2b or Not 2b2b?
If you've spent much time online, or off, for that matter, you have probably run into what are known as b2b web sites. The only real question is, "What does b2b mean?"
Simply put, b2b means Business to Business. That is, b2b sites are sites specifically designed by businesses to be used by other businesses. This can take just about any form from online auction houses for industrial equipment to keeping your general ledger online.
So, what can you really do online these days in the b2b arena? Just about anything you want and anywhere you want.
Take the case of Worldbid.com. In its homepage, Worldbid.com touts itself as "an international, business-to-business marketplace that facilitates international trade by providing qualified import/export trade leads, B2B auctions and catalog posting ..." It is a paid membership site that allows a company ready access to an international marketplace at a fraction of the cost of trying to penetrate markets separately. The payoff to the member is ready access to supplies and suppliers as well as guidance on playing in the international arena.
For several years, companies have been able to share accounting and sales information over the web through the use of virtual private networks (VPNs). However, this generally required the acquisition and maintenance of sophisticated hardware and software and, lest we forget, sophisticated in this sense generally means "expensive." Most small companies cannot afford to tie up resources in information systems.
This situation has created opportunities for companies like bCentral Business Solutions (by Microsoft), Intuit with its QuickBooks for the Web, and eController, Inc. These companies offer both the small business and its advisors 24/7 access to all pertinent information regarding the company. In addition, the ability to access inventories and service offerings allows companies a convenient way to set up a web-based store and begin offering products to customers. These services also typically offer users some form of customer management capabilities at prices far less than those attainable on their own.
eController even provides the capability of storing documents electronically. As most businesses know, it is easy to get buried in a mountain of paid and unpaid invoices. By using eController's document management solution, invoices can be stored on servers rather than in voluminous filing cabinets.
The payoff to using services such as these can be tremendous. In the first place, there is no need of maintaining backups which, in many cases, we suggest be done daily. Instead, these services perform daily backups. You also don't have to rely on obtaining and maintaining the latest equipment. The b2b sites provide this service. As long as you're able to connect to the Internet, you'll be using primarily the b2b site's hardware and software which, in many cases, are superior to yours and if you don't like the fact that your data is somewhere else than your own shop, eController, at least, will allow you to backup your data onto your own hard drive.
So far, we have touched only on voluntary services, but b2b capability is becoming increasingly non-voluntary. Take, for instance, Microsoft Corporation. For several years, Microsoft has refused to pay vendor invoices unless those invoices were received electronically. If you want to be a player in the automotive industry, don't expect to work with the big automakers unless you have Electronic Data Interchange (EDI) capability.
Let's face it. In an increasingly technologically literate society, which is becoming more and more competitive, companies will continue to seek the maximum leverage on their technology dollar. This means that more and more of your major trading partners will require you to use b2b technology rather than FedEx or the U.S. Mail. Pure survival will most likely dictate you invest in b2b capability some time in the very near future.
You may be thinking you don't even like buying shirts over the Internet with your credit card. How on earth will you be able to sleep knowing your business information is somewhere in cyberspace for anyone to access? The answer is simple. You may very well have to do it. But to make you feel better, remember, we have pretty stringent privacy laws, at least in the United States. Add to this the simple fact that the first time a b2b company allows large scale access to customer data will likely be its last and you have a high degree of confidence that the information you submit will be secure. When you get down to it, even the data in your own office is only secure if your employees don't tell anyone and no one breaks in to steal your secrets. The fact is, with the general redundancy (multiple, fully functioning, parallel systems) and security built into most b2b solutions, you are probably safer with your data off-site rather than on-site.
Assuming you buy the argument that b2b is safe and the wave of the future, what are the next steps you should take to protect your business in the b2b environment of the future?
Here are some suggested steps from CNET - a leading information technology publication. Ask yourself the following:
Is my business technologically up-to-date or is it technologically challenged? This may seem to be a stupid question, but you'd be surprised at the responses. We don't mean - do you have Quicken? We mean is your customer and product data interconnected to allow sharing online? If not, you probably fall into the "technologically challenged" category.
What is my strategy? If you don't know what your business is about, where you want it to go and how b2b access will help you get there, don't start yet. All you are asking for is a lot of headache brought about by pocketbook-ache. Clearly define the benefit you expect to receive from your online activities, or forget implementation of online activities until you can.
Who else is playing? There's nothing worse than spending an enormous amount of time and money developing a unique idea and then finding out there are a hundred other "unique" players with the same idea. Even if there are such players, you may still be able to distinguish yourself from others through value added services, but be certain the customers you are likely to attract are the customers you want.
How will I know my plan is working? Development of specific goals and benchmarks is essential. Then, monitoring progress toward those goals is required. Don't skimp on this step if you want to maximize your investment.
Despite the b2b "dot com" bust last year, there are still significant opportunities out there in cyberspace. One of those ways is through leveraging customer and vendor contacts to maximize your value to your customers while keeping vendors competitive.
All this being said, using the Internet to your best advantage takes a considerable amount of planning and diligent implementation. And in this regard, Internet related business is no different than any other business initiative. As CPAs we are in the unique position of understanding business and technology - your business and the technology available to help you. Give us a call so we can discuss how you may be able to benefit from the opportunities current technology offers your business.
Have a great June.