9. What are the transition
costs & benefits of adopting a B2B system?
Any change involves additional costs – not
just the obvious ones like developing and buying
new systems, new technology, but the subtler and
far-reaching ones where employees and partners invest
time and personal motivation in learning how to
alter patterns of work. Of course, there has to
be a return on investment for the organisation and
the individual for the change to succeed.
Once a business
fully understands the ‘business as usual’
cost trend it can compare with savings made possible
by introducing B2B systems.
By examining the costs of making
a transition and consequent savings versus
those of the existing situation a balanced
judgement on the best investment rate in B2B
can be made.
The major financial impact
that B2B will normally have is on reducing
the organisation’s variable costs over
the long term.
The reason for this is
that most automated, internet-based systems
require fixed ‘up front’ investment
in analysis, design, development, and implementation
- equipment, training. The ongoing maintenance costs
will mostly be related to software feature requests
and new user training. Internet access for most
businesses will normally be a fixed rate ‘permanently
on’ service (such as ‘Broadband’
and faster connections) except for users dialling
in remotely on telephone lines. Therefore the more
users migrate to self-service and online B2B, the
greater the savings per transaction versus more
traditional processing methods.
Direct Benefits Summary
- Decreased administration costs, decreased inventory
costs, improved speed of communications, improved
data sharing and reduced or redeployed staff.
Indirect Benefits Summary
- Improvement of internal operations, streamlining
of business processes, better market position, closer
ties with customers, improved trading partner relationships,
improved access to information, improved quality
of data, reduced data handling of physical documents,
improved sharing of information, reduction of data
entry errors.
37%
of small businesses in the UK are boosting their
business success by attracting custom from new national
and international markets through the Internet.
Other key benefits
cited [in the survey] included improved efficiency
and time saving with 32% of companies in the region
stating e-commerce improved business performance
in this area.
