As supplier and buyer networks become increasingly interdependent, all agents within the B2B environment are becoming reliant on each other’s activities. Payment, procurement and eCommerce networks, to name but a few, have all become intertwined as the supply system becomes more closely integrated.
What this has exposed is that there is a greater need for ‘synergies’, as businesses look to co-operate under a new and uncertain financial climate, in order to make cost efficiencies. And the most favourable course of action is to implement an ‘open’ approach.
Research from the Cost of Control – Disrupted Networks report, launched on March 28th found that 64% of CFOs believe open and collaborative supplier networks provide a more effective basis for sustainable cost savings than closed or exclusive network environments. This ‘network collaboration’ was seen as particularly important in countries such as France (80%) and the US (78%).
However, there are still perceived reservations towards a more collaborative approach. Over half of finance executives (57%) think increases in systems interdependencies between suppliers, partners and customers create commercial risks for buyer organisations. It is not an ignorant view that expresses concern against systems interdependency, but more a reasonable evaluation of the impact of change on organisations with legacies of intra-company silos and processes.
However, this concern is unfounded as there are a variety of networks that can ‘accelerate’ the communication process between companies. Shared information (56%) and e-commerce systems (56%) are deemed to be the most effective methods to enhance interaction.
What is clear is that connecting disparate parts of the P2P process is high on the agenda for businesses over the coming year, with an increased focus on developing a collaborative network amongst suppliers which is both transparent and dynamic.
Businesses believe that an open system will lay the foundations for sustainable cost savings. However, innovative methods are perceived to bring with them a degree of uncertainty and risk for businesses. Organisations are therefore tasked with finding optimum methods which reduce both network inefficiencies and cost challenges.
You can find the full report here.