09.11.07

I spend a lot of time talking to large enterprises with vast networks of suppliers and customers, most of whom should be enabled as Trading Partners in a B2B program.  Beyond that, companies, industry groups, standards bodies, and the e-commerce industry have spent decades developing a dizzying array of options and techniques for getting partners “connected”, the latest of which are supplier portals and AS2, with large scale use of web services clearly visible on the horizon.

But in spite of this, as with the invention of ever more powerful processors, smaller and denser storage, or more efficient power generation, it is a task that will never be done, and for much the same reason — our very success creates new demand.

Now I am not talking about classic demand generation, which is about price.  In economics there is a moderately famous curve that shows demand increasing as price decreases, and that has certainly been a factor in B2B — but it has not been the major factor.  There is another demand pattern that is harder to quantify, but we’ve all seen it.  When a restaurant opens and attracts lots of people, other restaurants usually open across the street or parking lot.  But far from reducing waiting times or prices, the multiple restaurants usually attract more people and increase the demand for food. 

So what does this have to do with B2B?  There was a time when B2B was about eliminating the paper in the ordering process, but that goal is now one of many, and not even the primary goal anymore.  Once all that order information was digitized, we took a crack at shipping information, which created all sorts of interesting possibilities — which led to the first major transaction that did not have a paper opposite, the ASN (advanced ship notice).  ASNs helped make possible tremendous innovations in industries like cross-dock distribution centers (impossible without advanced knowledge of inbound shipments, and — of course — barcodes).

My point is that no one knew ASNs would be needed until they got the POs flowing (in truth, many organizations are not even using ASNs and barcodes effectively to this day).  Now we have new physical technologies like RFID, new approaches to managing information flows (BPM applied to B2B), and new business needs enabled by technology (BAM, business activity monitoring).

The good news is we are getting more information faster, and we are able to substitute “information for inventory”, but the bad news is that B2B is looking increasingly like internal IT — one continuous upgrade process.  Once we have orders automated, we want to manage the order process.  To make this happen we tie the physical supply chain (using barcodes or RFID tags) to the information supply chain — traditional documents and logistics documents.  At this point we want to start tracking performance over time and sharing the data with our partners . . . and on and on.

But unlike internal IT, which is an upgrade of one infrastructure, a new B2B capability needs to span an entire trading community, anywhere from 600 to 17000 companies (and that is only DIRECT relationships).  And that is why enablement is never done….