Realizing Value through

B2B Initiatives
Piyush Swain
Abstract
Over the years, Business-to-Business (B2B) initiatives have come a long way
in providing appropriate solutions to the multi-enterprise integration needs of
customers. However, expectations from B2B initiatives have increased manifold
and some enterprises find it difficult to articulate the value realized from their B2B
investments. This point of view provides a business value oriented perspective that
encourages enterprises to have a tighter alignment between business requirements
and technology offerings within these B2B initiatives.
Jul 2010
2 | Infosys White Paper
Introduction
With B2B integration promising an efficient, cost-effective and agile supply chain structure and a competitive advantage,
it has been the principal driver for multi-enterprise collaboration. Since it enabled automated Electronic Data Interchange
(EDI) exchange, CIOs could be rest assured about the secure data transfer, minimal data exchange errors, shorter data
transaction cycles and low Total Cost of Ownership (TCO). However, this core value proposition of B2B integration soon
became hygiene, paving the way for concepts like partner collaboration. It is vendors like Axway and Sterling Commerce
who played a major role in this evolution as they provided bolt-on features such as integrated trading partner community
management. Today, B2B integration has come a long way, and we are at a stage where we can leverage the B2B platform to
top up e-commerce layers.
However, as B2B offerings evolved, enterprises forgot something critical - that multi-enterprise integration was not a goal by
itself. It was only meant to support the goal of increasing top-line and bottom-line revenue. The misplaced focus on enriching
B2B-specific features and offerings shifted the attention away from the organizations business objectives. Therefore, despite
making significant B2B-specific investments, enterprises are struggling to articulate the positive impact of B2B initiatives on
their organizations overarching business objectives.
The problem is with traditional B2B approaches which are constrained by pre-defined B2B products or existing processes,
thereby making the B2B programs either technology or process centric. This article questions the traditional approach to B2B
initiatives and encourages a re-look at B2B investments from a business value creation perspective.
Collaboration with Business Objectives
Enterprises are embarking upon large-scale transformation programs where B2B initiatives have a key role to play. In such
B2B transformation initiatives, traditional B2B approaches fail to deliver to the B2B platforms potential. If we take a step back
and understand the need of the B2B investments in the first place, we realize organizations make IT investments to map to
or align with its business objectives. With B2B platforms expected to address these business objectives through a set of value
parameters, their success can be best articulated against these parameters. Based on experience, the possible set of value
parameters can be consolidated into the following six buckets:
Cost-Effectiveness of the Business: Clients want to reduce the cost of operation, the capital investment for new
business changes and the cost for partners to do business with the company, and align the costs to the returns/
business performance to justify investments.
Ability to Seamlessly Scale to Support Business Growth: Clients want to be able to scale up various components of
the operating environment to support the demands of business growth. This can involve setting up the appropriate
physical infrastructure, providing man power, and streamlining process efficiency.
Business Experience Quality for all Stakeholders: Enterprises are expected to provide best-in-class business experience
to all key stakeholders. This experience can be enhanced through systemic process engagements, information flow,
and human interactions. Typically, the measurement criteria for this business objective can be stakeholder satisfaction
and complaints.
De-risking of Business Continuity and Growth: Enterprises want to focus on maximizing their ability to strategically
respond to business continuity/ growth risks - both anticipated and unexpected ones. The risk perspective can be
regulatory compliance, and business decision-making quality.
Lead-time to Deliver Business Value: The business focus is on reducing lead-time to deliver business value across the
value supply chains. Organizations can see where and how fast or slow business values are created in terms of partner
acquisition, onboarding, partner transaction management, etc., through the value supply chain.
Quality of Business: The focus is to maximize the quality of the business value being delivered or created by the
partners and to maximize business opportunities with partner eco-systems in the global market place. In a way, it is
the partners business effectiveness that is being measured and improved through this.
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Identifying the Engineering Platforms
Once enterprises define the key value parameters, they can identify the platforms to be leveraged to achieve these objectives.
IT initiatives depend on people, process and technology to achieve the respective business objectives. The B2B-specific
dimension - partner marketplace - can be added to this, while the people aspect can be split into service delivery and
sourcing platforms. Lets take a closer look at the value that each of these platforms can deliver through B2B initiatives:
Technology Platform: Enterprises have the option of defining their B2B architecture, choosing appropriate products,
and designing their technology infrastructure such that the expected results align with business requirements. For
example, if the enterprises focus is managing trading partner expectations, then technology-specific initiatives will be
taken up in the sphere of trading partner community management rather than on the core B2B gateway. Similarly, B2B
products in the market have a distinct value proposition in terms of gateway performance, gateway options, protocol
support, business monitoring, trading partner management, etc. This drives the adoption of the appropriate product
for the technology platform.
