Driven by digitalized operating models, today’s B2B procurement processes are hardly recognizable to those just five years ago.
While that’s good news for younger B2B buyers and Generation Z decision-makers, it puts companies relying primarily on legacy processes and manual workflows in the hot seat when it comes to competing in performance capabilities and customer services.
There are two sides to every B2B transaction, and digitally savvy younger B2B buyers are not only influencing the market but are also accelerating the demand for more digital and seamless purchasing experiences, pushing incumbent suppliers to rethink and revamp their digital commerce strategies, B2B payment capabilities and even marketing tactics.
This shift is prompting businesses to adapt quickly to remain competitive and relevant by providing the digital-first interactions and personalized experiences younger B2B decision-makers both want and expect. Legacy firms that embrace digital transformation are more likely to win over this rising generation, as well as fend off competition from B2B newcomers unburdened by legacy systems and traditional modes of operation.
On the internal side, firms are finding that younger talent is also increasingly influenced by agile, digital processes. Gen Z staff don’t want to work on paper-based processes or handle manual workflows. They want to be challenged and engaged by new technologies and processes, just as they are in their personal lives.
That’s why, as the dynamics of B2B procurement evolve and are increasingly driven by technological advancements and changing expectations, the pressure is mounting for B2B firms to adapt or risk losing their position in an increasingly competitive landscape.
Read also: From Tradition to Transformation: B2B Enterprises Hit Generational Inflection Point
As emerging behavioral and generational shifts reshape the B2B ecosystem, firms are reevaluating their payment processes, recognizing the strategic importance of adopting digital and automated solutions.
Business customers now expect a similar level of digital ease, convenience and visibility over their B2B payments as they get in their daily lives as regular consumers. Providing younger buyers with these modern conveniences is becoming an imperative for incumbent firms.
“This is the first generation of digital natives, and they prefer digital payment methods over traditional ones,” i2c President Jacqueline White told PYMNTS in October.
That includes providing a menu of payment options for buyers, enabling a fully automated and streamlined reconciliation back to the supplier, and even using emerging technologies like artificial intelligence chatbots for quick and convenient payments.
Adapting to this new, digital-first norm in the B2B space is not without its challenges. Companies are tasked with balancing the technological demands of Gen Z with the preferences of older generations, while at the same time identifying key investments in process modernization.
“Not every buyer is going to pay all of their suppliers the same way … unlike traditional consumer payments where there’s a standardized way in which consumers pay and merchants get paid, within the B2B arena, no two buyer-supplier profiles are the same,” Dean M. Leavitt, founder and CEO at Boost Payment Solutions, told PYMNTS this week.
See also: Legacy Firms Prep for Digital Buyers Who Don’t Want to Talk to Procurement
The digital transformation of B2B is not occurring within a vacuum. Many B2B companies are undergoing a leadership transition, with second-generation and older leaders taking charge and introducing technology to their formerly more traditionally operated businesses.
“There’s legacy businesses, family businesses, old traditional companies that have now reached a point in the last two years where they understand that if they don’t take the next step, they will have troubles, they might even close, because they now need technology to provide the right level of service that their customers are looking for,” Raz Ronen, CEO at FreightTech startup Wisor.AI, said in a discussion with PYMNTS in February 2023.
Modernization initiatives that automate accounts receivable and accounts payable programs can help firms save time, resources and build better relationships with newer generations — and they could leave bigger, slower-to-move firms at a competitive disadvantage.
As Nathan Bhatt, vice president of B2B products and partnerships at American Express, told PYMNTS in October, automating AP processes can save finance teams “on average 9.9 hours per week … over 500 hours per year, which represents a huge saving for business leaders [trying to grow] their business.”
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