B2B eCommerce Series 2: Assessing Digital Maturity for B2B eCommerce

Rick O'Neill Rick O'Neill

The post-pandemic era has created unprecedented digital development opportunities for companies in the B2B eCommerce field. In our first of eight articles on the topic, we looked at how the pandemic has helped to accelerate digital transformation, but what about digital maturity? 

Firstly, let’s differentiate these two terms. While they may be used interchangeably, and are connected, they do actually mean different things. Digital transformation is the measures that a company takes to adapt to the digital era. As we explored in the last article, this may take place by transforming the core operations of a company, transforming the customer experience, building a digital architecture, and by making informed decisions through the use of artificial intelligence (AI) and big data analysis.

On the other hand, digital maturity is the ability to adapt to the digital era. So, essentially, how fast and efficient digital transformation can take place will depend on the digital maturity of the company. In this article, we’ll look at the different stages of digital maturity, and what a company can achieve by the different stages.

In 2021, most companies have reached a certain level of digital maturity at one stage or another, but there are also many that have not yet begun to deploy eCommerce platforms. Different companies will have different motivations and long-term goals, and as such, they will differ in how much progress they have made. 

But as can be seen by this sample of answers from a polling of B2B eCommerce senior managers in China (taken by Accenture in collaboration with the National Research and Development Center) below, many companies in B2B eCommerce are not satisfied with their current progress, and feel more needs to be done. 

In this article, we will look at the different digital maturity levels of companies, and analyze the characteristics of the early, growth, and advanced stages of digital maturity. Based on this, you will then be able to determine the stage of B2B eCommerce deployment that your company is currently in, and how to move forward. 

In this article, we’ll look at the three stages of digital maturity and what can be expected to be achieved by each stage:

  • Initiation Stage
  • Growth Stage
  • Advanced Stage

Digital Maturity Stages: Initiation Stage

User Experience

In the initiation stage of digital maturity, the user experience will be somewhat limited. It is likely that the channels accessible to users will just be the company’s desktop website, and shopping options may not be available (or will be basic). Means of contact will also likely be limited, with email and/or phone options meaning it may be time-consuming for the consumer to get in touch if needed.

Digital Catalog 

For traditional B2B companies, the digitization of product catalogs is crucial, but in reality, few traditional companies have strong digitization capabilities from the beginning. In the initial stage, most of the company’s product data is based on production specifications – only some key products have detailed instructions, and customer orders are limited to sales through SKU numbers.

The first step of catalog digitization requires companies to invest in classifying products according to technologies and applications, and at the same time standardize basic specifications to cover every SKU. As they do not want prices to be revealed, eCommerce websites in this stage generally opt to hide product prices.

Products are displayed in SKU, including number and basic specifications. There is no price or inventory visibility, and there is generally just a simple picture of the product, or none at all.

Pricing, Payment and Degree of Personalization

Prices in this initiation stage of digital maturity tend to be communicated offline. Based on the differences in sales conditions and negotiations, the prices of the products obtained by each customer may vary. Customers must contact sales representatives through telephone or email to negotiate the price. It is worth mentioning here that it is good practice to provide users with sample ordering (without online payment and inventory synchronization).

Omnichannel Scalability

At this stage, just a single channel, most likely a desktop website, will probably be in operation. Other channels such as mobile applications are unlikely to have been developed at this stage of digital maturity. Therefore, omnichannel scalability is not a realistic possibility at this stage. However, that’s not to disregard the importance of the desktop channel – it still has huge catchment in China, for example. 

System Establishment, Delivery and Operation

Most of the platform systems at the initiation stage operate independently from each other, and data generally cannot be synchronized between them. The overall tracking of sales, orders and customized prices is carried out through manual processes. Company operations require significant labor costs. Whether it is a sales order or a freight bill, it requires manual operations by sales representatives, customer service, financial or related warehousing staff. Because of the increased workload on employees, the potential for human error is increased. To address these issues, companies need to listen to and analyze feedback, and refine these error-prone parts into part of the future operating process.

