What are business networks and why you should know them

Over the last decades, the use of the internet has improved the performance of companies through technological interaction, the integration of participants and the transformation of the value chain, to the point of creating B2B business models.

B2B or “Business to Business” is a business model where a company sells products or provides services that another company —not an end customer— acquires to support its production process. This model is very popular in Europe, although its incorporation into the digital world has yet to come.

In the 90s, B2B models were based on one-to-one interaction, until we reached what we know as business platforms that enable the creation of B2B business networks, where the concept of a social network is transferred to the world of the company. But have the current business platforms really been optimized and exploited?

During the 90s, the Internet and the development of standard communication languages ​​such as HTML and the XML metalanguage, led companies to opt for the implementation of EDI (Electronic Data Interchange) models to exchange business documents (purchase orders, invoices …), thus reducing costs due to double manual data entry and avoiding the consequent errors. In the EDI model, one implementation is required for each supplier buyer pair and a private network is used. Many companies opted for this model but the cost of integrating it with their ERP systems is high, which means that it has only been adopted by companies in certain sectors with high turnover.

The Internet facilitated the evolution of the “one to one” model, the traditional point-to-point, to a “one to many” model in which we managed to interact with several providers at the same time, using a generalized and low-cost medium such as the Internet.

Hence, in the 00s, the “supplier portals” emerged. The supplier portal belongs to the field of supplier relationship management (SRM) and is a software tool that allows companies to streamline their purchasing processes.

The supplier portals have been used by large corporations, although they required long and tedious procedures to register, register and verify the information. Very complex and unfriendly technological tools were used (and are used). The economic costs for the providers were and are in these cases excessively high. They were also not open portals since they were reserved for those companies that were invited to participate in them.

The supplier portals were useful for companies with many suppliers (even in the case of public entities) since they allowed to compare the different supplier options in an automated way, make order requests, validate purchases or know if the delivery deadlines would be met.

With all this we can affirm that supplier portals integrated with ERP systems have helped to improve logistics processes in large companies, but the continuous technological evolution or tragic situations such as the current pandemic, means that companies do not only seek to optimize the processes of purchase.

It is here where the need arises to evolve towards digital business networks (B2B Networks) that improve all their processes and allow the creation of new business opportunities.

The great challenge, therefore, is to move towards a new step in digitization and to be able to obtain the best performance from our company’s supply chain, not only to make our purchasing or electronic invoicing processes more efficient.

That is why B2B business networks allow us from a single interface, in addition to managing purchases from suppliers:

  • Integrate all supply, billing and accounts payable processes.
  • Automate the capture, workflow and approval of invoicesintegrating everything with our own ERP.
  • Provide all our suppliers with a single interface to receive orders, send invoices, check their status and request financing for them.
  • Save costs by taking advantage of supply synergies, receipt of invoices and optimization of accounts payable.
  • Intelligent expense management tools and network-generated strategic information, clients establish sustainable and reliable connections with partners while ensuring efficient and error-free transactions.

In the market we can find different software providers that develop tools for the management of the supply chain through B2B networks. Among them, Tradeshift has been gaining popularity for having developed an open, friendly and constantly evolving platform.

Tradeshift is a platform to connect customers and suppliers through a B2B network

Tradeshift has been developing technologies to manage the supply chain for more than 10 years, generating business opportunities for any company globally. As of today, there are more than 1.5 million companies in its network.

Its platform is based on applications, so that all the tasks that are done in Tradeshift are done through apps, and this design allows the platform to grow and expand functionalities in a simple way and at the same time that its customers grow.

The fact that the platform is open has allowed other providers of supply chain management solutions, companies such as Qyntess, Wax Digital, Coface, Transfermate and others, to have developed their own applications available on the Tradeshift platform.

Tradeshift groups its technologies into 5 solutions:

  • TS Buy: e-procurement and Marketplaces, the solution to manage purchases.
  • TS Pay: e-invoicing and automation of Accounts Payable, the tool to manage the invoices received.
  • TS Engage: the tool for analysis and collaboration with suppliers.
  • Tradeshift Cash: the solution to offer providers advance payments.
  • Tradeshift Go: the solution to managing expenses through virtual credit cards.

In summary, the new technologies for the management of the supply chain allow us to integrate the entire purchasing process of our company from end to end, from a simple supplier search to payment, integrating electronic invoice of suppliers, eliminating complex procedures, acting from a single interface in constant evolution and through access to B2B business networks that will help you find new business opportunities for your company.

At Brait, we invite you to visit our section dedicated to B2B networks through the following link and obtain more information about business networks, as well as the possibility to calculate the return of the investment if you are thinking of facing the challenge of digitization in your company. If you want to see a demo or need help in this field, do not hesitate to contact us, we will be happy to help you!

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