Business Process and Information Platform: Enterprises can outline core business process activities for partner
collaboration, information models, information flow, and information engineering. Though the technology platform
is well suited to business requirements in many cases, misalignment of the existing process and information flow
obstructs enterprises from extracting value from their B2B technology investments. In such cases, the enterprises focus
is on the engineering process and information flow to facilitate the transformation initiatives.
Service Delivery: Organizational structure, procedures, methodologies, and operational frameworks are the levers
that enterprises can use to optimize their B2B initiatives. An appropriate model can facilitate the appropriate portfolio
service delivery across the development, support, and enhancement phases. Essentially, it encourages enterprises to
decide if they really need to have a competency center model to support their B2B initiatives.
Capability Sourcing: Enterprises have the option of choosing a sourcing model from a broad spectrum ranging from
in-house delivery at one end to outsourced delivery at the other. The decision depends on the availability of enterprise
capability like talent, infrastructure services, application services, and strategic services. Enterprises seeing B2B
capability as beyond their core competencies choose system integrators to execute the B2B initiatives where factors
like technology expertise, geographic presence, etc., become the selection criteria for capability sourcing.
Partner Marketplace: Enterprises with low trading volumes find it difficult to justify their B2B spend despite
streamlining the technology platform, B2B specific processes, and providing the right kind of personnel support. The
root cause is lack of incentives for trading partners. Enterprises can create a vibrant trading partner marketplace that
can create business value, helping partners increase their trading volumes.
Enterprises have the option of creating their initiatives on all or a combination of some of these five platforms to achieve their
transformation objectives. However, the key to the success of the business transformation initiatives lies in identifying the
platforms to be leveraged and choosing the strategy to execute the initiative.
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Defining the Strategies
The success of any B2B-driven transformation initiative is guaranteed only if the execution strategy aligns with the key
business objectives behind the B2B initiatives. Infosys proposed B2B Value Realization Framework enables organizations
to develop their capabilities on B2B platforms that align with their business transformation objective. The framework is
partitioned into three aspects - value parameters, value engineering platforms and value creation strategies, as shown in
Figure 1.
The Approach and Execution
The approach to adopting the framework comprises of the following steps:
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1Identify the key business drivers/needs for which
the client is willing to invest in the B2B initiative.
Map the key business drivers/needs to the given
value parameters.
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Enlist the available enterprise platforms that can
be used as value engineering levers. Each
platform has diferent concerns to address and
ofers diferent capabilities to be utilized for
value creation.
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Determine the strategy (or strategies) to be adopted
across the identifed B2B-specifc platforms to
create value in line with the given parameters.
The list of strategies included in the framework is not exhaustive, and can be modified based on requirements. Organizations
leverage a range of strategies like reuse, consolidation, sourcing, improvement, self servicing, automation, and standardization
for their B2B ecosystem to transform their business.
Each of these strategies has a distinct impact across the five value engineering platforms listed. For example, we can improve
the processes, technology platform, service model, and partner marketplace - with varying degrees of impact on the overall
business. The approach is defined for organizations to identify the appropriate strategies to execute their B2B transformation
initiatives. Once enterprises are able to identify each value parameter associated with their B2B program, the impact of each
of the strategies on the value engineering platform can be ascertained. The appropriate strategy is chosen when we find that
the impact of the strategy has a positive influence on the overall outcome that aligns with the value parameters.
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The illustration below is a snapshot of the approach explained.
Figure 1: Infosys B2B value realization framework
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Figure 1: Infosys B2B value realization framework
Once the execution strategy is defined, the list of actions under each strategy-engineering platform combination is defined.
For example the action items from Capability Improvement-Technology Platform are as follows:
Technology selection and usage,
Technology upgrades,
Design and deployment best practice usage, and
Performance engineering
The consolidated list of action items from the framework evolves along with the blueprint of the B2B transformation
initiatives. This completes the business value-engineering platforms-execution strategy chain of the B2B Value Realization
Framework.
Figure 2 - Value Engineering Model - Modeling Example
Conclusion
The Infosys B2B Value Realization Framework is designed to bridge the IT-business gap in B2B initiatives. Since both
business and technology teams need to work closely, enterprises are able to extract the maximum potential from B2B for
their transformation initiatives. This is not a sacrosanct model for B2B-oriented business transformation initiatives and there
is scope for further evolution. Yet, this is the first step in helping business and IT teams execute their B2B initiatives with a
business-value orientation.
About the Author
Piyush Swain is a Associate Practice Engagement Manager at Infosys and a member of the Enterprise Solutions unit.
Piyush has more than 9 years of work experience in B2B initiatives of Fortune 500 enterprises. His B2B expertise
ranges across B2B project implementation, creation of business cases for B2B initiatives, B2B solution development
and B2B consulting. He is an engineering graduate from NIT Rourkela and is a MBA graduate from IIM Kozhikode.