Examples of tasks done at this stage include:

  • Manually entering data into an Excel spreadsheet
  • Manual freight orders and dispatch

Data Management and Analysis

The eCommerce data that can be obtained at this stage focuses on website traffic and page statistics, as well as basic user browsing behavior data. Descriptive analysis is used, a technique used to describe the basic outline of the data. Results are analyzed by viewing dashboards and reports. Business decisions however still tend to be based on assumptions on unanalyzed data rather than big data analysis.

Digital Talent

In the initiation stages of a company’s digital maturity, there is rarely a dedicated digital team to support the process. Most companies in the marketing department often select 1-2 IT personnel to work with offline employees from the traditional marketing department to perform digital related tasks. Companies lacking IT capabilities will focus on business and marketing, or increase the deployment of eCommerce operators. Companies with specialized digital talents and/or departments are few and far between. Fundamentally, most of the employees of B2B companies at this stage will have more traditional offline experience.

Digital Maturity Growth Stage

User Experience 

By this stage, the accuracy of matching SKUs with customer needs has improved thanks to the continuous testing and optimization of the user experience. Product marketing characteristics are more refined (combined with offline sales), data standards for each product line are built, and product data is more accurate. Search is no longer limited to product categories. Customers can perform more accurate searches through various features of products, and at the same time increase filtering by different product attributes to improve the efficiency of customer selection. Additionally, companies provide online customer service by this stage. 

Digital Catalog

In the growth stage of digital maturity, the digital catalog capabilities of a company have been expanded. Some data analysis of products and trends will take place, although it may still be somewhat limited. AI may begin to be used, but companies will still primarily rely on SKUs to keep track of inventory. 

Pricing, Payment and Degree of Personalization

At this stage, companies can implement more flexible pricing strategies. Through the classification of customer groups, different prices can be devised for different customers. Tiered pricing can also be set according to the number of sales; and more sophisticated promotion models can be implemented, such as customer loyalty programs. Regarding payment methods, fixed price online payment, offline cash on delivery, or B2B specific credit authorization payment (online) and other relatively standardized methods.

Omnichannel Scalability

Omnichannel scalability is expanded by this stage.  A wider range of channels now operate, including both mobile and desktop, and a more complete user journey across channels can now be experienced. Also, the establishment of omnichannel warehouses can help bring this scalability to fruition. Instead of having warehouses for different channels, an omnichannel warehouse brings everything together under one roof, meaning greater integration of supply chains, and enabling more delivery options for the consumer. 

System Establishment, Delivery and Operation

B2B eCommerce companies begin to integrate basic online systems such as ERP, CRM, and warehousing systems to process order fulfillment, financial information, and inventory management, and bills are generally processed digitally. Changes take place in the structure of the company to simplify and optimize sales processes, and each stage of the process is evaluated for its effectiveness. All departments of the company collect feedback and adjust processes in an integrated manner.

Data Management and Analysis

Data management and analysis begins to become more advanced by this stage. With more data collected by this stage, various touch points of products, user behaviors, and operational processes are now covered. Companies can utilize all customer-related data to gain actionable insights to better segment customers and provide personalized experiences to meet their expectations. Diagnostic analysis is now more sophisticated. Data is analyzed more for ‘why’ something happens, rather than just reporting that it did happen.

Digital Talent

Companies in the growth stage of digital maturity have a team of digital talents with a solid background of professional knowledge in the field. They will collaborate with strong IT partners/service providers and strong digital thinking capabilities to actively contribute to the digital transformation of the company. However, the proportion of digital talents in companies is still not significant at this stage, and they are, depending on the structure and approach a company takes, generally limited to employees who are selected from various departments to carry out tasks related to digital transformation.

Digital Maturity Advanced Stage

User Experience

By this stage, customers can enjoy a well-rounded, comprehensive user experience. The website is built upon well-researched digital insights, and product sales are primarily driven by online channels rather than offline. The product-related information provided on the website is richer and more comprehensive, the search functions are more accurate and efficient, and the online customer service is powered by AI ‘intelligent’ bots, who can answer customer queries in real-time. 

