A few years removed from the daily slog of the B2B industry, CEO of Software Platform Consulting and former SVP of Ariba Bob Solomon boldly asserts that not much has changed in his former business landscape. So how are B2B thought leaders meant to innovate in this stalled space? That’s where Karen Webster comes in. Take a listen to their conversation as they navigate through various payments barriers to help give the B2B industry the inspiration it needs.
KW: You’ve been away from the B2B payments space for some time now. What, if anything, has changed?
BS: Not much, in some ways. I’m still very close to that community through my consulting and my board work. When I talk to people, many of them say I can jump right back in and not see the differences, which is a little bit appalling. There has been some change and it probably looks really incremental and hard-fought but I do think we have a long way to go. It is a tough business.
KW: As a proponent of B2B payments why do you think payments is so hard? Is there something in particular that causes so much friction?
BS: When there is a great deal of money at stake there is always going to be friction. There are a lot of entrenched interests, obviously, in the form of the traditional banking and treasury community. Now we add a regulatory environment piece and more complexities to the mix. I’m trying to think of what doesn’t add friction – I guess, maybe freshness is about the only thing.
KW: What has to change in order to allow business to innovate on the way businesses pay each other?
BS: There is no silver bullet here and we really need think about each process, each part of the procure-to-pay process pretty separately, in order to knock off barriers one by one. What are those barriers? You have technological barriers, you have change management barriers, and you have legal barriers, sometimes. What we need is to facilitate improvements in all of those areas so that it’s easier to enable people to transact from a user- base perspective.
KW: Are there things that are happening on the retail payment side are causing people within the enterprise payment space to work differently?
BS: I think so. I learned a lot from the retail and the credit card model about B2B – it truly is an education. There are 90 million retail enterprises and we as B2B professionals need to start to learn how important user-friendliness is. You can draw parallels no question and I do think we’ll see some bleed over from B2C.
KW: What’s your impression of the business model constraints that may exist today and what needs to change in order to have a business model underpinning enterprise payments that works?
BS: I think that the business model is critical and I think people are starting to realize where there’s money to be made and where there are opportunities. So for instance, eliminating paper transport has a certain value and you have to be realistic about it. Facilitating a faster approval has certain value and you have to be realistic about it. Providing early payment in the form of a discount or supply chain finance has to be looked at very separately, and you have to be realistic about the interest rate, and I think a lot of people have tried, you know, to sort of skim the top off, if you will. And it will never be a really big business until it is, you know, appropriately priced and massively promoted. I wouldn’t call it a pot of gold but the strongest area is facilitating the earlier payment and supplement of what a relatively long payment cycles in B2B.
KW: So what do you think is next for B2B payments?
BS: I think we’re going to finally see payables become more granular, more standardized, more easily financed than ever before. We’re going to see the right combination of technology business process change and funding models. That, for me, I think is the biggest change.
Interested in giving your two cents on what’s next for payments? Then we want to see you at New York on 10/15 where you’ll meet like-minded industry innovators looking to answer that very question! Don’t miss a chance for your voice to be heard, register today.