levels and means priorities are changing.
“There are so many channels for companies to reach their supplier,” Brown said. “How do you move at the speed they expect?”
[bctt tweet=””There are so many channels for companies to reach their supplier.””]
There is a flurry of implications of omnichannel B2B eCommerce. For example, Brown explained that with so much data flowing in from so many channels, it’s more difficult from an enterprise resource planning standpoint to actually gain the proper insight into cash flow, sales volumes and more.
But more broadly, Brown said, the omnichannel shift highlights the expanding importance of the buyer-supplier relationship.
A Paid Supplier Is A Happy Supplier
With digital buying habits, corporate buyers now have more choice when it comes to choosing which suppliers with whom they would like to work. For suppliers to stick out from the crowd, they must go beyond offering an electronic invoice, Brown explained.
“Payments are going to go digital. They are going to occur faster to the extent that the entire process chain is digitizing,” he said. “It’s going to bring greater transparency and fluidity.”
The shift away from the manual pushing around of paper bills and purchase orders will ultimately be a good thing for the buyer-supplier relationship, Brown added.
He would know. As a former CFO of SAP’s Latin America operations, Brown has seen first-hand the friction of B2B payments, even for some of the largest corporations.
“I’ve had to deal with mass numbers of customers, and late payments and follow-up on collections,” he told PYMNTS, adding that while there has been much talk of the challenge suppliers face when their buyers extend payment terms, procurement officials understand that supplier payments are key to this buyer-supplier relationship.
“Ninety-nine percent of companies are genuinely interested in paying their bills on time,” he added. “The majority of the delay that comes is in the form of the difficulty of the payment process — its transparency, clarity in invoicing, making sure it arrives at the right place and the right time, making sure it gets processed in appropriate ways.”
[bctt tweet=””99% of companies are genuinely interested in paying their bills on time.””]
Of course, supplier payment has always been important to strong B2B relationships. But Brown said that in today’s omnichannel world, where the procurement process gets digitized, payments aren’t just about keeping the supplier happy — they’re about proactively strengthening that collaboration.
“Delays in payment are rarely about somebody choosing not to pay; that’s not the way you build effective relationships in your ecosystem,” he said. “And a good relationship in the ecosystem in the digital world is becoming more and more important. Buyers are reaching out to suppliers saying, ‘We need to work closer together, innovate together, to have a different kind of strategy.’”
“You don’t want payment terms or issues to become a barrier in those relationships,” he continued.
Longer Distances, But Closer Ties
Omnichannel commerce means corporate buyers are sifting through potential suppliers online and across channels, and that gives them access to international partners. This global, digital process means that while the buyer and supplier can be a world apart, the need for strong collaborative ties — especially across borders — is key, and payments are no exception.
Brown explained that international deals mean more effort on tax and trade compliance for CFOs.
“Especially for companies that are new to this, or even for large companies that are already global but looking to streamline and keep up with the complexity of legislative requirements, payment terms, taxes, it can become overwhelming, even for very large, well-funded organizations to keep up,” he said.
But not impossible. Brown said corporations today will be tasked with spending greater resources on vetting suppliers and choosing the right partners. They’ll also need to choose the right third-party service providers and platforms that not only support streamlined payment and business transactions across channels and across oceans but also scale with the company as it grows.
According to Brown, the B2B market today is a new era of commerce. “What we’re hearing all the time right now from customers is that this move to digital is accelerating business so much,” he said. “What we have to do is be able to keep up. It’s a completely new paradigm.”