In addition to mobile and desktop channels, eCommerce has expanded to social media channels, and across multiple brands and markets. After obtaining the user’s consent, the user’s behavior trajectory on the website will be recorded and analyzed in the form of data, and the website can provide exclusive customized services based on the user’s previous search habits or purchase behavior.  Users can enjoy more advanced search features, and multi-market, multi-currency, multi-language and localized catalogs are all supported.  

Digital Catalog

In the advanced stage of digital maturity, companies in B2B eCommerce employ more sophisticated techniques for their digital catalog range. Marketing is driven by the analysis of data, such as consumer behavior trends. Based on platform big data analysis and user feedback, product categories are expanded according to existing customer needs and industry demand trends. Digital insights guide product design, according to product structure and innovation. 

AI is used to provide customers with exclusive product recommendations and dynamic personalized product catalogs. Internet of Things (IoT) technology is now increasingly used to keep track of product inventory. Product Information Management (PIM) software is now used by this stage to manage the company’s product information under one centralized database.

Pricing, Payment and Degree of Personalization

Companies in this stage have a powerful eCommerce back-end that can support the implementation of special pricing strategies, and personalized price displays for different groups of customers. Companies can customize different price strategies according to multiple needs, such as on-demand quotation, recurring orders and PO. Companies can also provide exclusive preferential policies based on the customer’s level and value. Additionally, a variety of B2B payment methods are now supported, including secured online payments, and offline payments such as bank transfers, purchase orders, and credit limits.

Omnichannel Scalability

By the advanced stage of digital maturity, the range of channels will have expanded to include different social media channels, which because of global integration and expansion, will include global social media channels and country-specific ones (e.g. WeChat in China), and a complete virtual inventory of products online. 

System Integration, Delivery and B2B Operations

In addition to the internal operating systems of the company, API architecture is in the advanced stage of digital maturity stage used to access more external supply chains and partner ecosystems. Data automation simplifies the data collection process of each system, reducing the potential for human error, and giving companies more scope with their strategic planning. 

At the same time, you can also set up a single sign-on (SSO) system for employees of the company to allow a single login for different company operations. Additionally, B2B operations by this stage adopt new business models to meet the needs of new and ever-changing markets, such as a subscription of a  product as a service, or more online and offline integrated business models.

Data Management and Analysis

Data is no longer just stored in separate, non-integrated systems, but rather through a unified system, where data is collected and integrated. This data is then scrutinized at a high level through AI and big data analysis.

Two forms of AI and big data-driven analysis become increasingly important in the advanced period of digital maturity:

  • Predictive analysis

By analyzing historical data, predictions can be made on how users will act in certain situations, such as how a user will react to promotions or website designs. Also, through predictive analysis, companies can also gain insights on how products should be priced, or how long it takes for machines to run under the current workload before it needs maintenance. Predictive analysis is usually achieved through machine learning.

  • Normative analysis

When solving problems, normative analysis can influence decision making after specific conditions are confirmed.  For example, international banks collect various data about credit card transactions to determine the possibility of fraudulent transactions. Once the algorithm is triggered by a specific situation, the transactions are halted in a fully automated manner.

Digital Talent

Companies in the advanced maturity stage are no longer limited to a team of digital talents; the vast majority of employees are digitized in their mindsets and use this as the basis for decision-making. By this stage, digital is at the core of the company’s work culture. Additionally, decision making is now fundamentally decentralized. In the company’s stage of digital maturity, there will be a centralized work culture, with one or a few individuals making most of the big decisions. However, by the latter stages of digital maturity, decision making is more evenly spread throughout the company, with numerous teams of digital specialists devising key strategies.

Source: BCG

B2B eCommerce Implementation Roadmap 

Above we have explained the three stages of digital maturity. But how can B2B eCommerce be implemented? The model below demonstrates the different stages of implementing general B2B eCommerce.

So…at what stage is your company?

We hope you enjoyed the latest installment of our series of articles on B2B eCommerce. Stay tuned for our next article in this series, where we will look at how your company can help build up digital assets/resources. 

If you would like to know what stage your company is currently in:

  • Contact TMO Group for a consultation. Our skilled team of experts are on hand to help you with your B2B eCommerce needs.
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